Jon Cruddas's speech to the Resolution Foundation: full text

The head of Labour's policy review on "earning and belonging".

Thanks for offering me this platform here at The Resolution Foundation.  The title of tonight’s discussion is ‘earning and belonging’.  These two verbs are building blocks for the Labour Policy Review.

 

I want to use this talk to signal where we are with the Review and detail some of the thinking and the work in progress.

 

Why speak at The Resolution Foundation about this?

 

Because the impoverishment and estrangement of the working poor has defined the concerns of The Resolution Foundation.   

 

Gavin and his team have developed their contribution and gained influence due to the quality and rigour of their analysis. 

 

Clive Cowdery understood more than a decade ago, that this area of work and poverty, dispossession and abandonment, earning and belonging was absent from political debate and committed to give  ‘voice to the voiceless’. 

 

I have no doubt that due to this the influence of  the Foundation will continue to grow.

 

You have earned it; you belong.

 

EARNING AND BELONGING

 

So the  title for this talk is ‘earning and belonging’.

 

What is it to earn or to belong?

 

We tend to think of earning  in terms of how we gain in return for one's labour or service. Or acquire through merit; to bring about or cause deservedly.

 

We tend to think of belonging in terms of being in an appropriate situation or environment. Or to be a part of something larger.

 

They are very interesting words for Labour. They shine a light on what we have lost.

 

Let me give you an example.

 

In January 2005 the head of election strategy was asked what is the purpose of Labour?

 

He said this:

 

"What we want is for more people to be able to earn and own. That is what people want. It is what Labour policy in the end is all about."

 

But is to ‘earn and own’ the essence of Labour?

 

Is it really what people want? Does this give our lives true meaning?

 

Here what we  aspire to consists of the impulse to accumulate and consume severed from a deeper sense of responsibility to others and society as a whole. It is a bit one sided.

 

Lets call this the ‘economistic tradition’ within Labour.

 

It also strips down the notion of earning into one built around consumption rather than, for example,  earning respect or citizenship.

 

For me this was never what we were about.

 

First, it was never simply materialistic. Labour is a political tradition that allows us to realise our potentials, to flourish as human beings- to live more rewarding lives.

 

Second, it is not just about money- but about earning respect and a place in society. These have to be earnt- it is not just about preordained individual rights.

 

So if this orthodox Labour take on earning tends to be reductive  what about the notion of belonging?

 

Here we can identify another tradition within Labour; a ‘progressive tradition’.

 

Think of it this way.

 

Today feelings of loss and of uprootedness, dominate much of the national landscape; a modern anomie. Yet in Labour, we often tend to consider a desire to conserve settled ways of life as hindering our own, or indeed humanity’s progress.

 

For many on the left they have become reactionary feelings; we deem this search for belonging as an irrational conservative pathology.

 

This can border on contempt for those fearful of change; a contempt for people’s desire for stability as the drumbeat to their lives.

 

This is a very dangerous a priori position for a politician or a party to hold. It suggests a tin ear for those things that give people meaning in their lives; indeed it can appear to belittle their concerns.

 

This is especially true when these same concerns capture a very real process at work in terms of economic and social rupture, of loss and grievance;  of globalisation and epochal change.

 

 

In the past Labour stood for neighbourhood, mutual obligation, earnt respect  and common betterment.

 

A story of pride and dignity central to our historic identity; it gave us meaning.

 

Yet, on the one hand, we in Labour have tended to collapse these sentiments into a mechanistic, indeed economistic, notion of consumption.

 

On the other our progressive cosmopolitanism tends toward an inability to comprehend the deep desire for the familiar and the parochial; the ordinary.

 

Through a combination of these two traditions Labour has in recent years appeared remote and administrative. 

 

Often a reductive economism has stripped down what we think people want into a series of fiscal transfers- often administered by a remote bureaucracy.  A transactional culture. 

 

Whilst a belief in ‘progress’ can trip into a condescension toward the local, and the search for home, family and security.

 

The combination of these two traditions I believe accounts for Labour’s lack of voice in recent years. It collapsed the Labour project into an exercise in fiscal transfers without a deeper story of earning respect and a place in society and how and where we  belong as part of a national story.

 

Therefore, a key task for Labour through its Policy Review  is to rebuild a national project of ‘earning and belonging’.

 

 

THE LABOUR STORY AND THE NATIONAL STORY

 

 

Lets come at this from a different angle.

 

As we know One Nation Labour seeks to tell a plausible and compelling story of national renewal and transformation.

 

However, we had developed an unhealthy tendency to think exclusively in terms of the state and the market. 

 

This has subordinated a story of human agency to questions of administrative and price efficiency. 

