It’s the 1970s, stupid

For Labour the 1970s, not the 1990s, is the decade to search for comparisons.

Has the political class lost all memory? The comparisons between Ed Miliband and his two immediate predecessors as Labour leader are fatuous. The more exact comparison is Labour in its first 18 months after a heavy defeat. In 1952, 1971 or 1980 Labour was divided, depressed, demoralised, down and out. In 2011, Labour has none of the left-right, Bevan-Gaitskell, Benn-Healey, pro or anti Europe/CND divisions that ripped the guts out of the party in previous periods of opposition. Labour frontbenchers with greater or lesser degrees of effectiveness are focusing on the Government not on each other. Compared to Clement Attlee or Michael Foot, Ed Miliband seems young, fresh, open to ideas, and, as we saw in Monday's speech willing to tell hard truths to his party.

This is extremely frustrating for the commentariat, all of whom have been in the same job, writing the same columns for twenty years of more. They don't get Ed and Labour is not behaving according to tradition by refusing to become centrifugal, fissiparous and quarrelsome in opposition. Progress, the Fabians, Compass, and other think tanks and websites are post-factionalist. They plough their furrows and are not seeking to be organising centres for alternative leaders in the way that Bennite or Gaitskellite factionalism damaged Labour after 1979 or 1951.

Forget TB/GB. They are yesterday. More important, their rise to power came after fifteen years in opposition. When both took over in 1994, the Conservatives were unelectable. For Labour the 1970s are much more a decade to examine to search for comparisons. There were four governments in less than a decade. The Heath government arrived in power in 1970 with a sense of ideological purpose and a desire to shake up government. But events - domestic and international - forced change after change, U-turn after U-turn as the Heath government lost its bearings and momentum.

Heath's reforms, similar to Cameron's NHS policy, came to naught when tested against reality and widespread social opposition. What arrived as a confident, cocky Conservative government in June 1970 had become by late 1972 a confused cacophony of unhappy Tory MPs. Labour simply picked up the pieces in 1974. Then Margaret Thatcher arrived. Like Ed Miliband, she was widely derided for her voice, her cautious style at the Despatch Box, her lack of ideological certainty and her refusal to dump on the 70-74 Tory government. The Iron Lady and ideological Maggie we all remember is a product of power and was not evident in opposition. All she had to do was hold her party together and wait for Labour to collapse.

The 1970s like the second decade of the 21st century were a transition era between the welfare state mixed economy era that began in 1945 and run out of steam after the first oil shock of 1973. The United States had to withdraw from Vietnam just as America will withdraw from Afghanistan. By 1980, the world was ready to move into the long globalisation era defined by Reagan and Thatcher based on reducing by 10 per cent the share of national income going into wages and reinforcing rentier capitalism. This era came to an abrupt end in 2008. As in the 1970s we are in a transition period. Cameron and Osborne are still applying the recipes of the Thatcher-Reagan era and have not analysed the time-shift to a new economic model and the space-shift to a new geo-politics based on the rise of authoritarian nationalist expansionist powers like China, Russia, and India. President Obama in Westminster hall invited the EuroAtlantic community to reassert its values and confidence. But the petty Europhobic nationalism of today's Conservatives does not allow Cameron to see a bigger picture.

Labour and Ed Miliband thus find themselves with a trilemma. All Blair had to do was adapt Labour to the era of globalisation. In a transition era there is no such obvious road map to follow though Miliband's thoughtful speech gave some pointers. Second, there is a systemic failure of European social democracy to find solutions to current economic and social transitions. Thirdly, Labour is trapped in a fatuous row over its immediate past as the putschists of 2006 refuse to admit they made a tragic mistake by elevating normal personal rivalries into an assault on the most successful Labour prime minister(together with his Chancellor) in political history.

