D Miliband: Labour must buck the trend to prevent the return of mass unemployment

Labour leadership candidate David Miliband writes for Left Foot Forward on the GDP figures and the state of the economy.

Our guest writer is David Miliband, shadow foreign secretary and Labour leadership candidate

Today’s figures showing that GDP grew by 1.1 per cent in the second quarter of this year are encouraging. They suggest that Labour’s action to get the economy back on its feet were working. Contrary to what the Chancellor has been saying, public spending played a significant role, particularly in boosting the construction sector. However, there are still reasons to be nervous about the near term prospects for the British economy.

Many commentators and economists have argued that early and deep cuts to public spending – while the private sector is fragile – risks crushing this recovery. For instance, a series of surveys have shown business confidence slipping while falling house prices and low levels of bank lending are adding to the grim economic picture.

And this is before the vast bulk of the planned cuts have been fully detailed let alone implemented. The victims of this folly will be the hundreds of thousands who lose their jobs in the public and private sectors.

This Government will bear a very heavy responsibility for the choices that they are making – which are far from ‘unavoidable’. But there is a huge responsibility for Labour as well.

The grassroots opposition to cuts to Building Schools for the Future show that the British people will not take the Tory plans lying down. But ultimately, the only force that can stop the Conservatives for good is the Labour Party, with the support of the wider labour movement.

We have to be honest and acknowledge that, in the past, we have not been quick enough to halt the Tory vandalism. After the 1931 election loss, it was 14 years before Labour won again – a period when people desperately needed our party to be in government doing everything to help those suffering in the Depression.

After 1979, Labour’s lack of intellectual confidence and political unity left the jobless at the mercy of a heartless Government for eighteen long years.

This time around I don’t believe our Party and our movement is content to let history repeat itself. There is a deep commitment to get back into power as soon as possible. This is based on enduring Labour values: stronger together, not each on their own.

However, these values alone will not be enough to stop the Tories. We need to convince the British people that we also have the mettle to stand up for them and face up to the tough challenges our country faces.

As the Chancellor’s economic gamble begins to bite, Labour will need to not only oppose, but offer a credible alternative economic vision. With 2.5m people looking for work, as Labour leader, I would make reducing the jobs deficit central to my economic agenda – through a plan to protect, create and improve jobs.

That means, firstly, reducing the deficit in a way and at a pace that promotes jobs and growth – which is essential to balancing the books in a sustainable way. When the Swedish government reduced its budget deficit in the 1990s it made halving unemployment the top priority – and achieved it. By contrast our government is doing the exact opposite.

Its cuts will cost 610,000 public sector jobs in the coming years, despite no evidence that the private sector is yet strong enough to fill the gap. Over the last year our economy lost almost a quarter of million private sector jobs, making the Tory strategy not only immoral but terrible economics.

That’s why I believe the Office for Budget Responsibility not only needs to be made accountable to Parliament not Ministers, but should have a stronger remit to advise government about when it is safe to reduce the deficit without damaging jobs and growth.

Creating new jobs in the private sector will be hard work. The OBR is predicting 2.5 million new jobs over the next six years, but it took 11 years to achieve that level of job growth after the early 1990s recession (based on higher annual average growth rates than the OBR is predicting).

The innovative, well-funded companies that can survive in an ultra-competitive global economy and create jobs in Britain will not spring up by magic – which makes the government’s tepid growth plan even more worrying. Labour should make it clear that there is a realistic and more effective alternative to Osborne’s back to the future economics.

Reducing the jobs deficit rests on the fundamental belief that secure, fulfilling jobs and decent pay are not a drag on business but are the key to success in the modern economy – where innovation and imagination will make the difference.

A serious plan to create and improve jobs would include considering the establishment of a British Investment Bank to facilitate investment into infrastructure and to accelerate our transition to a low carbon economy. It would marshall all the powers of government – regulation, taxation, planning and procurement – to incentivise and resource the most innovative and jobs-rich businesses. That is the basis for a modern industrial strategy for Britain.

It would set itself the goal of 60 per cent of 18-30 year olds going in university, higher level vocational learning or apprenticeships by 2025. And it would also pursue a new workplace settlement for the British economy – because well-rewarded, highly motivated workers will be the cornerstone of the productive, innovative economy we must become.

Labour needs to show the British people that it wants to improve their working lives. For too long, the Party relied too heavily on taxes and benefits to reduce inequality. We neglected private sector reform to ensure working people are properly respected and rewarded in the workplace in the first place.

We need to think creatively about how government, business, unions and industry experts can work together to tackle low productivity and poor quality work in some sector in our economy.

This is also the way to address the absurd income disparities within firms that have emerged in recent years. For example, a living wage in the public sector and greater employee representation on the pay committees of top firms would redistribute power within firms.

Labour cannot go into the next election thinking, once again, that it has opposed the misery faced by millions on the dole but not done enough to stop and reverse it. The Party needs to be ready right now to lead the fight back against the Tories and their Lib Dem allies.

We must be fit to do the job of sinking the Conservative Party before it can damage millions of lives all over again.

30 Responses to “D Miliband: Labour must buck the trend to prevent the return of mass unemployment”

  1. Shamik Das

    Excellent piece by @DMiliband for @leftfootfwd: "Labour must offer a credible alternative economic vision" //bit.ly/b1GQZS

  2. Jessica Asato

    RT @leftfootfwd: Excellent piece by @DMiliband: "Labour must offer a credible alternative economic vision" //bit.ly/b1GQZS

  3. Tim H

    Nice to see you’ve finally put that whole irksome business of complicity in kidnap and torture behind you, David.

