Labour must recognise the need for ruthless prioritisation

The party must seize control of the debate and show a bit of leg when it comes to economic policy.

 

There are three central arguments that will determine the outcome of the next election. One is over fairness, a second is over economic management, and a third over cultural affinity with the British – or more accurately the English – people.

Labour is winning the first of these hands down, but on the other two there is still a lot of spade work to do. Winning the cultural argument is perhaps the hardest. But it is on the economy that more progress must be made now if Labour is to make a genuine breakthrough.

Many observers wrongly believe that a weak economy and depressed living standards will hand Labour victory. There is nothing axiomatic about this. In fact, even if there is no economic recovery – and there may well be – this assumption is intoxicatingly complacent. No one should confuse the vicissitudes of government with the big questions that determine election outcomes.

If economic malaise continues, it is likely that in the general election campaign more questions will be asked of Labour than of the Conservatives because fear of change will dominate the psychology of the electorate. Credit downgrade, double, triple or even quadruple dip, it will not matter much. Elections are about choice.

And on the economy one question above all will define the debates – where is the money coming from? There is nothing new in this. It is an age old question, which has defined many elections. But this time, without better economic news, anxiety about debt – national and personal - will make it more potent.

To borrow from George Bernard Shaw, if Labour is unable to answer this question - we will neither find it easy to look at things as they are and ask why nor dream of things that never were and ask why not?

Ed Miliband knows this. Hence, his use of the phrase “ruthless prioritisation” in his Fabian lecture in January. It is time his party knew it.

There is a perfectly credible economic argument that the pace of cuts should be slower but whether you are a Keynesian, a Monetarist or just care about the price of a loaf of bread, it cannot be denied that there is now a need for some ruthless prioritisation.

Economics and politics sometimes pass in the night, but they rarely face in the same direction. The paradox is that the more you side with the view that cuts should be slower, the more you must reassure the electorate by demonstrating your determination to prioritise ruthlessly.

Taxing the rich more is not ruthless prioritisation, but the easy option; a habit that progressive parties should indulge in judiciously. Tax avoidance has to be tackled, but it is fiendishly difficult to raise more revenue consistently by doing so, particularly from global corporations. To deal with it effectively often requires international agreement.

Before Labour comes to a judgement on the spending envelope it needs to set out a coherent case to begin to answer the question that looms large on the horizon.

First, it must define, or rather redefine, the role of the state, and from this demonstrate how it will deliver value for money.

Old Labour believed that central government’s job was to deliver. New Labour wanted to steer not row the boat, but this too often became micro management from the centre, which stifled local initiative. One Nation Labour must let go. On housing benefit, employment programmes, and support for business, there are strong arguments for devolving certain powers to local government.

The IPPR has already made the case for some devolution of powers, but it has also articulated an excellent case for what it terms the ‘relational state.’ Fundamentally, opportunity derives from connections: who you know, not just what you know. By beginning to think about the problem in this way One Nation Labour can radically redefine the role of the state.

Here there are encouraging signs. In his recent contribution to the debate, Jon Cruddas, set out the case for both these changes in thinking.  But to make it fly Labour’s Treasury team must also sign up to this agenda.

One of Ed Miliband’s most effective themes is responsibility, from top to bottom. He should tie government into this theme, based on the responsibility of government to deliver good value for taxpayers. To make the case for this there are many reforms that should be advocated. Most of which don’t normally grab headlines, but demonstrate a real desire to be responsible with taxpayer’s money. An obvious example is the amalgamation of local government pensions, which has the potential to save billions.

Labour is beginning to think about ways to raise revenue which do not entail plucking the goose. It has to be careful not to show too much leg too soon but one idea that has far more mileage is social impact bonds, which reward investors only if certain agreed social outcomes are attained.

But even if Labour articulates these arguments well it cannot duck the need for ruthless prioritisation.  Universal provision of certain services and core universal benefits are vital to binding the nation together, but the boundaries of state provision have always fluctuated, and a debate about those boundaries, based on clear principles, should hold no fear. Certainly not for a mature party that is hungry for government.

