Labour has a public sector reform agenda. Or does it?

Ed Miliband has said the state needs to change. He also needs to say how.

A familiar charge against Labour is that the party is in denial about the need to make cuts to public services. This isn’t quite true. The economic argument Ed Miliband and Ed Balls have advanced certainly attacks the government for premature, ill-targeted and aggressive cuts that stifle growth. (It is safe to say the “too far, too fast” line has had an adequate public airing.) There is also constituency on the left that sees budget austerity as wholly unnecessary – a pretext for indulging an old Conservative appetite for shrinking the state. But the official party line is to accept that spending under a Labour government would be tight. Miliband has been explicit in saying a return to pre-crisis levels of investment in public services is not an option. Balls has promised a “zero-based” spending review, which, in theory at least, puts everything on the table for possible cuts.

The problem is that not enough voters think Labour’s heart is in fiscal discipline, partly because there is very little indication of what the opposition sees the state doing now that it imagines not being done at taxpayers’ expense in the future or, failing that, how it might be done differently so money can be saved. Meanwhile, there are plenty of coalition measures being opposed. If there is a credibility gap it won’t be closed by more theoretical commitments to control spending but in the generation of imaginative ideas for getting more for less. No one questions Labour's love of public services. The doubt is whether it has ideas for expressing that love in ways other than central government spending.

Slowly, a reform agenda is emerging. I’ve blogged before about the shadow health team’s plans for “whole person care” and the merger of NHS and social care budgets. This is perhaps the furthest advanced policy area where Labour front benchers are talking openly about long-term financial constraints. They don’t have much choice. Demographic trends mean that health budgets will be squeezed regardless of the timetable a Chancellor adopts for reining in the deficit.

Liz Kendall, shadow social care minister, gave a speech yesterday setting out in some depth Labour’s approach to the question of how society should care for an ageing population and, crucially, how it might better afford to do so. It is worth a read not just because it contains actual policy but because it sets the issue in a wider context of how state services need to evolve more generally if they are to retain the confidence of people who rely on them. Kendall’s argument is that ultimately users of services will expect to have more control and will expect state provision to be more flexible and responsive to their needs. Those demands can be met, in part, by devolution of budgets but they also require a new way of thinking about what state provision looks and feels like. In a revealing pasage in the speech, Kendall notes:

Making the big changes people want, and our public finances demand, will require fundamental reforms to public services and the role of the state. The old top-down approach - where the state does things to or for people - won’t work. This isn’t just because the kinds of increases in public spending that Labour secured when we were last in Government simply won’t be possible for the foreseeable future. It’s because public services must change if they’re going to retain support in the long run. Every week in my constituency surgery people tell me how frustrated and even angry they are about one public service or another: how they’ve been badly treated, fobbed off and passed between different departments, as if their views and concerns don’t matter. A One Nation approach to public services understands that an over bureaucratic state, as well as unrestrained markets, prevents people from leading the lives they want to live.

A similar argument was made by Ivan Lewis, shadow International Development Secretary, writing about the need to reform the state in the New Statesman last week. He wrote that:

By the end of our period in government, Labour’s failure to talk about family and community left the impression that we saw Britain’s future only through the prism of state and market. One Nation Labour believes our future success depends on our capacity to harness the best of an active state, aspirational individuals, strong families and community networks supported by a vibrant private sector.

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New private sector provision would be supported where state provision has repeatedly failed or is unable to meet needs and where partnerships between public and private can improve outcomes. But this has to be within a framework of public accountability and high ethical standards. It is one tool in the locker, not the answer in all times and places.

In the NHS and education, the Tories have focused on giving power to the providers of services. One Nation Labour will give more influence and control to patients and parents. In my view choice is neither a panacea nor a realistic option in many circumstances. But it is crucial to give people a personalised - not a “conveyor belt” - service, with greater control for individuals and families over decisions about their lives together with a greater stake in collective community provision.

This may all sound a bit wonkish and abstract but in the context of Labour’s gradual advance towards a position on public sector reform it is significant. (Both interventions would have to be approved by the leader’s office so can be said to have Ed Miliband’s permission – even, perhaps, his blessing.) The problem and the reason new ideas sometimes come across as encrypted or camouflaged in jargon is that not everyone in the party is persuaded that this is the kind of language Labour should be using, or even the kind of conversation the party should be having.