    Oh, wait …

    //www.independent.co.uk/opinion/leading-articles/leading-article-only-a-proper-investigation-will-suffice-2033115.html

  4. David Miliband

    Pls read my article for @leftfootfwd today on why Labour must offer a credible alternative economic vision: //bit.ly/9psSSg

  5. Look Left – The Week in Fast Forward | Left Foot Forward

    […] pointed out that Labour managed the recovery “in a way that kept unemployment down” and David Miliband, writing on Left Foot Forward in the last couple of hours, said the figures suggest […]

  6. Edelee Cangson

    RT @DMiliband Pls read my article 4 @leftfootfwd today on y Labour must offer a credible alternative economic vision: //bit.ly/9psSSg

  7. Sarah Stanbridge

    RT @DMiliband: Pls read my article for @leftfootfwd today on why Labour must offer a credible alternative economic vision: //bit.ly/9psSSg

  8. Aditya Vikram Das

    RT @DMiliband: my article for @leftfootfwd today on why Labour must offer a credible alternative economic vision: //bit.ly/9psSSg

  9. TheBiPolarBearMD

    RT @leftfootfwd: D Miliband: Labour must buck the trend to prevent the return of mass unemployment //bit.ly/9psSSg

  10. Blair McDougall

    RT @leftfootfwd: D Miliband: Labour must buck the trend to prevent the return of mass unemployment //bit.ly/9psSSg

  11. Alison McGovern

    RT @DMiliband Pls read my article @leftfootfwd today on why Labour must offer a credible alternative economic vision: //bit.ly/9psSSg

  12. Karen Connolly

    RT @DMiliband: Pls read my article for @leftfootfwd today on why Labour must offer a credible alternative economic vision: //bit.ly/9psSSg

  13. Rosa Rubicondior

    RT @Alison_McGovern: RT @DMiliband Pls read my article @leftfootfwd today on why Labour must offer a credible alternative economic vision: //bit.ly/9psSSg

  14. ♫Emma D

    RT @DMiliband: Pls read my article for @leftfootfwd today on why Labour must offer a credible alternative economic vision: //bit.ly/9psSSg

  15. Karen Connolly

    RT @leftfootfwd: Writing for @leftfootfwd, @DMiliband says Labour must buck the trend to prevent the return of mass unemployment //bit.ly/b1GQZS

  16. Hollie Teague

    RT @leftfootfwd: D Miliband: Labour must buck the trend to prevent the return of mass unemployment //bit.ly/9psSSg

  17. Neil Shepherd

    RT @DMiliband:Labour must offer a credible alternative economic vision: //bit.ly/9psSSg <great,credible opposition to condem #DM4Leader

  18. Liza Harding

    RT @neilshepherd: RT @DMiliband:Labour must offer a credible alternative economic vision: //bit.ly/9psSSg <great,credible opposi …

  19. Butter Not Guns

    This article says all I need to know about David Miliband. RT @leftfootfwd //bit.ly/9psSSg #anyonebutDavid

  20. Jon

    rea this //bit.ly/9jhKNn and tell me you don't want @Dmiliband to be the one that leads the attack against the tories.

  21. jpowls

    rea this //bit.ly/9jhKNn and tell me you don't want @Dmiliband to be the one that leads the attack against the tories.

  22. Mark Morris

    A very strange use of statistics indeed.

    The harsh fact is that unemployment doubled under the Labour Goovernment of 1974 and 1979.

    Equally after 13 years of a Labour Government from 1997 to 2010 the unemployment rate was as high as when Labour were first elected.

    Yes unemployment soared in the early 1980s under Thatcher but lazy and highly selective use of statistics and claims that unemployment has always fallen under Labour are pretty appalling.

  23. Liza Harding

    RT @leftfootfwd: DMiliband: Labour must buck the trend to prevent the return of mass unemployment //bit.ly/b1GQZS

  24. Steva

    Mark, the reason Unemployment was so high this time was because of a GLOBAL RECESSION. In fact the Economy has grown over the last quarter and Osbourne and his mates are trying to claim credit for it when in fact it was thanks to measures taken by the outgoing Labour Government. I bet after the next quarter Unemployment will have risen again and we will be back into recession thanks to the Tories cost cutting nonsense.

  25. Deborah E Hanscombe

    Though far from being a Labour supporter, I do think there are some excellent points on the economy made here //bit.ly/9jhKNn

  26. Evidence based? Really?

    Good spot from Mark Morris. Actual evidence being used to back up a point, I hope Will and others are taking notes.

  27. Mark Morris

    Steva, since when has the state of the UK economy not been in some way related to the world economy? The quadrupling of oil prices in 1974 for example might be considered a global development, as could be the sudden rise in oil prices in 1979/1980.

    As for the argument that the situation in the last three months (where unemployment has slightly fallen) is merely due to inheritance from the last Government, well lets see, but I don’t quite remember Gordon Brown giving credit to previous Chancellors when he moved into the Treasury and inherited some very encouraging figures from the Treasury.

    As I said earlier, to their shame the Tories allowed unemmployment to soar in the early 1980s – and this should never be forgotten, but it is just lazy to justify this as an excuse for the fact that unemployment has increased under Labour governments. To pretend otherwise is misleading.

  28. Alex

    RT @DMiliband: Pls read my article for @leftfootfwd today on why Labour must offer a credible alternative economic vision: //bit.ly/9psSSg

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