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.

...

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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Forget planning for no deal. The government isn't really planning for Brexit at all

The British government is simply not in a position to handle life after the EU.

No deal is better than a bad deal? That phrase has essentially vanished from Theresa May’s lips since the loss of her parliamentary majority in June, but it lives on in the minds of her boosters in the commentariat and the most committed parts of the Brexit press. In fact, they have a new meme: criticising the civil service and ministers who backed a Remain vote for “not preparing” for a no deal Brexit.

Leaving without a deal would mean, among other things, dropping out of the Open Skies agreement which allows British aeroplanes to fly to the United States and European Union. It would lead very quickly to food shortages and also mean that radioactive isotopes, used among other things for cancer treatment, wouldn’t be able to cross into the UK anymore. “Planning for no deal” actually means “making a deal”.  (Where the Brexit elite may have a point is that the consequences of no deal are sufficiently disruptive on both sides that the British government shouldn’t  worry too much about the two-year time frame set out in Article 50, as both sides have too big an incentive to always agree to extra time. I don’t think this is likely for political reasons but there is a good economic case for it.)

For the most part, you can’t really plan for no deal. There are however some things the government could prepare for. They could, for instance, start hiring additional staff for customs checks and investing in a bigger IT system to be able to handle the increased volume of work that would need to take place at the British border. It would need to begin issuing compulsory purchases to build new customs posts at ports, particularly along the 300-mile stretch of the Irish border – where Northern Ireland, outside the European Union, would immediately have a hard border with the Republic of Ireland, which would remain inside the bloc. But as Newsnight’s Christopher Cook details, the government is doing none of these things.

Now, in a way, you might say that this is a good decision on the government’s part. Frankly, these measures would only be about as useful as doing your seatbelt up before driving off the Grand Canyon. Buying up land and properties along the Irish border has the potential to cause political headaches that neither the British nor Irish governments need. However, as Cook notes, much of the government’s negotiating strategy seems to be based around convincing the EU27 that the United Kingdom might actually walk away without a deal, so not making even these inadequate plans makes a mockery of their own strategy. 

But the frothing about preparing for “no deal” ignores a far bigger problem: the government isn’t really preparing for any deal, and certainly not the one envisaged in May’s Lancaster House speech, where she set out the terms of Britain’s Brexit negotiations, or in her letter to the EU27 triggering Article 50. Just to reiterate: the government’s proposal is that the United Kingdom will leave both the single market and the customs union. Its regulations will no longer be set or enforced by the European Court of Justice or related bodies.

That means that, when Britain leaves the EU, it will need, at a minimum: to beef up the number of staff, the quality of its computer systems and the amount of physical space given over to customs checks and other assorted border work. It will need to hire its own food and standards inspectors to travel the globe checking the quality of products exported to the United Kingdom. It will need to increase the size of its own regulatory bodies.

The Foreign Office is doing some good and important work on preparing Britain’s re-entry into the World Trade Organisation as a nation with its own set of tariffs. But across the government, the level of preparation is simply not where it should be.

And all that’s assuming that May gets exactly what she wants. It’s not that the government isn’t preparing for no deal, or isn’t preparing for a bad deal. It can’t even be said to be preparing for what it believes is a great deal. 

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.