What Jon Cruddas's speech told us about Labour's policy review

The head of Labour's policy review hints that a mass programme of housebuilding will be a priority for the party.

Jon Cruddas's speech to the Resolution Foundation last night on "earning and belonging" was, in common with all of his addresses, thoughtful, intellectually rich and imbued with a rare sense of history. But anyone hoping for specifics from the head of Labour's policy review would have left disappointed. Cruddas described the review as being in its "first phase" and promised that over the next 12 months major pieces of work would be completed on "childhood, the Condition of Britain [Cruddas will deliver an IPPR lecture on this subject next Thursday], a British Investment Bank, infrastructure and voctional education". After the 2013 conference, he added, the review would enter a "second phase" before the policies "distil into a manifesto and pledge cards" after the 2014 conference.

There were, however, several important hints of Labour's priorities. In one of the most memorable passages, Cruddas lamented that while the government spends £1.2bn on housebuilding, it spends twenty times that amount on "rental payments to landlords". Not only was this a good example of how Labour is seeking to reframe the debate around welfare policy (Cruddas referred to "rent payments", rather than housing benefit), it also suggested that one of the party's key pledges will be a mass programme of housebuilding. 

In another intriguing section of the speech, Cruddas spoke of how Labour was exploring new ways of holding "our public institutions" to account and generating "a sense of ownership and responsibility". He cited the BBC, the police, Parliament and the City of London. Tessa Jowell's recent piece for the Telegraph calling for the BBC to be turned into "the country’s biggest mutual, with 26.8 million licence-fee payers as its shareholders", is a good example of the form this could take in practice. 

The line that has attracted the most attention is Cruddas's warning that "simply opposing the cuts without an alternative is no good." (He added: "It fails to offer reasonable hope. The stakes are high because when hope is not reasonable despair becomes real.") 

On one level this is a statement of the obvious. But it also points to a significant divide in Labour between those who believe there is nothing wrong with the economy that a bit of Keynesian stimulus won't fix and those who believe that capitalism needs to be fundamentally remade (Raf has neatly characterised this as a battle between Brown Labour and Blue). Cruddas's words made it clear that he intends to position Labour on the latter half of this divide. 

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

George Eaton is political editor of the New Statesman.

Photo: Getty
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Sooner or later, a British university is going to go bankrupt

Theresa May's anti-immigration policies will have a big impact - and no-one is talking about it. 

The most effective way to regenerate somewhere? Build a university there. Of all the bits of the public sector, they have the most beneficial local effects – they create, near-instantly, a constellation of jobs, both directly and indirectly.

Don’t forget that the housing crisis in England’s great cities is the jobs crisis everywhere else: universities not only attract students but create graduate employment, both through directly working for the university or servicing its students and staff.

In the United Kingdom, when you look at the renaissance of England’s cities from the 1990s to the present day, universities are often unnoticed and uncelebrated but they are always at the heart of the picture.

And crucial to their funding: the high fees of overseas students. Thanks to the dominance of Oxford and Cambridge in television and film, the wide spread of English around the world, and the soft power of the BBC, particularly the World Service,  an education at a British university is highly prized around of the world. Add to that the fact that higher education is something that Britain does well and the conditions for financially secure development of regional centres of growth and jobs – supposedly the tentpole of Theresa May’s agenda – are all in place.

But at the Home Office, May did more to stop the flow of foreign students into higher education in Britain than any other minister since the Second World War. Under May, that department did its utmost to reduce the number of overseas students, despite opposition both from BIS, then responsible for higher education, and the Treasury, then supremely powerful under the leadership of George Osborne.

That’s the hidden story in today’s Office of National Statistics figures showing a drop in the number of international students. Even small falls in the number of international students has big repercussions for student funding. Take the University of Hull – one in six students are international students. But remove their contribution in fees and the University’s finances would instantly go from surplus into deficit. At Imperial, international students make up a third of the student population – but contribute 56 per cent of student fee income.

Bluntly – if May continues to reduce student numbers, the end result is going to be a university going bust, with massive knock-on effects, not only for research enterprise but for the local economies of the surrounding area.

And that’s the trajectory under David Cameron, when the Home Office’s instincts faced strong countervailing pressure from a powerful Treasury and a department for Business, Innovation and Skills that for most of his premiership hosted a vocal Liberal Democrat who needed to be mollified. There’s every reason to believe that the Cameron-era trajectory will accelerate, rather than decline, now that May is at the Treasury, the new department of Business, Energy and Industrial Strategy doesn’t even have responsibility for higher education anymore. (That’s back at the Department for Education, where the Secretary of State, Justine Greening, is a May loyalist.)

We talk about the pressures in the NHS or in care, and those, too, are warning lights in the British state. But watch out too, for a university that needs to be bailed out before long. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.