Time to rethink, not reassure

The big state is a political dead end for Labour. The public won't vote for the belief that governme

Labour needs comradely and serious debate. So it should be with the former deputy leader Roy Hattersley's recent article (with Kevin Hickson) "In praise of social democracy" for the Political Quarterly. Roy has been pretty consistent in his views over 40 years, even if the framing labels in the party (right, left, new, old, radical, conservative) have swivelled around him. His commentary on politics is born not of self-promotion but out of belief. But that doesn't mean he is right.

In his article Roy sets out to make three arguments: that policy needs to be built on a consistent and coherent idea; that the only tenable ideological position for Labour is a social democratic commitment to greater equality and the freedom that is its product; and that Labour should eschew "news value" in favour of ideology. He is convinced that there exists an obvious instrument for putting social democracy into practice - the central national state, whose strength has been underestimated, he argues, in a rush of market fundamentalism on both left and right. His fundamental point is this: that Labour in the past 20 years has been scared off the most potent vehicle for the expression of its values, and in the process has come to be seen as ineffective as well as unprincipled.

For some, this will be seductive. It is what I shall call Reassurance Labour. Reassurance about our purpose, our relevance, our position, even our morals. Reassurance Labour feels good. But feeling good is not the same as doing good - and it gets in the way when it stops us rethinking our ideas to meet the challenges of the time. And now is a time for restless rethinking, not reassurance. Ed Miliband has shown he understands this with the policy review now under way.

The role of social democrats is to take the values of ethical socialism and put them into practice in a gradual way. The trouble is that while coming to praise social democracy, Reassurance Labour is the way to bury it. Its definition of the good society is too narrow; and it is inadequate to point to the importance of central government without addressing its limitations.

Louder assertion is just not enough for Labour - nor for the 24 out of 27 EU social democratic parties which find themselves out of power. We will win again only when two conditions are met. First, that we fully understand in a deep way why the electorate voted against us in 2010. Second, that we clarify the kind of future we seek for Britain, and the means to achieve it, in a way that speaks to the demands of the time.

Here are seven areas where we have to work through the right approach. They are about purpose as well as politics.

1. We should be the reformers of the state and not just its defenders, in the interests of both our effectiveness in government and our ability to win elections.
The mechanism Roy describes for furthering social democratic goals is "the central state", whose popularity and efficacy are to be proven by "demonstrating the inherent ethical superiority of social democratic values". This isn't right, and can leave us snared.

He makes two sensible claims about central government: that only the central state can perform certain essential tasks (regulation of banking is the example) and that "only the central state can perform certain other tasks fairly" (for example, in setting pension levels). The Tories don't usually dispute either point.

But these claims are then elevated to be the guiding light for the advance of social democratic values. This is dangerous for a number of reasons. A central state unclear whether its starting point is the entitlements of citizens or the delivery of services is unlikely to achieve either; a central state without the discipline of decentralisation is likely to become bureaucratic and out of touch; a central state that simply aims to do more - with no discussion of who pays for what, never mind who does what - is going to run into huge constraints of affordability and efficiency; a central state that sees itself as the only source of public virtue is going to lead to an impoverished notion of public good; and crucially, more and more problems - from obesity to mental illness - are not amenable to resolution by central government diktat.

The weaknesses of the "big society" should not blind us to the policy and political dead end of the "Big State". The public won't vote for the prescription that central government is the cure for all ills for the good reason that it isn't.

Active government is important beyond the demands of a minimal state. But it will only be effective when it mobilises people, whether as patients or parents or employees or citizens, to make choices and take decisions that reshape their own lives. That is why we are enjoined on our party membership cards to put power as well as wealth and opportunity in the hands of the many, not the few.

2. We need to be the champions of local political change rather than sceptics, not least because local government is going to be our area of greatest strength in the next few years.
Local government is where Labour holds power across the UK and is making change. Localism is derided on the grounds that autonomous communities can become oppressive rather than empowering in the absence of safeguarded national rights. But who is proposing to allow local communities to decide whether to apply anti-discrimination law? No one, as far as I know.

New Labour should have done more to pursue a thoroughgoing empowerment of local government and local communities - what I called in my time as minister for communities and local government "double devolution". Yet Labour councils in Newcastle, Lambeth, Liverpool - and South Tyneside, but I am biased - are showing what it means to do things differently. This is the only way to protect people from the onslaught of Tory economic policy.

