Five election pledges Labour should make to win in 2015

Tim Montgomerie wrote an interesting piece in yesterday’s Times setting out ‘five ways to widen Tory appeal and win’ in 2015.

Today we thought we might do the same for Labour.

In 2010 the party suffered its worst election defeat since the 1983 debacle, losing 5 million votes since 1997. In order to win in 2015, Labour now has less than two years to put together an appealing package for the electorate – one that shows the party is credible but also one that is also radical enough to warrant a change of government.

Here, then, are five policies I think Labour should adopt to attract the voters and win in 2015.

1. Universal childcare for all pre-school children

The coalition has settled for the introduction of tax-free childcare vouchers for middle and higher income families but hasn’t the stomach to go the whole hog due to an innate reticence to spending government money. The result is an unequal system, with analysis by the Resolution Foundation showing that more the 80 per cent of the families that benefit from the government’s heralded voucher scheme are in the top half of the working-age household income distribution.

There is a straightforward way to overcome the (justified) perception of unfairness in the guise of a radical and attractive alternative: free universal early years childcare. As well as being a likely vote winner, analysis by the IPPR has found that the introduction of universal childcare would pay a return to the government of £20,050 over four years due to the tax revenue generated by mothers returning to work after one year. In other words, it would save the government money by allowing mothers to return to work sooner if they so wished.

2. Build houses and cap rents

Rather than selling people houses they cannot afford and in the process inflating another housing bubble, as George Osborne is currently doing, Labour should instead propose an ambitious house building programme and put a cap on rents. This needs to be a two-pronged approach due to the fact that, while many young people are understandably keen to get on the property ladder, many others will realistically spend a significant period of time in the rented sector. It also makes it a great deal harder to put down the money for a mortgage when 40 per cent of your income (the national average) is disappearing on rent.

Optimists like to think that building more houses will be enough to bring down the cost of rents; but unless there is a sudden halt in migration to the UK, the demand for a place to live is likely to carry on rising at a significant pace, meaning rents will likely continue rising. Official figures from last year show that the median rent in London rose by 9 per cent – during the same period pay increased by just 2 per cent. This was despite Mayor Boris Johnson trying for four years to build more homes.

I suspect that, despite the views of some on the left, the British are constitutionally incapable of a continental model of low home ownership for reasons too complex to go into here. A radical and progressive policy in this area would accept this reality but also recognise that ‘Buy-To-Let’ landlordism is out of control.

3. Expand apprenticeships for young workers

If Britain is going to compete in the much trumpeted ‘global race’ then it is essential that our young people have the skills employers want. An apprenticeship also provides its recipient with a skill for life, making long-term unemployment far less likely further down the road.

Relying on migrants to fill the skills gap is  an easy way out, and does nothing to address the problem of youth unemployment and its resulting alienation and social exclusion. Employers should be incentivised to take on young apprentices and apprenticeships must be of high quality and for those aged below 25. The state must also lead on this if it is to expect private employers to follow. A recent FOI request by Lord Adonis found that four of the largest agencies in the Department for Business, Innovation and Skills – the department responsible for apprenticeships – have no apprentices between them. This is not acceptable if we are serious about giving young people skills for the future.

4. Take action on energy companies and stamp duty

It’s something of a cliche to say this but aspiration shouldn’t be a dirty word for Labour. If the party is to win in 2015 it must attract those who are, in the words of the late Philip Gould, determined to “improve their homes and their lives; to get gradually better cars, washing machines and televisions; to go on holiday in Spain rather than Bournemouth”.

Labour has a distinct advantage in this respect because, as the Economist puts it, David Cameron talks a lot about aspiration but is unable to ‘close the deal’ due to his own background (what, indeed, have Cameron and Osborne ever ‘strived’ for?). C2 voters – so-called ‘Mondeo man’ – deserted Labour in droves in 2010. If the party is to return to office it must, as Blair did, win their support.

Ed Balls has already stated that a future Labour government would create a stamp duty holiday for first time buyers buying homes for less than £250,000. This is welcome. Action is also needed on energy prices, however. After all, it’s hard to aspire to spending your money on the things you want when it’s all going on essentials like heating your home.

The government currently gets its energy from the big suppliers at a cheaper rate than ordinary consumers because it (obviously) buys in bulk. A centralisation of government contracts with the energy companies and a plan to allow ordinary consumers to buy into this contract would allow consumers to benefit from the government discount too.

5. Create a (bigger) British investment bank

The market is failing to provide sufficient access to finance for British businesses and has been for some time. As the British Chambers of Commerce put it last year, “the government’s efforts to increase the flow of working capital to businesses, starting with the Enterprise Finance Guarantee and ending most recently with the Funding for Lending scheme, all share a fatal flaw: total dependence on the existing UK banking infrastructure”. The the UK is the only country in the G8 without a government-backed institution to address the problem.

Vince Cable announced in April that the government would be setting up a new business bank, with £300 million of new capital available to lend out to small businesses. This is relatively small fry, however, and Labour should think much bigger in terms of the bank’s investment capital if it is to stimulate growing companies.

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