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 Downing Street adviser to Gordon Brown and Tony Blair. He tweets @GavinJKelly1.

Photo: Getty Images
Show Hide image

Bomb Isil? That's exactly what they want

The government appears not to answer the nature of its enemy, warns Maria Norris.

As MPs are set to vote on further airstrikes in Syria, it is difficult to shake off the feeling that the government does not fully appreciate the complexity of the problem Isil poses. Just a cursory glance at its magazine, the pronouncements of its leaders and its ideology reveals that Isil is desperate for Western bombs to fall out of the sky. As Martin Chulov argues, Isil is fighting a war it believes was preordained since the early days of Islam. Isil’s obsession with the city of Dabiq, in Northern Syria, stems from a hadith which prophesises that the ‘Crusader’ army will land in the city as a precursor to a final battle where Islam will emerge victorious. Dabiq is also the name of its magazine, which starts every issue with the same quote: "The spark has been lit here in Iraq, and its heat will continue to intensify -- by Allah's permission -- until it burns the crusader armies in Dabiq". Isil wants a war with the West. If we don’t negotiate with terrorists, then we also should not give them what they want.

Further, bombs are indiscriminate and will inevitably lead to the suffering of those trapped in Isil territories. Isil is counting on this suffering to swell their ranks. Civilian suffering from airstrikes only underline the narrative that the West is at war with Islam, which plays directly into Isil’s hands. And despite misleading headlines and the genuine government concern with individuals fleeing to Syria, Isis is supremely unpopular. It is no wonder that its magazine is filled with glossy adds begging people to move to its territories.  You cannot be a state without people. Terrorist attacks such as Paris thus have a two-pronged purpose: they provoke the West to respond with its military, and they act as a recruitment drive. The fact that fake Syrian passports were found around the sites of the Paris attacks is no coincidence as Isil are both seeking to stem the flow of refugees from its territories and hoping to provoke an Islamophobic backlash. They hope that, as more Muslims feel alienated in the West, more will join them, not just as fighters, but as the doctors, nurses and teachers it desperately needs.

In addition to this, airstrikes overlook the fact that Isil is a result of what Fawaz Gerges calls a severe, organic institutional crisis in the Middle East. In a lecture at the London School of Economics earlier this year, Gerges pointed out the dysfunction created when a region that is incredibly resource rich also is also deeply undemocratic, riddled with corruption, food insecurity, unemployment and poverty. This forms an institutional vacuum that is filled by non-state actors as the population does not trust its political structures. Further, the civil war in Syria is also the site of the toxic soup of Middle Eastern state dysfunction. Iran supports Assad, Saudi Arabia and the Gulf countries, fund anti-Shia groups in Syria. Throw in the Kurdish conflict, Turkey’s ambiguous position and Russian bombs, it is difficult to see how airstrikes will solve anything.

Finally, it is crucial that Isil is seen as a direct result of the Iraq war. The American-led invasion destroyed the institutions, giving the Shia majority power almost overnight, creating deep dissatisfaction in the Sunni regions of Iraq. On top of this thousands of foreign fighters flooded Iraq to fight the invaders, attracting disenfranchised and angry Sunnis. The result is that since 2003, Iraq has been embroiled in a sectarian civil war.  It is in civil war, inherently connected to the Iraq War, that you find the roots of Isil. As even the Prime Minister concedes that ground troops are necessary, albeit it regional ground troops with its own set of problems, it is important to consider what further monster can arise from the ashes of another ill-thought out military intervention in the Middle East.
We have had decades of military intervention in the Middle East with disastrous consequences. Airstrikes represent business as usual, when what we actually need is a radically new approach. Who is funding Isil? Who is buying its oil? How to curb Isil’s recruitment drives? What can be done about the refugees? How to end the conflict in Syria? What happens to Assad? These are questions hopefully being addressed in talks recently held in Vienna with Russian, Ira, the USA, France, Syria’s neighbours and the Gulf states. Airstrikes do not answer any of these questions. What airstrikes do is give Isil exactly what it is asking for. Surely this is reason enough not to bomb Syria. 

Maria W. Norris is a PhD candidate and a teacher at the London School of Economics and Political Science. Her PhD is on the UK counter-terrorism strategy since 9/11 and its relationship with identity. She tweets as @MariaWNorris.