We must learn from our past without retracing our steps. That will require a new analysis of the role of the state and the market, writes Douglas Alexander in this extract from The Purple Book
Various accounts of why Labour lost have circulated since the 2010 defeat. Some focus on street-level support, arguing that Labour’s approach to immigration or the welfare state contributed decisively to defeat. Others focus on how we lost permission to be heard when we lost the support of media or business elites. But a deeper account recognises that Labour is not the only centre-left party with cause for concern: the French centre-left has not won in a decade while, following the crash, the German and Swedish centre-left polled their lowest-ever votes for at least 20 years.
Nevertheless, we have to examine what is still relevant in the New Labour prospectus that saw us through three general election victories. New Labour was composed of positions, personnel and policies. The personnel have changed and the policies for the 1990s are not going to be the solutions to problems in the 2010s. But the positions – a determination to prioritise credibility on the economy and a willingness to take bold steps on crime and antisocial behaviour – are ones we would reject at great cost to our prospects of winning back power.
Our challenge is not to retrace our steps to a pre-1990s settlement on the centre-left but to forge an authentically new settlement for the 2010s and 2020s. In my view, this work starts with a new analysis of the role of both the market and the state.
For much of the 20th century, the debate in the Labour party was about to what extent the state should control what the country produced and to what extent it should be left up to the market. The original Clause IV represented Labour’s early belief that the more the state controlled, the better for everyone. In moving away from that, starting with Tony Crosland through to Tony Blair and Gordon Brown, Labour moved from being market-phobic to being market-sceptics to finally being seen as market-enthusiasts.
Some of the language endorsing the market in all its forms and impacts – talk of being relaxed about the super-rich or a golden age of the City – reflected an apparently uncritical embrace that was a product of the anxieties of the past. Yet the politicians who made these statements were not bad people. They were progressive people who – in the face of repeated electoral defeats and continuing media hostility – forged a progressive settlement for their time.
Our focus now should be on how we achieve a better capitalism in a very different environment. The coalition government has adopted a politics of austerity that risks delivering an economics of decline. We need positive and specific answers when we are asked how we can build an economy where ordinary people, not just the elite, have the power to make a success of their own lives. We can show just how unlikely it is that an unreconstructed anti-government strategy is going to deliver the sustainable, stable growth people want to see.
But to match that intellectual renewal we also need to make the emotional link to why market economies, however flawed they are, in the end, are better than the alternatives.
Here the invention of my friend the late David Cairns comes in useful. He thought up the ‘conservatory principle’: that no one should be allowed to lead the Labour party unless they understood the desire to own a conservatory. And certainly the charge has been levelled that Labour politicians do not instinctively understand why people want small improvements to their standard of living. Being the party of holidays, home ownership, and an HD TV is something that the party’s ethical socialist tradition has always struggled with.
But, in fact, aspiration – the holiday, the house, the television – can be about far more than the material. The holiday might be the one time we get to spend the hours with our kids that our parents, home by 6pm, never questioned. The house is a project, an inheritance and a guarantee against disaster. The television is a chance to relax and be distracted from the intensity of modern work.
So aspiration does not have to mean one thing, or consumption for its own sake. But understanding aspiration means understanding how the loss of savings, the loss of a home, seeing too much of your paycheque disappear before it reaches your bank account, put people’s dreams at risk.
The route to economic credibility has to start from a real understanding of aspiration. If you do not understand what is at stake, you will never understand why people need such reassurance on economic issues: reassurance that you will do everything possible to avoid economic crashes, that you will not suddenly introduce unforeseen taxes or store up problems by constantly borrowing money to fund day-to-day spending.
It is that bedrock of mainstream economic credibility and the hope of a return to rising living standards that could allow us to reject the false choice between aspiration and fairness.
The extent to which the public judge that a political party ‘gets it’ reflects its approach not only to the market but also to the state. During our time in office we killed for a generation the argument that a publicly funded NHS could not meet the rising aspirations of the British people.
But by focusing on how the state could do good, at times we lacked a language for state failure. And that left us fighting a referendum on the virtues of the public sector. We talked about spending on particular areas reaching a certain proportion of GDP and used the word ‘billions’ as if it was the conclusive point in an argument.
With such a monochrome palette, at times we looked as if we thought there was no problem that government could not or should not solve. But when people angrily raised something like GP pay or the salaries of local government chief executives, we did not have much to say.
It will not be easy changing the public’s view of us on these issues. Scepticism towards politicians blends with a scepticism towards government and that makes the advocacy of the capacity of government to help improve lives a tough task. The answer has to be to balance the necessary resources with the necessary reform. People need to believe we are as serious about productivity as we are about investment.
But the record of Labour’s time in office is under assault not simply in terms of efficiency but also in terms of fairness. In the minds of some voters, some of the very policy tools designed to make society fairer – like housing benefit – too often came to be associated with unfairness.
So if we are going to sustain the case for taking action to keep inequality in check – and part of that strategy involves cash transfers – then we are going to have to remake the political case for action at the bottom of the income scale as surely as we need to remake the case for action at the top.
No one starts off aspiring to a life on benefits. No one really hopes for a job where they can only afford to get by because of a top-up to their income from the state. But people do know that awful things can happen, and they want the state to be ready to help if they do.
We need to redesign our welfare state with that in mind.
There is more that can be done to enhance the legitimacy of welfare through conditionality – taking greater action to enforce the duty to work, while if necessary providing support to make sure the jobs are there. But we also need to be aware that for many people on average salaries who worried for their jobs during the recession, the prospect of getting or losing £65 a week was just not relevant to them despite years of paying into the system. Rethinking welfare means looking less to compensation and more to contribution as a guiding principle in our welfare state.
The type of renewed policy agenda we need will not itself be sufficient unless we renew the way we emotionally engage the electorate. That means taking this debate beyond the market and the state and asking the question: ‘What is Britain for?’ My guess is that people will answer that Britain is for fundamentally progressive measures at home – like the NHS – and internationalist measures abroad. Synchronising our pride and our patriotism with our best instincts could allow us not merely to criticise but to compete with everything this government can offer.
We could shy away from that task, stay in a defensive crouch and hope our luck turns. I do not think it would work. But I believe the Labour party is more than that: Britain needs us to learn from both our victories and our defeats, and so renew our offer to serve the country.
Douglas Alexander is MP for Paisley and Renfrewshire South and shadow foreign secretary. This is an abridged version of his chapter in The Purple Book
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