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Category Archives: Labour’s policy review

Is there a new centre-ground and how does Labour win it?

My speech to Progress Annual Conference on Saturday 12 May.

Keep centre

30 January 2012

In the 1990s, progressives learned an important lesson about how to win elections: we built wide coalitions; we held firm to traditional values; but we freed the political mind for new solutions, new methods, new ways of doing business. We kept our philosophy. But we changed the policy. We forged a new path between old-fashioned leftwing statism and new-fangled rightwing laissez-faire.

That new approach worked for Bill Clinton’s New Democrats, the Australian Labor party, the New Democrat party in Canada, social democrats in Germany, the Netherlands, Norway – and, yes, for New Labour.

And today it feels like a long time ago. The political confidence of the third way has taken a battering. Yet faltering growth, worried financial markets, rising unemployment and social unease all point to one thing: the need for a new progressive politics. Yet outside the United States, Brazil, Norway and Denmark, progressives are not winning by default. We need a new way back to the centre-ground.

Now some, of course, will say: ‘New Labour was the mistake. Let’s go back to the 1980s.’ Others will counter: ‘We were not modernising enough.’ A debate like that will not get us far. In 2015 we face a new world: a new global balance of power between Asia and the west, and a budget £30bn in the red. So Ed Miliband is right: we need hard thought now about what to keep from the third way and what to change for new times.

So first, let’s move on from the 1990s. Why? Because, as the world changed, politics changed – and we did not. Tony Blair once argued: ‘What of policy? Our approach is “permanent revisionism”, a continual search for better means to meet our goals, based on a clear view of the changes taking place in advanced industrialised societies.’

But our politics did not keep pace with the change we helped to author. By 2005, progressives had helped create a vast new global market that linked six billion of the world’s seven billion people. Massive new movements of capital kept interest rates low but fuelled asset bubbles. The market, our society and technology changed fundamentally. New challenges emerged: a new inequality between the middle and the top and young and old; living standards plateaued; old solidarities, old communities felt pressured; asset bubbles burst; and banks crashed.

Back in 1958, Tony Crosland wrote: ‘The intellectual framework within which most prewar socialist discussion was conducted has been rendered obsolete.’ Economic growth and ‘a different configuration of economic power … call for a complete reappraisal of the socialist position.’ The revisionist’s lesson? Change as the world changes.

That is why, after the third way, we need a new way back to a new centre-ground. Let’s keep the insights of the 1990s but build on them for a different era. Let’s keep the best of New Labour, not least the late Philip Gould’s basic insight: ‘What most voters want is over time and without greed to advance and improve their lives. In short, to become better off.’

Let’s keep the insight that elections are won in the centre-ground by building an alliance around the values – aspiration, responsibility and community – that unite traditional supporters with footloose voters who change sides.

What does that centre-ground look like? It is bigger than before. More voters are more likely to switch sides. Look at Scotland. No one can win elections trading on old loyalties. That is true for social democrats everywhere. Attitudes have changed too. Take the latest British Social Attitudes Survey which found that support for tax increases to spend more on public services has halved from nine years ago and only a third now say that government should redistribute wealth.

This is no counsel of despair. Neither opinion polls nor by-elections point to any return to Maggie-mania. As Deborah Mattinson puts it: ‘When things get really hard the instinct to put nearest and dearest first is, understandably, paramount.’

This is why Labour’s leader is placing our party firmly in the centre-ground with new ideas not old attitudes. Globally, social democrats are pinpointing five basic principles that can deliver our values in tough times. But Labour is leading the way.

First, the deficit needs not denial but fiscal realism. That is why Ed Balls is tough on tax and public spending. But his approach marries aggressive short-term action to boost jobs and growth, with medium-term ideas to bring down debt. The crash taught us we cannot immunise the world from financial crashes; we have now had 40 since 1800. If we want to protect our room to act when future trouble breaks, we need to bring debt down. That is the best insurance policy for Keynesians. The Tories will leave us with debt at 80 per cent of GDP. That is too high, which is why we have to plan for budgets that are tight.

