Labour needs an argument about the state not just the deficit

It's time to start a blunter conversation about tax and spending choices.

Following last week's media storm about the season's new East-end duo, Abbott and Glasman, the real business of politics will get back underway this week. And if the weekend's reports are anything to go by it will see Labour moving to a more muscular position, or at least tone, on deficit reduction.

The new year strategy is set to play down the importance of spending levels to the next phase of centre left politics as it talks up other routes to social justice. "We can't spend our way to the new economy", as Ed Miliband likes to say. The intellectual effort required by Labour to carve out what it sees as a progressive austerity agenda will be every bit as demanding as that required in the 1990s to reclaim fiscal prudence. But in the end the politics of tax and spend won't go away, it never does. It will just return in new form.

The pressure for more fiscal resolve over the longer term is reinforced by a mood among Labour strategists that they have so far failed to turn the coalition's Autumn statement, with its admission that cuts will extend into the next parliament, into a new chapter in the debate on the deficit in which Labour gains credit and then moves beyond a sole reliance on its immediate "too far, too fast" critique.

The risk is that the Labour leadership now moves from talking about the short-term case for stimulus to talking about longer term deficit reduction without yet having a strategic account of what this would mean for the state: what it should do less of, more of, and differently, given the realities of the next decade and beyond.

There needs to be synchronicity between its position on the deficit and the underlying willingness to see through the hard politics of shifting ground on spending and tax. There will be no prizes for sounding more hawkish in the abstract and dovish when it comes to specifics.

Opposition is always a precarious balancing act. Between flashes of resolve on the one hand and the need to retain maximum flexibility to respond to events on the other. Between proving your relevance in the here and now via tactical raids and effective protest, and nurturing the belief that you are ripening as a governing proposition, cultivating ideas and attitudes that will chime with the needs of the next era.

And the little that we can glean about the times that lie ahead is that they are going to be very lean yet laden with new challenges. Once we emerge from the nasty decade we are now living through we will soon be bumping into the towering fiscal cost of an ageing society (read this OBR report to get a sense of the scale).

Any party that wants to win in 2015 with a claim to the future will have no choice other than to speak directly to challenges like these.

All of which reinforces the view that a far bigger and blunter conversation about future choices is needed than the one that Labour has so far embarked upon with the public.

What does a plausible Labour cuts agenda look like for 2015; what are real priorities for the future where Labour should seek to increase investment; and what does a Labour tax agenda for 2015-2020 look like?

There will of course be many views and no easy answers. But some answers are certainly easier and better than others. And though Labour certainly shouldn't be coming up with lots of detailed policies this far ahead of an election, nor should it fail to set out some clear directions of travel.

My own view is that there is a principled and progressive set of arguments that could be made about how the state should change its role in important ways.

It could, for instance, offer less generous support for affluent baby boomers in terms of universal benefits at the same time as it puts in place a proper Dilnot-esque system of social care, overwhelmingly paid for by the ageing generation itself rather than their working age counterparts.

It could invest far more in childcare supporting more women to work, raising family living standards, and spreading opportunity; and far less in supporting the most affluent in our society to build up larger pensions. It could invest more in growth-enhancing capital investment and new housing even if this means a longer era of low or no growth in current expenditure.

I don't suggest these changes alone are up to the scale of the challenge faced -- indeed, I know for sure they're not. Nor do I downplay the scale of the political problem in attempting even these sorts of changes; there will be plenty of heartfelt opposition.

But it is possible to make a start.

Despite sweeping and brutal cuts targeted at low-and-middle income families the coalition has gone out of its way to protect some large areas of less essential spending, meaning the first £10bn of spending re-prioritisation shouldn't be that hard to find (beyond that things get dramatically tougher).

If Labour can't muster the resolve to consider these shifts -- or alternative ones conjured by wiser minds -- I suspect it isn't going to persuade a sceptical public that it is distinctive or has what it takes to govern in the tough decade ahead. The alternative is a slide towards a soggy, cautious politics in which it feels boxed in by a left that cries "betrayal" in response to any proposed cut, and a right that screams "deficit denial" at any new consideration of collective action.

Nor should this all be about re-balancing spending. Labour needs its own distinctive account on tax. Part of this should be leading a genuinely open and far-reaching debate about what a resilient 21st century tax-base should look like, as Nick Pearce says, one better able to withstand global shocks than was the case in 2008.

Equally, it should be identifying new and progressive sources of revenue that can help support fresh needs.

To take one example, it remains something of a mystery why Labour has opted to cede the rhetorical argument about taxing wealth and property to the Lib Dems.

Any new property tax will of course be fiendishly hard to design in a way that raises serious money without being politically toxic (as the person who tried and failed to get the Blair government to reform council tax so it raised more from high-end properties I know how not to do this). All the more reason for Labour to be getting on with this hard work now rather than leaving it to others.

Yet all these longer-term policy dilemmas are overshadowed by a larger political, even emotional, challenge which will require a whole generation of Labour figures to change -- unlearn -- how they practice politics.