There are, crudely speaking, two kinds of obstruction. The first is among those on the left, chiefly in the trade union movement, who see any discussion of private sector participation, choice or markets as an attack on the integrity of a well-resourced public sector and, by extension, a resurgence of “Blairism.” The increasing deployment of that word as a term of abuse has a suffocating effect, stifling any impulse to consider ways to innovate and demand efficiency in the way government works. The second obstacle is more subtle. It is the concern that advertising Labour’s commitment to reform public services with a more-for-less agenda confuses the message of opposition to what the coalition is doing. In essence, this is the enduring argument that Labour’s commitment to public services is a “dividing line” from the Tories who can be presented as wanting to slash, burn and privatise everything the public holds dear. According to this view, conceding that there is a long-term funding challenge, accepting that services were failing to live up to expectations even under the last government and naming ways to improve them risks abetting the coalition when it claims that its own policies represent a clearing up of Labour’s mess.

The trouble with that approach is that is presumes voters haven’t noticed that the public sector needs modernisation and that they are entirely happy with the kind of service that is delivered by monolithic institutions administered centrally and funded top-down by the Treasury. It also presumes that when voters despair of David Cameron and George Osborne they will rebound naturally into Labour’s arms and cease to believe that a cause of their current pain is profligate spending under the old regime. Three years into this parliament, with two years remaining before a general election, there isn’t much evidence that is the case. Labour needs to be in the business of reassuring people that it respects the fact that the money they spend comes from somewhere and that every sinew is being strained to get the best value from it in terms of quality and efficiency.

Ed Miliband appears gradually to be coming round to this view. When I spoke to him a few weeks ago, he spoke about the challenge of addressing public concerns about an “unresponsive state”. He cited the influence of Jon Cruddas, who leads Labour’s policy review and who has written and spoken in the past about the weakness of a position that relies on defending a faceless bureaucratic state model. But Miliband is happiest talking about the way poeple have lost faith in parts of the private sector – in the banks, privatised utilities, energy and train companies - who they feel are ripping them off. He is at ease urging a more humane and moral brand of capitalism. While he recognises that there is also a need to restore public trust in organs of the state, I sense he is far less enthusiastic about that side of the equation and so less consistently engaged in what might be involved. That will have to change. There is only so much that can be achieved by allowing out-riding shadow ministers to float public sector reform ideas in occasional op eds and speeches. At some point, if this is to become a serious plank of party policy, the leader has to put the full authority of his office behind it. If Labour really believes in reforming the state, if it thinks that innovation in the public sector is one route to a better society and a balanced budget, Ed Miliband has to start saying so.

Ed Miliband and Ed Balls at the Labour conference in Manchester last year. Photograph: Getty Images.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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Roy Hattersley: Labour is far closer to extinction now than in the 1980s

 If the takeover of the party by the far-left succeeds there will be no opportunity to rescue it from the wilder shores of socialism, says the former deputy leader.

The comparison with the Eighties is irresistible but misconceived. Labour is far closer to extinction as a major party than it was 35 years ago. That is not because Jeremy Corbyn is incapable of leading the party to victory — although he is. Nor is it because his supporters threaten the political assassination of anyone who says so — although they do. It is because, for the first time in its history, Labour is in real danger of a permanent domination by the unrepresentative and unelectable left.

All the other regular crises in the party’s history — German rearmament, nuclear disarmament, the defection of the Gang of Four to found the SPD — were resolved by mistakes being rectified, resolutions reversed and Labour resuming its place in the mainstream of British politics. Nor was there any genuine risk that the infiltrators from the far left would play a decisive part in national policy making. The Militant Tendency controlled municipal politics in Liverpool and attempted, with mixed success, to unseat vulnerable mainstream MP’s. But there was no possibility of them subverting the whole party. Now the far left operating through Momentum  aspires to make a decisive, and irreversible shift in Labour’s core ideology by initiating a purge of mainstream Labour MPs and a cull of headquarters office staff, reducing the part that the parliamentary party plays in choosing the leader and making the election manifesto the preserve of the annual conference. If the putsch — described by its instigators as an extension of party democracy — succeeds, there will be no opportunity for a latter day Neil Kinnock to rescue Labour from the wilder shores of socialism and the odds on its survival lengthen.

The crisis could have been averted. The parliamentary party  with the exception of a handful of residual Blairites  is ready for some sort of compromise. That is why, three weeks ago, it gave its overwhelming support to the proposal that the shadow cabinet should be elected by Labour MPs rather than chosen by the leader. The change was intended to allow an honourable return to the front bench for the shadow ministers who resigned in the spring. As a move towards unity, it is no more than papering over the cracks but better that than gaping fractures. Although Corbyn had neither the sense nor the grace immediately to accept the gesture of conciliation, the choice between an uneasy peace and continued guerrilla warfare still lies with him. If — as his victory speech suggests — he regards last Saturday’s victory as a mandate to impose his sectarian will on the party, the battle is likely end with mutual self-destruction.