For those who would protect everything and change nothing ask yourself how you would react if the Tories were to declare - as they are likely to do - that in the next parliament they would scrap certain pensioner benefits, such as free bus passes and the winter fuel allowance, and put the money instead into a better minimum pension, to protect the poorest?

It is far better for Labour to demonstrate strength and open up this debate now than to respond meekly when the question is put. Oppositions oppose, governments in waiting confront the challenges the nation faces.

Nick Pecorelli is associate director of The Campaign Company

Ed Miliband. Photograph: Getty Images

Nick Pecorelli is Associate Director of The Campaign Company

Photo: Getty
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Here's what Theresa May could say to save the Brexit talks

The best option would be to invent a time machine, but unfortunately that's not on the table. 

One of my favourite types of joke is the logical impossibility: a statement that seems plausible but, on closer examination, is simply impossible and contradictory. “If you break both legs, don’t come running to me” is one. The most famous concerns a hapless tourist popping into a pub to ask for directions to London, or Manchester, or Belfast or wherever. “Well,” the barman replies, “I wouldn’t have started from here.”

That’s the trouble, too, with assessing what the government should do next in its approach to the Brexit talks: I wouldn’t have started from here.

I wouldn’t have started from a transient Leave campaign that offered a series of promises that can’t be reconciled with one another, but that’s the nature of a referendum in which the government isn’t supporting the change proposition. It’s always in the interest of the change proposition to be at best flexible and at worst outright disregarding of the truth.

Britain would be better off if it were leaving the European Union after a vote in which a pro-Brexit government had already had to prepare a white paper and an exit strategy before seeking popular consent. Now the government is tasked with negotiating the terms of Britain’s exit from the European Union with a mandate that is contradictory and unclear. (Take immigration. It’s clear that a majority of people who voted to leave want control over Britain’s borders. But it’s also clear that a minority did not and if you take that minority away, there’s no majority for a Leave vote.

Does that then mean that the “democratic” option is a Brexit that prioritises minimising economic harm at the cost of continuing free movement of people? That option might command more support than the 52 per cent that Leave got but it also runs roughshod over the concerns that really drove Britain’s Leave vote.

You wouldn’t, having had a referendum in inauspicious circumstances, have a government that neglected to make a big and genuinely generous offer on the rights of the three million citizens of the European Union currently living in the United Kingdom.

In fact the government would have immediately done all it could to show that it wanted to approach exit in a constructive and co-operative manner. Why? Because the more difficult it looks like the departing nation is going to be, the greater the incentive the remaining nations of the European Union have to insist that you leave via Article 50. Why? Because the Article 50 process is designed to reduce the leverage of the departing state through its strict timetable. Its architect, British diplomat John Kerr, envisaged it being used after an increasingly authoritarian state on the bloc’s eastern periphery found its voting rights suspended and quit “in high dudgeon”.

The strict timeframe also hurts the European Union, as it increases the chances of an unsatisfactory or incomplete deal. The only incentive to use it is if the departing nation is going to behave in a unconstructive way.

Then if you were going to have to exit via the Article 50 process, you’d wait until the elections in France and Germany were over, and restructure Whitehall and the rest of the British state so it was fit to face the challenges of Brexit. And you wouldn’t behave so shabbily towards the heads of the devolved administrations that Nicola Sturgeon of the SNP and Carwyn Jones of the Welsh Labour Party have not become political allies.

So having neglected to do all of that, it’s hard to say: here’s what Theresa May should say in Florence, short of inventing time travel and starting the whole process again from scratch.

What she could do, though, is show flexibility on the question of British contributions to the European budget after we leave, and present a serious solution to the problem of how you ensure that the rights of three million EU citizens living in Britain have a legal backdrop that can’t simply be unpicked by 325 MPs in the House of Commons, and show some engagement in the question of what happens to the Irish border after Brexit.

There are solutions to all of these problems – but the trouble is that all of them are unacceptable to at least part of the Conservative Party. A reminder that, as far as the trouble with Brexit goes, Theresa May is the name of the monster – not the doctor. 

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