A reset is an opportunity. A lesson from the government’s recent difficulties is that timidity and short-termism, disconnected from a compelling narrative, leads you into political blind alleys. Now is the time to be bolder and more radical – or face political disaster.
The episode on welfare reform stands as a case-in-point. An agenda for far wider and deeper reforms to dramatically reduce welfare spending and economic inactivity, while protecting the most vulnerable, is very possible. Tinkering to confront short-term need appeared to many colleagues unprincipled and lacking in purpose. A more all-encompassing project to reimagine the welfare state was more likely to succeed and would have been more beneficial to the Exchequer – and the country.
There is a risk that governments across the western world equivocate while Rome burns. The horrendous legacy of the Tory years, combined with rapid global and technological change, means fundamental reform here is the only option.
The country’s public services are broken, but the tax burden is high, and our public finances are wretched. A newly fragile world order means keeping our country safe will be increasingly difficult and will require domestic reindustrialisation, rearmament and investment in defence technology. The threat of AI to bring about large-scale disruption to employment, our economy and the accompanying burden on the welfare state is significant and has not been given due attention. The threat of climate catastrophe and the need to secure energy independence will also weigh heavily on any government.
In this context, there are some hard truths for colleagues. A strategy of “tax and spend” will not be sufficient to rebuild the country. If Labour is serious about national security, then further difficult decisions around spending and the scope of the state will be necessary. Government is attempting to do more than ever, and is increasingly failing its citizens. We will need to be nimbler as defence spending inevitably grows.
Finally, the “wealth tax” unicorn is not a realistic alternative to a very real fiscal constraint. There may be more money that can be taxed from the “super rich”, but it would not amount to sums that would significantly ease the burden for the Exchequer. There is no way to escape hard choices.
This may sound depressing, or even apocalyptic, to some. But an enormously difficult context means Labour must be more radical, not less – and fundamentally rewrite the rules of the state, the economy and public services. This is an opportunity to rewire our country underpinned by progressive values.
Reindustrialisation can mean rebalancing our economy with a focus on investment and jobs in towns that were failed in the 1980s. A rapidly changing job market is an opportunity for a skills revolution, and life-long upskilling, to ensure everyone can benefit from artificial intelligence. The search for growth is paramount, but that must mean more than GDP figures or the number of capital projects, but also place-based, social infrastructure, which is so critical to tackling the productivity gap, reducing poverty and raising living standards.
The acute prisons crisis means creative community punishments and transforming criminal justice, putting rehabilitation at the heart of our justice policy. An ageing and increasingly unhealthy population needs a completely revitalised and preventative NHS, remoulding the institution for the rest of the 21st century. Facial recognition technology and AI will transform policing, offering huge efficiencies so we can properly rebuild community policing across the country.
This urgency for change must also lead to a healthy disrespect for the old order. There is a third way between the performative approach of Dominic Cummings and Liz Truss, who attacked institutions and rules to make a point and, on the other hand, an overly deferential attitude. On the ECHR, the OBR and civil service reform, nothing must stand in the way of delivering change for the British people.
Fundamental change also inevitably means making enemies. That is no bad thing for a government. In 1945, it was the “capitalist class” and colonialists. In the 1980s, it was trade union power that Margaret Thatcher callously weaponised. In 2010 to 2015, it was a bloated state. The government will need to make clear who will lose from their agenda, only to emphasise the wider benefits.
There is scope for more aggressive attacks on the vulture capitalist class – the Covid-fraud billionaires, those making their fortunes from desperate asylum hotels and accommodation in the children and adult social care system, and the multi-national corporates that thrive on illegal working. Why is it that foreign states are often profiteering from our basic domestic public services?
Change is not simply technocratic but applies to the social contract. If the state is to become more agile, social and cultural change must be led by government. Personal responsibility, family and community are Labour values and we should not assume that the answer to all social ills is more state activity. Those who flagrantly disrespect wider society should be called out and lose the benefits they have gain from citizenship. An agenda of rights and responsibilities is needed now more than ever.
This new covenant also requires us to reconsider what it means to be a citizen today. Illegal immigration, like issues of welfare fraud or tax evasion, causes so much anxiety because people do not believe the system rewards those who play by the rules. A new, comprehensive digital ID scheme is an opportunity to begin to confront this with conversations about access to public services and welfare.
This approach is hard-headed but the only way to break the doom-loop of failure that populists feed upon. With the right split, and the Conservatives barely on the pitch, the next election is very winnable. Let us take this opportunity.
[Further reading: Starmer can still turn this around]
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