Second, new growth needs more than just any old jobs. We cannot compete with new economies like that. We cannot risk drawing so much of our tax from financial services. So we need a new active partnership between business and government to rebalance our economy, play to our national strengths, switch to low-carbon energy, strengthen infrastructure, redouble enterprise, and reform our banking system so that, once again, small business and entrepreneurs have the life-blood of credit to grow. This is the new bargain with business. And in return we expect business to behave in a way that values and does not vaporise trust. People want responsibility – on top pay and ethics – throughout society.

Third, we have to renew our welfare states to drive up the rate of employment. In tough times we need as many hands on the pump as possible. For some that means making sure services like childcare and social care are there to help families juggle the ‘care crunch’ so they are free to work when they like. For others it means firm action to ensure that if you can take a job, you do take a job. It is a renewal of William Beveridge’s belief that good social insurance helps people keep working.


Fourth, we know that to get through the next decade we need to draw not simply on the wealth of nations, but the ‘hidden wealth of nations’. The challenges we face today are too big to all be left to government. Governments and political parties alike need to help make it easier for good people to come together to make a difference through social action and innovation – and it is this kind of civic inventiveness that modern democracies need to renew the ties that bind strong communities together. That is why Refounding Labour is so important.

Fifth, we know that in tough times taxpayers’ money must go as far as possible. Standards in public service have to go up even when budgets are coming down. Only a revolution in innovation can square that circle. And that is very hard to mandate from the centre. So sometimes, the centre has to let go – set high standards, yes, but then free up the frontline and devolve power to speed up new ways of doing business, delivering for citizens better than before.

Finally, we need to advance this cause with confidence. Progressives win by mobilising an appeal to optimism. Conservatives want voters to feel disempowered and cynical. They want to diminish the appeal of politics. Where they are in power, they want a fearful electorate to cling to nurse for fear of something worse. Our task is to offer hope in an age of uncertainty, and optimism in an era of doubt. That is how we seize the centre-ground and build a new progressive majority.

Here is a link to my pamphlet “The new centre ground: how can progressives win a majority?” .

Full employment was the foundation for Beveridge’s welfare state. It should be the foundation for renewing it.

Every civil servant can tell you stories of ministers who are a bit demanding. I’ve had a few of those stories myself. But sometimes the same is true of civil servants. None more so than Sir William Beveridge. Back in 1941, Ernie Bevin faced mandarins in revolt at the idea of working with the illustrious knight. Looking for a diplomatic answer, Bevin shipped out Sir William to lead an enquiry into social insurance. A year later, ‘the people’s William’ had drawn up the blueprint for Britain welfare state.

Timing, as they say, is everything in politics – and Beveridge’s timing was perfect. In November 1942, the Allies had beaten Rommel, counter-attacked in Stalingrad and secured the Pacific base of Guadalcanal. It was not as Churchill said on 10th November 1942, the beginning of the end. But it was the end of the beginning. Interest in what it was the country was fighting for hit a new high, and that interest swept the Beveridge Report off the shelves.

But what turned an idea into reality, was the not the events of 1942, but 1943. After ferocious debate in the Commons – in which David Lloyd George cast his last vote against the Government – Churchill conceded that planning for Beveridge had to begin in earnest. And it was then, in government committees, that four great Labour leaders – Atlee, Bevin, Morrison and Jowitt – fused the ideas of Beveridge with a plan for full employment; the full employment that would pay to make the new welfare state a reality.

The campaign for work, for jobs, for full employment has always been Labour’s first demand. Labour. The clue is in the name. But throughout our history, Labour has insisted the right to work must come with the responsibility to work as well. Back in 1947, Herbert Morrison put it like this; ‘We have no hands and brains to waste and no resources to fritter away on those who don’t contribute to our common effort’.

Today, I would insist on the same principle. Those who don’t want to work but can are a tiny minority. But we must insist they do their bit. So, alongside our five point plan for jobs and growth, we want new ideas that enforce the responsibility to look for and take a job. Because we simply can’t afford to renew the welfare state for the 21st century without more people back in work.

New analysis of DWP’s accounts by my team reveals that the shocking costs of economic failure. The bills for the dole, housing benefit and incapacity benefit are now set to rise by an incredible £5.5 billion a year – that’s a lot of income tax.

