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Chuka Umunna: These are "perilous times" for the Left

Read: the full text of Chuka Umunna's speech to the Progressive Policy Institute.

Introduction

Thank you so much to Will and the entire Progressive Policy Institute team for organising this gathering and inviting me to speak.

It is no secret that, as we sought to modernise the UK Labour Party in the 1990s and transform ourselves from a party of protest to a credible party of government, we drew much inspiration from President Clinton and the New Democrats.  PPI was an incubator of so many of the ideas of that time which took the New Democrats into office.  You were the original modernisers. 

Unfortunately my party is suffering a relapse.  We were established to be the political wing of working people in Britain, resolutely focused on ensuring that everyone has a stake in the future.  But, too often over the last five years in opposition we behaved like a party of protest.  Now we urgently need to modernise again so people can trust us to govern once more and fulfil our historic covenant with those that founded our Party. 

The Democrats here have bucked the trend of progressive parties across the advanced world – the trend of losing General Elections since the global financial crisis.  So, coming back to tap into your thinking and exchange views is a no-brainer. 

 

Progressive challenge

We meet at perilous times for centre left “progressive” parties, across advanced economies.

We face a resurgent Conservative Party who have told a story about debt and deficit issues following the global financial crisis far more effectively than progressives.  That crisis was a failure of the laissez-faire economic model the centre right were in thrall to and yet they have made the political weather since 2008/9. 

In opposing the centre-right, we also compete with the populist left - in particular on economic policy - and the populist right - on issues of identity and belonging.  I will touch on all this shortly. 

The Danish Social Democrats provide the most recent example.  In spite of winning the largest share of the vote by a comfortable margin in their General Election last month, they are out of power.

In May the British Labour Party went down to our worst defeat since 1983.  The defeat comprised different elements: a failure to tackle Conservative hegemony in the Southern regions of England outside London; a challenge by the populist right – in the form of the UK Independence Party – in seats in the North of England; and a wipe out at the behest of the Scottish Nationalist Party in Scotland.  A perfect storm.

It was England primarily that delivered the Conservative majority.  We must win back support in Scotland but will need to prioritise taking seats from the Conservatives in England if we are to win again.

I cannot cover all of the reasons for our defeat but I shall make some observations on what it says about the challenges progressives face across the advanced world in this era of globalisation.

 

Economic competence

In the immediate aftermath of our defeat people have naturally prayed in aid arguments to suit their particular political perspective.  But most agree our perceived lack of economic competence severely compromised our ability to gain the support needed to win. 

It wasn’t that people like the Conservatives more than us - far from it - but they felt voting Labour represented a risk in a world of uncertainty.  This was particularly so amongst older voters who vote in greater numbers and amongst whom support for Labour since 2010 dropped by eight points. 

How did this come to pass?

Rahm Emanuel famously said you should never let a serious crisis go to waste.  Our Conservative rivals heeded this advice, as did many other centre right parties across Europe.  The 2008/9 crash occurred under our watch and they used it ruthlessly to make their argument.

In the UK the crash had precipitated a recession that brought about a collapse in tax revenues leading to a deficit of 11.1 per cent of GDP in 2009/10.  This was inevitably going to have to be dealt with once demand and growth returned.  So from 2008 in opposition through to government in 2010, Conservative Chancellor of the Exchequer, George Osborne reframed the economic debate in our country from one centred around the need for demand stimulus, to one resolutely focused on deficit and debt reduction.   

Osborne argued that the Labour Government’s domestic spending before the crash had threatened our economy, and went on to argue – successfully – through the last Parliament, that if elected again, we would borrow, spend and tax more than the Conservatives.  In so doing, our values were attacked too – they argued that not only were we incompetent, but that we were reckless and irresponsible too. 

It was a ludicrous argument.  We had reduced the national debt from 42 per cent of GDP in 1997 to 37 per cent of GDP on the eve of the crash in 2007.  Before the crisis hit the deficit was small and unremarkable, averaging 1.3 per cent from 1997 to 2007 compared to 3.2 per cent beforehand under the previous 18 years of Tory rule.  Indeed, so relaxed was Mr Osborne about borrowing before the crash that he signed up to our spending plans in 2007. 

No matter. Mr Osborne’s argument stuck.  As you would expect, he was greatly assisted by the fact that – notwithstanding the fact that the Labour government did not cause the crisis – the crash occurred whilst we were in office.  But this was compounded because, once we left office, we failed to sufficiently concede where we went wrong – not properly regulating the banks and rebalancing our economy so we weren’t so exposed when the crash hit; in turn this compromised our ability to communicate what we got right.   

At the general election just passed we had good policy to better balance our economy between sectors and regions, and to improve our trade position, but this was drowned out by the noise being made in relation to our alleged past economic misdemeanours on the deficit. 

We were also not helped by some of the rhetoric the party deployed which gave the impression that we were against wealth creation and the productive businesses we would need to help us reform the economy if elected 

Going forward we will need to ensure any weakness in our fiscal position is dealt with.  It starts by asserting again and again that reducing our borrowing is a progressive endeavour – much as Democratic Nominee Bill Clinton did in 1992.  We will need policy positions consistent with this goal. But, we must relate this to our values: compassion to ensure all have the support they need to get on; a responsibility to run sound public finances so we have resources to invest in people.

