Progress | Centre-left Labour politics

Labour’s missing project

You cannot lead a social democratic party without an economic project. Respect them as we do, none of the ‘Anyone But Corbyn’ candidates had one. Each had economic policy but no project. Andy Burnham’s attempt to be pro-business spurred his hard-left supporters to put Jeremy Corbyn on the ballot paper; Yvette Cooper had good ideas on science and technology; and Liz Kendall – who, it could be argued, had the most comprehensive ideas – gave her ‘pro-worker, pro-business’ speech late in the day when no one was listening.

So why no project? There are three reasons.

First, the economic legacy of the last Labour government. Its first 10 years were a huge triumph. Labour’s able management of the economy should be in no doubt and, following 18 years of Thatcherism, bringing a social face to markets was a step-change on what had been before.

While New Labour was the creation of both Tony Blair and Gordon Brown, the price paid by the former to be the frontman of the project was – from Granita onwards – to give the latter almost total control over economic policy. This became the jealously guarded domain of the Treasury team, so much so that the prime minister in 2006 did not know the contents of his last budget. This left the ‘Blairites’ with limited levers like welfare and public services – tools insufficient to create the transformation the economy needed, and still needs. New Labour transferred power to workers early on – the minimum wage, rights to join and recruit for a trade union, the social chapter – but after 2002 the focus became almost solely income transfers in the form of tax credits. The two should have continued in tandem. Add to this the squeeze on living standards and transfer of profit from wages to the dividends of shareholders that occurred from 2004 (but which was apparent later once a pattern had emerged). Fast-forward to 2015 and the inheritors of Labour’s two big beasts were left wanting and in need – separated by the global crash – of something new.

Second, the party’s ‘economic credibility’, or lack thereof. In May this year, the voters’ message was clear. In 2010 Brown’s handling of the crash denied the Tories a majority. But, while Labour had managed the crisis well in the eyes of the public, it lacked credibility on future economic policy, having picked an ‘investment versus cuts’ dividing lines campaign. Regardless, the coalition effectively trashed 13 years of economic management. With little done to counter this, in 2015 this proved fatal.

This sent everyone on a wild goose chase in search of ‘economic credibility’. This elevated it to both ‘means’ and ‘ends’ when in reality it is neither. ‘Economic credibility’ is the test you pass if the ‘means’ – your policies – when implemented appear likely to meet your ‘ends’ – your vision – and when those ‘means’ are acceptable to voters in the country. There is no shortcut to this. Ed Balls – with the best intentions – used a ‘cut to create credibility’ strategy to convey that Labour would be responsible, but it did not succeed. A not dissimilar deficit-to-invest policy did not work out too badly for Justin Trudeau in October. It is important to remember, however, that Canada’s debt-to-GDP ratio is a world away from the United Kingdom’s. More importantly for Labour, Trudeau’s Liberal party did not avoid the heavy-lifting and deep thinking needed to create confidence in their plans. Bill Clinton – and the best Labour leaders in local government – still provide the best model for this, with a ‘cut to invest’ approach. Short-term pain for long-term gain allows a reprioritisation of budgets and a focus on productive spending that creates the good jobs and economy desired. More importantly, it neither concedes to the ‘austerity’ lobby that public spending is bad, but proves we understand the limits to spending and the desire from the public for efficiency.

Third, Ed Miliband. The reason a leadership election was happening was because the party had suffered a second terrible and avoidable loss. The problem for the candidates in this regard was that Miliband was right about his central insight – that Britain wants a more responsible capitalism and the ‘rigged market’ holds people back. But, while he got the essay question right, he got the politics wholly wrong and the policy continually fell short. Immediately after Miliband’s 2011 conference speech, Progress magazine’s editorial said, ‘the distinction between firms that are “producers” and “predators” made better prose than policy’ and allowed Labour to be seen as the ‘anti-business left’. In the years that followed, little was done to correct this. Labour’s leader never sought to build bridges with business and economic leaders, even though they were also expressing their own concern about rising inequality, including at Davos. Labour’s conversation appeared to be taking place in parallel, entirely with itself, and, critically, never considered what non-state actors it might need to bring its vision about.