Yesterday in the House of Lords, the government pressed its policy of a cap on benefits. It’s an idea we support in principle but we would like to see improved because we don’t want a massive new council tax bill to sort out a new homelessness. But there’s a bigger point: without work, the cap won’t stop benefits spiralling upwards. DWP’s own figures show, despite the cap, the housing benefit bill is set to rocket up £4 billion above the figure post-election, to an incredible £28 billion. That’s too high. And the way to bring it down is to get people into work.

Back in the 1940s, the British people achieved incredible things. In a famous broadcast, Labour leader Clement Attlee called on Britain to create a country where ‘all may have the duty and the opportunity of rendering service to the nation, everyone in his or her sphere, and that all may help to create and share in an increasing material prosperity free from the fear of want’. We not only won a war, we won a peace. A welfare state that gave families like mine the chance to achieve things my grand-parents could never have dreamed of. If we want a welfare state for the 21st century, that once again support working people in the lives they lead today – and want for tomorrow – then I say our starting point is simple. Let’s get Britain back to work.

What working people need from the welfare state

Here’s the link to my Guardian comment is free op ed today….How the squeezed middle need a different kind of welfare state. My cif column.

Our policy review: next steps

At conference this year we published four reports which draw together what we heard from the public over the last year, and some of the emerging conclusions and findings from the shadow cabinet-led policy groups. These documents will now form the foundations of our policy work over the next year. If you’d like to debate these in your local Labour Party of CLP or trade union, let me know!

Towards a new economy

Fulfilling the promise of Britain

Restoring responsibility, strengthening our communities

Britain’s role in the world

Interview with Jon Sopel

Ahead of this week’s conference, here’s my interview with Jon Sopel for the Politics Show.

The Tories’ problem with the centre-ground

Here’s the link to my Telegraph op ed, on why David Cameron has failed to put the Tories on the new centre-ground in British politics

National Policy Forum – 25 June 2011

Labour has spent the last six months listening, talking and debating with the public, our members and our partners – the biggest such exercise in our party’s history. At the National Policy Forum in Wrexham I reported back on what they said.

“One Term Opposition”

“One Term Opposition”

Rt Hon Liam Byrne MP

Speech to the ABI, Wed 22 June 2011


 I’m really glad to have this chance to speak with the ABI this morning.

Arrayed amongst your members are some of the most successful businesses in our country.

Including companies that have survived the vicissitudes of the market for literally centuries.

When I was at business school I had a fantastic teacher of business history – Prof Richard Tedlow.

In our final class a friend of mine asked him to sum up what he had learned studying 200 years of business history about why companies went bust.

His answer was brutally simple:

Companies fail when markets leave the company, or when companies leave their markets.

Well, what can be true in business can be true in politics.

Political parties lose when voters move on and the party stands still.

That I am afraid is the fate that befell us last year.

We had too little to say about the future.

Our voters had moved on – and we were stood still.

And politics like business is about the future.

This lesson is simple and true across the ages – and like the successful companies here, it’s a lesson we’re determined to pay heed to.

So, I’d like to say a word today about how the Labour Party under Ed Miliband has learned this lesson and more, and how we are setting course to repeat something achieved just once in the last 30 years; an opposition that bounces back to power in just one term.

Today is a good day for talk, because at the end of the week I’ll present back the first results from the biggest exercise we’ve ever undertaken listening, debating, talking to the public about what they think about Britain, our future, and us.

This work is the result of Ed Miliband’s determination to put first things first.

Last year’s result was bad for Labour.

That meant our first task had to be to get back in touch with the public, and re-found our party to help make sure we never again leave their side.

So, over the last 9 months, we’ve been in touch with over four million people.

Twenty thousand submissions and ideas have poured in to my team at Labour party headquarters.

Over 6,000 members of the public have come to one of the eighty events to speak to us direct;

Nearly two thousand people came to our Peoples’ Policy Forum in Nottingham.

Now we begin the job of setting out what the public and our members have said so that it can become the new foundation for our analysis, our arguments and our policy

This we will do, not in secret, but in public.

There are difficult messages for us.

But frankly they are no more difficult than the difficult conversations we’ve all had on the doorstep for the last couple of years.

