How Labour can win a mandate for change

The spending squeeze will be dramatic and tough, requiring a very different governing strategy for Labour.

The spending squeeze will be dramatic and tough, requiring a very different governing strategy for Labour

The hard reality facing an incoming Labour government in 2015 will be the imperative of consolidating the UK public finances. According to the IFS Green Budget, public sector net debt in Britain by 2018-19 will reach £1.6 trillion: such levels of debt are a heavy constraint on future spending, leaving the UK vulnerable to higher long-term interest rates and rising debt interest payments.

That’s why Labour has signed up to a deficit reduction plan that will require an incoming administration to reduce departmental budgets by 31.2 per cent year on year outside the ‘protected’ areas of the National Health Service, schools, and international development. This is after five years of spending cuts in which a host of departmental programmes have already been cut by the coalition government.

The spending squeeze will be dramatic and tough, requiring a very different social democratic governing strategy.

The fundamental challenge for a post-2015 Labour government will be to reshape the British state – forging a model of governance which is not only leaner and more efficient, but better equipped to meet the social and economic challenges of the next decade. As resources get tighter so demands on the state are rising – the product of an ageing society and rising inequality fuelled by the ‘scarring effects’ of the great recession.

This is what Jon Cruddas, Labour’s policy review co-ordinator, describes as “the opportunity of austerity” – building a model of statecraft which is properly attuned to contemporary circumstances: decentralising power, investing in the capacities of local communities, building a new political economy after the financial crisis.

Of course, reform is inevitably easier when there is more money around. The Blair-Brown governments instigated major reforms of key public services, but had the resources to award year-on-year pay rises to public sector workers. As the going got tough politically, Labour was able to progressively improve the position of the poorest pensioners and families with children. The post-1997 governments did not have to choose between helping the most disadvantaged parts of Britain and addressing the aspirations of ‘middle England’: they could invariably afford to do both.

A Labour government after 2015 will not be in such a fortuitous position: it will face tough choices and trade-offs across the terrain of public policy. New models of reform will be needed. One fruitful debate being opened up within Labour circles concerns the objective of breaking down centralised concentrations of power, both of the state and the market. As Cruddas recently told the Local Government Association:

“Our country has suffered from decades of excessive centralisation in the market and the state. People feel that their opinions are ignored and their interests as workers and citizens excluded.”

In the post-war years, Labour defaulted to a statist model of social democratic reform, harnessing the power of central government to build a universal welfare state and National Health Service while creating the conditions for economic stability and full employment. Then, imposing change by pulling administrative levers in Whitehall seemed appropriate and legitimate; moreover, centralised dictat appeared effective.

Not so today. Labour has to emphasise the importance of ‘moral’ as well as ‘mechanical’ reform – allowing new centres of governance and power to emerge across the UK as an antidote to the central power of market and state.

In practice, that will mean policy delivery by devolving financial powers for infrastructure, skills, economic development, and welfare to work to new ‘city regions’, ensuring accountability through directly elected mayors. There will be greater use of pooled budgets in local areas, building on the previous government’s highly successful ‘Total Place’ model, driving efficiencies by breaking down silos and incentivising the integration of public services.

Moreover, any concerted shift towards decentralising power requires local authorities to raise more of what they spend locally, rather than through financial dependence on central government. The culture of arbitrary rate-capping and rigid financial controls overseen by Whitehall will have to end.

In an era of austerity, governments have to work alongside communities: the ‘big society’ was a proxy for replacing the state with Burke’s ‘little platoons’. But civil society and active government should always work in partnership as a means of advancing social justice and the public good. A bold demonstration would be transferring borrowing powers to local government to expand social housing, setting a headline target of half a million affordable homes within a parliament.

The electorate acknowledge that Britain is facing major upheavals: no party can promise more growth, rising living standards, and increasing public spending. Making costed, credible commitments and creating effective systems of governance to secure them will be pivotal for governing success.

In an era of insecurity, Labour politicians will have to set out the painful choices that lie ahead, but also the opportunities for Britain if we have the courage to reform our institutions and our system of government.

Patrick Diamond is a lecturer in public policy at Queen Mary, University of London

Progress annual conference is taking place this Saturday, 31 May, from 10am-5pm, at TUC Congress Centre, London.

Speakers include:

David Aaronovitch, Diane Abbott, Andrew Adonis, Hilary Benn, Chris Bryant, Liam Byrne, Vernon Coaker, Philip Collins, Stella Creasy, Angela Eagle, Maria Eagle, Charlie Falconer, Simon Fanshawe, Caroline Flint, Margaret Hodge, Owen Jones, Peter Kellner, Chris Leslie, Sue Marsh, Deborah Mattinson, Andrew Murray, Jacqui Smith, Stephen Twigg, Chuka Umunna and Stewart Wood.

See the full agenda and book your place now.

