Liz Kendall on the campaign trail. Photo: Getty Images
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Liz Kendall: "The Labour Party I lead will always remember its purpose"

The full text of Liz Kendall's speech in her constituency.

It’s always a pleasure to be at De Montfort University. As Earl of Leicester, Simon De Montfort summoned the first parliament that included citizens of major towns, not just the aristocracy.
Every Labour politician should be grateful for that innovation. But I’ve not brought you here to show that it is possible to depose aristocratic rulers.
As you know, 20 days ago I announced that I wanted to be the leader of the Labour Party.
For a state school girl from Watford, who has been an MP for just 5 years - I recognise some people might think it’s audacious to suggest that I might lead our party and ask the country to elect me as our Prime Minister.
But I believe the magnitude of the defeat that our party has suffered, and the scale of the challenge we face, means taking the safe option and repeating the remedies of the past just won’t cut it for our party or country any more.
I know that in starting to lay out what fuels my passion about giving everyone an equal chance to succeed - and telling you more about me, where I’ve come from and where I want to go - there is nowhere I’d rather do this, than in Leicester, the city I represent and love.
This city and this university says so much both about the challenges we face in eradicating decades of inequality and the new and inspiring ways we need to work to ensure everyone achieves their potential.
I’m here because I want the work we’ve done together here in Leicester to be a model for Britain’s future.
At DMU you are relentlessly ambitious for your students. You’re passionate about giving all young people the best possible education, unleashing their talents and preparing them for life after University.
To achieve this, you work with others – like the Square Mile project that we’ve worked on together.
We’ve brought together DMU students with local schools and parents to mentor and inspire talented kids - many of whom would never even dream that they might be good enough to study at University let alone become a designer, doctor, lawyer, accountant, photographer or actor.
And we’ve done it because we know education opens doors that would otherwise remain tightly shut and because for far too many of our fellow citizens the chance to fulfill their potential and to dare to dream is just a distant illusion
I’m standing here today with an extraordinary request - to elect me as the leader of our party – not because my background is extraordinary.
Quite the opposite.  My parents are like many across Britain. Neither on the breadline, nor loaded, they were determined to give their daughter all that any of us can ask from our parents: love, security, ambition and hope.
And alongside that unconditional love, my parents demanded that I make the best of myself, that I recognise the opportunities that education offered and the doors it could open. Yet too few get that chance in life.
 
I well remember the pride that my parents felt when my brother and I went up to Cambridge, but I also know many friends that I grew up with - brilliant, funny, acutely intelligent girls - who never fulfilled their potential.
And I meet children here in Leicester, and look into their eyes and talk to them about their futures and know that the barriers that stand in their way are so high - and their capacity to scale them, with the hand that life has dealt them, is so small.
I know how difficult the future is for them in a world that is so unforgiving of those without skills. And I know that all of us who are responsible for their education are betraying their futures with our failure. As Labour people, we understand the complex problems that face children and families in some of our most deprived communities.
But make no mistake, under my leadership this understanding will never be an excuse for tolerating failure or dumbing down our expectations of kids on some of Britain’s toughest estates. We must be the champion of every child and passionate about ensuring they get the chances in life they deserve. 
Getting a great education is about even more than our profound belief that everyone should have the chance to fulfill their potential and live their hopes and dreams. It’s at the heart of our response to globalisation.
Our world is changing faster than ever before. New technologies develop, markets emerge, and companies and jobs change in what seems like the blink of an eye. When we were in Government, we were determined to seize the opportunities these changes bring - and rightly so.
 
But we failed to realise that the scale and pace of change was creating a profound sense of loss in some of our communities, and leaving too many people behind.  New Labour was too cavalier about the problems created globalisation.  I am not.
But showing leadership on this issue is about more than empathy, more than understanding, necessary though this is. Our response to global change should not be grievance and anger.  That leads nowhere and does not create a single new opportunity. We must be the champions of a chance not a grievance. And we mustn’t shy away from change but make it our mission to equip people with the skills, knowledge, character and confidence to make the most of it whatever their background.
This starts with the very earliest years of a life. I know, from when I was Director of the Maternity Alliance charity before I became an MP, that inequality shapes children’s futures before their lives have begun.
 
