How Labour can give real meaning to predistribution

If the party is to offer a positive account of how it would govern in tough times, it must rigorously define future spending priorities.

Whatever the modern obsession with personality and presentation, ideas still have the potential to make the weather in British politics. 'Predistribution' is hardly the punchiest term invented to describe a big concept. But it is the closest thing that Ed Miliband's Labour has to a coherent governing strategy.

The strength of the idea, coming hot on the heels of the Labour leader's landmark welfare speech last Thursday, is two-fold. Predistribution acknowledges what went wrong under the previous government, emphasising that Labour would be different next time, eschewing the Byzantine tax credit economy in favour of active measures to make the labour market fairer, while increasing the supply of secure high quality jobs. Secondly, predistribution points to how a Labour government would operate with less money around, using a richer set of levers to affect change from tougher regulation of labour and product markets, to legislation that transforms the culture of corporate governance and short-termism in British business. The agenda underlines the argument that higher public expenditure is not the only route to a fairer, more equal society.

However, even the most ardent Labour loyalist would concede the party has not made sufficient progress in fleshing out a substantive predistribution project. The policy review has sought to carve out fresh territory, stimulating much-needed debate about rebuilding solidarity and the 'limits to markets' (as espoused by Michael Sandel). But the clock is ticking; many in the party are beginning to ask: where is the substance underpinning Labour's programme?

Both the Balls and Miliband speeches have bought Labour desperately needed economic and political credibility. But they were essentially about dumping negatives: drawing a line under Labour's reputation for economic profligacy and a perceived failure to reform the welfare state in the Blair and Brown years. What the party urgently needs is a positive account of how it would govern in tough times. Labour cannot hope to secure a substantive majority in 2015 unless it sets out a credible, forward-looking programme. The predistribution idea has to make much greater impact with the public. 

The challenge for Labour is that while the concept of predistribution appears sufficiently nebulous to appeal to all sides of the political spectrum, this agenda, if it is to mean anything, necessitates facing up to hard choices. Substantive predistribution requires tough reforms that raise difficult questions for the party. Intriguingly, this is the case whether it is 'Blairite modernisers', or the more traditional elements of Labour's left. The challenge is to step beyond outdated ideological categories as Miliband embarks on the task of reshaping British social democracy for an era of post-crisis austerity.

For one, predistribution will not succeed unless the bargaining position of low-paid workers can be strengthened. This will require a very different balance to be struck between regulation and flexibility in the labour market, including a higher 'living' minimum wage with scope for sectoral pay bargaining to prevent under-cutting. It will require stronger collective organisation too, with scope for 'new unions' to organise the lowest paid workers. New Labour's claim that 'any job is a good job' is no longer tenable if the aim is to make the distribution of initial market outcomes fairer. 

Neither will predistribution be credible unless Labour can advance a bold education reform strategy for Britain. In the UK, raising the economy onto a high wage, high skill, high productivity trajectory entails sustained investment in training and human capital. The party has been undermined on education, allowing Michael Gove to acquire ownership of the academy schools programme popularised by Tony Blair. Free schools have serious limitations, creating an uncoordinated market and an admissions free for all, but Labour needs its own proposals to ratchet up performance in the lowest performing areas. Further education colleges need bold reform to raise quality; apprenticeships should be guaranteed for young people who achieve the requisite qualifications in English and Maths; access to university, regardless of social background, must be further expanded. 

Finally, an effective strategy of predistribution will require Labour to resolve major debates about the balance between targeting and universalism in the welfare state. The old model of redistributive welfare relied heavily on means-testing, underlined by the structure of tax credits in an effort to subsidise low pay at the lower end of the labour market. The contributory system which Labour favours would have real strengths in underpinning support for the welfare state, but the costs of transitioning to a new system would be significant. Many of the benefit cuts introduced by the coalition cannot be reversed by an incoming Labour government: the price of the contributory principle will be declining benefits for the workless poor.

As such, a credible predistribution agenda will require Labour to rigorously define future spending priorities. This is not simply a question of which departmental budget to trim, or which benefit cuts to reverse or accept. This is a bigger existential question about whether Labour's strategic purpose is to be a party of distribution or a party of production. To be a governing force committed to an underlying shift in the distribution of wealth and power in British society, Labour will need to prioritise social investment in the early years and childcare, family support, education, skills, knowledge, innovation, human capital, and industrial policy. These are the most viable policies for 'predistributing' market outcomes among those on lower and middle incomes, as north European countries such as Sweden, Denmark and the Netherlands demonstrate. But the party should be under no illusions: if such policies are to be advanced, a future Labour government will have to examine every line of spending on health, pensions, policing, criminal justice, and defence. 

There will inevitably be painful decisions for a party deeply committed to social justice and fairness. But they have to be addressed head on if Labour is to be a credible party of government in tough times. 

Patrick Diamond is a senior research fellow at Policy Network

Ed Miliband walks through Hyde Park after addressing TUC members at the end of a march in protest against the government's austerity measures on October 20, 2012. Photograph: Getty Images.
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Justin Trudeau points the way forward for European politics

Is the charismatic Canadian Prime Minister modelling the party of the future?

Six months after Canadian election day, Justin Trudeau’s Liberal party continues to bask in the glow of victory. With 44 per cent of support in the polls, the Liberals are the most popular party amongst every single demographic – men and women, young and old, and people of all educational backgrounds. 

