Statecraft without statism: governing for shared prosperity in an age of austerity

The task is to seek material gains through a new, less transactional politics.

Whoever governs from 2015 will have to do more than repair the public finances, as tough as that will be. If shared growth is to be saved, an incoming administration will need to be radically reformist at the same time. This will mean fixing the structural failures that caused living standards to falter for all but the richest before 2008, restoring the three conditions of shared growth: fuller employment, a strong link from productivity to pay, and a sustainable welfare system for families. It will mean little less than re-crafting the state for new times.

Consider fuller employment. Simply returning the UK to a pre-crisis employment rate requires 850,000 more jobs. Even if the UK now emulates the strongest sustainable period of employment growth in the past 20 years –the late-1990s jobs boom – this will take until late 2016. We will not come close to this without steady growth.

But fuller employment won’t flow from growth alone. It will also require reform. The UK population aged 65 and over is growing twice as fast as the population aged 16–64, meaning unprecedented employment among over 65s is needed to stand still. And with soaring childcare costs undermining incentives to work, parents as well as older workers will need more support if people are to move into the new jobs we create.

What about productivity and pay? Anaemic demand has caused an unprecedented collapse in real wages and spikes in job insecurity. But around one in five UK workers were already paid below £7.50 an hour before 2008, trapped in sluggish swathes of our jobs market that have expanded over time. Meanwhile, the link from productivity to pay has eroded; only 18 per cent of pre-tax income now goes to the entire bottom half while 10 per cent goes to the top 1 per cent. None of this will change until growth returns.

But just as with employment, growth won’t be enough. Addressing low pay will require reform. In a society that is older, more unequal and increasingly online, the growth sectors of the future aren’t just hi-tech knowledge industries that create well-paid jobs but also low paying industries like social care, hospitality and logistics. The UK’s skills system and the structures in our jobs market don’t encourage good quality versions of these jobs. They need an overhaul.

Finally, what about welfare? How will families with children keep up with childless households as growth returns? No level of employment or wage growth can fulfil this function. Assuming that we don’t want to send children out to work, the task of sharing growth with larger households is necessarily one for the tax and benefit system – it’s one reason that tools like Child Benefit were created.

The squeeze on these forms of support is unlikely to end until growth returns. But even once a recovery takes hold, no-one seriously believes that today’s approach to family support is a sustainable settlement. In 2015, the UK will be left with two illogically separate systems of means-tested child support, Child Benefit and Universal Credit. Meanwhile, the coalition’s cuts work mainly by freezing and squeezing support rather than re-sculpting it. No party has yet set out which parts of the system should be protected or extended and which will need to be run down over time. Such decisions will be needed if the system is to be made sustainable.

So, ambitious reform is needed to save shared growth. How can this be delivered when there’s no money? One thing is clear: the answer can’t be to use the same approach as the last government, when so many major reforms relied heavily on a growing spending envelope, whether through large pay hikes for GPs’ extended opening hours, vast capital spending for early academies, or simply funding reductions in child poverty without contentious cuts elsewhere. Next time around, there won’t be money to oil the wheels.

In thinking about how to drive reform without money, a useful place to start is Jon Cruddas’s recent critique of New Labour’s statecraft. He argues that New Labour became managerial and bureaucratic, focusing overwhelmingly on material goals that under-emphasised culture, community and family and also became pre-occupied with state remedies. The result was a transactional approach to social problems like child poverty that had some major successes, for example, raising 1.1 million children above the poverty line, but that was also both too reliant on new spending, and too liable to lead to change with shallow roots.

The call for a richer, deeper statecraft – both less purely materialist and less instinctively statist – is a useful one when thinking about a post-2015 agenda on living standards. But it has both strengths and weaknesses. On the one hand, it must be right that shared growth won’t be saved unless progressives break away from a cold arithmetic of cash transfers and distributional charts to argue for more structural reforms. On the other hand, by far the greatest challenge we now face is a material one of falling living standards. Now is hardly the time to retreat into a post-materialist politics of pubs, patriotism and parks.

So the task is to seek material gains through a new, less transactional politics, obsessing less with static charts of winners and losers and more with economic empowerment through reform, embracing an instinct to spread power in the market. That means rejecting power hoarding in the central state, including policy solutions that see poverty reduction as something done for people rather than with them, and shifting away from cash transfers towards structural reforms like investment in pro-employment public services and the institutions in which they are provided.

What could that mean in practice? On employment, the priorities are services that give individuals and families more freedom to boost their own incomes through work, like childcare and elderly care, and fully functional re-employment and support services for older workers as extensive as traditional job search services are today.

What about pay? A minimalist approach of ‘skills supply plus a minimum wage’ has proven a grossly inadequate response to the modern challenge of low-wage labour. A fuller response would make the Low Pay Commission worthy of its name with a broader, more strategic remit, advising the government on how to reduce the extent of low pay and assessing the ‘affordable wage’ that major sectors could pay without employment effects. This would need to be backed with stronger sectoral institutions to address the coordination failures that stop UK employers from investing in skills, and particularly long-term training relationships with young people. It will also require detailed work to raise demand for skills – for example, through the greater use of occupational licences.

The long-term view must be grounded in a recognition that shared growth depends as much on reform as on recovery. Broad-based real income growth won’t return until its three foundation stones – fuller employment, a stronger link from productivity and pay, and a sustainable welfare system for families – are back in place. Achieving this in the austere environment of the next parliament will require a new way of governing. It is a no less material agenda than those pursued by progressives in the past. But it will need a richer, more confident and less statist approach to reform than the last government, requiring a statecraft that is appropriate for new times.