They are no more difficult than Mr Brown’s rather well publicised conversation with Gillian Duffy.

And we’re not putting this up in glorious technicolour to say, look at the what the public thinks.

We want to be their leaders. We must follow them.

Rather, we know that if we do want to win back the peoples’ trust to lead again, we have to understand how the public sees us, and why.

Therein starts the business of renewal.

This is perhaps the first great lesson from Oppositions which stay in Opposition a long time.

Oppositions that stay in opposition are the parties that fail to confront and take on the weaknesses the public see in them.

Think about the Conservative party under Mr Hague and Mr Duncan- Smith.

It was five years before Theresa May summoned the gumption to tell her party they were seen as the ‘nasty party’ in British politics – and another three years before Mr Cameron began hugging hoodies and riding with huskies in a rapid attempt to de-toxify – in the jargon – the Conservative party brand.

Think about the Labour party under Mr Foot and Mr Kinnock.

First, we lost an election in 1979, and then we lost ourselves.

It was an incredible eight years before Mr Kinnock embarked on a major exercise of his own, talking to the public about the way they saw things.

That is not a mistake we’re going to repeat.

We’re straight out there talking to the public about what we got right, what we got wrong, and crucially how we need to change to re-earn peoples’ trust to serve our country once again.

This is not an exercise in gratuitous masohicism.

In fact, the public in my experience, don’t expect governments to get everything right.

But they expect people to learn from experience.

A bit like Alan Sugar, they don’t like politicians to make the same mistake twice.

And the public – like our members – expect us to learn from our past – and not live in it.

So, yes we did make mistakes – we should call a spade a spade.

We didn’t regulate the banks as well as we should; we didn’t spend every single pound wisely; we should have moved faster on welfare reform and we under-estimated the effect of East European migration.

But that is why Ed Balls and John Denham have set out the need for tougher regulation for banks.

It’s why I’ve been set to work looking at how we cut welfare waste by getting people back into work, and toughening responsibilities to take a job if you can.

It’s why Ed has said bluntly that when the EU expanded to include more Eastern European countries we should have had stronger controls to deal with the transition.

It’s why Yvette Cooper is looking at how we strengthen controls on immigration to protect those who feel their wages and job security have been put at risk.

We are confronting head on the things we got wrong.

But, the reason we are confident Labour can win again is not because of the judgements we got wrong – but because of the judgements we got right.

From rescuing the NHS, peace in Northern Ireland, the National Minimum Wage, Sure Start, tax credits to make work pay, a million children lifted out of poverty, community policing, new rights at work, record results in our schools, more people than ever at university, quadrupling apprenticeships, the lowest level of pensioner poverty for 30 years and of course leading the world’s response to the worst recession since the 1930s.

I could of course go on.

The reason these ideas worked was because they were rooted in a vision for the future.

We wanted to create a different, better kind of country.

A country that combined economic efficiency and social justice.

And this is the second key lesson if you want one term opposition.

We musn’t shy away from confronting the weaknesses of the past; but it’s more important to confront the challenges of the future.

That’s the lesson of the Blair administration between 1994 and 1997.

And the lesson from the Thatcher leadership between 1975 and 1979.

And it’s the lesson I think David Cameron got wrong.

He tried to reposition the brand of the Conservative Party – but he didn’t engage in an argument about what the Tory party was for.

The contrast is with Mrs Thatcher.

The last leader to bounce back into power after just one term in opposition.

That’s the record we want to match.

It’s not easy.

But we are determined to square up to it fast.

So that is why we have asked every member of the shadow cabinet to bring experts together to focus on a big, but basic question: what kind of country and what kind of future do we want together to build?

Their work is now bringing us to the end of the beginning of our policy review.

The fundamental questions that we need to answer are now becoming clear.

Deficit/ Jobs

First and most important for the here and now is the right strategy for down the deficit.

An approach that focuses on how we get people back into work paying taxes in, instead of putting people out of work and taking benefits out.

New economy

But second, is the wider question of the kind of economy we want to build after 2015.

I think it now fairly clear that the shape of our economy will be as important in 2015 as the issue of public services had become in 1997.

The questions are big.