While most European mainstream parties only dream of such approval, this is actually a small dip for the Liberals. They were enjoying almost 50 per cent support in the polls up until budget day on 21 March. Even after announcing $29.4 billion in deficit spending, Canadians overall viewed the budget favourably – only 34 per cent said they would vote to defeat it.

Progressives around the world are suddenly intrigued by Canadian politics. Why is Justin Trudeau so successful?

Of course it helps that the new Prime Minister is young, handsome and loves pandas (who doesn’t?) But it’s also true that he was leader of the Liberals for a year and half before the election. He brought with him an initial surge in support for the party. But he also oversaw its steady decline in the lead up to last year’s election – leadership is important, but clearly it isn’t the only factor behind the Liberals’ success today.

Context matters

As disappointing as it is for Europeans seeking to unpack Canadian secrets, the truth is that a large part of the Liberals’ success was also down to the former Prime Minister Stephen Harper’s extreme unpopularity by election time.

Throughout almost ten years in power, Harper shifted Canada markedly to the right. His Conservative government did not just alter policies; it started changing the rules of the democratic game. While centre-right governments in Europe may be implementing policies that progressives dislike, they are nonetheless operating within the constraints of democratic systems (for the most part; Hungary and Poland are exceptions).

Which is why the first weeks of the election campaign were dominated by an ‘Anybody But Harper’ sentiment, benefitting both the Liberals and the left-wing New Democratic Party (NDP). The NDP was even leading the polls for a while, inviting pundits to consider the possibility of a hung parliament.

But eight days before election day, the Liberals began to pull ahead.

The most important reason – and why they continue to be so popular today – is that they were able to own the mantle of ‘change’. They were the only party to promise running a (small) deficit and invest heavily in infrastructure. Notably absent was abstract discourse about tackling inequality. Trudeau’s plan was about fairness for the middle class, promoting social justice and economic growth.

Democratic reform was also a core feature of the Liberal campaign, which the party has maintained in government – Trudeau appointed a new Minister of Democratic Institutions and promised a change in the voting system before the next election.

The change has also been in style, however. Justin Trudeau is rebranding Canada as an open, progressive, plural society. Even though this was Canada’s reputation pre-Harper, it is not as simple as turning back the clock.

In a world increasingly taken by populist rhetoric on immigration – not just by politicians like Donald Trump, Nigel Farage, Marine Le Pen and other right-wingers, but also increasingly by mainstream politicians of right and left – Justin Trudeau has been unashamedly proclaiming the benefits of living in a diverse, plural society. He repeatedly calls himself a feminist, in the hope that one day “it is met with a shrug” rather than a social media explosion. Live-streamed Global Town Halls are one part of a renewed openness with the media. Progressive politicians in Europe would do well to take note.

Questioning the role of political parties today

Another interesting development is that the Liberal party is implicitly questioning the point of parties today. It recently abolished fee-paying, card-carrying party members. While this has been met with some criticism regarding the party’s structure and integrity, with commentators worried that “it’s the equivalent of turning your party into one giant Facebook page: Click ‘Like’ and you’re in the club,” it seems this is the point.

Colin Horgan, one of Trudeau’s former speechwriters, explains that Facebook is “literally a treasure trove for political parties”. All kinds of information becomes available – for free; supporters become easier to contact.

It was something the Liberals were already hinting at two years ago when they introduced a ‘supporters’ category to make the party appear more open. Liberal president Anna Gainey also used the word “movement” to describe what the Liberals hope to be.

And yes, they are trying to win over millennials. Which proved to be a good strategy, as a new study shows that Canadians aged 18-25 were a key reason why the Liberals won a majority. Young voter turnout was up by 12 per cent from the last election in 2011; among this age group, 45 per cent voted for the Liberals.

Some interesting questions for European progressives to consider. Of course, some of the newer political parties in Europe have already been experimenting with looser membership structures and less hierarchical ways of engaging, like Podemos’ ‘circles’ in Spain and the Five Star Movement’s ‘liquid democracy’ in Italy.

The British centre-left may be hesitant after its recent fiasco. Labour opened up its leadership primary to ‘supporters’ and ended up with a polarising leader who is extremely popular amongst members, but unpopular amongst the British public. But it would be wrong to assume that the process was to blame.

The better comparison is perhaps to Emmanuel Macron, France’s young economy minister who recently launched his own movement ‘En Marche !’ Moving beyond the traditional party structure, he is attempting to unite ‘right’ and ‘left’ by inspiring French people with an optimistic vision of the future. Time will tell whether this works to engage people in the longer term, or at least until next year’s presidential election.

In any case, European parties could start by asking themselves: What kind of political parties are they? What is the point of them?

Most importantly: What do they want people to think is the point of them?

Ultimately, the Canadian Liberals’ model of success rests on three main pillars:

  1. They unambiguously promote and defend a progressive, open, plural vision of society.
  2. They have a coherent economic plan focused on social justice and economic growth which, most importantly, they are trusted to deliver.
  3. They understand that society has changed – people are more interconnected than ever, relationships are less hierarchical and networks exist online – and they are adapting a once rigid party structure into a looser, open movement to reflect that.

*And as a bonus, a young, charismatic leader doesn’t hurt either.

Claudia Chwalisz is a Senior Policy Researcher at Policy Network, a Crook Public Service Fellow at the University of Sheffield and author of The Populist Signal: Why Politics and Democracy Need to Change