The economy continues to flat-line, unemployment is escalating especially for young people, and the headlines show the government attacking the NHS and the incomes of respectable tax-paying pensioners. The “cash for Cameron” scandal has further undermined the coalition government and given Labour a buoyant, short-term poll bounce. Yet the same polls still show the coalition ahead of Labour on economic credibility. Why does the left find it so hard to make headway when they are shooting at an open goal?
An important underlying factor is the policymaking trilemma that Labour faces. The left must respond adequately to the economic crisis to be seen as competent, it must address the established themes in public opinion to be electable, and it must develop generous and inclusive policies, to be progressive.
There are real difficulties in all three areas, and they are growing steadily more intractable. First, low public sector productivity growth and demographic shifts tighten already harsh spending constraints. Productivity in the main state services, the NHS and education has failed to rise since detailed analyses started in the early 1990s. This is despite a whole armoury of reforms: staff redeployment, new public management, internal markets, the productivity challenges, targets, flexible working, new pricing mechanisms and so on. As the public demands improvements over time, costs will rise, unless new ways of doing more for less can be found.
Second, it is hard to make egalitarian or redistributive policies attractive to much of the electorate when public opinion is unsupportive of higher taxes for any but the distant rich, and public discourse makes rigid distinctions between those who are deserving and undeserving of state welfare. In the past, public attitudes to benefit levels have tracked unemployment: when unemployment goes up people say benefits are too mean, when it goes down they say they are too generous. The most recent British Social Attitudes survey shows that attitudes have shifted: unemployment is rising steeply, yet more people believe benefits are too liberal. Analysis of media discourse shows that references to claimants as ‘scroungers’ and ‘workshy’ also continue to rise, despite the fact that the jobless vastly outnumber available jobs.
Third, both the spending constraints and the key themes in public opinion conflict with generous and inclusive policies.
The right faces no such difficulties. Spending cuts are central to its programme. The failure to make the tax system progressive, meagre benefits and the stigmatisation of the poor as scroungers fit both public opinion and the right agenda. There is no commitment to generosity or inclusiveness.
One implication is that Labour must be realistic in its policies, recognising the reality of spending constraints and the importance of investing to create future growth, as the May 2012 Budget did. If the party is to retain its progressive identity it must also ensure that new policies are inclusive and build solidarity. The rhetoric of ‘hard-working families’ implicitly excludes all those outside the labour market.
The approaches that offer a positive way forward include new universal services. Ben Galim in a recent IPPR paper demonstrates that a universal child care service would produce a real return for the economy as it made it easier for women to pursue paid jobs. Moves towards a social care service might have similar impact and be highly popular.
Governments also need to promote pre-distribution policies. Tax and spend redistribution works after the market has distributed resources, and market incomes are growing steadily more unequal. Pre-distribution would rebalance the rules of the game between the mass of the population and the elite. This would require stronger trade unions, better protection at work, workers’ representation on remuneration committees, minimum wage at living wage levels, cheaper fares, cheaper utility prices, perhaps the extension of producer and consumer co-operatives. All these measures would help shift the balance of power back towards that of the 1960s and 1970s, when outcomes were much more equal.
The essential element in these policies is that they build solidarity between social groups. They confront the current social agenda that is concerned to divide rich and poor, workers and scroungers, deserving and undeserving, insiders and outsiders. It will only be possible for Labour to address the Left Trilemma if it builds support across society through a programme that includes the widest possible range of groups.
A Left Trilemma: progressive public policy in an age of austerity by Peter Taylor-Gooby is available from Policy Network.