How does Labour win in 2015 on policy? The first step is clearly securing credibility on the economy. Labour has to be hawkish on the deficit, not only in theory but in practice. History demonstrates that successful political parties are willing to identify their achilles heel and tackle it head on, however painful. For Labour in recent times too many voters have feared that a future Labour government would borrow in order to avoid expenditure cuts and increase current spending, leading to an unsustainable burden of public debt. That is why the shadow chancellor, Ed Balls, has been astute in committing Labour to a framework of strict fiscal rules. For centre-left parties, being hawkish on the deficit is not purely an act of electoral pragmatism, but is also an affirmation of political principle. As Martin Wolf demonstrated in last Friday’s Financial Times, following George Osborne’s inept handling of the public finances by 2018-19 the UK will be spending 3.8 per cent of GDP on debt interest payments – more than we presently spend on the entire schools system. It should be remembered that debt interest is current spending forgone on education, early years intervention, poverty alleviation, youth training, and so on. Around the world, election-winning progressive parties have always put macroeconomic prudence and low public debt at the core of their programmatic appeal – especially the Nordic social democrats in Sweden, Denmark and Norway. For Labour in Britain, there should be no compromise on fiscal responsibility.
The next step to winning in 2015 means framing a policy agenda that will not only survive the heat of a six week election campaign, but enable Labour to govern successfully for a five year parliament. Every policy the party puts forward has to be ruthlessly stress-tested, convincing voters that Labour’s plans are robust and achievable. In my view, the best policy Labour has ever put forward is the national minimum wage. Why? The policy is right for Britain in tackling the scourge of low pay and unequal labour markets. The national minimum wage is popular with voters who by and large believe that workers deserve a fair day’s pay for a fair day’s work. And the minimum wage reinforces Labour’s distinctive credentials of social justice, fairness, and opportunity for all, not just the privileged few. However, the secret of the national minimum wage was also its credibility. The Low Pay Commission established a tripartite structure bringing together employers, trade unions and government. The ethos of the national minimum wage was that social justice would be best achieved in Britain by practising the politics of partnership, rather than the politics of confrontation. It is true that markets do not always produce optimal outcomes, and taking on corporate ‘fat cat’ interests can be necessary for social fairness. Nonetheless, to achieve its mission of a more equal Britain whether through improved social housing or overhauling vocational education, Labour will need to establish effective partnerships across the public, voluntary, and private sectors.
The final policy step to winning in 2015 means forging an election-winning argument that will resonate in the minds of voters as they enter the polling booths next year. The Conservatives have an argument of sorts: ‘Labour made a mess of the economy; the government is clearing up the mess, but the work is not yet done; don’t let Labour back to mess it up again’. Labour has to shape an even more compelling account of why it deserves to be back in government, emphasising that the coalition government has been both incompetent and unfair: addressing the ‘cost of living crisis’ and the failure of growth to improve nominal wages and living standards for the majority of workers is an excellent starting point. But let us not forget that real wages across much of the UK may be rising again by 2015. Moreover, voters want to know that Labour’s remedies for the living standards crisis are really durable.
Making a coherent argument about the type of Britain we want also means striking the correct balance between hope and pessimism. Yes, there is much wrong with our country today: too much inequality and social polarisation; unfair cuts which have hurt the poorest hardest; rising poverty with too many young people held back from realising their true potential. Nonetheless, there is a lot right with Britain too. We remain one of the most open, liberal, tolerant and outward-looking countries in the world. Our communities are generally accepting, even welcoming, of diversity. We have world-beating businesses and some of the very best public services. London is an amazing global city successfully hosting the 2012 Olympic Games. Our northern cities – Leeds, Manchester, Sheffield, Liverpool, Newcastle, Birmingham – have been undergoing an urban renaissance. Britain today is a social democratic rather than a conservative country; that is Labour’s achievement. As a party, let us always run on optimism about Britain, rather than the politics of fear.
Patrick Diamond is lecturer in Public Policy at Queen Mary University of London and vice-chair of Policy Network. He tweets @patrickdiamond1. This article is based on his speech at Progress Political Weekend 2014 in the opening plenary session, Building a majority Britain: How do we win in 2015?
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