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.




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’.






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 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.



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.





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.





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

Getty Images.
Show Hide image

John McDonnell interview: "We’re going to destroy Osborne’s credibility"

The shadow chancellor on the Spending Review, Jeremy Corbyn's leadership and why trade unions will have to break the law. 

When I interviewed John McDonnell in March, before the general election, he predicted that Labour would be the largest party and confessed to a “sneaking feeling that we could win a small majority – because I think the Tory vote is really soft”. As the long-standing chair of the Socialist Campaign Group, McDonnell anticipated leading the resistance inside Labour to any spending cuts made by Ed Miliband. Eight months later, he is indeed campaigning against austerity – but as shadow chancellor against a Conservative majority government.

I meet McDonnell in his new Westminster office in Norman Shaw South, a short walk down the corridor from that of his close friend and greatest ally, Jeremy Corbyn. The day before George Osborne delivers his Spending Review and Autumn Statement, his desk is cluttered with economic papers in preparation for his response.

“The message we’re trying to get across is that this concept of the Tories’ having a ‘long-term economic plan’ is an absolute myth and they’re in chaos, really in chaos on many fronts,” he tells me. McDonnell points to the revolt against cuts to tax credits and policing, and the social care crisis, as evidence that Osborne’s programme is unravelling. On health, he says: “He’s trying to dig out money as best as he can for the NHS, he’s announced the frontloading of some of it, but that simply covers the deficits that there are. Behind that, he’s looking for £22bn of savings, so this winter the NHS is going to be in crisis again.”

Asked what Labour’s equivalent is to the Tories’ undeniably effective “long-term economic plan” message, he said: “I don’t think we’re going to get into one-liners in that way. We’ll be more sophisticated in the way that we communicate. We’re going to have an intelligent and a mature economic debate. If I hear again that they’re going to ‘fix the roof while the sun shines’ I will throw up. It’s nauseating, isn’t it? It reduces debate, intellectual debate, economic debate, to the lowest level of a slogan. That’s why we’re in the mess we are.”

Having abandoned his original support for the Chancellor’s fiscal charter, which mandated a budget surplus by 2020, McDonnell makes an unashamed case for borrowing to invest. “The biggest failure of the last five years under Osborne is the failure to invest,” he says. “Borrowing at the moment is at its cheapest level, but in addition to that I’m not even sure we’ll need to borrow great amounts, because we can get more efficient spending in terms of government spending. If we can address the tax cuts that have gone ahead, particularly around corporation tax, that will give us the resources to actually start paying again in terms of investment.”

He promises a “line-by-line budget review” when I ask whether there are any areas in which he believes spending should be reduced. “My background is hard-nosed bureaucrat . . . we’ll be looking at where we can shift expenditure into more productive areas.”

From 1982 until 1985, John McDonnell, who is 64, was chair of finance at the Greater London Council under Ken Livingstone. After vowing to defy the Thatcher government’s rate-capping policy he was sacked by Livingstone, who accused him of manipulating figures for political purposes. “We’re going to look like the biggest fucking liars since Goebbels,” the future mayor of London told him. McDonnell, who later described Livingstone’s account as “complete fiction”, has since resolved his differences with the man now co-chairing Labour’s defence review.

After his election as the MP for Hayes and Harlington in 1997, McDonnell achieved renown as one of New Labour’s most vociferous opponents, rebelling with a frequency rivalled only by Corbyn. His appointment as shadow chancellor was the most divisive of the Labour leader’s reshuffle. “People like Jeremy even if they don’t agree with him. People don’t like John,” one MP told me at the time. Mindful of this, McDonnell has sought to transform his image. He has apologised for his past praise of the IRA and for joking about assassinating Margaret Thatcher, rebranding himself as a “boring bank manager”. But there are moments when his more radical side surfaces.

He told me that he supports workers breaking the law if the trade union bill, which would limit the right to strike, is passed. “It’s inevitable, I think it’s inevitable. If the bill is introduced in its existing form and is used against any particular trade unionist or trade union, I think it’s inevitable that people will resist. We established our rights by campaigning against unjust laws and taking the risk if necessary. I think that’s inevitable and I’ll support them.”