 

This was not always the case.

 

Historically - and I would say this- Labour was as Catholic as it was Methodist, in that it was as wary of state domination as it was of market power. 

 

The Labour Party did not come into the world as an economistic left  party preoccupied with state remedies; nor with a remote cosmopolitan bent that surrendered talk of place, home and nation.  That all came later.

 

Historically, the dispossessed peasantry built land banks to house each other, food banks to feed each other and burial societies so that their humanity was not lost in the humiliation of a pauper’s grave.  We created real banks too. 

 

The big story of the last thirty years is that there has been a centralisation of both market and state power.  The intermediate institutions  and associations through which people could own and belong withered. 

 

Historically, Labour demanded a partnership with the state not its own subordination to it.  Municipal socialism gave new life and power to the regions of Britain and brought to prominence the fundamental role of cities. 

 

The institutions of the Labour Movement- burial societies, unions, retail food and building societies and socialised house building- asserted that habitation was as important a consideration as improvement.

 

For Labour the paradox is that our tradition is our future. Today the renewal of political and civic institutions is an essential part of restoring our global economic competitiveness. 

 

This is being acknowledged in Labour led Town Halls right across the country. Not simply preoccupied with fighting or managing the cuts but focused on building partnerships for local and regional economic growth. In short, seeking to build more resilient communities.

 

 

 

 

 

 

 

THE SCALE OF THE TASK

 

The scale of the task before us is daunting.

 

Learning from our own history, the emphasis has to shift from demands exclusively built around simple state expenditure toward interventions and campaigns that bring people together and enable them to improve their common life and build their power from the bottom up. 

 

That will be the future. The money is not there to rewind this. Nor should we wish to do so and simply defend and back pass to the state.

 

Think about some of the most energetic local campaigns up and down the country.

 

-Living wages;

-Local regulation and accreditation of landlords;

 -Supporting  local credit unions and confronting pay day lending;

 -Innovative forms of advocacy following legal aid cuts and CAB cuts;

 -High street campaigns around food, gambling and licensing;

 -New forms of volunteering nurturing duties and responsibilities in our streets and through  building community spaces;

-Community purchase of utilities and collective insurance;

-Building new safety nets- banking of food, time, furniture, white goods and the like.

 

 

Here economic campaigns and social policy combine in the search for more resilient communities, not simply about back end fiscal transfers administrated by a remote state.

 

 

Lets be very clear though that this Labour Agenda is not the political equivalent of Corporate Social Responsibility, it is fundamental to the generation of national competitive advantage in a global economy. 

 

We are learning this. The quiet revolution within the party led by Iain McNicol and Arnie Graf is perhaps the most encouraging of all the Labour stories. In that it is developing local leadership and local campaigns.  It is confronting centralism and bureaucracy; remote authority and alienation within the actual Party itself. 

 

I would suggest 20 years on this could be the modern equivalent of the Party reformation supplied by Tony Blair with the changes to Clause IV.

 

 

 

The Policy Review: what is to be done?

 

As The Resolution Foundation tells us the real stagnation in wages began a lot longer ago than 2010 or even 2008.   

 

Return to the idea of ‘earning and owning’.  Has not the opposite happened?

 

Think of two examples:

 

First, an Earning example.

 

The Northern Counties Permanent Building Society was established in 1850.  It was created by local people to serve local interests and was a stable building society in the North East that grew steadily over the years.  During the Miners strike it suspended mortgage payments for striking miners.  It was part of the local economy and society, that most precious civic inheritance, a trusted financial institution.  In 1965 it merged with another local institution, the Rock Building society to become Northern Rock Building Society.

 

I think you see where this story is going.

 

 It demutualised in 1997 and became Northern Rock, which sponsored Newcastle United and became the fifth biggest lender in the UK market. 

 

An institution that had partnered its region in good times and bad for a hundred and forty seven years, that had weathered four serious depressions and emerged stronger from each could not last through New Labour’s period in Government. 

 

It was nationalised in 2008 and Newcastle United are now sponsored by Wonga, a company that begins its lending at four thousand per cent at a time when the banks are borrowing at less than three. 

 

A great city, Newcastle, with its great football club and local banking institutions were all degraded by a lack of regard for institutions that belonged to the people of the area and which generated value. 

 

The story generates, in contrast, a feeling of abandonment and dispossession.  The aggressive maximisation of returns led to the destruction of the original asset.

 

When millions of people are turning to the Money Shop or Wonga because they have nowhere else to go you can safely say that the institutions of the Labour Movement are not functioning as they should. 