During the Blair-Brown era of steadily rising public expenditure, it was possible to thrive by hugging close lots of competing groups and sub-sections of the electorate. The young and the old; parents -- both working and stay-at-home; the head teacher and teaching assistant; the hospital consultant and nursing assistant. They all benefited. There were, of course, noisy battles about reform, but even the bitterest row was soothed by the salve of higher spending.

Today's Labour leadership has, perhaps not surprisingly, been caught between the realisation that this model of politics is over and an instinctive reluctance to embark on the new and far harder course -- one which accepts, sooner or later, the need for clarity about who will be the winners and losers from Labour's fiscal decisions, and the need to build widespread public consent for these choices.

This is a scary transition to make. Outraged representatives of the groups who feel let down will appear on our TV screens. It's tough to handle this in government, harder still when in opposition with few friends.

But until Labour makes this mental shift it will continue to be pushed into a largely defensive posture; defined more by its opponents than by its own positive choices.

That is a position it must break out of long before the curtain falls on 2012.

 

Gavin Kelly is the chief executive of the Resolution Foundation.

Gavin Kelly is a former adviser to Downing Street and the Treasury. He tweets @GavinJKelly1.

Shazia Awan
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I'm a Welsh Asian - so why doesn't the Welsh Assembly have a box for me to tick?

A bureaucrat's form clumsily equates being Welsh with being White. 

As someone born in Caerphilly, who grew up in Wales, and is learning Welsh, I feel nothing but Welsh. I am a proud Welsh Asian – and yet the Welsh Assembly appear to be telling me and many like me that that’s not an option.

An equalities form issued in Wales, by the Welsh Assembly, that does not have an option to identify as non-white and Welsh. What kind of message does this send, especially at a time of public worries about integration? Sadly, I am not so surprised at this from an institution which, despite a 17-year history, seems to still struggle with the very basics of equality and diversity.
 
By the omission of options to identify as Welsh and Asian, Welsh and black, Welsh and mixed heritage (I could go on), the Welsh Assembly's form has told us something wider about the institutional perception of our diverse communities in Wales. There are options on the form for "Asian or Asian British Indian" and "Black or Black British Caribbean", to give but two examples. And also for "White British", "White Irish" and "White Welsh". But not for "Asian Welsh", or "Black Welsh". Did it not occur to anyone that there was something wrong? 

It seems like a monumental error by the Welsh Assembly Commission, which designed the form, and a telling one at that. 

A predominantly white institution (there are two non-white Assembly members out of 60 and there has never been a female Black, Asian or minority ethnic Assembly member) has dictated which ethnic group is deemed to look Welsh enough to tick their box (for those of us Welsh Asians, it seems the only box to tick is that most Orientalist of descriptions, "Other"). 
 
Over the summer, meanwhile, we saw the First minister of Wales Carwyn Jones rather clumsily assemble his Brexit advisory group. This group was made up of predominantly white, middle aged men, and not a single person from a black, Asian and minority ethnic background. It seems that despite the box ticking exercises, the First Minister is taking advice from his “White Welsh” group. 
 
And it matters. The Welsh Assembly was established with a statutory duty to promote equality in Wales. In June, 17 out of 22 local authority areas in Wales voted Leave. Post-referendum, our proud Welsh BAME communities have been affected by hate crime. The perpetrators wish to draw a distinction between "them" and "us". Our national parliament is doing nothing to challenge such a distinction. Does it really think there are no non-white Welsh people in Wales? 

In Wales, we have a huge sense of overwhelming pride in what it means to be Welsh, from pride in our rugby and football teams, our language, to our food and our culture. Many friends over the years from different backgrounds have come to Wales to either study or work, fallen in love with our country and chosen to make it their home. They identify as Welsh. The thing about those of us who are Welsh and proud is that we understand that we are stronger in our diversity and stronger together as a Welsh nation. It’s a shame that our Welsh Assembly is not operating with that same sense of understanding that we have in our communities in Wales. 
 
No doubt the nameless form creator simply copied a format seen elsewhere, and would argue the omission is not their fault. Yet in these tense times, such an omission seems to arrogantly suggest Welsh is something exclusively White. 
 
The Welsh Assembly has a long way to travel on the road to creating a fairer society. From these kind of blunders, it seems clear that it is not even off the starting line. 
 
Shazia Awan is an equality activist and Consultant advising on equality and diversity issues. She is launching Women Create, a social enterprise to help women and young people from disadvantaged backgrounds into enterprise and employment. She  is Vice President of the Council for Voluntary Youth Services in Wales, is an Ambassador to Show Racism the Red Card and she was the first Asian woman to address a Welsh Tory party conference. 

 

Shazia Awan is an equality activist. She is launching Women Create, a social enterprise to help women and young people from disadvantaged backgrounds into enterprise and employment. She is Vice President of the Council for Voluntary Youth Services in Wales and she was the first Asian woman to address a Welsh Tory party conference. You can follow her @shaziaawan.