Labour's fault lines open up

As the political season opens and a Conservative revival gathers pace, former Home Secretary Charles

The 1981 Labour conference was the most acrimonious in recent history. The Healey-Benn-Silkin deputy leadership contest dominated the months before the conference, led to enduring bitterness and division after, and paved the way for a disastrous election defeat two years later. Nineteen eighty-three was the party's lowest point. Labour learned and changed from that experience and built a modern party able to face the future with confidence. Parliamentary representation increased in 1987 and 1992, leading to the triumphs of 1997 and 2001 and the solid majority of 2005.

That progress defied the commentators' forecasts of near extinction. It was not inevitable. It happened only by taking on the challenges rather than avoiding them, by the exercise of strong leadership and political discipline. Labour learned the lessons of defeats and showed mettle in the face of external attack and internal division. It turned from being a party happy with opposition to one contending for long-term government.

But in order to seek office for the long term, problems have to be honestly acknowledged, achievements celebrated, divisions overcome, alliances constructed, difficult policy problems sorted out, and all in a way that maintains unity.

Labour has to face the fault lines that exist between government and many who supported us in 1997 and 2001. A full discussion about these matters - starting now - is the best way to regain the forward momentum that has delivered success, despite the difficulties, in the past quarter-century.

Of course, for many, opposition can be a more comfortable long-term resting place than government. Manufactured outrage beats the dogged day-to-day grind of reform every time. How else to explain the enduring pull of the Liberal Democrats? Or the persistent group of Labour rebels in parliament who would rather relive the glorious days of confronting Thatcherism than put in the hours needed to think through and cement a progressive social democratic century?

In these circumstances, Labour needs to face its demons, not through the proxies of leadership and deputy leader- ship contests, real or imagined, imminent or far-off, but by looking seriously at the direction in which the party is travelling. Leadership is not only about personality and style, important though those are. It is about policies, politics and a sense of purpose.

It is difficult to have this discussion while in government, particularly with a media that dwells on policy differences, disguises opinion as news and delivers gossip as a serious exploration of ideas. Politicians are often presented as professional fraudsters and the political process is seen as serial sleights of hand delivered by the avaricious of Westminster.

The discussion has to start with a realistic appraisal of Labour's strengths and weaknesses. Recent polls suggest that Labour's very substantial achievements in government have been discounted or ignored. The efforts of both Conservatives and Liberal Democrats to contest the political centre ground, flimsy and insubstantial though they are, have found some public resonance, despite their focus on opposition for the sake of it without clear policy alternatives.

The strengths are routinely understated. This is not surprising from political enemies and the media, but it is surprising from many parts of Labour itself. Since 1997, the achievements, despite the most unpromising of inheritances, are immense. Just a few examples make that case.

Britain has one of the strongest economies in the world, with good growth, low inflation and low unemployment. There is high investment in public services, fairer wages and better benefits for millions, including pensioners and carers. Poverty is being overcome. The contrast with the years before 1997, and even with the last Labour government, is stark.

Public services have improved vastly, whether measured by educational achievement, access to high-quality healthcare, lower levels of crime or increased public transport passenger numbers. Contrast this with the period before 1997, when Tory decay had become endemic.

It is this outstanding record that has changed the battleground. This seismic shift has forced David Cameron to adopt the case for diversity, express concern about poverty, attack chocolate producers, emote public compassion for "hoodies" and even apologise for past Conservative attitudes to Nelson Mandela. The reason the Liberal Democrats are being provoked to accept the minimum wage or Asbos is because the policies make practical sense locally and opposition would be politically destructive for them.

So the first lesson this September is for Labour to describe the achievements better, to explain why they happened and were necessary. There is no reason to apologise and every reason for pride, particularly given the starting point. At the same time, Labour has to identify its own weaknesses. Fault lines have developed between government and certain sections of society.

The five fault lines identified here are formidable and represent significant change in our support since 1997 and 2001. They are partly a consequence of the tough decisions of an extended period of government, but some have deeper causes.

The first, and probably the most significant, arises from the process of reform itself. It is obvious that reform is difficult. It cannot be done simply by a newspaper editorial or speech, a white paper or a new law, necessary though these may be. It requires the right structures, the right culture, an approach of partnership with employees and stakeholders, and a commitment to engage fully with the inevitable controversy. Each reform needs its own clear strategy and timescale, which encompasses the whole process, so going well beyond the statement of an ambition to its thorough implementation. For that reason, the entrenchment of large-scale reform takes time, energy and consistency of purpose and leadership.

Five critical areas

Across government, there are many examples. But some of the reforms with which I have personally been involved illustrate well both the difficulties and the need for a long-term approach. Reform of the education workforce to build and extend the school team, the creation of co-ordinated pre-school provision that focuses on those most in need, the reform of student finance and the establishment of a legal framework for identity cards are obvious examples.