13 Responses to “How Labour can win a mandate for change”

  1. PhilJoMar

    31.2% year on year!….I don’t think so.
    Correction coming?

    It also appears that PD has given up on doing anything about tax avoidance/evasion…no…much better to slash and burn and hope something trickles down from above. To govern is to give up apparently…

  2. sarntcrip

    iAMA DISABLED PARTY MEMBER WHO CAN’T MAKE IT IT TO WESTMINSTER SHOULD BE BROADCAST OVER THE WEB IF INCLUSION IS REALLY THE AIM .
    INCLUSION IS CLEARLY NOT THE AIM OF THE CURRENT DISABILITY SHADOW WHO’S INTERVIEW TO DISABILITY NOW BETRAYED NO REAL POLICY FOR THE 1.4 MILLION UK DISABLED WHO’S VOTES COULD TIP MARGINALS ONE WAY OR THE OTHER THE ONLY DISABILITY POLICY LABOUR CURRENTLY HAVE IS NO, YOU CAN’T HAVE ANY MONEY TO REPLACE THAT STOLEN BY THE TORIES THAT’S 1.4 MILLION VOTES EXCLUDED BY LABOUR BECAUSE THEY DON’T HAVE THE BOTTLE TO BACK THE ROBIN HOOD TAX AS MUCH OF EUROPE HAS
    THIS FTT IS VICTIMLESS AND COULD HELP FUND A SOCIAL REBALANCING OF AUSTERITY INSTEAD OF LABOUR’S CURRENT POLICY WHICH STILL LAYS AUSTERITY AT THE DOOR OF THE MOST VULNERABLE LARGELY BECAUSE ED IS STILL AGREEING WITH NICK AND DAVE AND COULD NOT GIVE A TOSS ABOUT THE DISABLED UNDERCLASS CREATED BY THE TORIES LABOUR ARE TOO FRIGHTENED OF THE PRESS TO DO THE RIGHT THING
    ENORMOUSLY DISAPPOINTING IF ED CAN’T STAND THE HEAT OF A REAL LABOUR KITCHEN HE SHOULD GET OUT HE CURRENTLY LOOKS WELL OUT OF HIS DEPTH AXEL IS DOING A SHITE JOB SO FAR

  3. neilcraig

    What nonsense. A truly left wing government that wanted to win would promote economic growth as China has done. Allow fracking and nuclear power to reduce electricity prices, perhaps by 98%, end fuel poverty and allow industry to regrow. Denounce all the reactionary luddite lies about catastrophic warming used to keep us obedient.

    But of course to adopt that Labour would have to be a progressive movement rather than the reactionary, corrupt, mindless organisation it is.

    Which is why these precise policies are being put forward by UKIP.

  4. jaydeepee

    Mandelson protege tells us ‘Austerity must stay’. Get real. It’s a Tory shield to cover them whilst they pillage the public services.

  5. Ley Shade

    It’s funny. A far right party member, demanding a left party becomes more right-wing so that ”they’re more left”.

    I guess if you go far enough right, you become left eventually. But this only works for objects with a circumference. Without one, you continue infinitly in that direction. The answer to become ”more left” isn’t ”to move right endlessly”. But hey ho, UKIP isn’t exactly big on facts or logic.

    PS: UKIP promotes that exact opposite of those policies (adside from fracking). But hey, a minority of people who want to lie about their own beliefs and lie to gain support is fine. Just please, stop believing your a majority and that a lie outweights science – otherwise we’re all going back to the stone age =/

  6. Norfolk29

    The incoming Labour Administration have to pass a law requiring all MP’s, members of the House of Lords and Board Members and senior executives of FTSE100 and 250 Companies and everyone earning over £150,000 a year to publish their tax return. HMRC could provide an appropriate secure Web Site for this purpose. They should announce this in their manifesto so that there is no mistake as to their intentions about a massive reduction in tax avoidance. If austerity has to hit pensioners and public sector workers, then the rich have to pay their fair share of taxation. And no tax allowances whatsoever on income above £150,000.

  7. neilcraig

    Perhaps what it shows is that “left” is more of a convenient flag than an actual definition. The original “left”, at the time of the French revolution were free marketeers. The current “left” includes the Greens – the most reactionary political movement in Europe since feudalism.

    PS What I stated as policies, including fracking, is precisely true (though you are invited to produce your evidence to the contrary). I don’t consider it right to lie about beliefs, but then I’m not a Labour supporter, which may account for it.

  8. Ley Shade

    Evidence: http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&uact=8&ved=0CDMQFjAC&url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FUK_Independence_Party&ei=BJaHU-LCLYGm0QWU7IDwCQ&usg=AFQjCNHezfJmMEn6nlfAGIBzInQGbMGJYQ&sig2=12g7JNzt7AP6qLAWEA4OuA

    That’s the Wikipedia link for UKIP. It’s just about the most impartial thing that can be cited (possibly due to Wiki’s no-bias attitudes, and most journalism contains confirmation bias).