And I see it here in Leicester West – where children start school on average 15 months behind where they should be in terms of their development. This means they struggle even to get basic GCSEs let alone have the chance of going to college, university or getting a great job. A big reason why these early inequalities exist is about parenting and what happens in the home.
Children growing up in professional homes hear three times as many words as children in the most disadvantaged homes. The amount parents read to their children and the number of books at home makes a huge difference here. The quality of the relationship between parents and their babies also shapes children’s social and emotional development - their self-esteem and self-confidence - and their ability to build relationships with others.
These kinds of skills can affect how well children do at school and in the world of work, particularly in today’s service-driven economy
Children in this city can’t afford to play catch up for the rest of their lives, and our country can’t afford to pay the consequences either, not only in terms of higher unemployment rates and benefits but lost talent and skills. There’s nothing economically credible about ending up paying far more for problems that could have been prevented. And having a genuine long-term economic plan means prioritising the early years.
 
Under my leadership, the foundation years – zero to five – will be equal in importance and status as primary and secondary schools. That means far more than increasing the amount of childcare that’s available to help parents with young children go out to work – vital though this is.
It means midwives and health visitors helping parents understand the importance of reading, talking to and playing with their babies as well as their good health. It means drawing on the wealth of experience that many voluntary organisations have of working with parents in the most disadvantaged areas. It means transforming the status and quality of the entire early years workforce, and ensuring everyone with a responsibility for children – parents as well as professionals – really understands the importance of the early years.
Labour made a huge difference to children’s early years when we were in Government through Sure Start - one of our proudest achievements, which the Tories have shamefully neglected and undermined. But Sure Start Children’s Centres need to change to ensure an even more radical shift towards early intervention, tackle the root causes of problems, and give families the tools they need to give their children the best start in life, especially when resources are tight.
We need to get more from our Children’s Centres by opening them up other local family services like health and childcare, and by focusing far more on outreach so problems can be spotted early on. Cities like Manchester are already undertaking big reforms to Sure Start, and delivering big results even within tight resources.Under my leadership, early years will be a top priority, with a clear direction of travel for early years services, but what works best will be determined locally, not from Westminster, because that is where the knowledge and experience lies. 
I’ve said that re-establishing our reputation for economic credibility is a fundamental part of Labour being seen as fit to govern our country again. But believe me there is no economic credibility for our country if we don’t skill up our workforce in the 21st century
And that’s not just about what children learn in traditional lessons but about how we open minds and broaden horizons in schools.
One of the best days I’ve had since I became an MP was in Parks Primary in my constituency. The Head, Mrs Evans, and her team had brought people with all different types of jobs and careers into the school to talk to the children about the amazing opportunities that are out there if they work hard and do well at school. They call it ‘Aspirations week’. In Westminster, talking about aspiration can sound hollow. At Parks Primary, ‘aspiration’ really means something.
It means four year olds bandaging cuddly toys because they’re learning what it means to be a vet. It means young boys being mesmerised by a man making delicious chocolates, and telling them how he loved running his own small business. It means a woman engineer telling an enthralled group of 10 years olds about building tunnels in Australia, with her plans, pictures and hard hat. And it means a young girl telling me that if she wants to be an engineer herself, she’d better work harder at maths.
Mrs Evans and her teachers go the extra mile to contact everyone they knew with an interesting job to inspire their pupils. They know that if they don’t show all their kids what education made possible, the same way some parents do, they might get left behind.
Making sure children from all backgrounds learn about opportunities that are usually available to a few, is an inspiring vision of what our schools can be. That means ensuring there is strong leadership and great teachers, particularly in the most deprived areas.
It means being as demanding about maximising the potential of the A grade student who is taking their exams early, as the child who might just be able to get the grades they need to earn an apprenticeship if they give it their all. It means stretching and supporting children with special educational needs, autism and physical and learning disabilities – and offering fair access to the curriculum to children with dyslexia and children who are excluded who must never be forgotten.
It means asking even more of our teachers, but never forgetting the amazing contribution so many of them make - and never denigrating them for a cheap headline, as David Cameron shamefully allowed Michael Gove to do for four years.
And it means backing the inspiring innovations in schools like Parks Primary to teach girls and boys – particularly from white working class communities - about the chances in life they may not even know exist - like being an engineer, a chemist, and even leader of the Labour Party.
And we don’t have to wait to make that start. Usually oppositions can only criticise, not act.
But this is an issue we in the Labour party can do something about right now. I want to see businesses, charities, universities, volunteers and parents play a bigger role in helping to raise standards and achievement.
I want every Labour Council to lead a revolution in opening horizons for pupils and making better educational chances everyone’s business. The Labour party I lead won’t use opposition as an excuse for inaction but as a spur to find new ways to improve the lives of the people we seek to serve.