 

A vision of the future

We also failed to set out a vision of the future of our economy and our country that all could rally around. 

Much of what we said focused on how terrible the country was and how we would regulate and clamp down on the many vested interests that we identified as being the source of all ills.  This was hardly an optimistic, positive and patriotic story about what our country is and could be in the future.  So, little wonder that even if voters did not believe the economy had improved under the Tories, too few believed it would get any better under Labour. 

As globalisation has marched on and left too many behind, there has been an increasing sense in our country that the economy is not being run in the interests of people who work hard, play by the rules and do the right thing.  In the absence of a positive narrative to explain how under a smart, enterprising Labour government every person and family would be empowered to take advantage of the opportunities the new digitally connected world can bring, social security and immigration dominated.

The social security bill was consistently one of the top three issues throughout the last Parliament.  We spend more than £200bn a year – almost a third of all government spending - on the welfare state and this is not sustainable in the long run. 

The Conservatives have chosen, in the main, to target entitlements the working poor and vulnerable receive to help make work pay – as the best way of reducing the social security bill.  This is not something we would entertain.  But we failed to set out an alternative way of reducing the benefits bill that convinced.  In fact, we voted against every single social security measure put through parliament which helped reinforce the notion that we were not serious at getting to grips with this. 

The price of successful politics is a constructive alternative and we did not have one.  We need to rebuild support for our welfare state by setting out an alternative that puts notions of contribution and responsibility at its heart – where we all have a responsibility to work when we can and contribute in to the system if we want to we take out.  That is what most people mean by fairness.

In addition to this, Ukip have sought to place blame for the lack of fairness in the system with immigrants.  Many blue collar workers have understandably been troubled by the impact of immigration on our labour market.  Whatever arguments are made by business of the necessity of immigration, for many blue collar workers it has meant more competition for jobs and the undercutting of their wages.  The funding of public services has also been too slow to take account of population changes, putting local public services in some areas under pressure.  This has proved toxic and provided fertile terrain for the populist right to use for their own divisive agenda.

The solution is not to pander to anti-immigrant sentiment or ignore it but to ensure proper enforcement of labour market rules and that new arrivals contribute into our system before they take out.

But, if we are to tackle the underlying causes of concern about social security and immigration, we must implement modern industrial strategies to stimulate innovation, grow the industries that produce better paying jobs, give people an education  that match the needs of our industries, and give them the skills to connect into the digital global economy.  Our education systems currently are simply not up to the job of giving workers the skills to adapt throughout their working lives to multiple career changes and constant technological advance.  Again, we defended the status quo. 

Above all, we need a system which doesn’t just treat people as commodities but where we value the work people do – the vocational and technical as well as the academic – and give them more of a say and greater employee engagement in the work place, fostering a greater sense of power and security in an uncertain, fast-changing world.  This was not sufficiently central to our message – it must be for all progressive parties.

In other words there is work to do; real heavy lifting on the relationship between the economy and welfare if we are to win again.

 

National identity and belonging

 

The debate on immigration is symptomatic of the wider impact of globalisation. 

People feel increasingly powerless in an age of globalisation that has brought about insecurity for so many.  As a result, issues of belonging and cultural identity have taken on an increased importance as people search for security and solidarity in a fast changing world.

They are also increasingly mistrustful of a political elite who they believe is remote, passing laws and pulling levers at the centre, at a time when people want more power for themselves and autonomy for their communities.  Progressives ignore this at our peril.  If we do not address it, nationalism will flourish, which brings me to Scotland.    

Although we were on the winning side of the argument in the September 2014 Scottish independence referendum, we lost 40 of our 41 seats there to the Scottish Nationalist Party at the General Election this year. 

The rise of nationalism there was a factor that has deep, cultural roots.  But, more than that, the constitutional issue of independence had become intertwined with issues of social justice.   Whereas the English have tended to be slightly to the right of the Labour Party on economic matters, Scottish voters tend to the left of the party.  The 2014 referendum campaign did not deliver the result the SNP desired, but it did give them the opportunity to set out a vision of the kind of independent Scotland they wished to create.  In 2015 they successfully argued that an independent Scotland would be more progressive, stand up and protect them in a changing world. 

In a sense, what we are witnessing – as the psephologist who came closest to predicting the UK result, Professor John Curtis of Strathclyde University, has argued - is the end of British electoral politics as we know it.  He argues that the first break came in the 1970s when the links between Northern Ireland’s politics and the rest of the UK’s were broken; he argues we have just witnessed the second break where Scotland’s politics takes on a different character to that of the rest of UK, powered by issues of national belonging and cultural identity. 

I think we can maintain the union but we should embrace people’s natural desire in our different nations to have more autonomy over their own affairs and give voice to the different cultural identities in the UK, whilst maintaining the benefits that the pooling and sharing of resources across the constituent parts of the UK brings.  This is why I believe we need a more federal structure for the nations of the UK with a new English Parliament to sit alongside bodies in Scotland, Wales and Northern Ireland.  We need a federal Labour Party too which recognises the unique character of each nation.