    I understand that the original left is a lot further in that direction than the current. Your statement echoes my point about moving in one direction to reach the other ”only works for objects with a cirumference”.

    Politics fails because it doesn’t include and Up and Down axis to better understand viewpoints beyond Left and Right. If you include both X and Y axis, you find that even within the Left and Right, you will find differences (Up and Down respectively).

    Also, to show the actual known effects without bias of fracking, here is this: http://en.wikipedia.org/wiki/Fracking

    Also, ending fuel poverty is difficult when UKIP’s own policies would increase the prices of fuel for those in fuel poverty. While it sure would make it cheaper for those who can already afford it, it creates the adverse effect by making the buying into price to expensive, even if the upkeep is minute. By removing the barrier to entry you do better, but removing the policies that remove the barrier to entry doesn’t solve the problem.

    Also, I’m not a Labour supporter, just in case you had assumed that =)

  9. neilcraig

    I see nothing whatsoever in your wiki boilerplate that supports your claims that, for example, UKIP are absolutely opposed to nuclear power. Please provide.

    You also provide absolutely no evidence for your assertion that UKIP’s policies would increase fuel costs and since getting rid of the totalitarian Luddite restrictions the LabCons insist on could reduce prices by as much as 98%, you would have to have some pretty convincing evidence of UKIP raising them more than 50 fold to
    prove your assertions.

    Ending fuel poverty (& thus also recession) could be done easily if the ruling class wished it.

    I do not agree about the sanctity of Wikipedia having seen how any facts about “catastrophic global warming” fraud or on acts of genocide carried out under the orders of Labour politicians are censored.

    I suspect you are being economical with the truth in claiming not to be partisan in this discussion, but am open to evidence.

  10. Ley Shade

    I apologise. When I read your post I missed nuclear power and only read fracking. That is my mistake.

    Actually, it does. The Wikipedia article lists an entire section on economics of fracking. To ignore that entire section because it doesn’t suit your needs is foolish =)

    This I agreed. But when your argument is that Ukip is different because it wants to impose even more degenerative version of the LabCons policies, then I believe that you may have been decieved to their true intentions.

    Denying global warming as fraud is only one paticular viewpoint, and is not fact. Because it is a subject of scientific debate, Wikipedia aims to cite both sides of the argument, and, only use citable evidence. Because of this, they cite scientific evidence before political conjecture. Your assertion that somehow Wikipedia is a conspiracy against you or your political affiliates is a symptom of ”confirmation bias”. You may read up on it here: http://en.wikipedia.org/wiki/Confirmation_bias

    If you suspect me of being non-biased because I’ve said I don’t vote Labour, then that is your own bias, not mine. I am simply replying to what I see as incorrect conjecture. I appreciate evidence based discussion, and so I would now ask you for evidence to disprove any of the evidence and claims I’ve made.

    Thank you for your time =)

  11. neilcraig

    Your wiki article’s Energy …. section doesn’t actually even mention fracking (or nuclear) – a serious oversight. It doesn’t even move in the direction of mentioning any of the other policies to support your assertion “UKIP promotes that exact opposite of those policies (adside from fracking).” I trust we may now agree that assertion was indefensible.

    Nonetheless I accept your apology – from my experience it is almost unique for anybody on the “left” or the “environmentalist” movement to ever acknowledge being wrong in any sort of way. Possibly why they so often are.

  12. PhilJoMar

    OK I’ll try one more/last time.

    A 31.2% year-on-year cut performed over a five-year parliament means that if cuts took place from day 1 then all unprotected depts at the end of the 5 year period would have budgets that were 15.4% of what they had been on entering government.

    If PD is happy to look stupid then that’s his affair but the Labour Party deserves better than this sloppiness.

    Further thoughts…PD’s acceptance of this ‘era of austerity’ is craven and self-defeating. There is more than enough economic activity out there to fund pretty much everything a good social-democrat would want. But then a real social-democrat and not a neo-liberal shadow of one would be trying to affect the balance of power away from rentiers back to productive activity…that is the reason why we have anything like this planned penury i.e. age of austerity/insecurity.
    I was going to write more but on re-reading the piece I caught the word ‘silos’ which I missed first time…unbelievably wretch-worthy…awful…I give up…

  13. PoundInYourPocket

    Utter illiterate drivel that we’ve all heard before. Time for some real policies instead of this bizarre notion that new-management methods can magically deliver more services for less money. Anyone with a job has heard this nonesense from countless MBA consultants who take the cheque, ruin the company then re-appear elsewhere with the same idiotic message. There’s no room for corporate drivel or “magical” thinking; services cost money, money comes from taxes. The rules of the game haven’t changed. If you give in on this simple fact then you have abandoned socalism and should just join the Tory party.

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