So as Labour leader, I will launch an “Inspiring the future” project, bringing together businesses, voluntary and community activists and union members, to encourage them go into state schools and show how education can transform children’s lives.
It will be a programme independent of our party, and open to all, but run according to our values - that by the strength of our common endeavour we can achieve much more than we achieve alone. As Leader, I’ll volunteer too, going to state schools across England, bringing with me successful people from all backgrounds to tell children how education helped us, and how it can help them too.
All too often the Labour Party is about delivering leaflets, knocking on doors and attending meetings. But we can be so much more than that. We may not be in power nationally, but we do have the power to show people that our politics can transform their lives. The party I lead will also work to rebuild and renew our communities through the strength of our common endeavour.

I’ll never forget the debt that I owe my parents, the teachers who guided me, and university lecturers who inspired me.
I also know that I owe so much to the opportunities Labour governments created in the decades before I was born – from the National Health Service which took care of my family, to the state school that taught me success was about what was in your head not in your wallet.
So many of the opportunities I’ve enjoyed and the chances I’ve been able to take, I owe to our party and to the brilliant and visionary people who have gone before me. They understood that fulfilling your potential should never be dependent on where you’re born, what your parents did, your gender, sexuality or the colour of skin.
We must end the scourge of illiteracy and innumeracy, broaden the horizons of our young people and give everyone a better chance in life. Under my leadership, Labour will do just that.
So my approach to building a fairer Britain - and reducing the crippling inequality that shames our nation and holds it back - will be rooted in transforming the life chances of all our children; by backing our teachers and parents but challenging them too. And our economic credibility will be based on having a plan that starts before children are born and follows them through the ups and downs of their lives.
And it will be based on a simple truth - that a Labour Party that isn’t talking about education and social mobility has forgotten what it exists for.

 
The Labour Party I lead will always remember its purpose. And we will act on it. Starting from day one.
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Why Labour's manifesto wasn't regressive

The Institute for Fiscal Studies' analysis did not take into account the progressive effect that most of the party's policies would have. 

Think tankers, for example at the Institute for Fiscal Studies, the Resolution Foundation and IPPR, often like to use ‘distributional analysis’ to assess the impacts of policy on households, and these analyses are often picked up on in wider debates over fairness.

To test whether a policy change is ‘progressive’ – where its impact on poorer households is more positive than it is on richer households – a preferred method is to group all households in the population into buckets, ordered from lowest income to highest, and show the average effect of a policy for each bucket.

The benefits of this type of analysis are obvious. The relatively complicated question of progressivity can, at least for a given metric, be reduced to a visually clear and accessible chart: answering the question of fairness seemingly irrefutably, at least in quantifiable terms.

An influential part of the IFS’s excellent election manifesto analysis was just such a chart, showing the distributional impact of all tax and benefit proposals from the Conservative, Labour and Liberal Democrat manifestos (reproduced below).

