Miliband's sheet is still blank on public service reform

The Labour leader appears determined to avoid the challenge of fixing state services without spending more money on them.

Even people who are obsessed with politics often find their eyes glazing over when the conversation turns to the detail of public sector reform. That is understandable given the technical complexity of some of the systems under discussion and the tendency for reformers to speak in think tank patois. But I’m sure Ed Miliband has a firm grasp of that rarefied idiom, so he must have other reasons for avoiding the subject.

And avoid it he does. I have seen for myself the glazing-over of the opposition leader’s eyes and averting of the gaze into the middle distance when he is asked how Labour would meet the challenge of fixing state services without spending more money on them. Shadow cabinet ministers who want to have that conversation find it hard to get access to Miliband. Frontbenchers who have tried to push reform onto the agenda were notably overlooked or sidelined in October’s shadow cabinet reshuffle. Labour MPs understood the message clearly enough – the Labour leader will say something about public services when he is good and ready; there are no rewards for trying to accelerate the timetable.

There are a various interpretations of this caution. Miliband’s aides are quick to point out that public sector reform is not a paramount concern among voters. It is a reasonable point. Labour should concentrate on winning support where it is available, not where policy wonks wish it would be. The counter-argument, with which I have now bored even myself through repetition in blogs, columns and private conversations, is that having an imaginative story to tell about public service reform is the way Labour can transmit a message about getting more for less with taxpayers’ money. That is a route to fiscal credibility, which is a paramount concern among many voters. Presenting creative solutions to the challenge of governing in austerity is likely to be a whole lot more persuasive than paper pledges to keep purse-strings tight, which the public discounts as just the kind of thing politicians feel they have to say.

There are senior Labour figures who take that view, including Miliband advisors, but they seem to have difficulty getting the boss to focus on the matter for long. There are various explanations for this is the case.

One view I have heard from the shadow cabinet is that Miliband doesn’t have any experience of working in or shadowing a big spending department. His time in government was spent as a Treasury advisor, a Cabinet Office minister and, finally, as Energy Secretary. In that latter role, he was often focused on climate change, working with people who believed in a cause in which he also believed. He hasn’t experienced first hand the frustration of the minister who has a plan for improving services – or tightening their budgets – and finds that the sector itself and that civil service are blocking change. He has never, for example, been forced to take sides when the interests of patients and doctors collide, or teaching unions and parents.

A parallel factor is Miliband’s reluctance to get into policy debates that risk opening up old factional wounds from the Blair-Brown era. The Labour leader’s allies are fond of dismissing calls for a clear public sector reform agenda as part of "an old 90s frame" – which is code for saying that it is something Blairite ultras obsess about while everyone else on the left has moved on. That is partly fair. The idea that services can be improved by outsourcing key functions to the likes of Serco, Capita and G4S has been pretty well discredited. Likewise, there is mixed evidence at best when it comes to the belief that public sector efficiency and quality are raised when service users (parents and patients) choose between competing providers (schools and hospitals) in quasi-markets.

But there aren’t that many people on the Labour side who seriously advocate an unalloyed choice-and-markets approach to reform. The conversation has, as Miliband’s friends declare, moved on. The problem is that any attempt to question the traditional model of state delivery or to criticise existing services risks being interpreted in some Labour circles as stealthy Blairism, which for its fiercest critics is hardly better than Conservatism.

The fear among some Labour MPs is that they can’t even discuss ways to make the NHS more responsive to patients’ needs or ways to make sure standards in schools keep rising without being accused of back-door privatisation and pandering to a Tory agenda.

The would-be reformers are currently pinning some hope on Jon Cruddas, who is leading Labour’s policy review for Miliband. No-one in the Labour party is ever going to accuse Cruddas of being a slavish devotee of the Cult of Tony, which gives him rare authority in the leader’s office to raise the matter of state reform. Indeed, the one time I have heard Miliband acknowledge the need for the party to have a public sector reform message he referred to the need to match people’s resentment of greedy, self-serving corporations with a need to address their frustrations at the hands of an "unresponsive state". That’s a Cruddas phrase.

The essential division now seems to be between those, like Cruddas, who think the party needs a radical shift in the way Labour talks about the state and between those – chiefly, but not exclusively, allies of Ed Balls – who prefer to contain the debate in the more conventional parameters of how much is being spent in Whitehall and on what.

This isn’t an argument about fiscal responsibility – the shadow Chancellor is more alert than anyone to the need to show that Labour can be prudent. At issue is a conceptual point about whether the future of public services lies in devolution of power and control over budgets to local level and even, ultimately, to service users themselves. The key Cruddasite ambition (outlined in this lecture from last December) is between services that work at the level of sustaining relationships between provider and citizen and those that deal in impersonal transactions.

The reformers think Labour has an opportunity to launch a consumer-led revolution in public services, thereby renewing the social contract that serves as the left’s mandate to spend public money. The sceptics think that is all abstract wonk-speak that would amount, in practice, to chaos and loss of central control. Time spent at the Treasury teaches politicians to fear devolution of budgeting authority to anyone for fear that they mess it all up and leave the Chancellor to pick up the pieces.