 

The Resolution Foundation has found that a third of people do not earn enough to live, to pay their essential bills, and they do not have a relationship with networks or institutions that can make up for the shortfall and it is the family debt, the personal debt that is the untold grief of this recession.  It did not begin in 2010 or even in 1997. People did not earn enough and feel as if they don’t belong. 

 

That is the task of the Policy review.  From debt to value is one way of putting it. 

 

Second a story of Belonging

 

Think of Council Housing.  It used to be, in the docking areas of East London that a council flat was passed on through the mother.  Seaman were away a lot of the time and maternal inheritance was the norm.  It gave a stability to families, a place in the world.  With the arrival of new immigrants it was unfair and unjust to deny homes to impoverished large families and this required public authorities to distribute on the basis of need, not of customary practice or length of habitation, or seniority. 

 

Consequently there was no recognition of inter-generational solidarities.  Need trumped tenure.  That had little to do with earning or belonging and it generated a sense of dispossession and abandonment.  No new houses were built and the right to buy spoke to that anxiety of not leaving anything to your children, of not belonging.  There was a rupture of trust with Labour.  When we are spending 1.2 billion on house building and twenty times that on rental payments to landlords you know there is something very badly wrong. 

 

The Policy Review.

 

So how do you build a Policy Review that pivots around these twin concerns of ‘owning and belonging’?

How do you structure such a Review in tough times, after arguably our worst defeat since 1918?

 

First we sort out the time line :

 

Actually we have been handed a  fixed term route map of some twenty-six months. With natural cut offs.

The first phase Jan-July 2013.

The second phase post conference 2013-july.

Finally six months post 2014 Conference to distil into a Manifesto and Pledge Cards.

 

Second we build  the process:

 

We have set up three Shadow Cabinet Sub-Committees chaired by Ed Miliband on: The Economy, Society and Politics.

We began to build the overarching One Nation frame at the last Conference.

Following meetings between the Leader and all members of the Shadow Cabinet we have agreed priorities, work programme, deadlines and responsibilities for the first phase till July this year.

 

Third, the policy delivered by the process.

 

A One Nation Economy focused on living standards and a reformed, responsible capitalism that is more democratic.

 

Our first phase priorities: bank reform, our spending strategy, infrastructure housing and transport, a modern growth agenda, reform of the energy market and Europe.

 

A Social Policy rebuilt around family and home, well being, duty and responsibility. The initial priorities: welfare and immigration reform, crime, policing and justice, childcare and adult social care.

 

A One Nation Politics anchored around a modern citizenship.  Our initial priorities: constitutional reform, a new devolution settlement and reviving local government, the balance between liberty and security.

Economy

 

A strategy for greater economic resilience must confront certain facts: 

 

There is a lack of skills in the workforce.

 

There is a lack of internal investment in the regions. 

 

A third of people do not earn enough to cover their living costs.  The family budget is impossible to manage. 

 

The institutions that generated the crash are still predominant within the economy. 

 

The predatory is winning out over the productive.

 

There is no growth strategy other than more of the same.

 

 

Society

 

A more resilient society means public sector reform is as vital as private sector reform and the principles are the same, how to decentralise, how to give the workforce power and responsibility, how to engage users in a negotiation with funders and providers on how to generate something different and better. 

 

The Big Society has remained incapable of decentralising economic power, of holding financial elites accountable and so a promising and interesting idea has collapsed. We will produce our alternative.

 

We need to actively rebuild solidarity and a sense of duty and obligation in society.  When there is a breakdown of trust in each other people feel powerless and used.  We have to earn each others respect and that must be part of belonging.  One Nation Labour will renew our welfare institutions and the key building blocks  are relationships, contribution and responsibility.

 

 

Politics

 

Using the organising principle of One Nation we are asking how we can renew our polity, through reviving old institutions and creating new ones.  We are looking at how a sense of ownership and responsibility can be generated towards our public institutions and find ways of holding them accountable.  From the BBC to the Police to Parliament and to the City of London, trust has been eroded in respected institutions.  This has demoralised the workforce and the population and both need to be engaged in restoring their lost authority. 

 

Overall our Party itself is the key to The Policy Review. There has been a campaigning priority given to a Living Wage and a renegotiation of energy bills through party organisation. Innovative growth partnerships are being developed in our Councils.  These deal directly with the issue of wages and debt, of earning and belonging.  They are campaigns that link up to the fundamental issues of working and family life.

 

Each gives a strong role to constituency parties. It transcends the old divide between party and organisation.  It is a way that links can be made with faith communities and business to build our coalition around national renewal- the pursuit of a common good.  The key issue is growth, how to solve the problem of the family budget, when the outgoings outstrip the incomings.  To offer pathways out of debt through the generation of value. 