The analysis is striking on two accounts. First, it appears to show that the policies in Labour’s manifesto are almost perfectly regressive: from the second to the ninth decile, the poorer a family is, the worse off Labour’s plans would make them. Second, Labour’s plans appear pretty regressive even relative to the other two parties: almost as regressive as the Conservatives, and far more so than the Liberal Democrats.

This chart in particular has helped fuel a broad, alternative narrative that has emerged about the Labour manifesto since the election. This narrative suggests that, far from being radical, the impact of the policies recommended wasn’t even redistributive. For example, John Rentoul reproduced the same chart in his article for the Independent and Andrew Harrop leant on IFS analysis for his piece in the Guardian. Less formally, the arguments have attracted particular traction on social media with commentators such as Robert Peston at ITV and Jeremy Cliffe at the Economist reposting the chart on Twitter.

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Is this correct? Would the effects of implementing Labour’s manifesto be not only to take away from the poor, but to take away far more than they would from the rich? The answer is either an unequivocal ‘no’ or ‘we don’t know because the analysis hasn’t been done’, depending on the interpretation of ‘effect’. But the answer certainly is not ‘yes’.

Commentators have misinterpreted the IFS work in two important ways.

First, the IFS did not assess the whole of the Labour manifesto. They did not even reflect most of it.

Distributional analysis is most effective in assessing impacts that can be measured, reasonably unambiguously, in a monetised form. Quite sensibly then, and as is often standard practice, the IFS applied their analysis to tax and benefit reforms only – excluding services or other government programmes. Even tax measures where the ‘effective incidence’ (the final, often indirect impact of a tax on households, as opposed to the entity that might have paid the tax in the first instance such as a firm) is equivocal, such as corporation tax, were excluded.

This means the analysis only assessed a fraction of the Labour manifesto’s tax rises (around £8bn from £49bn) and spending commitments (around £4bn from £49bn). In the case of Labour, unlike the manifesto itself which was supposedly cost neutral, the analysis included almost twice as many ‘takeaways’ (tax rises) as it did ‘giveaways’ (additional welfare support).

The final picture, then, is not a reflection of the whole manifesto, but of less than 8 per cent of spending commitments and 16 per cent of tax rises. Some of the measures excluded would likely have had a broadly progressive impact, such as increasing the living wage to £10 per hour, applying VAT to private school fees, scrapping planned giveaways in the taxation of inheritance and capital gains, restoring the Educational Maintenance Allowance and boosting Sure Start.

For those reforms that reflected a stronger principle of universalism – such as the National Education Service, increased child care and scrapping university tuition fees – the effects are less clear and possibly regressive in a strict accountancy sense.

But the IFS work cannot help us reach a conclusion either way because they are excluded from the analysis. Since the UK is one of only six countries among 35 OECD members where the state spends more on welfare in kind than it does in cash, it would be an especially poor outcome for our political discourse if benefits in kind were to be excluded from our redistributive conversation altogether.

The second reason is that the IFS did not at any stage assess manifesto commitments in isolation.

All distributional analysis is essentially an exercise in simulating a number of scenarios, one of which is treated as a ‘baseline’, and all the others as counterfactuals. The estimated impact of a specific counterfactual scenario is essentially just the total difference observed with the baseline scenario.

In addition to the issue of which, and how many, manifesto measures are included, the issue of what is in or out of the baseline relative to the counterfactuals is therefore also critical.

In the case of the recent IFS work, the baseline excluded the suite of policies that have already been legislated for and in some cases already begun to be implemented but nonetheless not come into full effect. The IFS make this clear by labelling each manifesto scenario in the chart as the sum of both ‘current plans’ and the personal tax and benefit announcements from a respective manifesto.  Most notable among them is the introduction of the coalition government’s flagship welfare reform: Universal Credit (UC).

This choice is not without merit but it is also not beyond question: for example the Office for Budget Responsibility’s standard baseline always includes all planned policy that is presently legislated for.

For the purposes of assessing distributional impact, then, the IFS excluded the entire system of UC (which has been legislated for since 2013) from the baseline. This meant that each of the counterfactual scenarios  (including the Labour one) included the full effects of UC as well.