How do we unlock investment-led growth to win in world markets, when the evidence points to a corporate sector that isn’t investing cash – but hoarding cash – nearly £700 billion of it – because it lacks the confidence to invest?

How do we make sure that there’s a fairer share of the new wealth we create, when worker’s share of national earnings is falling and wage growth is much lower than the rise in prices?

The challenge identified by American economists like Jacob Hacker, and my own work in the Treasury back in 2009?

And how do we help families deal not just with the crunch on their living standards but the crunch on their time?

Already, one in ten people aged 25-34 and one in seven of those aged 35-44 are now facing the burden of “double caring” where they have to care for dependent children and elderly relatives at the same time.

In other words, how do we avoid the future as a low pay, unskilled economy and instead revolutionise investment in small business, enterprise and the infrastructure we need for tomorrow?

New welfare state

Third, how do we make sure that there is a different kind of bargain at the heart of the welfare state?

Last week, Ed Miliband explained the appetite there is in our country for a renewed responsibility.

Today there are powerful, long term changes at work in our economy and our society that undermining old ideas of community and one of the most corrorsive of all is the individualistic culture of “take what you can” which began in the 1980s.

We began to address it in government, but we didn’t finish the job.

We were not vigilant enough about irresponsibility at the top and the bottom of society.

Whether it was boardroom executives rewarding themselves for financial failure or those on benefits not trying hard enough to get a job, both fuelled a sense of unfairness in Britain that puts pressure on the ties that bind us.

It contributes to a sense that government’s waste money.

It fuels a sense that those in the middle no longer get out what they put in.

We have to be the party that restores the idea that welfare state is a national bargain that is fair to all, because it helps all get on.

That is why the restoration of a something for something deal in our welfare state is so important.

Despite the scepticism, a large majority of people still feel that the solution to the problems we face today is not less government – it is for government to get stuck in.

In other words, they don’t want less government, they want a different kind of government; a government that restores a something for something deal.

Franklin Roosevelt once spoke passionately of the democracy of opportunity; a place where everyone, no matter who you were, or where you came from, if you worked hard, you deserved to do well.

Today, people want alongside that democracy of opportunity, a democracy of responsibility.

Where we don’t subsidise those who break the rules whether they are in the board-room or on benefits, and where we instead reward those who do the right thing.

That means that we have to renew the welfare state so that it more clearly combines an attack on poverty with a rejuvenation of those ‘social insurance instincts’ that helped forge the welfare state in the first place.

That means we have to ask ourselves what are the new risks that families today need to safeguard themselves against.

Where – and when – do people need that extra help not just to pick themselves up when things go wrong, but to make more rapid progress when the wind is behind them.

Those risks are very different to the risks that Beveridge identified.

That is why Ed Miliband has said we should explore the way we reward those who do the right thing, for example by looking again at the way we allocated social housing

It’s why we’re looking hard at the ways higher earners are protected in the first period out of work, as they do in Denmark

It’s why we have to look at how we help families today with the radically new lifecycle for savings – with tuition fees to pay back, big mortgage deposits to save for, and the cost of social care and a pension that needs to nourish them far longer in old age – we have to ask how is the welfare state helping ordinary working people face new risks.

Now, people often don’t look at politics in quite the way I put it to you.

But they do understand when Ed Miliband talks about

-         The squeeze on those in the middle confronting a crisis in their cost of living. The people who feel everyone else is getting one over on them and the Government does nothing to help.

-         Or the prospect that, for the first time in more than a century, the next generation will struggle to do better than the last – that the Promise of Britain will be broken.

-         Or the weakening of the ties that bind us together through the irresponsibility of a minority at the top and the bottom of society

Answering these challenges will demands a different kind of economy, a different kind of welfare state and a different kind of government determined to deliver a new balance of power in Britain.

And unless we engage in these fundamental challenges of the future, we might reposition a brand, but we will never command a majority deep and wide enough to genuinely build a country where our promise is matched by our performance.

Your role

Ultimately this debate is also your debate.

Many of the businesses I speak to every week are undergoing profound change.

They are thinking hard about how they exploit the chances of the globalization unfolding around us.

But my message is that it’s not enough just to get the economics of globalization right.

