Ed Miliband. Photo: Getty
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The left must think big to win

Whatever happens in May, the only way forward for the centre-left is to raises it sights.

The mood of crisis that accompanied the global financial crash shows no sign of lifting seven years on. On the contrary, talk of a ‘lost decade’ has begun to seem more like a best-case scenario than a jeremiad. This is about much more than economic recovery and squeezed living standards. It is about the loss of purpose and self-confidence affecting societies that no longer feel sure of their capacity to change for the better. 
This sense of loss is reflected in the downbeat atmosphere of the general election campaign and a growing disaffection with conventional politics. If the country’s prospects were as rosy as the Conservatives now claim, they would already be contemplating a sizeable majority. But daily experience leaves voters profoundly sceptical that any of Britain’s deep structural problems have been addressed. Once again growth is driven by consumer debt and asset-price inflation instead of exports, rising real wages and new investment. The benefits, such as they are, have not fed through to the majority. Britain feels like it is stagnating, not recovering. 

This presents the left with its own challenge. In navigating the politics of hard times, it has always been difficult to contend with rising pessimism and the instinct to hunker down. This time many mainstream parties of the centre-left are also struggling to account for their own roles in building an economic system that has failed to deliver the promise of sustainable growth and social progress.  In many parts of continental Europe the established representatives of social democracy are no longer seen as credible agents of change and are losing ground to new populist movements of left and right. The collapse of Pasok in Greece is an extreme example of a wider trend.

In Britain, after thirteen years in power, Labour could list many achievements to its credit from the minimum wage to the reduction in child poverty. But the party could no longer claim either to have tamed global capitalism or ended boom and bust. An early decision was taken to leave the basic structure of the economy untouched and focus on distributing the proceeds of growth to achieve progressive social goals. Unfortunately, the capacities of government were insufficient to curb the widening power imbalances between the employee and employer and between the consumer and the global corporates.

Despite a willingness to promote social justice and a shift to a low carbon economy, public spending alone was unable to compensate for the maladies of an unregulated market. The state assumed expensive new liabilities as business retreated from its responsibilities to pay a living wage, provide workplace pensions and improve the national skills base. Yet even this heroic effort at redistribution failed to stop inequalities from widening and social mobility from collapsing. When a runaway market eventually crashed, the state was forced to pick up the bill for that as well. A crisis of the free market was thus transformed into a story about the folly of big government.

To restore its political fortunes, the mainstream left will have to do more than become better managers and enablers than the Conservatives. The promise of a more enlightened version of the status quo won’t work, either as an electoral strategy or as a programme for national recovery. The country’s problems are too big. Chief among them is the need to deal with the vast structural imbalances that led to the economic crisis and remain completely unresolved after five years of Conservative-led austerity. Creating a path for sustainable, long-term recovery means restoring balance between public and private, industry and finance, exports and imports, wage growth and consumer debt, North and South, the many and the few. Anything less than this would leave Britain treading water until the next crisis strikes.

Since markets are not self-correcting, and since the levers of public finance are much weaker today than they were in the Blair-Brown era, the only realistic route to reform involves grappling with the tough questions about the nature of British capitalism that New Labour shied away from in 1997. How can we reverse the financialisation of our economy? What should be done to make multinational companies and the super rich pay their fare share of tax? How do we replace a business culture based on short-term profit and financial engineering with one geared towards long-term success? What new forms of ownership and participation would help to spread wealth and democratise our economy? How do we restore the link between earnings and growth? What can be done to reduce inequalities between places and between generations?
Calls for radical change are often dismissed as idealistic, but recent experience would suggest that it is those still hoping to achieve better social outcomes within the existing economic settlement that are guilty of wishful thinking. The only practical strategy for change is one that envisages a significant alteration to the balance of wealth and power in society. Inevitably this means confronting the determined resistance of those who have profited most from an economic system that has failed the country. The centre-left needs to be strong enough to deal with the political consequences of standing up to these powerful vested interests because the alternative is one that leaves Britain locked in a cycle of crisis and stagnation. 

