Labour’s electoral results compel a course correction. That much is not in doubt. But before anyone commissions more opinion polling on new policies in lieu of principles, it’s time to take stock. We must resist the temptating notion that slashing spending, like throwing good money after bad, solves anything and start with why taxpayer cash matters at all. To get out of this doom loop, Labour needs to restore public confidence that we can apply our progressive values to being value for money.
The tendency to panic promise that has characterised the current administration has not just underpinned the loss of hundreds of councillors. It has also limited our capacity to change anything. It’s a bad habit Labour needs to break to show we understand how we got to the wrong answers in the first place. From agreeing to match Tory national insurance cuts (and so restrict public service funding), to calls to cut welfare to pay for defence (and so wracking up costs for mental health services), these costly errors are part of a clear pattern in British politics. Trapped in a cycle of short-termism where the hope is a headline will salvage poll ratings, we have become a party that knows the price of everything but the value of nothing.
Not all spending costs money in the long run, and not all saving plans actually save anything. True Labour thinking compels us to know the difference. That is about more than good financial management- its planning for the human consequences of decisions too. Labour can give disillusioned voters across the country something to believe in again by showing we know how to use precious and often limited resources to best effect- and when to say no too. It is the difference between being the party of the ‘bedroom tax’ and the party of child trust funds. The former cost more than it saved because of its knock-on impact on housing needs. The latter delivered nest eggs for children living in families who did not own their own properties.
At our best our mantra has been about investing to save because of the social and economic benefits — and the costs of doing otherwise. We fought for SureStart centres because for every £1 of up-front spending, the IFS found £2.05 was generated in total benefits to society. We also know it is the poorest and most vulnerable who suffer when markets fail or money is wasted. Failing to invest in social care costs the NHS £2bn a year in patients who cannot be discharged.
This is about more than joining up government priorities. It goes to who we are and how we work to achieve our goals. Socialism is rooted in the notion pooling resources — creating a healthcare service, public schooling, tackling poverty — pays off for all. Nearly eighty years of data shows that Labour’s NHS has consistently delivered healthcare outcomes at a fraction of the cost of comparable systems. America spends roughly twice as much per head on healthcare as the UK yet produces worse outcomes on almost every measurable indicator — from infant mortality to life expectancy. And, as IPPR have shown, tax-funded healthcare systems are cheaper, and have lower administration costs.
The country is angry, divided and frustrated. Populists on all sides offer the promise of someone to hate, not how to make change happen. Our future as a movement lies not in focus groups, but focusing on what we stand for. And that means doing the maths, even when the maths is inconvenient to the popular headline. As recent evidence shows, plans to restrict indefinitely leave to remain do not save money but will ruin lives and damage the economy. A similar lack of evidentiary foundation should also mean an end to the plans to cut jury trials, introduce ID cards and calls to cut welfare spending by reducing entitlement, rather than solving the problems that leave people reliant on the state for support instead.
We should also draw hope from where the data proves the concept. Investment in energy independence through the Great British Energy company pays off in a world where oil and gas prices drive collective fiscal uncertainty. Cutting the cost of childcare enables more families to balance work and life obligations, while simultaneously increasing productivity. Restoring our relationship with Europe generates growth — as does investing in further and higher education.
Some of the most expensive decisions this country has ever made have been the ones dressed up as savings, and some of the best investments attacked at the time proposed as unaffordable. Being truly progressive compels us to follow the data. Without showing how we make a difference in people’s lives, as the NHS or Sure Start did, trust and outcomes in our politics will continue to shatter. The question is not whether we can afford to be values led, it is whether we can afford not to.
Stella Creasy is the Labour and Cooperative MP for Walthamstow.
[Further reading: The last thing Britain wants is a Labour leadership struggle]
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