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