Labour's manifesto uncut how to win in 2015 and why

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This book is intended to fill that gap. After a summer of discontent the party urgently needs to give voters an indication of its direction of travel.

In Labour’s manifesto uncut: How to win in 2015 and why, we set out the steps we believe Labour needs to take to address the party’s weaknesses , develop a credible alternative vision for Britain and ensure Ed Miliband becomes the new occupant of Number 10 on May 8th 2015.

Labour’s manifesto

Labour Uncut is a centrist Labour blog. Over the past three years we have often been a critical friend to Labour, giving an honest opinion on the direction of the party. Much has been reaction to the latest leadership initiative, with less detail on the alternative path that Labour should take.

Labour’s manifesto

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Labour’s manifesto

How to win in 2015 and why Edited by Atul Hatwal and Peter Goddard

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Copyright www.labour-uncut.co.uk 2013

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First published in 2013 by www.labour-uncut.co.uk www.labour-uncut.co.uk

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Printed and bound by Intype Libra Ltd, UK Cover and text design by PABPS, London www.bookproductionservices.co.uk

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Contents Foreword 1.

2.

3.

4.

5.

6.

7.

8.

9.

Executive Summary: Labour’s manifesto uncut Atul Hatwal

5

7

Leadership and party reform Rob Marchant

12

How to find the money Jonathan Todd

49

Regaining economic credibility Jonathan Todd Universal, free pre-school childcare Atul Hatwal

37

66

The party of labour needs to put work at its core Kevin Meagher 72 1m new homes in the areas people want to live David Talbot How Labour can plan to win on housing and growth Helen Hayes

85

102

Lower energy bills with £1000 of energy efficiency improvements for 3m+ homes Rachel Danae Burgin 116

10. Re-connecting immigration and the public good Atul Hatwal 121 11. Getting welfare to work Duncan O’Leary & Claudia Wood

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Labour’s manifesto uncut: How to win in 2015 and why

12. Public Services: Hard choices and harder ministers needed next time Kevin Meagher 13. We need an in/out EU referendum on May 7th 2015 Anthony Bonneville 14. How to avoid the Hollande headache Paul Crowe Notes

140 154

159 174

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Foreword

Our purpose is to answer three questions: How can Labour win in 2015? To what end? And how can we deliver on our promises?

Pamphlets tend to focus on policy (what to do in power), op-eds in print and online do the political strategy (how to gain & retain power) and occasionally a think tank will run a seminar on delivery.

Rarely, if ever, are these three pillars of political success discussed holistically.

But to develop a programme for Labour to regain power, that is exactly what is needed.

Over the past 3 years Labour Uncut has often been a critical friend to Labour, giving an honest opinion on the direction of the party. Much has been reaction to the latest leadership initiative with less detail on the alternative path that Labour should take.

This collection is intended to fill that gap. After a summer of discontent, the party urgently needs to give voters an indication of its direction of travel.

The contributions address the big issues that dominate our political debate and that will determine how the public vote.

The whole of this book is greater than the sum of the chapters. Individually, each piece tactically addresses a discrete area for action. Together, they paint a picture of how Labour can win the next election and change Britain for the better.

Atul Hatwal, Editor

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1 Executive Summary: Labour’s manifesto uncut

by Atul Hatwal Forget “too far, too fast”. With less than two years to go until the next election Labour has a new line of attack on the government: the cost of living crisis.

We might have a nascent recovery, but for most people, life keeps getting tougher as prices continue to rise much faster than wages.

It’s powerful, but Labour needs to be careful.

Exclusive polling conducted for Uncut by YouGov reveals that almost as many people blame the last Labour government for today’s cost of living crisis as they do the Tories. 66% of respondents said they blamed the Labour government either a little or a lot for the problem while 71% blamed the Tories.

Even among Labour supporters, 37% blamed the last government.

Simply attacking the Tories and saying the words “cost of living crisis” will not be enough for Labour. It’s time for some show, don’t tell. Actions, or in this case, policies, speak louder than words.

The Labour leadership seems to be making heavy weather of demonstrating Labour’s alternative vision, but it doesn’t have to be this way.

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Labour’s manifesto uncut: How to win in 2015 and why

In this book, Labour Uncut sets out the five steps we believe Labour need to take for Ed Miliband to become the new occupant in Number 10 on 8th May 2015.

First, Ed Miliband needs to become a prime-minister-inwaiting.

