The Purple Papers: Labour means work

The Purple Papers

On a few occasions, as Steve Van Riel notes in The Purple Papers, the Labour government did suggest people should pay more for better public services. When it was a rise in national insurance for the health service, this was largely popular. When it was a levy on inheritance for social care, it was not.

These contrasting experiences bring to mind Deborah Mattinson’s Talking to a Brick Wall in which she recalls:

‘In Gordon Brown’s 2002 Budget he announced what was to become the most popular tax rise ever. Reflecting on this now in 2010, it makes a marked contrast with the lack of preparation and testing that went into 2009 Budget … Much of the painstaking planning of the early New Labour days had been abandoned by then. However, in 2002, armed with extensive voter feedback, using language carefully tested to press the right buttons and with surrounding publicity of TB and GB visiting Chelsea and Westminster Hospital GB argued, “What we did was look at what the healthcare needs in this country are. The tax is done in a fair way”.’

The national insurance increase that Van Riel cites was the most popular tax rise ever, a Labour success grounded on robust preparation, while the levy on inheritance was a failure typical of a period in which this robustness had fallen into abeyance.

The Purple Papers are right, of course, that much has changed since 1997. But many of the fundamentals of political success haven’t: understanding the electorate; knowing what they value; crafting an argument in language that they understand that links popular values to Labour values and the policy decisions that follow from these values.

We shouldn’t allow the changed context, particularly in terms of fiscal constraints, to blind us to the enduring significance of these political fundamentals. For too long the Labour party has seemed hobbled by these constraints. And, indeed, they are intimidating. Robert Philpot observes in The Purple Papers that the short-, medium- and long-term challenges facing an incoming Labour government are potentially huge, having dispassionately reviewed the evidence on the state of public finances. Equally, however, the party should also be liberated by the capacity of proper application of these fundamentals to build new consensuses in favour of positive change.

Philpot argues similarly when he calls for the party to define its priorities and then decide how it wishes to allocate Britain’s £700bn of public spending to them. Socialism is, after all, the language of priorities. And when thinking in such terms we would do well to not forget the name of our party.

It should be a cause of embarrassment that Iain Duncan Smith has so effectively traduced our party in recent years that one might be forgiven for thinking that we are the Welfare party. Over two-thirds of voters in the south consider Labour to be close to benefit claimants, according to Southern Discomfort Again.

Yet one of the best received speakers at any local Labour party meeting that I can recall did not come to exalt the virtues of welfare but to praise the dignity of work. The introduction to Colin Crooks’ How to Make a Million Jobs notes that the figures equate ‘to nearly one working-age person in three being unemployed or ‘economically inactive’ in the UK’, which he describes as ‘a staggering and scandalous figure. It represents millions of wasted and stunted lives; it represents a tower of frustration, anger and disappointment.’

The enthralled reception that the Dulwich and West Norwood GC gave to Crooks indicates that Labour members agree. And do you know what? While I’d like some of Mattinson’s polling to back up my hunch, I reckon the median voter would be just as won over by what Crooks argues as our GC was.

Furthermore, Crooks offers a raft of innovative policies that seem to me to have the potential to actually do something about the problem he identifies. Graeme Cooke and Patrick Diamond also stress the importance of maximising our employment rate in The Purple Papers, as well as outlining further convincing and affordable solutions. Cooke rightly argues that we need a pro-jobs employment policy; a pro-jobs welfare system; and a pro-jobs spending strategy.

What is this edging towards? Something that has all the elements of the most popular tax rise in history:

First, a concern driven by Labour values, which in 2002 was the NHS and in 2015 might be full employment.

Second, a Labour value that resonates with popular values – Andrew Lansley has discovered how important the NHS is to voters and the cause of work might be just as powerful.

Third, means of delivering these popular values, which the investment in the NHS following the national insurance increase brought and which the ideas of Cooke, Diamond and Crooks could bring.

The different fortunes of Lansley and Duncan Smith are insightful in taking this forward. Duncan Smith has largely done what he told the electorate he was going to do. Lansley did something quite different. We should get on with telling the electorate that Labour means work.

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Jonathan Todd is an economic consultant. He tweets @jonathan_todd

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  • http://www.facebook.com/Dan.Filson Daniel Filson

    Any inheritance tax increase hits an interesting raw nerve. It’s to do with aspiration rather than liability. People often object to IHT thresholds being what they are not because their estates would be within its compass if they died tomorrow, nor next year, but because they aspire for their estates to be of a size that would be above the IHT threshold. The fact that the amount of IHT that would be payable would at first be tiny relative to the estate doesn’t bother them. Nor that most truly wealthy people make lifetime transfers in sufficient time for both the gifts and the remaining estate to fall outside the IHT compass. It’s an aspiration thing.

    In the same way, many oppose a high rate of income tax even though they are not themselves liable to it. It’s a measure of how Nigel Lawson and the Thatcher government changed the political agenda that a 50% top rate is counted as high, when in my lifetime we had a top rate of income tax of 83% and even 98% on investment incomes (these, of course, were the marginal rates; nobody actually paid 83% income tax on their earnings).

    On the general issue of the language of priorities, I think that is a phrase we in the Labour movement should use more often, as otherwise we risk being labelled the party that ducks decisions. But we must not fall into the elephant handbag trap of portraying a national budget as a household budget writ on a much larger scale. The debate in 2010, which we lost, got mired in spending cuts, tax rises or a mixture of both. “Too much, too soon” fatally conceded that ground. We failed to convey the third arm of the equation, which is not available to the individual home budget manager, which is that economic growth will raise tax revenues and reduce benefit bills without any need to raise marginal rates; indeed we should aspire to edge marginal rates down but according to our priorities not those of the rich or the Tories.

    Generally speaking we should avoid linking tax rises to particular areas of spending, as it sets up hostages to fortune. I get really depressed by the debates each Budget day about who are the winners and losers (governments of the day invariably find twenty typical households , nineteen of whom benefit from the budget). We need to convey the concept of collective altruism, I.e. that what we do is for the cohesion of society, that sometimes we do things collectively from which we individually do not benefit. As an example, too many voters look at their Council Tax bill and tot up the components that affect them, street cleaning, refuse collection, pavement repairs, and overlookthat the Council Tax for entire street may be required to pay the costs of one client of social services with special needs.