So where does Miliband sit in all of this? As with so many issues, no-one seems entirely sure where his instincts lie. It is clear enough that he doesn’t want to make this stuff the centre-piece of his offer in a general election. The question is whether he will support a reformist agenda enough for it to make its way into a Labour manifesto. One close observer of the opposition leader’s office says that when Miliband has one-on-one meetings with Cruddas he gets very enthusiastic about his ideas and the policy review – that the two men find much in common. But then the fire in Miliband’s eyes is quickly extinguished on contact with the cold reality of managing the different views around the shadow cabinet table and factional prejudices in the party.

It isn’t even clear what the process is for debating ideas that come out of the policy review or turning them into a manifesto. There is a labyrinth of committees and sub-committees but none of these seems to have sufficient authority to say what will make it onto the party’s agenda for government. The shadow cabinet doesn’t make policy. Shadow cabinet ministers don’t always know whom to lobby in Miliband’s office to get their views heard. Reserves of trust between various senior figures in the leader’s office, the shadow treasury team, the election strategy team and the shadow cabinet all seem perilously low. There were hopes in the parliamentary party that, after the reshuffle, the Labour leader would feel more confident in his position – having stamped his personal authority on the front bench – and would allow a culture of open debate to flourish. At least where imagining the future of public services is concerned, there isn't much evidence of that happening.

Ed Miliband speaks at the Labour conference in Brighton earlier this year. Photograph: Getty Images.

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

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What Brussels can learn from the Italian referendum

Matteo Renzi's proposed reforms would have made it easier for eurosceptic forces within Italy to gain power in upcoming elections in 2018.

The Austrian presidential elections can justifiably be claimed as a victory for supporters of the European Union. But the Italian referendum is not the triumph for euroscepticism some have claimed.

In Austria, the victorious candidate Alexander van der Bellen ruthlessly put the EU centre stage in his campaign. “From the beginning I fought and argued for a pro-European Austria,” he said after a campaign that saw posters warning against “Öxit”.

Austrians have traditionally been eurosceptic, only joining the bloc in 1995, but Brexit changed all that.  Austrian voters saw the instability in the UK and support for EU membership soared. An overwhelming majority now back continued membership.

Van der Bellen’s opponent Norbert Hofer was at an immediate disadvantage. His far right Freedom Party has long pushed for an Öxit referendum.

The Freedom Party has claimed to have undergone a Damascene conversion but voters were not fooled.  They even blamed Nigel Farage for harming their chances with an interview he gave to Fox News claiming that the party would push to leave the EU.

The European Commission, as one would expect, hailed the result. “Europe was central in the campaign that led to the election of a new president and the final result speaks for itself,” chief spokesman Margaritis Schinas said today in Brussels.

“We think the referendum in Italy was about a change to the Italian constitution and not about Europe,” Schinas added.

Brussels has a history of sticking its head in the sand when it gets political results it doesn’t like.

When asked what lessons the Commission could learn from Brexit, Schinas had said the lessons to be learnt were for the government that called the referendum.

But in this case, the commission is right. The EU was a peripheral issue compared to domestic politics in the Italian referendum.

Alberto Alemanno is Jean Monnet Professor of EU Law and an Italian. He said the reforms would have been vital to modernise Italy but rejected any idea it would lead to an Italian Brexit.

“While anti-establishment and eurosceptic actors are likely to emerge emboldened from the vote, interpreting the outcome of the Italian referendum as the next stage of Europe’s populist, anti-establishment movement – as many mainstream journalists have done – is not only factually wrong, but also far-fetched.”

Renzi was very popular in Brussels after coming to power in a palace coup in February 2014. He was a pro-EU reformer, who seemed keen to engage in European politics.

After the Brexit vote, he was photographed with Merkel and Hollande on the Italian island of Ventotene, where a landmark manifesto by the EU’s founding fathers was written.

This staged communion with the past was swiftly forgotten as Renzi indulged in increasingly virulent Brussels-bashing over EU budget flexibility in a bid to shore up his plummeting popularity. 

Commission President Jean-Claude Juncker even publicly reprimanded Renzi for demonising the EU.

Renzi’s vow to resign personalised the referendum. He gave voters a chance to give him a bloody nose when his popularity was at an all-time low.

Some of the reforms he wanted were marked “to be confirmed”.  The referendum question was astonishingly verbose and complex. He was asking for a blank cheque from the voters.

Ironically Renzi’s reforms to the constitution and senate would have made it easier for the eurosceptic Five Star Movement to gain power in upcoming elections in 2018.

For reasons best known to themselves, they campaigned against the changes to their own disadvantage.

Thanks to the reforms, a Five Star government would have found it far easier to push through a “Quitaly” referendum, which now seems very distant.  

As things stand, Five Star has said it would push for an advisory vote on membership of the euro but not necessarily the EU.

The Italian constitution bans the overruling of international treaties by popular vote, so Five Star would need to amend the constitution. That would require a two thirds majority in both houses of parliament and then another referendum on euro membership. Even that could be blocked by one of the country’s supreme courts.

The Italian referendum was closely watched in Brussels. It was hailed as another triumph for euroscepticism by the likes of Farage and Marine Le Pen. But Italians are far more likely to be concerned about the possibility of financial turbulence, which has so far been mildly volatile, than any prospect of leaving the EU in the near future.

James Crisp is the news editor at EurActiv.com.