Strategies based on progressive minimalism and policy triangulation are now redundant. Retail politics still has its place, but the targeting of policy commitments at specific groups of voters will only convince if it illustrates a bigger reform project aimed at making Britain work in the interests of the majority. If it is intended to cover the absence of such a project, it will fail. In the absence of anything better, politics will become trapped between an inert centrism that says nothing much can change and a new populism (advanced in different ways by UKIP and the SNP) preaching false solutions based on a retreat behind national borders.
The only way forward for the centre-left is to raise its sights. This will remain true whatever happens on May 7. If a government of the centre-left assumes office, it is likely to do so with a hold on power that is fragile at first. It will only be able to build the momentum and legitimacy needed to strengthen its position by showing that it has the vision and the will to bring about deep and lasting change. If the centre-left loses, it will not restore it fortunes in opposition by becoming more conventional and cautious. Either way, realism will require radicalism.

Paul Hackett is director of the Smith Institute. David Clark is founder and editor of the blog site Shifting Grounds. The two organisations are working together to promote a new agenda for the British centre-left.

 

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There's nothing Luddite about banning zero-hours contracts

The TUC general secretary responds to the Taylor Review. 

Unions have been criticised over the past week for our lukewarm response to the Taylor Review. According to the report’s author we were wrong to expect “quick fixes”, when “gradual change” is the order of the day. “Why aren’t you celebrating the new ‘flexibility’ the gig economy has unleashed?” others have complained.

Our response to these arguments is clear. Unions are not Luddites, and we recognise that the world of work is changing. But to understand these changes, we need to recognise that we’ve seen shifts in the balance of power in the workplace that go well beyond the replacement of a paper schedule with an app.

Years of attacks on trade unions have reduced workers’ bargaining power. This is key to understanding today’s world of work. Economic theory says that the near full employment rates should enable workers to ask for higher pay – but we’re still in the middle of the longest pay squeeze for 150 years.

And while fears of mass unemployment didn’t materialise after the economic crisis, we saw working people increasingly forced to accept jobs with less security, be it zero-hours contracts, agency work, or low-paid self-employment.

The key test for us is not whether new laws respond to new technology. It’s whether they harness it to make the world of work better, and give working people the confidence they need to negotiate better rights.

Don’t get me wrong. Matthew Taylor’s review is not without merit. We support his call for the abolishment of the Swedish Derogation – a loophole that has allowed employers to get away with paying agency workers less, even when they are doing the same job as their permanent colleagues.

Guaranteeing all workers the right to sick pay would make a real difference, as would asking employers to pay a higher rate for non-contracted hours. Payment for when shifts are cancelled at the last minute, as is now increasingly the case in the United States, was a key ask in our submission to the review.

But where the report falls short is not taking power seriously. 

The proposed new "dependent contractor status" carries real risks of downgrading people’s ability to receive a fair day’s pay for a fair day’s work. Here new technology isn’t creating new risks – it’s exacerbating old ones that we have fought to eradicate.

It’s no surprise that we are nervous about the return of "piece rates" or payment for tasks completed, rather than hours worked. Our experience of these has been in sectors like contract cleaning and hotels, where they’re used to set unreasonable targets, and drive down pay. Forgive us for being sceptical about Uber’s record of following the letter of the law.

Taylor’s proposals on zero-hours contracts also miss the point. Those on zero hours contracts – working in low paid sectors like hospitality, caring, and retail - are dependent on their boss for the hours they need to pay their bills. A "right to request" guaranteed hours from an exploitative boss is no right at all for many workers. Those in insecure jobs are in constant fear of having their hours cut if they speak up at work. Will the "right to request" really change this?

Tilting the balance of power back towards workers is what the trade union movement exists for. But it’s also vital to delivering the better productivity and growth Britain so sorely needs.

There is plenty of evidence from across the UK and the wider world that workplaces with good terms and conditions, pay and worker voice are more productive. That’s why the OECD (hardly a left-wing mouth piece) has called for a new debate about how collective bargaining can deliver more equality, more inclusion and better jobs all round.

We know as a union movement that we have to up our game. And part of that thinking must include how trade unions can take advantage of new technologies to organise workers.

We are ready for this challenge. Our role isn’t to stop changes in technology. It’s to make sure technology is used to make working people’s lives better, and to make sure any gains are fairly shared.

Frances O'Grady is the General Secretary of the TUC.