“Chaos” might be how McDonnell describes Osborne’s position but the same term is now daily applied to Labour. The party is riven over air strikes in Syria and the renewal of Trident and MPs are ever more scornful of Corbyn’s leadership.

While Corbyn has so far refused to offer Labour MPs a free vote on Syria, McDonnell says that he favours one and would oppose military action. “My position on wars has always been that it’s a moral issue and therefore I veer towards free votes . . . We’re waiting for Cameron’s statement; we’ll analyse that, there’ll be a discussion in shadow cabinet and in the PLP [Parliamentary Labour Party] and then we’ll make a decision. I’m still in a situation where I’ve expressed the view that I’m opposed to the bombing campaign or engagement. I think the history of the UK involvement in the Middle East has been a disaster, to say the least . . .This isn’t like the Second World War where you have a military campaign – you defeat the enemy, you sign a peace agreement and that’s it – this is asymmetric warfare. In addition to the risks that are in the battlefield there’s a risk in every community in our land as a result of it.”

Would he want any of the 14 former shadow cabinet members who refused to serve under Corbyn to return? “All of them, we’re trying to get them all back. We’ve got Yvette [Cooper] helping us on a review we’re doing about the economy and women . . . It’s an open door policy, I’m trying to meet them all over these next few weeks.”

Livingstone, a member of Labour’s National Executive Committee, recently called for Simon Danczuk, who revealed details of a private meeting with Corbyn in the Mail on Sunday, and Frank Field, who told me that MPs should run as independents if deselected, to be disciplined. But McDonnell takes a more conciliatory line. “With Simon [Danczuk] in particular and the others, it’s just a matter of saying look at the long-term interests of the party. People don’t vote for a divided party. They’ll accept, though, that within a party you can have democratic debate. As I said time and time again, don’t mistake democracy for division. It’s the way in which you express those different views that are important. All I’m saying is let people express their views, let’s have democratic engagement but please don’t personalise this. I think there’s a reaction within the community, not just the party, against personalised politics. It’s not Jeremy’s style, he never responds in that way. It’s unfortunate but we’ll get through it. It’s just minor elements of it, that’s all.”

McDonnell disavows moves by some in Momentum, the Corbyn-aligned group, to deselect critical MPs. “What we’re not into is deselecting people, what we want to try and do is make sure that everyone’s involved in a democratic engagement process, simple as that.

“So I’ve said time and time again, this isn’t about deselection or whatever. But at the same what we’re trying to say to everybody is even if you disagree, treat each other with respect. At the height of the debates around tuition fees and the Iraq war, even though we had heated disagreements we always treated each other with mutual respect and I think we’ve got to adhere to that. Anyone who’s not doing that just lets themselves down, that’s not the culture of the Labour Party.”

In private, the 90 per cent of MPs who did not support Corbyn’s leadership bid speak often of how and when he could be removed. One point of debate is whether, under the current rules, the Labour leader would automatically make the ballot if challenged or be forced to re-seek nominations. McDonnell is emphatic that the former is the case: “Oh yeah, that’s the rule, yeah.”

McDonnell’s recent media performances have been praised by MPs, and he is spoken of by some on the left as a possible replacement if Corbyn is removed or stands down before 2020. His speech to the PLP on 23 November was described to me by one shadow minister as a “leadership bid”. But McDonnell rules out standing in any future contest. “No, no, I’ve tried twice [in 2007 and 2010], I’m not going to try again, there’s no way I would.”

Despite opinion polls showing Labour as much as 15 points behind the Conservatives, McDonnell insists that the party can win in 2020. “Oh definitely, yeah, you’ll see that. I think this next year’s going to be pivotal for us. We’re going to destroy Osborne’s credibility over the next six months. But more importantly than that, we can’t just be a negative party . . . we’re going to present a positive view of what Labour’s future will be and the future of the economy.

“Over the next 18 months, we’ll be in a situation where we’ve destroyed the Tories’ economic reputation and we’ve built up our own but we’ll do it in a visionary way that presents people with a real alternative.”  

George Eaton is political editor of the New Statesman.