The three issues Labour must focus on at conference

Left Foot Forward is at conference this year, and James Bloodworth has looked at what he believes are the three key issues the party needs to focus on.

This week sees delegates gather in Brighton for Labour annual conference. With lukewarm opinion poll ratings for Ed Miliband and voters still appearing to trust the Conservatives more than Labour on the economy, it is vital the party comes out of conference with a credible narrative backed by practical yet appealing policies.

Left Foot Forward is at conference this year, and James Bloodworth has looked at what he believes are the three key issues the party needs to focus on less than two years from the General Election.

Living standards

According to Ipsos MORI, the economy has consistently been at the top of voters’ concerns for the past five years. When voters say they are concerned about ‘the economy’, however, they aren’t necessarily worried about how many decimal points have registered on the latest growth figures, so much as how they feel the economy is doing. In other words, do they feel richer or poorer than they did last year?

The fact that an economic recovery appears to be on the cards also doesn’t necessarily mean voters will feel any better off. Considering the recovery also appears to be being driven by the creation of another housing bubble, anyone hoping to get on to the property ladder may feel even worse off in a year’s time than they do now, as house prices race further ahead of incomes.

That brings us to wages. Despite the coalition’s talk of ‘green shoots’ and recovery, wages are still lagging significantly behind inflation. Between June and July average weekly earnings (total pay) fell, from £475 to £474 – the third successive fall. According to the TUC, most new jobs are low paying ones – 77 per cent of net job creation since July 2010 has taken place in industries where the average wage is less than £7.95 an hour.

In sum, we may be experiencing a recovery, but what sort of recovery is it, and at what potential future cost? At present it looks like a further shift towards a low pay, insecure economy driven by a volatile boom in the housing sector – hardly something likely to benefit those on modest incomes (i.e. most people).

Labour has referred to 2015 as the ‘living standards’ election. The party needs, therefore, to make sure that it is: that means hammering home the message that real wages are falling and job security is being eroded by a government is dangerously relying on a housing bubble.

House prices/cost of rent

Labour has already pledged to build more homes should it win power in 2015, and with good reason: today it takes a first-time buyer saving half their annual income more than 10 years to put together a deposit for their first home, and in London that figure rises to 24 years.

Clearly more new houses are required, but politicians also need to tackle the cost of rent, something that building alone won’t remedy. As Darren Johnson of the Green Party has noted: even if we plan to build enough homes to stabilise prices – with the aim of allowing incomes to catch up – it will take 14 years for the London house price to incomes ratio to 2000 levels, and 30 years to return to a level of three to one.

What, then, will Labour do for generation rent?

A cap on the fees estate agents can charge tenants would be a good start, as would the introduction of stronger penalties for landlords who hang on to deposits for longer than necessary. The most radical policy would be a cap on rents. Rent controls already operate in some parts of the country: there are an estimated 100,000 tenancies in the UK where ‘fair rent’ rules apply, meaning private sector tenancies which began before 15 January 1989 have rent increases limited to an amount linked to the Retail Price Index.

Those who view property as a potential addition to their ‘portfolio’ rather than as a place to live will stridently oppose any rent caps. However the Labour Party needs to remember who it represents: access a reasonably priced place to live is a first principle.

Transport

This year marked the 10th consecutive year of fare increases across rail networks, with further increases on the way early next year. For many the cost of a season ticket will soon exceed £5,000 for the first time. This is because rail companies are permitted to raise average fares by one point more than inflation; but with the flexibility to increase prices more on certain routes, some fares rise much faster – unregulated fares may go up by as much as 9 per cent in January 2014.

On the back of inflation-busting fare increases and the success of the publically-owned East Coast Mainline, many in the Labour Party are waking up to the social cost of a privatised rail network. And the economic case for radical action on the railways is strong: despite ten years of above-inflation rail price increases which have left some in the south-east spending 15 per cent of their salary on rail travel, the cost of supporting the rail network is much greater today than it was before the dissolution of British Rail. In 2010/11, Network Rail was subsidised by the taxpayer to the tune of £3.96 billion. This compares with an average of £1.4billion over the 10 years leading up to privatisation.

While many politicians still go weak at the knees at the prospect of privatised public services (witness the enthusiasm shown by coalition ministers for privatising Royal Mail), this is increasingly at odds with public opinion. Over half the British public support full nationalisation of the railways; and even a majority of Conservative supporters say they would prefer nationalisation to the status quo.

If Labour is serious about making 2015 a living standards election, it must tackle the rising cost of getting to and from the workplace. Doing something about the price of petrol is tricky; doing something about train prices is less so, and begins by working towards a rail network run for the benefit of commuters, rather than shareholders and fat cats.

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