Why the party still needs its soul

<em>100 years of Labour</em> - Today, more than ever, vested interests try to accumulate privilege.

Like thousands of men and women marking Labour's centenary year as a political party, I am Labour not just because of upbringing or background but also because of conviction and belief. Like thousands of others, I joined Labour as a teenager not because of any single policy issue or simply to oppose Conservatism but because Labour stood, and still stands, for basic human values and high ethical principles.

I believe that we are not creatures locked in selfish individualism but that inherent in our human nature is empathy and altruism, that millions of us feel, however distantly, the pain of others and believe in something bigger than ourselves. I believe that we are not simply self-interested individuals in endless competition with each other but members of a community, with common interests, mutual needs, shared values and, indeed, linked destinies.

And I believe that the driving force of Labour is our belief in the equal worth of every individual and our duty to help each and every one develop his potential to the full. In other words, to create the good society - based on mutual rights and responsibilities - we enable all members of it to bridge the gap between what they are and what they have it in themselves to become.

One hundred years ago, that duty required as its immediate priority the relief of destitution. By the mid-20th century, the challenge was to ensure basic rights for all - in health, education, employment and social security. Now, as we enter the 21st century, our fundamental duty remains. In a very different world, we must unceasingly open up new opportunities for all in education, employment and the economy, and throughout our culture and democracy.

As R H Tawney said, political democracy is not a choice between different leaders but between different social objectives. So, like thousands of Labour supporters, I want a politics based not just on interests but on ideals, as we make a reality of the ambitions of our early pioneers that power, wealth and opportunity be in the hands of the many, not the few.

In fact, the Labour Party, which was formed as the Labour Representation Committee in 1900, was a movement of ideas long before it was a political party. Lenin - who said communists should offer Labour the right hand of friendship while leaving the left hand free for the knock-out blow - concluded that the Labour Party was "not an ordinary political party, not quite a political party at all". Indeed, Labour was not initially formed in parliament nor was its earliest purpose to fight elections. The first Labour parties were socialist societies formed in the 1880s and 1890s which came together with the trades unions in 1900. To form the Labour Representation Committee, they buried dogmatic and factional differences and concentrated on their shared values and common ethical roots.

William McIlvanney - author of Docherty, a novel evoking the history of early-century mining communities - movingly describes the roots of Labour, born out of the shared experience of a brutal and dangerous process of industrialisation. Hard times could have made people retreat into selfishness or indifference. Instead, hard times, McIlvanney writes, taught industrial communities not selfishness but solidarity, not individualism but compassion.

And that generation, he says, rose above the bleakness of its lives and even transformed its hardships into a vision. Those people sought justice not only for themselves but for everyone. They sensed that the economy should be there to serve the people, not that the people serve the economy. They knew that people should be measured not just by economic success or material possessions but by the humanity of their aspirations. They came to see their lives as part of a great and worthwhile struggle, and their sacrifices as leading towards a higher goal - a society where there was not indifference but care, not selfishness but sharing, not endless competition but enlightened co-operation. It was these values that gave purpose to the political mission of our Labour pioneers.

For them, as for Labour today, the overriding goal was creating, through politics, the social circumstances that would encourage what is best in human nature.

Labour's early socialists were not Marxists. Marxism, McIlvanney argues, insisted that every individual must become something he is not. It was an absolutism which our individual natures could not honestly answer. Democratic socialist values were more tolerant, more realistic and ultimately far more successful. They wanted people not to be something they were not but to be the best that they could be, while allowing others to be the best they could be. It reflected an attempt to share with each other, as justly as we can, the terms of human existence.

So, for Labour, winning elections has never been an end but a means to an end - a desire to create a Britain that is not just better fed, better housed, better provided for, better off, but a Britain that is quite simply better.

And 100 years into Labour's history, despite all the difficulties we have had to overcome, we should take pride in how far we have come and how much we have achieved: a National Health Service accessible to all, irrespective of income; a welfare state designed to take the shame out of need; education for all; and the commitment to work for all.

So, as a beneficiary of the welfare state, I am Labour not just by conviction and belief but also by experience. The chances I have had in my life - at school and university - and the crucial help provided by the NHS were available to me as a result of the progressive actions of the postwar Labour government. For the few, education and health care would always have been available, but, because of Labour, all of us have access to education and healthcare neither bought by wealth nor bestowed by charity but there as a right for everyone.

This view of Britain - a society sharing high ideals and common purposes - grew to become, in mid-century, the common sense of the age. As the Times editorialised in 1940:

"If we speak of democracy, we do not mean a democracy which maintains the right to vote but forgets the right to live and work.

"If we speak of freedom, we do not mean a rugged individualism which excludes social organisation and economic planning.

"And if we speak of equality, we do not mean a political equality nullified by social and economic privilege."

This reflected the purpose of Labour - the whole people working together to do what has to be done, righting wrongs, curbing ills, tackling injustices, empowering people to develop their potential. These Labour values - effective in the mid-century - must, in my view, be applied in new circumstances and be just as effective again. Modernisation is not a retreat from principle into some bland imitation of conservatism, but a commitment to apply the rich and enduring values that brought us into being to meet the challenges of a new century.

We approach the idea of potential in a very different social and economic order: one of a global economy, global markets and the global sourcing of companies. The nature of work and its place in life is changing. Assumptions about lifetime careers - a 40-hour week, a 48-week year and a 50-year working life - no longer hold. People's daily lives are far less influenced by tradition and habit: in other words, all of us want more opportunity than ever before to shape what we are and what we can become. People want more control over their own lives and more freedom to develop their talents to the full.