You have to get the politics of globalization right as well.

If you don’t you end up in a world, where voters to vote for parties that argue for a retreat from the world.

A closing the borders.

Slowing or stopping movement of people and movement of capital.

That’s not good for business.

That’s bad for business. And that’s why I think you need to get stuck in.

You will have many of the answers about how we re-shape our economy, our welfare state and our government.

If we get the answers right, I think we build a richer and fairer country more at ease with globalisation that today links together 6 billion of the world’s 7 billion people.

That’s helps keep you close to the markets you serve.

And that’s the way history teaches, companies, countries and yes, political parties, do well.


Labour’s new bargain

Here’s my speech to Progress tonight which builds on Ed Miliband’s wider argument today about renewing responsibility in Britain

Labour’s new bargain

Speech to Progress, Monday 13 June 2011


I am very grateful for the chance to speak to Progress tonight, on the cusp of what is an important time for the cause of welfare reformers in the Labour party

This week we have the third reading of the welfare reform bill;

Next week, we have our national policy forum in Wrexham, when I’ll present the first results of our huge exercise talking, debating, listening, reconnecting with the public all over our country.

And so tonight, I want set out;

  • What we’ve heard about the new politics of responsibility,
  • Why I believe the Tories have misunderstood what the public are seeking; and
  • Where I think Labour now needs to radically renew our policy for the welfare state

The policy review

Let me start with the policy review.

When Ed Miliband asked to lead this review for the party over the next few years, I was very clear that now was not the time to dot every i and cross every t of our next manifesto.

That would be an error the Conservatives would love us to make.

But, I was clear too that the task had to start with first things first.

And that meant reconnecting with the public.

When we lost office last year, the result was simply awful.

A 1983-level of returns. The worst performance since 1918.

A result that means its now possible to leave our capital in north London, carry on north and not reach another Labour seat until one bumped into Austin Mitchell in Grimsby.

The worst statistic for me was that nearly 60% of voters said that Labour was not just a bit, but seriously, out of touch with the lives of ordinary working people.

For the peoples’ party that was a hell of an achievement.

For that simple reason I say Ed Miliband was dead right to say our work starts with the job of reconnecting with the people whose trust we must earn again to once again win the chance to serve.

And then to change our party, to Refound Labour, so that never again do we drift away into a world of our own.

Now we could sugar-coat this, but frankly what’s the point.

Now is the time for some hard truths. Not comfortable delusions.

Frankly, what this report will say is no more difficult than the difficult conversations we’ve all had on the doorstep for the last couple of years.

If we’re not prepared to put that in the public domain, then what are we in this business for?

Now I know there will be some who want to say, this is just Liam Byrne banging on about immigration, welfare reform and deficit reduction just like he always does.

But I’m not saying we write this up in glorious technicolour in order to say, look at the pessismism of the public.

We want to be their leaders. Lets us follow them.

On the contrary.

I believe we win by telling a story about national renewal. An optimistic account of how we win in a world economy that is forecast to grow and grow.

But if we do want to win back the peoples’ trust to lead again, we have to understand how the public sees us, and why.

Therein starts the business of renewal.

So now, we have now been in touch with over 4 million members of the public. Over 20,000 submissions and ideas have already flooded in.

There is plenty of which we can be proud. The achievements we made in Northern Ireland, fixing the NHS, getting people back to work, the National Minimum Wage, neighbourhood policing, tax credits…

These are all things that the public associate with us and the our time in office. We remain Britain’s party of the fair deal.

But, overall the public is deeply worried. Anxious. Nervous. Pessimistic.

Our argument about the squeezed middle has struck a chord. People feel desperately squeezed by flat wages and rising prices and the threat of unemployment. Families are shopping around like never before.

The challenge for the next generation is a profound concern. People don’t worry about their kids finding a partner – our ability to fall in love appears undiminished – but getting to college, getting a house, saving for a pension; all these things are felt to be far harder than ever before.

But there is one sentiment more that really shines through.

People are angry about the state we face and they believe a new politics of responsibility is the answer.