With a federal UK structure no nation will feel left out; each nation’s voice can be properly heard whilst maintaining a UK parliament that will be stronger as a result.  To facilitate this we should establish a Constitutional Convention with all elements of political and civil society willing to participate, to settle this issue this Parliament.  This is bread and butter for you here where the constitution takes pride of place.  It would represent radical but much needed change in our country.  It would be constructive of our renewal – government of the people, by the people, for the people perhaps.

 

Conclusion 

I want to conclude in making a final observation.  Our offer and the debate during the election was far too parochial. 

If one considers what has had the greatest impact economically on people’s wallets in the first half of this year, it was the price of oil per barrel coming down to around $58 - an international phenomenon.  The multinationals we seek not only to work with but ensure pay their fair share and play by rules, know no borders.  And the biggest challenges we face, be it environmental or global terrorism, cross borders in a way they did not before. 

This says to me that we can only ultimately build a fairer more equal world in an era of globalisation if we as progressives become far more organised and co-ordinated at a supra national level.  For the UK that starts with maintaining our membership of the European Union in the coming EU referendum, but it extends beyond that to other institutions like the UN, the WTO.  A better networked state in the modern age will be better placed to help its people thrive in this new era.

I look forward to working with you, in common cause and for the Common Good in the years ahead.

 

Chuka Umunna is Labour MP for Streatham and Chair of the All Party Parliamentary Group on Social Integration.

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The tale of Battersea power station shows how affordable housing is lost

Initially, the developers promised 636 affordable homes. Now, they have reduced the number to 386. 

It’s the most predictable trick in the big book of property development. A developer signs an agreement with a local council promising to provide a barely acceptable level of barely affordable housing, then slashes these commitments at the first, second and third signs of trouble. It’s happened all over the country, from Hastings to Cumbria. But it happens most often in London, and most recently of all at Battersea power station, the Thames landmark and long-time London ruin which I wrote about in my 2016 book, Up In Smoke: The Failed Dreams of Battersea Power Station. For decades, the power station was one of London’s most popular buildings but now it represents some of the most depressing aspects of the capital’s attempts at regeneration. Almost in shame, the building itself has started to disappear from view behind a curtain of ugly gold-and-glass apartments aimed squarely at the international rich. The Battersea power station development is costing around £9bn. There will be around 4,200 flats, an office for Apple and a new Tube station. But only 386 of the new flats will be considered affordable

What makes the Battersea power station development worse is the developer’s argument for why there are so few affordable homes, which runs something like this. The bottom is falling out of the luxury homes market because too many are being built, which means developers can no longer afford to build the sort of homes that people actually want. It’s yet another sign of the failure of the housing market to provide what is most needed. But it also highlights the delusion of politicians who still seem to believe that property developers are going to provide the answers to one of the most pressing problems in politics.

A Malaysian consortium acquired the power station in 2012 and initially promised to build 517 affordable units, which then rose to 636. This was pretty meagre, but with four developers having already failed to develop the site, it was enough to satisfy Wandsworth council. By the time I wrote Up In Smoke, this had been reduced back to 565 units – around 15 per cent of the total number of new flats. Now the developers want to build only 386 affordable homes – around 9 per cent of the final residential offering, which includes expensive flats bought by the likes of Sting and Bear Grylls. 

The developers say this is because of escalating costs and the technical challenges of restoring the power station – but it’s also the case that the entire Nine Elms area between Battersea and Vauxhall is experiencing a glut of similar property, which is driving down prices. They want to focus instead on paying for the new Northern Line extension that joins the power station to Kennington. The slashing of affordable housing can be done without need for a new planning application or public consultation by using a “deed of variation”. It also means Mayor Sadiq Khan can’t do much more than write to Wandsworth urging the council to reject the new scheme. There’s little chance of that. Conservative Wandsworth has been committed to a developer-led solution to the power station for three decades and in that time has perfected the art of rolling over, despite several excruciating, and occasionally hilarious, disappointments.

The Battersea power station situation also highlights the sophistry developers will use to excuse any decision. When I interviewed Rob Tincknell, the developer’s chief executive, in 2014, he boasted it was the developer’s commitment to paying for the Northern Line extension (NLE) that was allowing the already limited amount of affordable housing to be built in the first place. Without the NLE, he insisted, they would never be able to build this number of affordable units. “The important point to note is that the NLE project allows the development density in the district of Nine Elms to nearly double,” he said. “Therefore, without the NLE the density at Battersea would be about half and even if there was a higher level of affordable, say 30 per cent, it would be a percentage of a lower figure and therefore the city wouldn’t get any more affordable than they do now.”

Now the argument is reversed. Because the developer has to pay for the transport infrastructure, they can’t afford to build as much affordable housing. Smart hey?

It’s not entirely hopeless. Wandsworth may yet reject the plan, while the developers say they hope to restore the missing 250 units at the end of the build.

But I wouldn’t hold your breath.

This is a version of a blog post which originally appeared here.

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