 

 

Simply opposing the cuts without an alternative is no good.  It fails to offer reasonable hope.  The stakes are high because when hope is not reasonable despair becomes real. 

 

A danger of any Labour drift to state managerialism is that every institution in the party simply proposes yet more state policy. I am much more open to real examples than to policy propositions.  ‘Do the work don’t write a proposal’ is my advice to those interested in influencing Labour’s Policy Review. 

 

These are the new rules of the game. To rebuild a sense of duty and responsibility so as to rebuild the country. More resilient families, communities and nations.

 

Thanks a lot.

Jon Cruddas, the MP for Dagenham and Rainham and the head of Labour's policy review. Photograph: Getty Images.

Jon Cruddas is Labour's policy review coordinator and MP for Dagenham

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By refusing to stand down, Jeremy Corbyn has betrayed the British working classes

The most successful Labour politicians of the last decades brought to politics not only a burning desire to improve the lot of the working classes but also an understanding of how free market economies work.

Jeremy Corbyn has defended his refusal to resign the leadership of the Labour Party on the grounds that to do so would be betraying all his supporters in the country at large. But by staying on as leader of the party and hence dooming it to heavy defeat in the next general election he would be betraying the interests of the working classes this country. More years of Tory rule means more years of austerity, further cuts in public services, and perpetuation of the gross inequality of incomes. The former Chief Secretary to the Treasury, Seema Malhotra, made the same point when she told Newsnight that “We have an unelectable leader, and if we lose elections then the price of our failure is paid by the working people of this country and their families who do not have a government to stand up for them.”

Of course, in different ways, many leading figures in the Labour movement, particularly in the trade unions, have betrayed the interests of the working classes for several decades. For example, in contrast with their union counterparts in the Scandinavian countries who pressurised governments to help move workers out of declining industries into expanding sectors of the economy, many British trade union leaders adopted the opposite policy. More generally, the trade unions have played a big part in the election of Labour party leaders, like Corbyn, who were unlikely to win a parliamentary election, thereby perpetuating the rule of Tory governments dedicated to promoting the interests of the richer sections of society.

And worse still, even in opposition Corbyn failed to protect the interests of the working classes. He did this by his abysmal failure to understand the significance of Tory economic policies. For example, when the Chancellor of the Exchequer had finished presenting the last budget, in which taxes were reduced for the rich at the expense of public services that benefit everybody, especially the poor, the best John McConnell could do – presumably in agreement with Corbyn – was to stand up and mock the Chancellor for having failed to fulfill his party’s old promise to balance the budget by this year! Obviously neither he nor Corbyn understood that had the government done so the effects on working class standards of living would have been even worse. Neither of them seems to have learnt that the object of fiscal policy is to balance the economy, not the budget.

Instead, they have gone along with Tory myth about the importance of not leaving future generations with the burden of debt. They have never asked “To whom would future generations owe this debt?” To their dead ancestors? To Martians? When Cameron and his accomplices banged on about how important it was to cut public expenditures because the average household in Britain owed about £3,000, they never pointed out that this meant that the average household in Britain was a creditor to the tune of about the same amount (after allowing for net overseas lending). Instead they went along with all this balanced budget nonsense. They did not understand that balancing the budget was just the excuse needed to justify the prime objective of the Tory Party, namely to reduce public expenditures in order to be able to reduce taxes on the rich. For Corbyn and his allies to go along with an overriding objective of balancing the budget is breathtaking economic illiteracy. And the working classes have paid the price.

One left-wing member of the panel on Question Time last week complained that the interests of the working classes were ignored by “the elite”. But it is members of the elite who have been most successful in promoting the interests of the working classes. The most successful pro-working class governments since the war have all been led mainly by politicians who would be castigated for being part of the elite, such as Clement Atlee, Harold Wilson, Tony Crosland, Barbara Castle, Richard Crossman, Roy Jenkins, Denis Healey, Tony Blair, and many others too numerous to list. They brought to politics not only a burning desire to improve the lot of the working classes (from which some of them, like me, had emerged) and reduce inequality in society but also an understanding of how free market economies work and how to deal with its deficiencies. This happens to be more effective than ignorant rhetoric that can only stroke the egos and satisfy the vanity of demagogues

People of stature like those I have singled out above seem to be much more rare in politics these days. But there is surely no need to go to other extreme and persist with leaders like Jeremy Corbyn, a certain election loser, however pure his motives and principled his ambitions.

Wilfred Beckerman is an Emeritus Fellow of Balliol College, Oxford, and was, for several years in the 1970s, the economics correspondent for the New Statesman