This had an especially large impact on the analysis since the backlog of government reforms currently still being implemented dwarfs the comparatively smaller tax and benefit measures proposed in the manifestos. The Liberal Democrats are the closest to an exception where, unlike Labour and the Conservatives, a far greater proportion of their spending plans affected welfare spending in general, and spending on UC in particular.

Whether this is the right way to conduct analysis depends entirely on the question that is being asked.

If the question is: compared with the world as it is configured today, would the tax and benefit system be more regressive in five years’ time after taking account of all the government’s current reforms that are in the process of implementation in addition to party manifesto pledges? The answer is the same for all parties because of the sheer scale of government reforms in the pipeline: ‘yes’. (Although the point remains that this would still only represent a small portion of total tax and spending announcements from Labour’s manifesto in particular, so the full picture is still unknown).

But if the question was: after taking into account the government’s current reforms to today’s tax and benefit system would the additional impact of the personal tax and benefit reforms scored from Labour’s election manifesto, taken in isolation, be regressive? The answer is absolutely not.

If interpreted correctly, the IFS analysis actually gives the answer to both of these questions. Compared with the world as it currently is (essentially the x-axis itself) all the manifesto policies are broadly regressive, albeit to varying degrees. But compared with the world as currently planned (the IFS’s scenario labelled in green) both the Labour and Liberal Democrat lines are clearly more progressive.

What determined whether the absolute figures presented in the chart were largely negative rather than positive – and therefore perhaps the immediate impression that the analysis leaves with readers – was the choice of baseline. If the ‘current plans’ scenario were to have been the baseline (as is more consistent with the OBR’s standard baseline) the Labour and Liberal Democratic manifestos would have been presented as having a net positive and progressive impact on households in the bottom half of the distribution.

Had that chart been produced instead, any alternative narratives about the Labour manifesto would have been less likely to misinterpret the evidence – although the chart itself would have been no more right or wrong for it.

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This discussion does not amount to a criticism of either distributional analysis of personal tax and benefits in general, nor of the IFS’s work in particular. The former is an essential tool – when applied appropriately – for assessing particular measures of fairness. The latter execute their work extremely well and in a way that often enhances the quality of the UK’s political conversation.

In particular, on both the main points raised above (the limited number of manifesto measures included and the choice of baselines), the IFS are entirely transparent. The title of their chart is labelled as analysis of ‘personal tax and benefit measures’ only, and the full list of policies included are published for all to see. They also make clear that their analysis has excluded ‘current plans’ from the baseline, and that current plans are included in each counterfactual scenario. The author was also extremely helpful and obliging in answering any queries.

The very worst that can be said of the IFS in this instance is that they have not gone further out of their way to tackle what has grown into – at times – a dangerous misinterpretation of their analysis. But in a political climate where both wilful and accidental misinterpretation of economic evidence and theory is endemic – and often on far more serious issues than the technical progressivity of a single manifesto – their lack of intervention is unfortunate but understandable.

Neither do the points raised here absolve the Labour manifesto from an alternative or progressive critique: in particular, the absence of a more serious reversal of the government’s welfare plans is highly conspicuous, not least given that the Liberal Democrats were able to go far further in their own commitments. And the critique of universalism from a principle of reciprocity, though not the final word, remains an area of useful discussion.

Probably the best conclusion that can be drawn from all this echoes that made by Torsten Bell of the Resolution Foundation in May. Commentators should be careful to not overstate the decisiveness of broad-brush analysis during an election campaign, where seemingly mere technicalities over methods and assumptions can actually shape entirely the final interpretation as much as the facts themselves.

Instead, more attention should be given to the broader direction of travel and the choices on offer.

At the last election, the real debate centred on the size and scale of the state, the balance of state support between welfare in cash or in kind, the divide between young and old, between the super-rich and the rest, and how principles of universalism, reciprocity and targeted redistribution should be brought to bear on questions of fairness. 

These are the tests against which commentators should judge our political parties at the next election as well.