Ed Miliband speaks at the Scottish Labour conference on March 21, 2014 in Perth. Photograph: Getty Images.
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Stuck on a burning platform – and with no money to give away – Labour is turning radical

In an age of fiscal famine, the tax and spend policies of the past are no longer an option.

When Conservative focus groups were asked before the last general election to select the picture that best represented Labour, they typically chose one of a lazy slob guzzling a beer while watching daytime TV. Four years later, the image persists. Lord Ashcroft’s new focus groups in Thurrock (Labour’s number two target seat) and Halifax found that this indolent character is still thought to epitomise the party. “Labour encourage that kind of behaviour. They make it too easy for people not to work and earn their money,” said one voter.

It is a charge that stings. The frequency with which shadow cabinet ministers assert that Labour is the “party of work” is testimony to how successful the Tories have been in branding it as the “party of welfare”. Ed Miliband’s own pollster James Morris told a Trades Union Congress meeting last year: “The challenge is very severe . . . if you look at politically salient target groups, those numbers get worse.” For those who celebrate Labour as the party of the Beveridge settlement, it is an unsettling reality. “If you’d said at the beginning of this parliament that the Tories would lead us on welfare, you would have been put in a straitjacket,” Labour’s former social security minister Frank Field told me.

Miliband’s speech on 19 June to mark IPPR’s Condition of Britain report was an attempt to turn this political supertanker around. He announced that Labour would abolish Jobseeker’s Allowance for 18-to-21-year-olds without Level 3 qualifications and replace it with a means-tested youth allowance conditional on recipients being in training. There would be winners from the policy: those who spend over 16 hours a week in further education would no longer be denied state support. There would also be losers. With the exception of some vulnerable groups, it would no longer be possible for school leavers to start their adult lives on benefits.

Labour strategists regarded Miliband’s address as an opportunity to change the conversation after a week defined by the fallout from his promotion of the Sun’s World Cup edition, Tony Blair’s bellicose pronouncements on the Middle East and ill-disguised tensions among shadow cabinet members. After Monday’s regular meeting of the Parliamentary Labour Party, Harriet Harman was heard to berate Douglas Alexander over the lack of women in Labour’s inner circle.

In these moments of drift, anxiety spreads about the likely outcome in May 2015. One Labour MP told me this week that he expects the Conservatives to win a majority of 10-20 seats. Few in Westminster regard that as conceivable, but it is a sign of how pessimism has entered the party’s bloodstream.

IPPR’s Condition of Britain report, consciously modelled on its influential 1994 Commission on Social Justice, had been 18 months in the making. But rarely had Miliband needed its message of national renewal more. After nearly a year spent lamenting the “cost-of-living-crisis”, with what many fear are diminishing returns, the Labour leader has begun to shift gears.

Confronted by the prospect of another parliament of austerity, the party is becoming more, rather than less, radical. Labour's policy review co-ordinator, Jon Cruddas, cites the “Burning Platform” email sent to Nokia staff in 2011 by the company’s then chief executive, Stephen Elop. Elop wrote of a man who woke to find the oil platform he was sleeping on engulfed in flames. In desperation, he jumped 30 metres into the freezing waters below. After his rescue, he reflected how the fire had caused him to act in a way he never previously thought possible. Faced with the “burning platform” of a £107bn budget deficit, Labour, too, is changing.

In an age of fiscal famine, the tax and spend policies of the past are no longer an option. To deliver progressive reforms, the state itself will need to change. In the next month, Andrew Adonis’s growth review for the party and the final report of the Local Government Innovation Taskforce will propose the biggest devolution of power in England for more than a century. Miliband has already committed Labour to transferring £20bn of funding to local councils, but Cruddas’s outriders are hopeful the final figure will be closer to £70bn. Responsibility for housing benefit, transport infrastructure, the Work Programme, and apprenticeships and skills will be delegated entirely to city and county regions. When Leviathan’s coffers run dry, the one thing that Labour can afford to give away is power.

If Labour’s problem is that it is viewed as the party of welfare, the Tories’ is that they are viewed as the party of the wealthy. In his conversation with the Miliband strategist and Labour peer Stewart Wood at parliament this week, the pin-up economist Thomas Piketty noted that the coalition government had introduced a super-rate of stamp duty on properties worth more than £2m. It has also raised capital gains tax from 20 per cent to 28 per cent and retained a top rate of income tax higher than that seen for all but one of New Labour’s 156 months in office. But, like Gordon Brown, on those occasions when he has redistributed, George Osborne has done so by stealth. The Tories missed their chance for a “Clause IV moment” on inequality when David Cameron vetoed a mansion tax on the grounds that “our donors will never put up with it”.

Both Labour and the Tories present themselves as parties for “the many, not the few”. But the voters have never been less convinced. An ICM poll on 17 June put combined support for the two parties at just 63 per cent (32 per cent and 31 per cent) – the lowest recorded figure in ICM’s history. Unless one is able to break the deadlock, the danger is that the country, like a lazy slob on the sofa, will be condemned to drift and decline. 

George Eaton is political editor of the New Statesman.

