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

Getty
Show Hide image

Find the EU renegotiation demands dull? Me too – but they are important

It's an old trick: smother anything in enough jargon and you can avoid being held accountable for it.

I don’t know about you, but I found the details of Britain’s European Union renegotiation demands quite hard to read. Literally. My eye kept gliding past them, in an endless quest for something more interesting in the paragraph ahead. It was as if the word “subsidiarity” had been smeared in grease. I haven’t felt tedium quite like this since I read The Lord of the Rings and found I slid straight past anything written in italics, reasoning that it was probably another interminable Elvish poem. (“The wind was in his flowing hair/The foam about him shone;/Afar they saw him strong and fair/Go riding like a swan.”)

Anyone who writes about politics encounters this; I call it Subclause Syndrome. Smother anything in enough jargon, whirr enough footnotes into the air, and you have a very effective shield for protecting yourself from accountability – better even than gutting the Freedom of Information laws, although the government seems quite keen on that, too. No wonder so much of our political conversation ends up being about personality: if we can’t hope to master all the technicalities, the next best thing is to trust the person to whom we have delegated that job.

Anyway, after 15 cups of coffee, three ice-bucket challenges and a bottle of poppers I borrowed from a Tory MP, I finally made it through. I didn’t feel much more enlightened, though, because there were notable omissions – no mention, thankfully, of rolling back employment protections – and elsewhere there was a touching faith in the power of adding “language” to official documents.

One thing did stand out, however. For months, we have been told that it is a terrible problem that migrants from Europe are sending child benefit to their families back home. In future, the amount that can be claimed will start at zero and it will reach full whack only after four years of working in Britain. Even better, to reduce the alleged “pull factor” of our generous in-work benefits regime, the child benefit rate will be paid on a ratio calculated according to average wages in the home country.

What a waste of time. At the moment, only £30m in child benefit is sent out of the country each year: quite a large sum if you’re doing a whip round for a retirement gift for a colleague, but basically a rounding error in the Department for Work and Pensions budget.

Only 20,000 workers, and 34,000 children, are involved. And yet, apparently, this makes it worth introducing 28 different rates of child benefit to be administered by the DWP. We are given to understand that Iain Duncan Smith thinks this is barmy – and this is a man optimistic enough about his department’s computer systems to predict in 2013 that 4.46 million people would be claiming Universal Credit by now*.

David Cameron’s renegotiation package was comprised exclusively of what Doctor Who fans call handwavium – a magic substance with no obvious physical attributes, which nonetheless helpfully advances the plot. In this case, the renegotiation covers up the fact that the Prime Minister always wanted to argue to stay in Europe, but needed a handy fig leaf to do so.

Brace yourself for a sentence you might not read again in the New Statesman, but this makes me feel sorry for Chris Grayling. He and other Outers in the cabinet have to wait at least two weeks for Cameron to get the demands signed off; all the while, Cameron can subtly make the case for staying in Europe, while they are bound to keep quiet because of collective responsibility.

When that stricture lifts, the high-ranking Eurosceptics will at last be free to make the case they have been sitting on for years. I have three strong beliefs about what will happen next. First, that everyone confidently predicting a paralysing civil war in the Tory ranks is doing so more in hope than expectation. Some on the left feel that if Labour is going to be divided over Trident, it is only fair that the Tories be split down the middle, too. They forget that power, and patronage, are strong solvents: there has already been much muttering about low-level blackmail from the high command, with MPs warned about the dire influence of disloyalty on their career prospects.

Second, the Europe campaign will feature large doses of both sides solemnly advising the other that they need to make “a positive case”. This will be roundly ignored. The Remain team will run a fear campaign based on job losses, access to the single market and “losing our seat at the table”; Leave will run a fear campaign based on the steady advance of whatever collective noun for migrants sounds just the right side of racist. (Current favourite: “hordes”.)

Third, the number of Britons making a decision based on a complete understanding of the renegotiation, and the future terms of our membership, will be vanishingly small. It is simply impossible to read about subsidiarity for more than an hour without lapsing into a coma.

Yet, funnily enough, this isn’t necessarily a bad thing. Just as the absurd complexity of policy frees us to talk instead about character, so the onset of Subclause Syndrome in the EU debate will allow us to ask ourselves a more profound, defining question: what kind of country do we want Britain to be? Polling suggests that very few of us see ourselves as “European” rather than Scottish, or British, but are we a country that feels open and looks outwards, or one that thinks this is the best it’s going to get, and we need to protect what we have? That’s more vital than any subclause. l

* For those of you keeping score at home, Universal Credit is now allegedly going to be implemented by 2021. Incidentally, George Osborne has recently discovered that it’s a great source of handwavium; tax credit cuts have been postponed because UC will render such huge savings that they aren’t needed.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

This article first appeared in the 11 February 2016 issue of the New Statesman, The legacy of Europe's worst battle