This is not the same as laissez-faire. It is not a means for local communities to oppress minorities, or local government to ignore need, but instead a mechanism for: a) local choice about how to deliver national entitlements, b) decisions about local life beyond the national minima guaranteed by central government, and c) innovation that is the lifeblood of progress.

For the future, we are going to have to come forward with plans for reform of central government as radical as those that the pioneers in local government are developing at that level. There is a crisis of trust in government across the democratic world, and we need to be the people who address it by changing the system, not just defending it.

3. We need to be clear how equality, and what kind of equality (including of what), services our notion of the good society.
Roy Hattersley has an admirable pedigree in helping Labour think through the relationship between liberty and equality. The argument of his book Choose Freedom: Future of Democratic Socialism - that the reduction of inequalities is necessary to expand individual freedom - is necessary and powerful. But in his article, liberty, rights, social justice and equality are listed as a range of desirable values, when the issue is how to resolve clashes between values, not whether you can make a list of them.

For two years in the early 1990s, as secretary to the Commission on Social Justice, and then in and around government for our period in office, I argued with people who said that New Labour's harping on about social justice was an abandonment of Labour's commitment to equality. The truth is that a proper definition of social justice provides a good guide to the competing demands of liberty, justice and equality.

Thanks to the insight of the late Bernard Williams, the Commission on Social Justice argued that the way to understand social justice is through a four-part scaffold. Social justice in this definition means:

1) The equal worth of all citizens;
2) Their birthright to have all basic needs met;
3) The need for a thorough assault on inequality of opportunity;
4) The reduction and where possible elimination of unjustified inequalities in political, economic and social power.

This means arguing strongly that the levels of inequality currently being generated in countries like Britain need to be tackled. But it also means embracing notions of merit, reward and responsibility in developing policy in areas such as tax and welfare - to service a viable and principled notion of social justice. Ed has spoken powerfully and correctly about this.

4. We need a politics of economic growth, not just redistribution and regulation.
Social democratic parties win when they combine a politics of production with a politics of distribution. Growing the pie and distributing it more fairly should be mutually reinforcing. Miss one of them out and we cannot help those who need it.

The party has been united over the past 18 months in arguing that the Tories' austerity plan is economically dangerous. There is good evidence that our concerns are justified. The Darling recovery has given way to the Osborne slump. But every Labour member also knows that the Tories have done a serious job at blackguarding Labour as fiscally incontinent and they are now moving on to blame the euro for our present economic ills. These are battles that we have to win to benefit from the misdeeds of the Tories.

It was a tough job to win back economic trust after 1992. The bequest from 2010 is even tougher. At the last election, not a single major business endorsed Labour, and we cannot afford that again.

The battle is not only a macroeconomic one about demand management and the deficit, vital though that is. There is an investment crisis facing many western economies, squeezed between limited scope for public investment and private-sector deleveraging. Its remedy will require deep-seated engagement with a changing economy, and the range of interventions and incentives that can stimulate it. It is about responsible capitalism. It is also about productive capitalism.

5. We need to resolve how to make our internationalism work for Britain.
It makes life easy to ignore the outside world, but domestic policy today cannot be insulated from the international context. The problems confronting all advanced western countries are not just the product of left v right battles over national levels of equality, regulation, welfare, state interventionism, and so on. They reflect profound shifts in the global power balance - between west and east, between state and market, between government and individual, between resource plenty and resource scarcity. These are the tectonic plates of global politics. The greatest strategic judgements are about how to engage at a regional or global level.

We cannot secure the future of the country or the party unless we engage with this new reality. My own view is that countries that are weak in their own region are going to struggle in this century. For Britain, that needs to be built into a political narrative about reform of the European Union that is plausible enough to be powerful; and combined with strategic insight into the deep questions of identity and belonging that now face Britain and notably the people of England.

The world is more open and connected than ever before - for individuals, for cities, for countries. But as an IPPR report published last month argued, unless globalisation is reshaped for mass benefit, the stirrings of discontent felt around the west will rise to become a dangerous tide.

6. We need to continue to modernise the party itself.
One of the correct charges laid against the last Labour government was that it lost the red thread that links decisions to values. Yet there is also a valid charge that its "mechanical" reforms reflected a view of government "for the people" that neglected the importance of government "by the people".

This starts in how the party itself is run. As Phil Wilson MP memorably said to me, we won the election on 1 May 1997 and stopped reforming the party on 2 May 1997.