It is difficult for opposition leaders to define themselves and the trappings of office give prime ministers a natural advantage. But there is one clear route open to opposition leaders to show their leaderly credentials: the manner in which they run their own party.

Ed Miliband must reveal the steel that the public expect in their leaders. Driving through reform of the union link will demonstrate strength in party management, independence from the party’s vested interests and can recast him as prime ministerial material.

Second, we must regain our economic credibility.

YouGov polling finds a consistent majority consider the government’s cuts necessary - a support rating never less than the mid-50s since the poll began at the start of 2011.

Equally, the lead that David Cameron and George Osborne enjoy over Ed Miliband and Ed Balls on trust to run the economy in ICM polls has widened to double digits over 2013. This is all in spite of the reality that Osborne is failing to close the deficit.

The broad strokes in which politics is painted mean that, almost no matter what happens to public finances, Osborne will be winning if he can say: “You will borrow more than me. Your excessive borrowing caused this mess.“

The key is to stop Osborne winning by rendering this claim irrefutably incorrect. And the only way to do that is accept the Tories’ overall spending totals and deficit reduction plan without any general rise in income tax or VAT. 8

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Executive Summary

But there’s no point just aping Tory plans. Step three involves identifying how we can fund a radical Labour alternative.

This means difficult choices: making deeper cuts in certain areas to free funds to spend elsewhere, and raising specific new revenue from new taxes in others.

For example, the ring fences around education and health should be brought down. They exacerbate the depth of cuts in other public services and inhibit even the small-scale efficiencies which are possible in almost every organisation.

This isn’t an easy option, especially for Labour, but it is a tough choice that is backed by the public. In YouGov’s polling for Uncut, 49% of the public agreed with making some cuts to schools and NHS budgets to protect spending in other departments with 37% opposed. Even 37% of Labour supporters and 41% of trade unionists backed this approach.

Labour further needs to demonstrate it’s serious about making savings by reducing the size of government. The Uncut approach calls for the scrapping of five government departments: Wales, Scotland, Northern Ireland, Culture Media and Sport (core funding and responsibilities to be merged into BIS) and International Development (with core development funding transferred to the FCO).

This would free funds for public priorities and send a clear political message that a Labour government would be ruthless in restricting the excessive growth of government spending.

New revenue sources need to be generated too. Taxing the bad, with measures like a windfall tax on utilities’ excess profits, will generate funds for the good in Labour’s programme.

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In all we’ve identified £34bn of funds to finance step four: a distinctive series of commitments that will cut voters’ cost of living and show how a Labour future will be different.

The programme includes

• Free universal, pre-school childcare for working families to reduce barriers to employment and cut family bills • A £50 rise in personal allowances for all tax payers to boost spending

• 1m new jobs targeted in the areas that need them most with a revived, regionalised Future Jobs Fund • 1m new homes in the areas people want them most, with a new house-building programme • Lower energy bills with £1,000 of energy efficiency improvements for over 3m homes

• 8,000 new immigration officers to tackle illegal immigration and rebuild public trust in the integrity of the immigration system

This platform would deliver bottom line cash savings to households, proving that Labour is on their side. It would redraw the dividing lines in British politics, moving the political conversation on from debt to Labour’s positive agenda.

But having the right policy alone is not enough. The fifth step to power for Labour is to get serious about delivery.

The only thing worse than losing the next election for Labour would be to win, and then fail. The fate of president Hollande in France is salutary lesson on the perils of overpromising and under-delivering.

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Executive Summary

To address this danger, we call for a delivery audit of manifesto policies so we only commit to what can be implemented. A transition team needs to be established before the election to plan for delivery of Labour’s flagship policies, enabling the new government to be ready to act on day one.

And this team should move into government to manage and monitor successful delivery of a programme that will redefine perceptions of Labour for the next generation.

These steps are not easy. True leadership, rebuilding lost economic credibility, painting a new vision for Britain, and ensuring the promises can be delivered, not one of these is a trivial task. Every month that passes time gets tighter and the challenge greater.

But if the party acts with urgency and commitment the future can still be won and we will yet see prime minister Miliband in 2015.

Atul Hatwal is editor of Labour Uncut

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2. Leadership and party reform

by Rob Marchant

“The Labour party is like a stage-coach. If you rattle along at great speed everybody inside is too exhilarated or too seasick to cause any trouble. But if you stop everybody gets out and argues about where to go next.”

- Harold Wilson

We have not stopped, but we are hardly “rattling along”.

