Europe: teaching us a lesson

As the candidates pledge to use Labour's leadership battles to debate new ideas, where should they l

Made in America! The phrase applies to most of new Labour's policies - made there well over ten years ago, under the influence of the policy-makers surrounding Bill Clinton. It is time to move on, to look more towards Europe, instead of the US, where there is much hostility to "big government" and where large inequalities are tolerated.

New Labour has been deficient in two ideological areas: it has failed to develop a robust definition of the public sphere and of the essential importance of citizenship. Labour has not found a persuasive enough vocabulary to express the difference between citizen and consumer. Consequently, it has been too vulnerable to the charge that it is only a slightly more human version of Thatcherism, fond of markets and privatisation.

It has also failed to find a vocabulary in which to make clear its egalitarian concerns. Why has Labour lost so much support among its core constituency, the poor and the deprived? In part, this is because its achievements have stayed invisible. Research shows that many people whose lives have improved thanks to tax credits do not attribute a change in their fortunes to the government. Labour was so anxious to avoid being seen as a tax-and-spend party that it created a smokescreen to conceal its levelling impulses.

In saying this, I am not suggesting a return to old Labour. The most successful countries in Europe are the Nordic ones - Sweden, Denmark, Finland, Norway and Iceland. What distinguishes them is a willingness to reform and modernise. They have learned how to become competitive in the global market place. Finland, for instance, has several times been ranked as the world's top country in which to do business. The Finns have reformed their labour markets, introducing greater flexibility; decentralised their education and health systems; and introduced greater choice into core public services. But they have shown how such an orientation can coincide with a strong idea of the public realm and social justice. High taxes, as such, do not have much to do with these successes. They come mainly from social policy, and from acceptance of the role of active government.

Labour can also gain much from tracking specific policy developments in various EU countries. In economic terms, the EU on average has not been doing well in recent years. Perhaps this is why the Labour leadership tends to act as though the UK has far more to teach the rest of Europe than they do us. This attitude is unwarranted. There is not a single social or economic indicator where the UK leads in Europe. Compare healthcare, for instance, and you find that the NHS comes well behind the French and German systems. The workforces of those countries are far more productive than ours. And so on . . .

So no more British hubris. Consider one of Labour's key policy areas, "welfare to work" - or "flexicurity", as it is known on the Continent. These strategies have been very effective in the UK. Old-fashioned passive unemployment benefits, which these policies have replaced, tend to lock people out of work when they could be in good jobs. Yet we should be thinking beyond simply helping people to move on or retrain once out of work. As is already happening in the Neth erlands and Belgium, there should be schemes to help workers before they lose their jobs, especially in industries known to be contracting.

True solidarity

There could also be ways of sharing the burden. The Dutch have a not-for-profit agency called Start, which temporarily employs people unable to get into the labour market, by loaning them to private employers to gain work experience or offering them training if employers will not take them. In Austria, work foundations have been set up, aided by unions and the government, where by employees who don't lose their jobs when there has been restructuring help fund retraining and job searches for those who do. Workers who keep their jobs pay 0.25 per cent of their wages for a period to the foundation in solidarity with their former workmates. The objective is to provide a network of resources for redundant workers, so that they do not have to deal with the transition to a new job in isolation.

Ageing is a major issue everywhere. Labour is finally getting round to pensions reform. But it is just as important to root out ageism and persuade older people either to stay in work or come back to work. Here, little progress has been made and other countries are much further ahead. In Finland, tax incentives have been introduced to encourage the over-65s to keep on working. There the proportion of older people in regular paid work is twice as high as in Britain.

Next we come to devolution and decentralisation. Labour has made a pig's ear of this, refusing to let go. Look at the great efforts that were made to stop Ken Livingstone becoming Mayor of London, while the proposed regional chambers were given so little power that few thought there was any point in having them. Compare this to Spain, with its successful system of regional autonomy, where policies were much more radical.

Politics now looks very different from in the early 1990s. It is being driven by factors as various as energy price hikes, climate change, health problems and work/life issues - all of which revolve around a presumption of lifestyle change. This is not about the old questions of scarcity or poverty. Again, there is much for us to learn. On green issues, Sweden has set itself the target of becoming the world's first carbon-free economy by 2020. The ambition is not unrealistic. The Swedes reacted to the oil crisis of the 1970s in an innovative way, and have sustained that impetus. A programme, for example, is being set up to convert all cars to ethanol.

Britain has the highest level of obesity in the EU, a level approaching that of the US. Other states have shown how positive changes can be produced in lifestyle habits. A generation ago, Fin land had the highest levels of type 2 diabetes and heart disease in Europe. Using a mixture of incentives, sanctions and counselling, the Finns achieved a dramatic reduction in these diseases.

It hardly needs saying, but we should also look more towards Europe in the area of foreign policy. Tony Blair's tracking of George W Bush has been his poll tax. Christopher Meyer, the former UK ambassador in Washington, claims Jonathan Powell, the PM's chief of staff, instructed him to "get up the arse of the White House and stay there". It was an even coarser metaphor than either man might have realised, because we all know what you find in that part of the body.