Since 1945, experience has taught us to ensure that government promotes liberty, not stifles it; that the state must not coerce people, but empower them; that government is there not to dictate, but to serve; that there is a higher view of society in which government enables, power is devolved not centralised, and civic society renews itself. And we have reminded ourselves that not only must the left attack structural injustices in our society, but also that the left must value personal and social responsibility as well as rights, that opportunities and obligations go together. This is the context for new Labour's modernisation programme.

A hundred years ago, many socialists thought that the only way to control the productive process in the public interest was for the state to expropriate the means of production, thereby eliminating both vested interests and the market. Today, we know that the state can, like private capital, be a vested interest. And we know, too, that the public interest does not require the abolition of markets, as some early socialists thought. It requires that markets are transparent and operate in a way that works not just in the interests of enterprise, but in the public interest also.

To achieve equality of opportunity, we need to encourage competition and open enterprise to all. Equality of opportunity does not exist in practice if, for example, small businesses or enterprising individuals are denied access to the marketplace and pushed aside by vested interests. So, in future years, Labour will be the champion of opening up competition and enterprise to all in a way that Conservatives could never be.

One hundred years ago, one socialist answer to exploitation of labour by capital was to abolish, or at least control, capital. But when today the success of an economy depends more upon access to knowledge than access to capital, individuals are more likely to be empowered by enhancing the value of their labour than by controlling private capital.

So the left's century-old case - that we must enhance the value of labour as the key to economic prosperity - is best realised by maximising the opportunity to acquire the skills that generate new wealth, and by ensuring that labour - people wanting to invest in their skills or ideas - has access to capital on the best terms.

A hundred years ago, socialists argued that the essential rights were the right to vote and rights to basic services such as health, education and social security. Now we see that for individuals truly to realise their potential, they must also have equal opportunity to enjoy the best - not just basic - services, and real opportunity to participate directly in the decisions that affect their lives.

A closed society, one that assigns to people pre-determined roles and fails to see its responsibility for opening up new opportunities, will also fail to harness potential. That is why in particular we recognise what 100 years ago was too easily ignored - equality for women in employment, education, the economy and our politics, too.

So our basic objectives go beyond our traditional "negative freedoms" - freedom from unemployment, poverty and illness. Our ambition of liberating potential opens up a new agenda for Labour that has relevance and resonance for every British citizen.

First, there must be employment opportunity for all. We must continue our crusade for full and fulfilling employment by tackling youth and long-term unemployment, and replacing the old spectre of redundancy and rejection with the opportunity of retraining for work. So the New Deal, the working families tax credit and the minimum wage are all helping people take up, and keep, work and make work pay - but we must continue to do more. In the next decade, we want more people in work than ever before.

And in seeking to achieve the highest possible levels of employment, we must continue to encourage stability and long-term investment not just in people, but in the equipment, technology and infrastructure that supports people.

To prepare for the "knowledge economy" - where there will be jobs that as yet do not exist - we will need a more skilled, more educated, more adaptable workforce. In education, the democratic socialist objective for a hundred years has rightly been to ensure individual fulfilment by means of education. But this has too often been too narrowly conceived: education for all - but only until the age of 16. Labour's vision for the years ahead is far more ambitious than just the uniform provision of educational opportunities to a certain age. Our aim is recurring and life-long educational opportunities for all through programmes ranging from Sure Start for the under-fives through to the training provisions in the New Deal for over-50s and the University for Industry.

The earliest years determine whether or not our children will fully realise their potential in life, so Labour must reaffirm its commitment to ending child poverty. We cannot hope to achieve our high aspirations for education and employment if we cannot give the next generation of pupils, students and employees the best start in life. By raising child benefit, by introducing a children's tax credit and by the measures we are taking to ensure that working families receive the help they need, we are making our intentions clear that we want to halve child poverty by 2010, on the road to abolishing it.

And just as we set national goals for realising our values in the new economy - for prosperity, for employment, for educational opportunity and for tackling child poverty - so, too, we must set national goals for realising our values both in the health service and modern public services.

In politics, we need a constitutional settlement that, as I argued last month, protects individual rights against state power and encourages a new civic patriotism built on local democracy and strong communities.

All these economic, social and constitutional reforms must be underwritten, as our early pioneers fervently argued, by a Britain that values not just rights but shared responsibilities, a Britain where people accept the personal and social obligations of citizenship as well as the benefits that flow from it.

Labour values point also to a Britain that is open, outward looking and internationalist - strong in Europe, vigilant in advancing liberty throughout the world and, in particular, honouring our obligations to the poorest countries by encouraging a virtuous circle of debt relief, poverty reduction and economic development.

There are some who suggest that we have now reached the end of ideology, that all the historic tasks have been accomplished and that remaining problems are technical and do not any longer demand radical social change. The challenges ahead demonstrate not only that they are wrong, but that they misunderstand our values and our purpose. Labour's mission has always been far more ambitious than simply governing or managing things as they are. More than ever, the global economy generates powerful vested interests with an undiminished zeal for acquiring and accumulating influence and privileges. More than ever, individuals need to be empowered if they are to realise their potential. We are a party not only with a programme, but with a soul. If 100 years ago a Labour Party had not been created, it would be necessary to create it today.

The writer is Chancellor of the Exchequer

This article first appeared in the 28 February 2000 issue of the New Statesman, Why the party still needs its soul