Full text of the opening speech of the second day of Progress political weekend 2017, given by Peter Mandelson:
Our situation is bad, not for the first time and not yet terminal.
Labour’s whole history is one of set backs and resets, the first couple of which didn’t wait long after our first taste of majority government.
1931 was a mega meltdown but by the end of the decade a reset had been achieved paving the way for Attlee’s pioneering postwar administration.
“We are a national party or we are nothing” my grandfather said when he chaired the 1945 election committee, rubbing up against the more sectional trade union bosses of the time.
This set Labour on its ecumenical, national path for the rest of the century.
A party of flag, family and the union.
Labour and Tory co-existed happily within a political system that for decades gave them roughly 90% of the vote.
Labour was an amalgam of industrial workers and middle class professionals that nonetheless thrived in the ‘them and us’ politics of postwar Britain – bosses vs workers, public sector vs private, state schools vs independents, city vs county.
But as the industrial economy started to change and society became more fluid and egalitarian, ‘them and us’ politics became progressively dated.
Harold Wilson’s reset in the 1960s followed the Bevanite split in the 1950s.
Wilson dialled down class and made Labour a more socially liberal party – a broadly-based party of heart and soul combined with the white hot heat of the technological revolution.
There wasn’t enough ‘state’ in this for the Bennite left who promptly set about stirring up the members to derail the party in the ‘70s and ‘80s. Neil Kinnock saved us from that.
Then came New Labour’s reset in the 1990s. This was also rooted in social and economic liberalism combined with a strong framework of social protection, expanded public services
and internationalism. Solidarity was its lodestar. Modern patriotism cemented our dual commitment to European integration and the Atlantic alliance.
It was Wilsonian but more market friendly and no more nationalisation.
The New Labour formula was essentially right and still is. We made a mistake though. In our understandable eagerness to bury the awful 1980s and obscure the chequered 70s, we airbrushed out Wilson and Attlee. We didn’t get our bearings completely right.
So we have had three major resets in our history – pioneering Attlee, broadening Wilson and modernising Blair. Ed Miliband’s project didn’t make it. Now we need another.
Which brings us to Corbyn and his efforts to pit principle against power, members against PLP, his disdain for social democracy and indifference to parliament. It may yet result in ruin.
But the question for us is what sort of reset do we need if we survive ?
We have to address three sets of new political conditions.
The first is that New Labour became less the party of flag, family and the union and more the party of globalisation, Europe and freedom of movement. None of these was wrong.
But despite our growing investment in public services and public sector employment – until the banking crisis in 2008 – as well the introduction of the national minimum wage and generous tax credits for the working poor, a lot of our voters were beginning to feel economically left behind.
Others felt they and their values were being left out of the new liberal, globalised, borderless order that was being created.
In Scotland a lot of our base has rejected the union. Others don’t see the use of a unionist party that cannot win at Westminster.
So how do we renew our UK-wide appeal to a lot of Scottish, left behind, left out, non-metropolitan as well as better off voters who are Labour by instinct but wonder whether the party is for them anymore ?
Second, Brexit, the biggest challenge of our time.
Labour was on the losing side but that doesn’t mean we should cease arguing for what we believe in, for what is right for the country, and holding the government to account for how they are choosing to interpret the referendum result.
After the referendum we gave the appearance of wanting to re-build our support on the back of those who voted Leave and in the process abandoned the two thirds of Labour voters who wanted to Remain.
We give the appearance now of not standing by our principles and saying goodbye to the jobs, trade and investment that come with single market membership. As a result it will be difficult to oppose the government later on when hard Brexit becomes a reality.
This position is not sustainable and we have to climb back on to the high ground.
With Trump, the only coherent vision for Britain is a more European one and that’s why there continues to be a patriotic case against Brexit. Let’s see how events unfold, both economically and in relation to the UK.
Third, economic change is accelerating around us and the world of work is being transformed by digitisation, robots and artificial intelligence.
Passing away is the era of manual jobs, structured hours and a single employer. The ‘gig’ economy means multiple employers, varied hours and low paid service sector employment, often self-fulfilling and usually non-unionised.
How are workers to be contracted, how do they bargain, how are they to receive decent incomes, what taxes should they pay in this new world ? We need answers to these questions that fit with Labour’s belief in solidarity and social protection.
We also have to resolve the economy’s continuing need for migrant workers and the way many Britons feel culturally unsettled by this. Post referendum, Labour’s mainstream is in danger of becoming dangerously divided over our response to migration. The answer is to address the legitimate labour market issues not end labour mobility.
And as for business, we are waking up to a different sort of capitalism in which, too often, ownership is invisible, trade unions are ineffectual, executive pay is unjustified, mergers and acquisitions lack logic and corporate taxes are left unpaid. These have become real ethical issues.
Some in the party, desperate for a fresh ideological project, argue that the answers to all these questions lay in more state, more spending, more intervention and tighter regulation. They call it Lexit – freed of the constraints of EU membership, we can now get on and build socialism in one country.
This is a dead idea. It’s another nostalgic reaching back to a bygone age. The biggest political risk we face is moving from the undeniable truth that globalisation could work better to the false conclusion that we are better off without it.
There is no route to prosperity that doesn’t see us competing in the global economy which means continuing to attract global talent and investment – but crucially this needs to work for all and we have to develop the means of achieving this.
New Labour transformed city centres but we need to do much more to restore a strong private sector backbone to areas that have had their economic heart ripped out of them in previous decades.
We transferred resources to the regions but we need to create the points of executive authority and accountability locally to match this investment, perhaps in some sort of federal structure. We have to build on the modern industrial policy New Labour started belatedly.
We also made a great start in education and training reform but to create real new life chances for young people this transformation has to go a lot further, made difficult at a time when more public resources are being devoted to our ageing population. There is a real tension here.
All told, we have to work much harder for the intellectual solutions to our problems. Of course our efforts will come to nought if we do not get a leader who is equally acceptable to both Labour MPs and Labour voters.
That is sine qua non.
But the reset we need to create has to be rooted in policy not personalities and with the latter not yet coming through, we should be working hard on the former, renewing ourselves for the new century and a new age, a strong centre left party once again, dependable and electable, proud of its history but not locked in it.
Remember the quote: we are a national party or we are nothing.
Peter Mandelson is former EU commissioner for trade
Progressive centre-ground Labour politics does not come for free.
Our work depends on you.