If Labour is to succeed, it must end its addiction to the state

Having distanced himself from neo-liberalism, Ed Miliband needs to redefine British social democracy as more participative, more socially liberal, and more community-focused.

2014 will usher in a new dynamic in British politics, a time when Labour’s credentials as a potential party of government will be subject to sustained, critical examination. This is the moment when the party has to reveal more about the policy directions it intends to pursue, signalling where its real priorities for Britain lie. And this is the year that will reveal whether Labour has used its time in opposition to think imaginatively about its mistakes – and governing achievements.

It is vital that the party’s policy review is ruthlessly tailored to the challenges and pressures of the post-crisis age, and neither refuses to evade current realities nor reverts to the managerialist populism which characterised New Labour’s final days. It has to address key strategic challenges, signalling its acceptance of the hard choices that policy-making inevitably entails in today’s world.

The first challenge is the sheer scale of the retrenchment that the current administration has been inflicting on the public sector, and its long-term implications. According to the Office for Budget Responsibility (OBR), by 2017-18 government consumption of goods and services will be at its lowest level since the end of the Second World War. A centre-left party will have to learn to govern with far less public money around. It should avoid becoming trapped in a defensive, austerity-lite mindset, salami-slicing departmental budgets without determining the major social priorities it intends to pursue.

Labour needs to make a compelling case for 'switch spending' – allocating resources according to distinctive priorities beyond those favoured by its opponents, while identifying itself as the party that speaks up for the public realm. This means making a case for the social and economic value of public investment in those areas where the market cannot be relied on to deliver - infrastructure, universities, childcare, and social care. In the stringent fiscal circumstances Labour will inherit, identifying national priorities means starting to level with the public about the areas where spending needs to be  tightened , while signalling the kind of tax regime which it believes is required to perpetuate growth and ensure a fairer recovery Saying hardly anything about  these questions, for fear of offering a target to the party’s opponents, is likely to undermine Labour’s chances of securing the kind of electoral coalition which it needs to secure victory in 2015.

The second related challenge concerns the impact upon the UK’s society and economy of the financial crisis, and subsequent recession. Overly stringent austerity has eroded the productive base of the UK economy yet further. The scarring effects of the recession are manifest in the appallingly high numbers of young unemployed and crippling poverty levels among families with 'working poor' parents. Social mobility has ground to a halt while the capacity of middle class parents to horde the advantages of money and human capital accrued across generations are a major obstacle to an inclusive and fair society. A party that seeks to sustain a principled, reforming government needs to prepare the ground for the kinds of measures – mansion and land taxes, a higher minimum wage, an expansion of the pupil premium (right up to university level), and investment in childcare – which are urgently required.

The third strategic challenge that Labour must confront is the implications of the growing crisis facing the future integrity of the United Kingdom. The party is not alone at Westminster in failing to establish a cogent response to the dilemmas posed by a referendum on Scottish independence, the threat posed by the populist nationalism espoused by UKIP, and the UK’s membership of the European Union. Indeed, the fumbling, confused response of the UK parties has fermented a governing crisis at least as potent in its implications as the global financial crash. Were Scotland to vote ‘yes’ to independence in 2014, or  the UK to vote to leave the EU  in 2017, the shocks administered to the British political system would be nothing short of seismic.

If Labour is to become the party that breaks the extraordinary concentration of political and economic power in London - distorting the social and economic balance of England and the rest of the UK - then it must engage with rising resentment about the absence of a political voice and economic levers for many different English communities. A road map is needed for how power will be devolved to cities and counties as a credible answer to the English question, for so long evaded in British politics.

Labour needs to face up to these issues and to give a broad indication of its intentions in the face of them. At present, the temptation is to revert to the well-intentioned redistributivism and Treasury orthodoxy that were a hallmark of the Brown era. Yet the notion that Labour might pursue a fairer society primarily through the long arm of the central state – using familiar tools such as public spending and tax credits – is fraught with danger. Such a notion ignores the problem of legitimacy which that kind of top-down statism now faces in England – the sole remaining territory directly controlled by a Westminster government. An approach that merely ameliorates the dysfunctional and systematic inequality generated by markets and inequitable public service provision is also expensive and wasteful.