The very difficulty of reform has meant that in certain areas the process has lost the confidence of significant numbers of employees and consumers. In some cases, this results from an almost visceral hostility to change, or an unprincipled and dishonest clinging to outdated vested interests and privileges. But, in rather more cases, it stems from an approach that has alienated too many, including sometimes even the most active supporters of reform.

It might have been possible to minimise such opposition by earlier and fuller dialogue with those involved.

A particularly important aspect of this problem is the failure to reach accommodation with local government about the appropriate modern balance between local and central rights and responsibilities. Phrases such as "the new localism" have offered just about nothing to this discussion, as the age-old unproductive wrangling between central government departments and local authorities about money, "targets" and responsibilities has not been resolved.

The role of local government in reform of vital public services such as education, health and policing - all of which require a "joined-up" and locally strategic approach - has not been settled. The reasons for this are complicated, but the biggest explanation is the size and political difficulty of the task of fashioning modern local government to provide reformed and effective public services. The net effect has been a distance between government, many councillors and others.

It is sad that in May David Miliband was moved from this responsibility where during his year in office he had been making major efforts to solve precisely these issues and it remains essential to develop a new stable and reformed relationship that permits local government to play its full part in the agenda of public service reform.

A second fault line is the relationship with the business world, much of which welcomed Labour's election in 1997. In any modern economy, the state-business relationship is vitally important. Despite those strong partnerships that do exist, there remain serious concerns, such as the operation of the regulatory regime, the effectiveness and value-for-money of public sector investment and the impact of fiscal targeting. Moreover, that element of business which strongly favoured UK membership of the euro feels that it has lost a key reason to support Labour.

Third, very many of those individuals and organisations who, rightly, put the environment and sustainability at the top of their concerns are not convinced that this government has made anything like enough progress, despite some successes which they acknowledge. They lack confidence in the party's commitment to green priorities.

The fourth group are those who have strongly supported constitutional reforms such as devolution, the first stages of Lords reform, and reform of political funding. They favour completion of these reforms, particularly in light of the current controversy about party funding, but - wrongly and unfairly in my opinion - doubt Labour's commitment to clean politics and to strengthening our democracy. This group overlaps with those "civil libertarians" who distrust the priority we give to protecting civil liberties as we develop the best means to protect our people from the threats we face.

Finally, the government's approach to the international situation - notably in Iraq, but also to an extent in Afghan istan and the Middle East - has alienated many. Moreover, others now see no clear way forward on relations with the EU.

These are serious differences with important sections of opinion which elected Labour in 1997, 2001 and 2005, and it is essential for Labour to address them. This can be done successfully, but only on the basis of refuting Conservative arguments for stagnation and accepting the continuing need for change in many parts of our society.

Enduring values

In some cases, political concern and practical difficulty have meant that necessary change has been put in the "too difficult" box. These include constitutional changes such as the role of local government and Lords reform, changed party funding rules, pensions and benefits and the Home Office areas of policing, prison and probation, immigration and asylum and the criminal justice system. It is essential to conclude these important reforms in the remaining three and a half years of this parliament. In many of these areas, work is already well under way. However, tackling each of them is politically difficult, particularly given the importance of healing divisions rather than aggravating them. Clear and unambiguous leadership is needed, based on self-confidence, which cannot easily be distracted by inevitable and serious media flurries but which argues and engages openly with sceptics.

It is vital that our approach is systematic and thorough. Major policy issues, such as the place of nuclear energy in the drive to energy sustainability and the value to our overall security strategy of replacing Trident, need serious consideration. They cannot simply be dealt with as an aside at the CBI's annual dinner or a half-sentence at the Guildhall. The country as a whole needs to see and understand the context and the options before such commitments are made that can otherwise seem to be delivered from on high without proper engagement by parliament and the country.

On all of these questions, substantive discussion is needed over the coming weeks and months. The sometimes tempting recourse of oppositionists to colourful descriptions of government failures is not enough.

The task is to lay the foundations for a programme and approach that can continue the powerful progressive movement of the past nine years; but now instead of simply repairing the detritus of the Conservative years, as we have had to do, build upon the substance of our achievement to create a society with the values to which Labour has committed over the whole of its existence. That starts from the completion of a thought-through programme for the rest of this parliament, goes on to prepare the approach that will be put before the country at the next election and then concludes with clarity about the ways in which we build a society that is founded upon enduring social democratic values.

Failure to undergo the systematic assessment I have discussed raises the real risk that our opponents will be able to present themselves as an attractive alternative at the next general election - and even before.