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What Labour needs to do in 2014

What Labour needs to do in 2014

“To win next time, it is the New Labour comfort zone that we must escape: the rigidity of old formulae that have served their time, the belittling of any attempt to move on from past verities and the belief that more of the same is the way to win.

"We lost because people lost a sense of who we are and what we stand for. To win again, we need to restore our clarity of purpose.

Only with a politics based on clear values can we win again.”

Ed Miliband, 2010

2014 will set the scene for the general election. By the end of the year, Labour’s priorities should be largely clear. The Tories, with Osborne’s new year speech advocating permanent austerity, have already drawn their battlelines; the Lib Dems will struggle to win a hearing, and UKIP will be snapping at the Tories’ ankles.

The above quote from Ed Miliband is an indicator that Labour may break away from old formulae: his criticisms of the policies of the last thirty years, and the explicit critique of neo-liberalism from Lord Stewart Wood (Miliband’s chief advisor), certainly suggest the possibility. More importantly, Miliband’s attack on energy prices and big energy resonated with the general public – suggesting that a Labour Party willing to take on the powerful may be rewarded in the polls.

The opening of a major front on living standards, posing the question “Whose recovery?” has indeed been Labour's most successful message. It is a message that could help re-establish the party’s relationship with working and middle class people. At the moment there is a great deal more to be done, and Labour’s current efforts have been too cautious, but this is territory Labour can win on and it must not be reticent about occupying it completely.

Just as Obama seeks to represent “middle class” Americans, Miliband must make clear that Labour seeks to represent the majority of Britain, against the unaccountable elite: the 1% who get richer by the day. Today’s Telegraph piece from Ed Miliband indicated he realises this, but there needs to be more effort to communicate an overarching message about Labour to the electorate.
The sense of whose side Labour is one has shone through most clearly when the party has been bold and radical - when it has sought to create a new radical consensus rather than triangulate and cautiously appeal to a mythical middle ground.

Falling living standards and real wages have hit the majority hard. They are a product of a divided society; the collapse of collective bargaining, deregulation, outsourcing, and a fundamental shift. In 2014, Labour must outline convincing policies to convince the electorate that it can change this.

Urging a big increase in the National Minimum Wage of £1.50, as well as Living Wage zones, is important. But support for strengthening collective bargaining is essential. Obama is doing it; the much vaunted German model does it. For living standards and a successful economy, we need this essential predistributive change.

2014 will see growth – based on private consumption and debt, and a housing bubble. It will be very fragile. Investment is currently not responding to growth – but it may begin to pick up. But at best it will be unbalanced recovery – without much living standard growth, in the wrong regions, and not in the key and productive areas for the future, nor addressing the major ecological challenges of our time.

Alongside addressing living standards, Labour needs to offer a vision for the future of the British economy, and its relationship to the European economy, which can be recognized as a path to prosperity. Labour will need to confidently argue for a new role for the state: ensuring the big banks remain in public ownership, establishing a major British Investment Bank, and working regionally within an ambitious industrial strategy should form a fundamental part of this. Big public investment in infrastructure, low carbon energy and related industries, a big housing programme, alongside investment support for British leading sectors will be crucial. Recent academic work, like that of Mariana Mazzucato, has demonstrated that the state plays a crucial role in innovation – recognising and developing that role, with a new role for science and technology within our economy will convincingly paint the picture of the future.

Austerity must be challenged and cuts plans reversed. It is an ideological sledgehammer which has damaged our economy and devastated living standards. Labour will, of course,  need to make clear its long-term policies to ensure debt and GDP do not get out of kilter – but strategies for growth and sensible taxation can deal with that. Taxation of the superrich; especially greater taxation of their wealth and bequest is essential to greater equality, balanced budgets, and less fragile economies. The previous truism that tax increases of any kind spell electoral disaster can be disproved. More tax for the superrich that translates to better living standards for the many will convince voters.

Labour needs to show it is clearly on the side of all working people – including migrants and recipients of benefits. Strengthening the labour market, ending the Swedish derogation by which UK Employment conditions are avoided by agencies, and abuses by agencies are fine and good. But Labour also needs to oppose xenophobia – low wages, unemployment, poor housing are the result of political choices by those in power, not migrants. A bold and convincing Labour voice will strengthen electoral support not weaken it, whereas chasing the right leads nowhere.

Ed Miliband was right when he spoke the words quoted in the introduction to this piece, and he continued: “It is by speaking openly and clearly about what we believe that we can best get back into power.”

If Labour can do this in 2014, it will win the next election.