Labour has gained over 60,000 new members since the last general election. But we remain a party of 0.3 per cent of the British population; and we are a party in which probably 5,000 people (less than 0.01 per cent of the population) do 90 per cent of the work. So we need to expand the party and redistribute responsibility within it. That is what I am hoping to contribute to through the Movement for Change, training 10,000 party members and supporters to make change in their own communities.

When you think that the French Socialists got 2.8 million people voting in their leadership election - for the price of €1 and a signature supporting the aims and values of the party - you see how far we have to go in the project of reconnecting with the British people. Yes, France has a presidential system; it differs from ours. But soon in cities around England we are going to be selecting our candidates for mayor. Imagine the boost to our campaigns, for elections soon after, if our candidates were selected in open primaries that require engagement with tens of thousands of Labour voters around the city even before the mayoral election gets under way.

7. We need to establish far more clearly what needs to be defended about Labour's record in government, not just join the blanket Tory denigration.
Roy says that Labour in government "would never dare to mount a real attack on poverty". This is weak. For example, by 2010, an extra £18bn per year in real terms was being spent to tackle child poverty, while the incomes of poor pensioners were also dragged upwards. It was funded in part from the unsustainable proceeds of the financial sector - far more sensible grounds for concern, as both Eds have said.

One of the jewels in the crown of Labour's time in office was the rescue of the National Health Service. As the Commonwealth Fund, the London School of Economics and the Nuffield Foundation have all shown, health reforms as well as additional investment were essential to improved outcomes, especially for poorer patients. Where reform was missing, in Scotland and Wales, the improvement was far slower.

Research by the Financial Times shows a similar picture in schooling, where the gap between best and worst schools, which correlates with a wealth gap, was narrowed in the context of rising performance by schools in general.

Our attacks on the Tories will not work if we are not clear about what we did. We should say loud and clear where we made mistakes, but we should also insist that the list of gains far outstripped the mistakes. After all, even David Cameron said on coming to office that Britain was better in 2010 than 1997.

Our defeat in 2010 was disastrous, Labour's second-worst in 70 years. We hold only 12 seats out of 210 in three southern regions outside London. Since then we have avoided the most obvious mistake of 1951 and 1979, namely disunity. That is very true, and strongly to Ed's credit and that of the wider party.

Yet we have a lot to be concerned about, from the Tories' financial advantage and the boundary review to the sociology of our representation at Westminster so that, for example, the professions are under-represented in the Parliamentary Labour Party, the threat of Scottish independence and, above all, the profound damage to our hard-won economic reputation following the economic crisis and the successful demonisation of our record.

After these challenges, it is a massive risk to say that there isn't much to worry about in our approach - and in fact, that history is coming in our direction. But the Reassurance tendency insists that anyone who disagrees has abandoned principle for power. It does so out of fatalism about our ability to persuade people of the correct course.

Roy says that the trouble started when our defeat in 1992 was taken to mean - wrongly, in his view - that people wouldn't vote for an "overtly social democratic policy platform". Not only does Roy argue that Labour made mistakes after 1994, he says that principle was deliberately abandoned for reasons of electoral expediency.

Yet the argument after 1994 - starting with the rewriting of Clause Four - was exactly the opposite of this. The whole revisionist argument throughout Labour history is that to impale ourselves on the choice of principle and power is logically as well as politically disastrous. And the real lesson of 1992 was that we couldn't rely on an unpopular government to lose an election and gift us victory.

After 1994, we did not say that it was a great pity we had to compromise our principles to meet the electorate halfway; we said that it was vital to reform the statement of our principles to reflect what we believed. The same was true in a range of policy areas, including health, education and crime. We changed our policy better to fulfil our values, not abandon them.

That is what we have to do again - not because we have changed but because the world has changed. Rethinking, not reassuring.

Principle without power is the stuff of a debating society, not a political party. However, power without principle is a violation of our most basic purpose. So let's not pretend that the party is divided between the virtuous and the impure.

The problem with the definition of social democratic politics by the Reassurance Labour tendency is not just that it reduces our chances of election, but rather that its vision is too narrow, its mechanisms too one-dimensional, and its effectiveness too limited. The debate is not whether one side is unprincipled; instead, it is who is right.

David Miliband is the MP for South Shields. He was environment secretary (2006-2007) and foreign secretary (2007-2010)