There’s a sense of too many great sins; wealth without work; commerce without morality; politics without principle

That’s why I think that throughout our listening events, and our campaign work, we’ve heard so much about;

  • The need for a sensible – but determined – way forward on cutting the deficit;
  • A fury about the bank bonus culture that helped land us with today’s deficit;
  • The echo of the anger with parliamentary expenses and a sharper sense of betrayal about the broken political promises on tuition fees;
  • And the ambition for a system of immigration control and welfare reform that does not pay out before people have paid in.


Earlier today Ed MiIiband called for “a new era of responsibility.” He is right on the money. This is absolutely the right way forward for Labour.

The appetite for a renewed responsibility state, isn’t a concern about our neighbours’ private conduct; it’s about our country’s public duties. It’s not about private ethics. It’s about public ethics.

It’s about how we behave as a good neighbour; act as a good parent, and get a job and pay tax if you can.

What this means for the Left

Now generally speaking, I am some-one who believes the British public typically has a sixth sense about what’s right and what’s wrong.

So, I do believe herein lies the bones of the answer to what Labour does next.

Can I ask you for a moment to cast your mind back for a moment to the birth of New Labour. You’ll remember perhaps, the optimism, the organisation and our arguments.

Which at its essence was about the future.

Was about how as a nation our performance could match our potential

And that it was possible for nation constituted like ours, to combine economic efficiency and social justice.

It was an argument that so strong that the wisest in today’s government do it homage.

The big challenge for us became, surely, that 10 years into the new century, voters confronted static wages and rising prices, in-your-face bank bonuses on the one hand and welfare bills on the other.

To voters that felt like economic injustice and social inefficiency.

Britain today is an anxious and worried island. Instinctively they like want we say about opportunity, optimism and an outlook for our country that is upbeat. But instinctively they feel that a new politics of responsibility has got to come first.

Now, why am I an optimist of the left?

Because crucially for us, people have not given up on the role of the state.

If you ask people do they think the answer to our national problems is for a government that gets stuck into problems; or simply walks off the pitch, then overwhelmingly people say, we want a government that gets stuck in.

But they want a government that is a bit more muscular with markets and a bit more sensitive to society; more attuned to traditional feelings of community, identity, reciprocity.

More determined to govern a society where people at the top, the middle and the bottom do the right thing by everyone else.

That’s the opportunity for Labour.

When people think about government, right now, they do not believe they will get out what they put in.

Quite simply there is a sense, that if we stop rewarding people for doing the wrong thing, we could do more help to the people doing the right thing.

I think that tells us that at the absolute core of winning back the public’s trust is the creation of a new kind of bargain. And I think that can start with the welfare state.

What does this mean for Labour?

As I said a few weeks ago, Labour is not ahead on the issue of welfare reform.

Given the thirst for responsibility, welfare reform is one of the policy areas where Labour needs to win back trust.

We have to show the public we get it.

By the time of the next election we must present tough, costed, forward looking proposals that put the welfare state on the side of the hard-working majority. We must not and we will not disappoint people.

We have to explain how we would reward work, protect the vulnerable and get tough on those who are consistently found shirking their responsibilities.

We have to explain how we would reshape the universal benefit system which bends to the differing needs that people face as they go through their lives.

We have to explain how a party which is after all, called the Labour Party, stands once again as the party of the right and the responsibility to work.

Right now there is a responsibility on government to do more to help create jobs.

It is frankly irresponsible to offer a Work Programme that is smaller than Labour’s.

It is irresponsible because rising unemployment is costing our country a fortune; £12 billion has gone on the welfare bill since this government took office – £500 for every household in the country’.

And if we did more to offer opportunity, then frankly we could demand more responsibility of those still stuck on benefits.

My constituency has the second highest unemployment in Britain.

Yet on the door-step, my constituents are very clear that we need to be tougher with those not trying hard enough to get into work.

So, I do believe we should repeat the bank bonus tax to provide £600 million to fund youth jobs.

It is outrageous that the DWP are spending more on stationery than their scheme to get young people back to work.

Yet alongside opportunity we should be tougher on enshrining a culture of work in every community in the country.

If you’re a parent who is long-term out of work, we should be intervening to make sure that children do not follow their parents onto the dole queues.

We have to make sure that habits of worklessness are not passed down from one generation to the next.