A shift of focus towards preventative up-front investment; a new model of social partnership – between government and civil society, and  the dispersal of power to agencies more likely to address the problems faced by different localities – would signal a distinctive approach to tackling some of the major problems facing England, and tackle  Labour’s reputation for excessive managerialism. It is increasingly evident that complex policy challenges – entrenched pockets of social disadvantage and isolation, the looming threat of obesity and lifestyle diseases, the prospect of catastrophic climate change – require a markedly different use of public power, a new model of partnership which is co-ordinated at local level, not the corridors of Whitehall.

The imperative to devolve more economic and political power across England should be reflected in a concerted programme of public service reform relying on the values of voice and locality, as well as choice; a welfare system in which contribution and protection are re-combined; and an explicit focus on SMEs and promoting local entrepreneurship. Only the concerted dispersal of power to individuals, communities and localities will provide the basis for an attack on elite vested interests and class-based inequalities that hold people back.    

Examples of this vision can be glimpsed in the work that local authorities throughout England from Oldham to Southwark are doing – drawing on the resources of communities, sharing front-line services, forging creative partnerships with the charitable sector and business, focusing on well-being and cultivating a  sense of place, while bringing neighbourhoods together to create public assets serving the common good.

Since 2010, Ed Miliband has demonstrated an impressive capacity to open up ideological territory and go against the conventional political grain. This quality might yet prove to be his winning card. Having distanced himself from the 'neo-liberalism' of the previous era, he needs now to redefine British social democracy as more participative, more socially liberal, and more community-focused. This kind of politics draws upon the non-statist strand of Labour’s heritage, reconnecting with those traditions that have woven decentralising and pluralist ideas with a determined opposition to injustice, alongside an understanding that the public realm means much more than the central state.

Patrick Diamond is vice chair of Policy Network, lecturer in public policy at Queen Mary, University of London, and a former Labour adviser

Michael Kenny is research associate at IPPR and professor of politics at Queen Mary, University of London

Ed Miliband speaks at the Labour conference in Brighton last year. Photograph: Getty Images.
Photo: Getty Images
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What's to be done about racial inequality?

David Cameron's words on equal opportunities are to be welcomed - now for some action, says Sunder Katwala.

David Cameron made the strongest, clearest and most high profile statement about ethnic inequalities and the need to tackle discrimination ever yet offered by a British Prime Minister in his leader’s speech to the Conservative Party conference in Manchester.
“Picture this. You’ve graduated with a good degree. You send out your CV far and wide. But you get rejection after rejection. What’s wrong? It’s not the qualifications or the previous experience. It’s just two words at the top: first name, surname. Do you know that in our country today: even if they have exactly the same qualifications, people with white-sounding names are nearly twice as likely to get call backs for jobs than people with ethnic-sounding names? … That, in 21st century Britain, is disgraceful. We can talk all we want about opportunity, but it’s meaningless unless people are really judged equally”, said Cameron.
While the proof of the pudding will be in the eating, this was a powerfully argued Prime Ministerial intervention – and a particularly well-timed one, for three reasons.

Firstly, the Prime Minister was able to root his case in an all-but-universally accepted appeal for equal opportunities. It will always prove more difficult in practice to put political energy and resources behind efforts to remedy discrimination against a minority of the population unless a convincing fairness case is made that values cherished across our whole society are at stake. Cameron’s argument, that any party which tells itself that it is the party of the ‘fair chance’ and ‘the equal shot’ must have a response when there is such clear evidence of discrimination, should prove persuasive to a Conservative Party that has not seen race inequalities as its natural territory. Cameron argued that the same principles should animate responses to discrimination when it comes to race, gender and social class. Put like that, wanting job interviews to be fair – by eradicating conscious and unconscious patterns of bias wherever possible – would strike most Britons as offering as clear a case of the values of fair play as wanting the best baker to win the Great British Bake-Off on television.
Secondly, Cameron’s intervention comes at a potential "tipping point" moment for fair opportunities across ethnic groups. Traditionally, ethnic discrimination has been discussed primarily through the lens of its impact on the most marginalised. Certainly, persistent gaps in the criminal justice system, mental health provision and unemployment rates remain stark for some minority groups. What has been less noticed is the emergence of a much more complex pattern of opportunity and disadvantage – not least as a consequence of significant ethnic minority progress.

Most strikingly of all, in educational outcomes, historic attainment gaps between ethnic minorities and their white British peers have disappeared over the last decade. In the aggregate, ethnic minorities get better GCSE results on average. Ethnic minority Britons are more likely, not less likely, to be university graduates than their fellow citizens. 