Even if Jeremy Corbin succeeds in his attempts to create a permanent far-left hegemony, the Labour Party is unlikely to split as it did 30 years ago . The fate of the SDP — absorption into a Liberal Party which kept the Tory-led coalition in office or defiant independence that ended in the ignominy of polling fewer by-election votes than the Monster Raving Loony Party — has dampened enthusiasm for a breakaway movement. Nor are there charismatic potential leaders who stand ready to lead their followers into battle in the way that Roy Jenkins and David Owen (the Fidel Castro and Che Guevara of social democracy) marched a dozen Labour MPs into the valley of political death. But a futile attempt to form a new party would at least imply the hope of some sort ofresurrection. The more likely outcome would be the product of pure despair — the parliamentary Labour party would not divide and instead would begin slowly to disintegrate.

If the worst happens some Labour MPs will suddenly discover previously undetected virtues in Corbyn and Corbynism and line up behind him. Others will grow weary of being abused by local extremists and fade away. Contrary to public opinion, most MPs could earn more from less demanding jobs outside parliament. The politically dedicated, determined to be candidates in the next election, will accept the challenge of reselection. More will succeed than fail, but the harm to the party’s reputation will be immense.

One feature of the 1980 desertion will certainly be replicated. When the Gang of Four defected, the damage done by the loss of glamorous leadership was more than matched by the loss of hard working membership. If Labour MPs begin to believe that the battle for reason and recovery is no longer worth fighting the disenchantment will become infectious. Jeremy Corbyn’s devotees would still turn out for the rallies. But the enthusiasm with which they would tramp the streets on rainy nights, or spend boring weekends telephoning target voters, is in doubt. Reliance on the notion that the election can be won online is the refuge of politicians who either have not identified or do not understand the floating voters.

The haemorrhage has already begun — increased by the behaviour of recently recruited Corbynites who do not seem to have heard that their hero has an olive tree outside his office door. All over the country they are bullying and filibustering their way into the control of local parties — excoriating mainstream members, manipulating the rules of debate and postponing votes until late in the evening. Of course, the men and women who oppose them could play the same game. But they are, by their nature, reasonable people and they want to lead reasonable lives. That is why they represent the sort of Labour Party with which voters can identify. 

Unfortunately, many of the Labour MPs who should have led the campaign to recreate an electable party have spent the last year either sulking or complaining. They have been anti Corbyn but pro very little. Owen Smith’s leadership campaign ended in disaster not because of the size of the incumbent’s votes but because of the challenger’s failure to set out an alternative vision of the society that socialists hope to create. Angela Eagle would have won fewer votes, but she would come closer to reassuring party members that "moderates" (a deadening description which should be abandoned) have principles and policies. A campaign that relied on nothing except the obvious truth that Jeremy Corbyn would lead Labour to defeat was doomed from the start. A majority of the party members who joined before 2015 voted for Smith. Think of how many more would have done the same had he offered them more to vote for than disapproval of his opponent.

Corbyn, and many of the Corbynites, are unmoved by the evidence that they are heading straight to defeat. That is, in part, because Corbyn himself is in what psychiatrists call “total denial.” There were times last year when he seemed to be implementing a carefully coordinated plan to alienate all the middle-of-road voters on whose support a Labour victory depends. He has proposed the unilateral abandonment of the British nuclear deterrent, refused to back Britain’s continued membership of the European Single Market and defended his historic association with apologists for terrorism — all items on the curriculum vitae of a Labour leader who might have been invented by Conservative Central Office. No political leader in British history has been so careless about his party’s prospects at the ballot box. But that is only one of the reasons why the threat of defeat will do little to halt the party's leftward gallop.

There is, within the ranks of Corbyn supporters, a substantial number of activists who — since they do not believe that parliamentary democracy can create the socialist Utopia of their dreams — regard the election of a Labour Government as an irrelevance. Indeed they believe that a prolonged period of Tory misrule will bring forward the day when a spontaneous uprising will herald the new dawn. It is near to inconceivable that Corbyn believes in such millenarian nonsense. But he appear to subscribe to the equally fatuous view that the first task is to make Labour a genuinely socialist party and that winning elections can wait until it is accomplished.

That is clearly the view of those correspondents to the New Statesman who complain about Corbyn’s critics obsession with what they call “electablity”. It is easy for their cynics to sneer about putting power before principle, but winning is a matter of principle too. Labour exists to make those changes in society which can only be achieved in power. In 2016 the fight — to quote the former Labour leader Hugh Gaitskell in 1962 — is less about saving “the party we love” than about rescuing the nation from long years of  Tory bigotry. To behave in a way which diminishes — indeed for a time extinguishes — Labour’s chance of fulfilling its historic purpose is worse than self indulgent. It is betrayal.