There are ideas pioneered in Australia with compulsory workshops and interviews that tell us a different, tougher approach is possible.

Second, we should explore saying to those looking for work that we expect you to work as hard as you to find a job.

Today, we ask people to sign on every fortnight. But for some, shouldn’t we saying we want to check every week how you’re getting on?

But, third, we need to reshape the welfare state so that for those who do the right thing, who do work hard, who do pay in, there is frankly something more that comes back.

The Tory vision, rehearsed over and over again in the House of Commons is that the welfare state is a safety net there only if you’re in the direst of straits.

That is not a welfare state for a democracy of responsibility.

We need a bolder vision. Of a welfare state that genuinely helps those trying to get ahead in life.

That means we have to ask ourselves what are the new risks that families today need to safeguard themselves against. Where – and when – do people need that extra help not just to pick themselves up when things go wrong, but to make more rapid progress when the wind is behind them.

Those risks are very different to the risks that Beveridge identified.

Take the basic problem of unemployment benefit.

If this recession showed one thing, it showed unemployment can hit anyone. Add to this the trend towards self-employment.

Nearly ¾ million more people have become self-employed in the last decade.

When more and more higher earners face the uncertainties of unemployment, is there a way of protecting peoples’ income in the first period they are out of work, as they do so successfully in Denmark?

Further, when families today face a radically new lifecycle for savings – with tuition fees to pay back, big mortgage deposits to save for, and the cost of social care and a pension that needs to nourish them far longer in old age – we have to ask how is the welfare state helping ordinary working people face.

Tories on welfare

The Tories are nowhere on this argument.

Their analysis says let the welfare state become a safety net for the worst case scenario.

The result is a bill that frankly we will vote against because it is at once an attack on ambition and an assault on compassion.

It is an attack on ambition because they have no idea what childcare support will be provided for thousands of working families who need childcare support in order to work the hours and shifts then need.

It is an attack on ambition because its remove all support from anyone with £16,000 in savings.

It is an attack on ambition because it offers a bureaucratic nightmare for 3 million self-employed people who potentially face filing returns to the DWP every month.

It is an attack on compassion because it risks watering down child poverty targets.

And its an attack on compassion because while I think ESA should be reformed, I think that it is wrong to ask people battling cancer to start filling in job applications.

Like most families, I know from bitter experience that it takes more than courage to beat cancer. And finding a job is not part of any recovery programme I’ve heard doctors recommend.

Of course we should cut welfare to help cut the deficit.

But this should be done by pushing unemployed people into jobs. Not pushing the disabled into poverty. That’s simply and unfair way to treat some of the most vulnerable people in our society.

That is what I now fear the government’s welfare reform bill is about to effect.

Perhaps most egregious of all is the policy to abolish DLA mobility payments. This will overnight, leave disabled people as prisoners in their care homes.”

Iain Duncan Smith may think his strategy is very elegant. I would repeat to him, Churchill’s warning.

However beautiful the strategy one should occasionally look at the results

My message to the Lib Dem MPs is rather different.

If they share our progressive values they should join us in defeating the Welfare Reform Bill this week.

Don’t be fooled by the idea that to succeed in politics you have to rise above your principles.

Don’t sacrifice the principles of Lloyd George, of Beveridge, or Keynes, for the political convenience of the hour.

You, like me, will have heard the voices of vulnerable people who are counting on us to protect them.


Let me conclude.

I believe that this appetite for renewed responsibility is what unites the concern we hear for realistic, clear policies on deficit reduction; sensible border control; strong welfare reform; action on bank bonuses; an attack on government waste; determined action on crime, and a renewal of the welfare bargain that genuinely helps those aspiring to do well deal with the new risks they confront in life, whether it’s the care crunch, the new challenge of saving for university fees, a deposit, retraining and then a pension, or the risks of unemployment or self-employment.

Ultimately, Labour has the best message; no matter who you are, or where you’re from, if you work hard and play by the rules, you deserve to succeed.

But, if we want people to buy into a notion of opportunity tomorrow, it’s got to come with a sense of the new bargain for government, a bargain that rewards the people who do the right thing. Get that bargain right and we can win.


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