As we point out elsewhere, headline polling has shown Labour with a consistent, modest lead on the whole, but still disappointing for a party aspiring to a parliamentary majority. A mid-term lead is patently not the same as a lead in an election year, and anyone basing their judgements on such a lead is surely building their house on sand.

Most worryingly for Labour’s electoral hopes, is its leadership polling where Labour is currently doing extremely poorly. The August 2013 YouGov poll1 was fairly typical: it showed a net leadership rating of (% who think the leader is doing well minus % who think they’re doing badly) of -42%. This is well below David Cameron (-15%), beating only the consistently unpopular Nick Clegg (-47%).

While Cameron‘s ranking is still negative (for example, UKIP’s Nigel Farage has recently been outpolling all of them), not only is it higher but he has the advantage of prime ministerial incumbency.

Finally, as YouGov’s Peter Kellner put it in May this year:2

“Overall, the fact that Miliband has closed the gap with Cameron has everything to do with the prime minister’s mounting unpopularity…and nothing to do with Miliband’s own appeal.”

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Leadership and party reform

Since then, significantly.

Cameron’s

rankings

have

recovered

In short, the Labour leader needs to be doing a lot better with personal polling. The intention of this chapter is simply to look dispassionately at some practical ways through which that situation might be reversed. It is emphatically not to “have a go” at the Labour leadership.

Indeed, it is easy to criticise leaders and Leader of the Opposition is an incredibly difficult role, not to mention the abnormally tough constraints the party faces with both its own finances and those of the country.

The media will focus on superficial criticisms, of this tone or that style; we should not. We will look to focus here on the doing, rather than the talking.

Background

It is a pedestrian truth which tends to get forgotten, as grand, inspiring visions of policy command the attention of politicians, but renewing your party is the only opportunity an opposition of any stripe has actually to do something; to demonstrate to the public what you could do with the country, if given the chance.

Until a couple of months ago, Labour had failed to grasp this and was apparently looking to “muddle through” with the party as it is. There had been no “Clause 4” moment under this leadership and the original intention of Labour Uncut was to argue for just such an initiative. However, during the writing of this piece, that situation has, happily, changed.

Following the Falkirk selection debacle the announcement of the Collins Review, into party funding and the party’s relationship with trade unions, may sound like an unlikely candidate to those outside the party for a turning point but 13

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it may well indeed be that moment.

It is conditional, though, on one thing: whether it is carried out effectively.

During this chapter we will argue how Miliband can use this and other party-side measures to build his personal ratings and become seen as the preferred future prime minister.

But first, let’s go back to why this is important.

Why party-side work is vital in opposition

There are four reasons why a party needs love and attention lavished on it during the opposition years.

The first is that it needs to be transformed into an effective, election-winning machine, usually on very little money.

Organisations which do not change stagnate, and stagnating parties do not win elections. Parties usually arrive in opposition broke, having spent all their money on a general election campaign and afterwards tend to lack the increased members and donors who could help replenish it. Party staff are invariably cut following a general election, and a cyclical process of renewal begins.

This can be done well or it can be done badly.

The second is that you will probably not get another chance. Leaders and other party heavyweights tend to forget about party once in government – they are too busy running the country. So, if the window is not grasped, it can be years until another presents itself. Meanwhile, the party could end up shot to pieces when you most need it.

The third is obvious, but easy to miss. A garden left untended overgrows with weeds. It is quite possible that a party left to its own devices – as Labour discovered during the 1980s – can end up projecting an image of such

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disarray, or even scandal, that it becomes a barrier to office in itself. Labour’s current generation has now learned this lesson with Falkirk, hopefully in time.

The last, crucially for Miliband, is that you get the chance to show people how effective you are. Yes, you can make lots of speeches from the Opposition benches, but people generally see them for what they are – warm words. It is best not to believe one’s own publicity too much when it comes to talking about what you will do, rather than what you are doing; and that goes not just for Miliband, of course, but for any leader of any party.

But changing your party shows your ability to do what you say you’re going to: it is about running something. It is not just your temporary springboard to get you into government. It is the little company of which you are, effectively, the CEO. If you want to graduate to running Marks and Spencer from your corner-shop, best learn your trade first by making yours the best corner-shop in town.

Why party-side work is so important in the context of opposition leadership

Let us now home in on the fourth and last of those points.

There are other ways in which we can show leadership, true. We can articulate an inspiring policy vision: but apart from the presentational aspects of making good speeches and running a good media operation, the success of that vision is largely inherent in having a coherent policy programme, which is laid out in the other chapters.

