Ed Miliband speaking in the target seat of Thurrock last month. Photograph: Getty Images.
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Labour's timid approach isn't working - it needs to think bigger

The 12 policies the party needs for a popular and a radical manifesto.

Two years ago the Labour Party was a policy vacuum and it was hard to know what it thought about anything. Not any more. In recent months its policy pledges have come thick and fast. From freezing fuel prices to a new benefit for under-21s, no longer can critics claim that the party has nothing to say.

But still something is missing. The promises are reasonable enough on their own terms but they whole is less than the sum of the parts. Each announcement is finely calibrated to maximise "doorstep" appeal. But most of them seem to bounce off the public without registering at all. The reason is because Labour’s policy doesn’t fit into a wider story about what the party wants to do with power.

new Fabian report published today argues that Labour’s "doorstep" pledges won’t win a hearing unless the party explains how it will bring deep change to Britain’s economy, society and government. In other words, Labour needs to promise a five-year programme that will leave Britain a different, better country by 2020.

The report makes 12 recommendations which are large enough in scale to collectively set a new course. If implemented they would create a clear rupture with the policies and priorities of the coalition and prove that voting Labour makes a difference. For this isn’t something to smuggle past the electorate, hoping not to scare the horses. Labour has to "go big" because otherwise no one will make sense of how the small, short-term pledges all hang together.

Some of our ideas are already in the Labour Party’s bloodstream, but caught in internal battles between radicals and incrementalists. For example Andy Burnham, who addresses the Fabian summer conference today, has a bold plan to merge health and care services but it is being gradually diluted. The detail of boardroom reforms to give workers a voice are still far from clear. And Labour’s pledge to build 200,000 homes is not yet accompanied by the big new powers and financial freedoms councils will need to make it happen.

Other proposals in the report mark a departure, for example on inequality. Labour has to decide whether it has the steel to call for policies that would truly turn the tide on the rising poverty and inequality we can now expect for decades ahead.

Ed Miliband has promised to raise the minimum wage but after that it needs to be permanently indexed to average earnings and accompanied by a Living Wage for public service workers. Meanwhile, two other essential solutions are not even being considered. First, the party must extend the indexation of social security to earnings beyond pensioners to people who are disabled, in work or looking after under-5s. Otherwise poverty will rise remorselessly. Second, it must promise a five-year programme of radical tax reform, to raise revenue more fairly and end the corrupting incentives of today’s system.

Next, the party needs to show it means it when it says it wants to bring long-term responsibility to the economy and society. Reforming boardrooms will help a bit, but a faster solution would be to use the proceeds from selling the nationalised banks to establish a huge sovereign wealth fund to direct investment towards long-term priorities. Alongside this Labour needs to get serious about the environment again and our report proposes two solutions. First the next government should embed care for the local environment into our everyday lives by creating a national environment bank holiday. Second it should set a ten-year deadline for every home in the country to be energy efficient before it can be sold or let.

Finally, Labour needs to show it is ready to reset the clock on how public services are run. There needs to be a clear break from the control freakery and market mania of both new Labour and the coalition. So far, Labour's fightback against Lansley, Grayling and Gove has been so timid and incremental that even Westminster insiders struggle to explain the difference.

The hallmarks of Labour’s approach must be public spirit and democratic control. People should be able to control what happens to services they value, not just decide which one they will choose. And locally elected politicians should have power over all public services in their patch, something Labour is reluctant to accept when it comes to health and schools. Above all, Labour should row back on 20 years of the commercialisation of public service. The party should pledge that companies will no longer be allowed to run whole public services and say that non-profit and government bodies will be the default providers of most frontline services.

As the Labour Party’s policy forum prepares to meet in July to finalise its policy recommendations it should feel inspired to think big. Timid symbolic policies have not been working for the party of late, and there’s no reason to think that will change. By adopting the Fabian recommendations, or something like them, Labour will emerge with a popular and a radical manifesto, but one still bound by fiscal and economic reality. Labour can win the public’s imagination and trust with a truly transformative programme for power.

Andrew Harrop is general secretary of the Fabian Society.

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Theresa May’s Brexit speech is Angela Merkel’s victory – here’s why

The Germans coined the word “merkeln to describe their Chancellor’s approach to negotiations. 

It is a measure of Britain’s weak position that Theresa May accepts Angela Merkel’s ultimatum even before the Brexit negotiations have formally started

The British Prime Minister blinked first when she presented her plan for Brexit Tuesday morning. After months of repeating the tautological mantra that “Brexit means Brexit”, she finally specified her position when she essentially proposed that Britain should leave the internal market for goods, services and people, which had been so championed by Margaret Thatcher in the 1980s. 

By accepting that the “UK will be outside” and that there can be “no half-way house”, Theresa May has essentially caved in before the negotiations have begun.

At her meeting with May in July last year, the German Chancellor stated her ultimatum that there could be no “Rosinenpickerei” – the German equivalent of cherry picking. Merkel stated that Britain was not free to choose. That is still her position.

Back then, May was still battling for access to the internal market. It is a measure of how much her position has weakened that the Prime Minister has been forced to accept that Britain will have to leave the single market.

For those who have followed Merkel in her eleven years as German Kanzlerin there is sense of déjà vu about all this.  In negotiations over the Greek debt in 2011 and in 2015, as well as in her negotiations with German banks, in the wake of the global clash in 2008, Merkel played a waiting game; she let others reveal their hands first. The Germans even coined the word "merkeln", to describe the Chancellor’s favoured approach to negotiations.

Unlike other politicians, Frau Merkel is known for her careful analysis, behind-the-scene diplomacy and her determination to pursue German interests. All these are evident in the Brexit negotiations even before they have started.

Much has been made of US President-Elect Donald Trump’s offer to do a trade deal with Britain “very quickly” (as well as bad-mouthing Merkel). In the greater scheme of things, such a deal – should it come – will amount to very little. The UK’s exports to the EU were valued at £223.3bn in 2015 – roughly five times as much as our exports to the United States. 

But more importantly, Britain’s main export is services. It constitutes 79 per cent of the economy, according to the Office of National Statistics. Without access to the single market for services, and without free movement of skilled workers, the financial sector will have a strong incentive to move to the European mainland.

This is Germany’s gain. There is a general consensus that many banks are ready to move if Britain quits the single market, and Frankfurt is an obvious destination.

In an election year, this is welcome news for Merkel. That the British Prime Minister voluntarily gives up the access to the internal market is a boon for the German Chancellor and solves several of her problems. 

May’s acceptance that Britain will not be in the single market shows that no country is able to secure a better deal outside the EU. This will deter other countries from following the UK’s example. 

Moreover, securing a deal that will make Frankfurt the financial centre in Europe will give Merkel a political boost, and will take focus away from other issues such as immigration.

Despite the rise of the far-right Alternative für Deutschland party, the largely proportional electoral system in Germany will all but guarantee that the current coalition government continues after the elections to the Bundestag in September.

Before the referendum in June last year, Brexiteers published a poster with the mildly xenophobic message "Halt ze German advance". By essentially caving in to Merkel’s demands before these have been expressly stated, Mrs May will strengthen Germany at Britain’s expense. 

Perhaps, the German word schadenfreude comes to mind?

Matthew Qvortrup is author of the book Angela Merkel: Europe’s Most Influential Leader published by Duckworth, and professor of applied political science at Coventry University.