That said, Labour and Ed are in a much stronger position than any previous period when Labour went into opposition. The NHS fiasco, brilliantly handled by John Healey, is showing up the Heathite nature of a government that is led by a Duke of York Cameron marching his troops into the lobbies and then saying their votes were wasted and they have to come marching down again. There is even a U-turn on bin collections a reductio ad absurdum that not even Heath achieved. The next generation of political problems will focus on issues like Scottish separatism, Middle East turmoil, reducing the number of MPs and reforming the Lords, and Britain's role internationally and in Europe. A policy for Europe and a theory of low-tax co-responsibility, co-funding socialism is overdue. As in the 1970s expect febrile, changing politics. If Labour can understand and exploit this transition era there is no reason to be pessimistic.

Denis MacShane is MP for Rotherham and a former minister for Europe

Denis MacShane is MP for Rotherham and was a minister at Foreign and Commonwealth Office
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How can Britain become a nation of homeowners?

David Cameron must unlock the spirit of his postwar predecessors to get the housing market back on track. 

In the 1955 election, Anthony Eden described turning Britain into a “property-owning democracy” as his – and by extension, the Conservative Party’s – overarching mission.

60 years later, what’s changed? Then, as now, an Old Etonian sits in Downing Street. Then, as now, Labour are badly riven between left and right, with their last stay in government widely believed – by their activists at least – to have been a disappointment. Then as now, few commentators seriously believe the Tories will be out of power any time soon.

But as for a property-owning democracy? That’s going less well.

When Eden won in 1955, around a third of people owned their own homes. By the time the Conservative government gave way to Harold Wilson in 1964, 42 per cent of households were owner-occupiers.

That kicked off a long period – from the mid-50s right until the fall of the Berlin Wall – in which home ownership increased, before staying roughly flat at 70 per cent of the population from 1991 to 2001.

But over the course of the next decade, for the first time in over a hundred years, the proportion of owner-occupiers went to into reverse. Just 64 percent of households were owner-occupier in 2011. No-one seriously believes that number will have gone anywhere other than down by the time of the next census in 2021. Most troublingly, in London – which, for the most part, gives us a fairly accurate idea of what the demographics of Britain as a whole will be in 30 years’ time – more than half of households are now renters.

What’s gone wrong?

In short, property prices have shot out of reach of increasing numbers of people. The British housing market increasingly gets a failing grade at “Social Contract 101”: could someone, without a backstop of parental or family capital, entering the workforce today, working full-time, seriously hope to retire in 50 years in their own home with their mortgage paid off?

It’s useful to compare and contrast the policy levers of those two Old Etonians, Eden and Cameron. Cameron, so far, has favoured demand-side solutions: Help to Buy and the new Help to Buy ISA.

To take the second, newer of those two policy innovations first: the Help to Buy ISA. Does it work?

Well, if you are a pre-existing saver – you can’t use the Help to Buy ISA for another tax year. And you have to stop putting money into any existing ISAs. So anyone putting a little aside at the moment – not going to feel the benefit of a Help to Buy ISA.

And anyone solely reliant on a Help to Buy ISA – the most you can benefit from, if you are single, it is an extra three grand from the government. This is not going to shift any houses any time soon.

What it is is a bung for the only working-age demographic to have done well out of the Coalition: dual-earner couples with no children earning above average income.

What about Help to Buy itself? At the margins, Help to Buy is helping some people achieve completions – while driving up the big disincentive to home ownership in the shape of prices – and creating sub-prime style risks for the taxpayer in future.

Eden, in contrast, preferred supply-side policies: his government, like every peacetime government from Baldwin until Thatcher’s it was a housebuilding government.

Why are house prices so high? Because there aren’t enough of them. The sector is over-regulated, underprovided, there isn’t enough housing either for social lets or for buyers. And until today’s Conservatives rediscover the spirit of Eden, that is unlikely to change.

I was at a Conservative party fringe (I was on the far left, both in terms of seating and politics).This is what I said, minus the ums, the ahs, and the moment my screensaver kicked in.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.