 

James Plunkett is director of policy at the Resolution Foundation. He writes in a personal capacity.

A fuller version of this article first appeared in the February issue of Juncture.

Jon Cruddas, the head of Labour's policy review, has criticised the last government for becoming too managerial and bureaucratic. Photograph: Getty Images.

James Plunkett is director of policy and development at the Resolution Foundation

Getty
Show Hide image

The Tinder dating app isn't just about sex – it's about friendship, too. And sex

The lines between sex, love and friendship are blurrier than ever, as I found out quickly while using the app.

The first time I met someone using Tinder, the free dating app that requires users to swipe left for “no” and right for “yes” before enabling new “matches” to chat, it was an unqualified success. I should probably qualify that. I was newly single after five years in a committed relationship and wasn’t looking for anything more than fun, friendship and, well, who knows. A few weeks earlier I had tried to give my number to a girl in a cinema café in Brixton. I wrote it on a postcard I’d been using as a bookmark. She said she had a boyfriend, but wanted to keep the postcard. I had no date and I lost my page.

My Tinder date was a master’s student from Valencia called Anna (her name wasn’t really Anna, of course, I’m not a sociopath). When I arrived at the appointed meeting place, she told me I was far more handsome IRL (“in real life”) than my pictures suggested. I was flattered and full of praise for the directness of continental Europeans but also thought sadly to myself: “If only the same could be said about you.”

Anna and I became friends, at least for a while. The date wasn’t a success in the traditional sense of leading us into a contract based on exclusivity, an accumulating cache of resentments and a mortgage, but it had put me back in the game (an appropriate metaphor – people speak regularly of “playing” with the app).

According to Sean Rad, the co-founder who launched Tinder in late 2012, the service was invented for people like me. “It was really a way to overcome my own problems,” he told the editor of Cosmopolitan at an event in London last month. “It was weird to me, to start a conversation [with a stranger]. Once I had an introduction I was fine, but it’s that first step. It’s difficult for a lot of people.” After just one outing, I’d learned two fundamental lessons about the world of online dating: pretty much everyone has at least one decent picture of themselves, and meeting women using a so-called hook-up app is seldom straightforwardly about sex.

Although sometimes it is. My second Tinder date took place in Vienna. I met Louisa (ditto, name) outside some notable church or other one evening while visiting on holiday (Tinder tourism being, in my view, a far more compelling way to get to know a place than a cumbersome Lonely Planet guide). We drank cocktails by the Danube and rambled across the city before making the romantic decision to stay awake all night, as she had to leave early the next day to go hiking with friends. It was just like the Richard Linklater movie Before Sunrise – something I said out loud more than a few times as the Aperol Spritzes took their toll.

When we met up in London a few months later, Louisa and I decided to skip the second part of Linklater’s beautiful triptych and fast-track our relationship straight to the third, Before Midnight, which takes place 18 years after the protagonists’ first meet in Vienna, and have begun to discover that they hate each others’ guts.

Which is one of the many hazards of the swiping life: unlike with older, web-based platforms such as Match.com or OkCupid, which require a substantial written profile, Tinder users know relatively little about their prospective mates. All that’s necessary is a Facebook account and a single photograph. University, occupation, a short bio and mutual Facebook “likes” are optional (my bio is made up entirely of emojis: the pizza slice, the dancing lady, the stack of books).

Worse still, you will see people you know on Tinder – that includes colleagues, neighbours and exes – and they will see you. Far more people swipe out of boredom or curiosity than are ever likely to want to meet up, in part because swiping is so brain-corrosively addictive.

While the company is cagey about its user data, we know that Tinder has been downloaded over 100 million times and has produced upwards of 11 billion matches – though the number of people who have made contact will be far lower. It may sound like a lot but the Tinder user-base remains stuck at around the 50 million mark: a self-selecting coterie of mainly urban, reasonably affluent, generally white men and women, mostly aged between 18 and 34.

A new generation of apps – such as Hey! Vina and Skout – is seeking to capitalise on Tinder’s reputation as a portal for sleaze, a charge Sean Rad was keen to deny at the London event. Tinder is working on a new iteration, Tinder Social, for groups of friends who want to hang out with other groups on a night out, rather than dating. This makes sense for a relatively fresh business determined to keep on growing: more people are in relationships than out of them, after all.

After two years of using Tinder, off and on, last weekend I deleted the app. I had been visiting a friend in Sweden, and took it pretty badly when a Tinder date invited me to a terrible nightclub, only to take a few looks at me and bolt without even bothering to fabricate an excuse. But on the plane back to London the next day, a strange thing happened. Before takeoff, the woman sitting beside me started crying. I assumed something bad had happened but she explained that she was terrified of flying. Almost as terrified, it turned out, as I am. We wound up holding hands through a horrific patch of mid-air turbulence, exchanged anecdotes to distract ourselves and even, when we were safely in sight of the ground, a kiss.

She’s in my phone, but as a contact on Facebook rather than an avatar on a dating app. I’ll probably never see her again but who knows. People connect in strange new ways all the time. The lines between sex, love and friendship are blurrier than ever, but you can be sure that if you look closely at the lines, you’ll almost certainly notice the pixels.

Philip Maughan is Assistant Editor at the New Statesman.

This article first appeared in the 26 May 2016 issue of the New Statesman, The Brexit odd squad