This article first appeared in the 18 June 2014 issue of the New Statesman, Islam tears itself apart

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MPs Seema Malhotra and Stephen Kinnock lay out a 6-point plan for Brexit:

Time for Theresa May to lay out her priorities and explain exactly what “Brexit means Brexit” really means.

Angela Merkel has called on Theresa May to “take her time” and “take a moment to identify Britain’s interests” before invoking Article 50. We know that is code for the “clock is ticking” and also that we hardly have any idea what the Prime Minister means by “Brexit means Brexit.”

We have no time to lose to seek to safeguard what is best in from our membership of the European Union. We also need to face some uncomfortable truths.

Yes, as remain campaigners we were incredibly disappointed by the result. However we also recognise the need to move forward with the strongest possible team to negotiate the best deal for Britain and maintain positive relationships with our nearest neighbours and allies. 
 
The first step will be to define what is meant by 'the best possible deal'. This needs to be a settlement that balances the economic imperative of access to the single market and access to skills with the political imperative to respond to the level of public opinion to reduce immigration from the EU. A significant proportion of people who voted Leave on 23 June did so due to concerns about immigration. We must now acknowledge the need to review and reform. 

We know that the single market is founded upon the so-called "four freedoms", namely the free movement of goods, capital, services and people & labour. As things stand, membership of the single market is on an all-or-nothing basis. 

We believe a focus for negotiations should be reforms to how the how the single market works. This should address how the movement of people and labour across the EU can exist alongside options for greater controls on immigration for EU states. 

We believe that there is an appetite for such reforms amongst a number of EU governments, and that it is essential for keeping public confidence in how well the EU is working.

So what should Britain’s priorities be? There are six vital principles that the three Cabinet Brexit Ministers should support now:

1. The UK should remain in the single market, to the greatest possible extent.

This is essential for our future prosperity as a country. A large proportion of the £17 billion of foreign direct investment that comes into the UK every year is linked to our tariff-free access to a market of 500 million consumers. 

Rather than seeking to strike a "package deal" across all four freedoms, we should instead sequence our approach, starting with an EU-wide review of the freedom of movement of people and labour. This review should explore whether the current system provides the right balance between consistency and flexibility for member states. Indeed, for the UK this should also address the issue of better registration of EU nationals in line with other nations and enforcement of existing rules. 

If we can secure a new EU-wide system for the movement of people and labour, we should then seek to retain full access to the free movement of goods, capital and services. This is not just in our interests, but in the interests of the EU. For other nation states to play hardball with Britain after we have grappled first with the complexity of the immigration debate would be to ignore rather than act early to address an issue that could eventually lead to the end of the EU as we know it.

2. In order to retain access to the single market we believe that it will be necessary to make a contribution to the EU budget.

Norway, not an EU member but with a high degree of access to the single market, makes approximately the same per capita contribution to the EU budget as the UK currently does. We must be realistic in our approach to this issue, and we insist that those who campaigned for Leave must now level with the British people. They must accept that if the British government wishes to retain access to the single market then it must make a contribution to the EU budget.

3. The UK should establish an immigration policy which is seen as fair, demonstrates that we remain a country that is open for business, and at the same time preventing unscrupulous firms from undercutting British workers by importing cheap foreign labour.  

We also need urgent confirmation that EU nationals who were settled here before the referendum as a minimum are guaranteed the right to remain, and that the same reassurance is urgently sought for Britons living in mainland Europe. The status of foreign students from the EU at our universities must be also be clarified and a strong message sent that they are welcomed and valued. 

4. The UK should protect its financial services industry, including passporting rights, vital to our national prosperity, while ensuring that the high standards of transparency and accountability agreed at an EU level are adhered to, alongside tough new rules against tax evasion and avoidance. In addition, our relationship with the European Investment Bank should continue. Industry should have the confidence that it is business as usual.

5. The UK should continue to shadow the EU’s employment legislation. People were promised that workers’ rights would be protected in a post-Brexit Britain. We need to make sure that we do not have weaker employment legislation than the rest of Europe.

6. The UK should continue to shadow the EU’s environmental legislation.

As with workers’ rights, we were promised that this too would be protected post-Brexit.  We must make sure we do not have weaker legislation on protecting the environment and combatting climate change. We must not become the weak link in Europe.

Finally, it is vital that the voice of Parliament and is heard, loud and clear. In a letter to the Prime Minister we called for new joint structures – a Special Parliamentary Committee - involving both Houses to be set up by October alongside the establishment of the new Brexit unit. There must be a clear role for opposition parties. It will be equally important to ensure that both Remain and Leave voices are represented and with clearly agreed advisory and scrutiny roles for parliament. Representation should be in the public domain, as with Select Committees.

However, it is also clear there will be a need for confidentiality, particularly when sensitive negotiating positions are being examined by the committee. 

We call for the establishment of a special vehicle – a Conference or National Convention to facilitate broader engagement of Parliament with MEPs, business organisations, the TUC, universities, elected Mayors, local government and devolved administrations. 

The UK’s exit from the EU has dominated the political and economic landscape since 23 June, and it will continue to do so for many years to come. It is essential that we enter into these negotiations with a clear plan. There can be no cutting of corners, and no half-baked proposals masquerading as "good old British pragmatism". 

The stakes are far too high for that.