As a result of that progress, Cameron’s intervention comes at a moment of significant potential – but significant risk too. Britain’s ethnic minorities are the youngest and fastest-growing sections of British society. If that educational progress translates into economic success, it will make a significant contribution to the "Great British Take-Off" that the Prime Minister envisions. But if that does not happen, with educational convergence combined with current ‘ethnic penalties’ in employment and income persisting, then that potential could well curdle into frustration that the British promise of equal opportunities is not being kept.  Cameron also mirrored his own language in committing himself to both a ‘fight against extremism’ and a ‘fight against discrimination’: while those are distinct challenges and causes, actively pursuing both tracks simultaneously has the potential, at least, depolarise some debates about responses to extremism  - and so to help deepen the broad social coalitions we need for a more cohesive society too.

Thirdly, Cameron’s challenge could mark an important deepening in the political competition between the major parties on race issues. Many have been struck by the increase in political attention on the centre-right to race issues over the last five to ten years. The focus has been on the politics of representation. By increasing the number of non-white Conservative MPs from two to seventeen since 2005, Cameron has sent a powerful signal that Labour’s traditional claim to be ‘the party of ethnic minorities’ would now be contested. Cameron was again able to celebrate in Manchester several ways in which his Cabinet and Parliamentary benches demonstrate many successful journeys of migrant and minority integration in British society. That might perhaps help to ease the fears, about integration being impossible in an era of higher immigration, which the Home Secretary had articulated the previous day.

So symbolism can matter. But facial diversity is not enough. The politics of ethnic minority opportunity needs to be about more than visits to gurdwaras, diversity nights at the party conference fringes and unveiling statues of Mahatma Gandhi in Parliament Square. Jeremy Corbyn’s first speech as Labour leader did include one brief celebratory reference to Britain’s ethnic diversity – “as I travelled the country during the leadership campaign it was wonderful to see the diversity of all the people in our country” – and to Labour bringing in more black, Asian and ethnic minority members - but it did not include any substantial content on discrimination. Tim Farron acknowledged during his leadership campaign that the Liberal Democrats have struggled to get to the starting-line on race and diversity at all. The opposition parties too will no doubt now be challenged to match not just the Prime Minister’s rhetorical commitment to challenging inequalities but also to propose how it could be done in practice.

Non-white Britons expect substance, not just symbolism from all of the parties on race inequalites.  Survation’s large survey of ethnic minority voters for British Future showed the Conservatives winning more ethnic minority support than ever before – but just 29 per cent of non-white respondents were confident that the Conservatives are committed to treating people of every ethnic background equally, while 54 per cent said this of Labour. Respondents were twice as likely to say that the Conservatives needto do more to reach out – and the Prime Minister would seem to be committed to showing that he has got that message.  Moreover, there is evidence that ethnic inclusion could be important in broadening a party’s appeal to other younger, urban and more liberal white voters too – which is why it made sense for this issue to form part of a broader attempt by David Cameron to colonise the broad centre of British politics in his Manchester speech.

But the case for caution is that there has been limited policy attention to ethnic inequalities under the last two governments. Restaurateur Iqbal Wahhab decided to give up his role chairing an ethnic minority taskforce for successive governments, unconvinced there was a political commitment to do much more than convene a talking shop. Lib Dem equalities minister Lynne Featherstone did push the CV discrimination issue – but many Conservatives were sceptical. Cameron’s new commitment may face similar challenges from those whose instinct is to worry that more attention to discrimination or bias in the jobs market will mean more red tape for business.

Labour had a separate race inequalities manifesto in 2015, outside of its main election manifesto, while the Conservative manifesto did not contain significant commitments to racial inequality. The mid-campaign launch in Croydon of a series of race equality pledges showed an increasing awareness of the growing importance of ethnic minority votes - though the fact that they all involved aiming for increases of 20 per cent by 2020 gave them a slightly back-of-the-envelope feel. 

Prime Ministerial commitments have an important agenda-setting function. A generation ago the Stephen Lawrence case opened the eyes of middle England to racist violence and police failures, particularly through the Daily Mail’s persistent challenging of those injustices. A Conservative Prime Minister’s words could similarly make a big difference in the mainstreaming of the issue of inequalities of opportunity. What action should follow words? Between now and next year’s party conference season, that must will now be the test for this Conservative government – and for their political opponents too. 

Sunder Katwala is director of British Future and former general secretary of the Fabian Society.