The simple fact remains that the market is indeed rigged against the people Labour members came into politics to help. This must be the focus for everyone on the left. John McDonnell’s ‘socialism with an iPad’ is one approach and might not be bad if iPad sales were not in decline. The polite words of the shadow chancellor will in time give way to the Corbynomics of the summer – ‘people’s quantitive easing’ and the like – and more insights from the Little Red Book. It will fall to the modernisers – future-focused, pro-business and fiscal realists, enthusiastically grappling with and really understanding business and the economy – to put together a big vision for the economy distinct from the Tories’, one that will deliver for those left behind by globalisation and which a future Labour government will be able to realise. This is the only way to win the party back, and to face the British public with a Labour party deserving of power. Social democracy in an Uber society.

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  • Can’t help but disagree, Corbyn’s economic plan would be stupid to implement today, let alone in 2020. Anybody introducing economic policy 5 years before they can implement it is “Winging it”. I don’t think it’s Corbynomics that attracted people to Corbyn, it’s the easy answer politics.

  • Labour’s missing project cannot be solely an economic project. Yes, Richard, it needs to address the problems of irresponsible capitalism and, yes, it needs to address the rapid growth in economic inequality.

    But the project also has to be a democratic project. Without that element, the party will not make the emotional break from its utopianism and the electorate will not reconsider its cynicism about both politicians and the political process.

    Here is a sketch of that democratic project:

    • Devolution may empower regions. But the people of a region are not empowered without local democratic reforms such as scrapping first-past-the-post and citizens’ assemblies. Devo-Manc needs Demo-Manc.

    • Shifting power to regions hollows out democratic control of the centre. This needs rectification. UK citizens have a right to representation in the second chamber. Millions do not have their preference represented in the Commons. The new voter registration system disenfranchises countless numbers.

    • In the EU, our directly elected MEPs must share their power more equally with Members’ governments. This would then diminish the perception that the EU’s civil service – the Commission – wields excessive power.

    • Individual rights – an essential component of democracy – are under threat as the Tories seek to abandon the European Convention on Human Rights, to ban public sector strikes, to turn benefits from a right to a privilege, to ‘cut Brussels red tape’ (i.e. remove individual and collective rights at work).

    • Community rights are barely recognised when it comes to those enduring exclusion of one form or another. This exclusion is associated with worse jobs, health, housing, education. The communities in question are those defined by ethnicity (and correlates such as religion) or by geography (e.g. secluded poor white communities). Empowering such communities and securing the engagement of their members is a democratic issue as much as it is a socio-economic issue.

  • All they need to do now is to oppose Tory lunacy.
    They also need to recognise that Blarites are stigmatised by the Muslim babies they murdered. And they need a Stalinist style purge.
    Voting for another war with more dead muslim babies a classic Russian roulette move.
    The Bairites are unelectable they have gone down hill post 2003.
    Out, damned spot! Out, I say!—One, two. Why, then, ’tis time to do ’t. Hell is murky!—Fie, my lord, fie! A soldier, and afeard? What need we fear who knows it, when none can call our power to account?—Yet who would have thought the old man to have had so much blood in him.
    Lady Macbeth’s mad scene

  • the SDP of the 1980’s was necessary because the US had and wanted amazing economic power and Labour was struggling dramatically as to whether to acknowledge this. It is not the same now and right wing Labour MP’s seem reluctant to think outside the box of the 90’s.
    The global economy has huge problems particularly the potential elimination of cultural diversity which is rarely discussed.
    It is refreshing to read Martinay….capitalism, whilst it has brought benefits has also produced many problems which it would be nice to see the Labour right addressing. Open debate needs to be fostered by all of you who hide behind only economic discussion…an improvement in real democracy would be a huge start.

  • Dear Chrissa:

    I have not expressed myself clearly enough. I fully support the view of the Progress editor that the party is missing a project.

    That project as outlined by the editor deals broadly with economics. My point is that the missing project needs also to deal with democracy.

    I don’t think that the editor will disagree that democracy is important or that the themes that I list are not central to a democratic project.

    If there is a difference, it may be that I would insist that both elements (economic and democratic) need to be presented simultaneously, all the time. In plain English.

  • Labour lost the election when Ed Miliband in the Q&A session in Leeds I think it was, said that he didn’t believe the previous Labour government borrowed too much. Rightly or wrongly. The Tories won the argument in 2010 and public opinion was against Miliband’s position. He should have just apologised instead of apologising for not regulating the banks enough, which wasn’t the question he was being asked. And moved on.

    A new policy (or even the same cleverly relaunched) could have been adopted and taken to the electorate. As it stands the public doesn’t trust Labour on the economy and won’t until it faces up to the past. Corbynomics is not going to do that and from what I’ve seen doesn’t look workable never mind sellable to the public.

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