There are major figures in the current drama of the Labour Party whose attitude towards the prospect of government is both inexcusable and incomprehensible. Chief among them is Len McCluskey, the general secretary of Unite and a man whose every bombastic television appearance is worth thousands of votes to the Tories. The members he represents have the strongest possible vested interest in a Labour victory at the next election. Yet many of his policies and pronouncements — particularly his risibly unsuccessful attempts to bully MPs into supporting Jeremy Corbyn’s leadership — contribute to the Conservatives’ opinion poll lead and increases the danger of massive defeat at the next election turning into total destruction.

Anyone who doubts that Labour could be reduced to the status of the Liberal Democrats or the Greens — struggling for influence without even hoping for power — should be sent to canvas for the party in Scotland. But the near oblivion north of the border is not yet inevitable in the south. Recovery will take time and before Labour can begin effectively to deal with the challenges from outside the party it must struggle back into the mainstream of politics — a process which has to begin with an acceptance that Jeremy Corbyn’s first election was more than a combination of the Peasants’ Revolt and the Children’s Crusade. For many of the men and women who voted for the first time in 2015 his victory represented the end of a decade of disillusion. At first they had felt no more than disappointment at opportunities that successive Blair Governments missed — their delight in the landslide victory of 1997 fading away until it was finally extinguished on the battlefields of Iraq.

The Peak District village in which I live is home to more Labour party members than the tourists may imagine. Two of them  —  a retired bank manager and an emeritus professor of cardiac surgery — voted for Corbyn in 2015. In part they were motivated by a desire to “give socialism a chance for once.” But they also thought that they were drawing a line under the years of “the third way” and triangulation. New Labour, in which they had once devoutly believed, had come to mean private enterprise edging its way into the health service, the surreptitious extension of secondary selection and light regulation of the City of London. Jeremy Corbyn, like the Scottish National Party, has much to thank Tony Blair for.

For some people Jeremy Corbyn was, like Donald Trump and Marine LePen, a welcome alternative to the politics of the establishment. To many more he was, by the very nature of his unelectability, the antidote to the opportunism which they (wrongly) believe characterises life in Westminster. Now, a mainstream candidate for the Labour leadership will have to make clear that they are guided not by opinion polls but by a vision of a new and better society. The next leader must concentrate every nerve and sinew on winning, but they must have faith in their ability to carry the country for reasonable revolution.

Unfortunately the members of the Labour mainstream are notoriously reticent about  discussing first principles. They find talk of “the vision thing” embarrassing and believe that the task which faces them is too obvious to need justification by any “fancy theories.” Yet there is a great body of work — by the likes of TH Green, RH Tawney. Anthony Crosland and John Rawls — which set out the theory of democratic socialism and descriptions of why it is especially relevant today – Joseph E Stiglitz’s The Price of Inequality and The Spirit Level by Richard Wilkinson and Kate Pickett — abound. The recovery of reason has to begin with Chukka Umuuna explaining the virtues of equality, Yvette Cooper describing Britain’s obligations to the developing world and Dan Jarvis defining the role of the state in protecting the weak against the strong. Or any of them talking about what they stand for instead of assuming that their convictions are taken for granted. The Daily Mail might not report their speeches, but moderate party members will treat the related Fabian Society pamphlets like water in the desert.

If, as they must, the reasonable majority of Labour MPs choose to stay and fight, they have to organise — inside the parliamentary party and, more importantly in the constituencies. I have spent much recent time insisting, to sceptical friends that the occupants of the opposition back benches are as competent and committed as were members of any of the governments, or shadow governments, in which I served. But I do not even try to argue that they are as active as my contemporaries once were in reclaiming the party. Success and survival depends on the constant demonstration that reasonable radicals still have a home in the Labour Party.  

One refugee from Corbyn’s original shadow cabinet assured me that like-minded Labour MPs do occasionally meet. When I asked what they discussed, I was told that they “wait for something to turn up.” But, something will only turn up if it is prepared and promoted by the men and women who have the courage and commitment to lead Labour out of the wilderness. The journey will be long and hard and there can be no guarantee of arrival at the desired destination. But those of us who believe that Labour can still provide the best prospect of a more equal society have to begin the trek toward the promised land — and we need to set out straight away.

Roy Hattersley was deputy leader of the Labour Party from 1983 to 1992.