But, as with a business leader, people will not judge you in the end on the words you say but on the results you deliver. And you can only deliver results where you actually have authority to act.

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Previous Labour opposition leaders have understood this.

The most famous recent example was Tony Blair’s rewording of Clause Four of the party’s constitution – a move which was really all symbolism rather than physical change, but still had massive reverberations across the party and movement. That said, it was by no means the only one.

John Smith, sadly party leader for only a short time before his unexpected death, nevertheless managed to secure OMOV (One Member, One Vote) as part of the electoral college for party leadership elections, a process which had previously been dominated by union bloc votes. This was, again, a relatively small change but allowed individual union members to actually have a say in electing their own leader for the first time.

And let us not forget that the defining moment of Neil Kinnock’s leadership was the moment at the 1985 party conference when he faced down the entryists of Militant.

He moved – as he had to – to demonstrate he had a grip on his fractious party, although sadly it turned out to be a necessary but not a sufficient condition for office.

Finally Michael Foot, of course, did none of these things.

But we all know what happened to him: electoral meltdown.

So, while it is convenient to trot out what for some of Blair’s critics on the left has become a conventional wisdom, that he “defined himself against his party”, we can see that he was only doing what all good leaders do.

In fact, challenging and revitalising the party through change it is a trait equally displayed by successful Labour leaders from the left or the centre. Taking the left-right politics out of the equation, we can start to see it rather as a necessary exercise of both necessary improvement and of reputation-building as a “doer”, than a statement of intent for political direction of travel.

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Aren’t these just boring internal matters the public won’t care about?

Let’s be honest: we cannot expect the British electorate to be jumping up and down in excitement at the prospect of a party embarking on an internal reform programme. In particular, it is easy for Westminster politicians, policy wonks and lobby journalists to suggest that this is far from what people are interested in hearing about because it is true.

This argument omits the important point, however, that this far from a general election they are interested in virtually nothing that an opposition party has to say (and that is if they are even interested in what the government has to say).

Many members of the three groups mentioned dislike this kind of work because it gives them nothing. Politicians, because is the party talking to itself rather than the public; policy wonks because it is a world devoid of policy and therefore entirely uninteresting to them; and lobby journalists because (a) there is no story in it and (b) it involves a world of which they know little. It is not surprising that the Westminster bubble is largely unenthused.

Fair enough, perhaps. But this is short-term, and wrong, thinking for a party strategist. Without your party, you are nothing and you neglect it at your peril.

What will be noticed, we believe, in the bubble and even – eventually – in the public eye, is a party which arrives in the run-up to the next election with a real achievement under its belt and which looks in control of its own destiny, where at the moment it is struggling to display either of those qualities.

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An achievement within the party in the end reflects better on its leader far better than any commanding speeches, or eye-catching policies, because it show that they can lead.

It shows that they can “do”.

And at this point we turn to our polling evidence, where we have concentrated the questions on our first and principal proposal, the full delivery of reforms outlined by Ed Miliband. Later, we will also look at second and third proposal sections, we look at how Labour could extend this reform agenda to cover additional areas.

Polling evidence

In summary, it tells us the following:

• Unions are felt to have too much influence on Labour, even among Labour supporters and affiliated trade unions themselves – 63% of those asked felt that unions had significant influence, versus 22% who thought they did not, a net result of +41%. When asked how things should be, the figures were reversed: 25% thought it should be significant, and 61% thought not, a net result of -36%. If we home in on only Labour supporters, they also think trade union influence should be less than they currently perceive it to be (net of +13% vs net of -9%).

And, astonishingly, even when we break these figures out for members of those affiliated unions themselves, this pattern holds (net of +17% vs net of -9%) in other words, their own members think unions have too much influence. Crucially, this demonstrates something of a disconnect between the unions’ leaders, who tend to argue for the maintenance of the status quo, and their members.

• Miliband’s outline proposals on affiliation, union funding and reducing union power internally are sensible and supported by most, including most affiliated trade union 18

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members – an astounding 60% of members of affiliated unions think that the outline reform proposals are sensible, against only 20% who do not. And a further 10% dislike the proposals because they do not think they go far enough – that Labour should scrap links altogether. A further 61% also said that union voting power at conference should either be reduced or abolished completely, and 63% of union members would abolish union-reserved places on Labour’s National Executive Committee.

• The outline proposals would help make people more likely to vote Labour – a net 12% of those polled say they would be more likely to vote Labour because of these proposals (i.e. those who would be more likely to vote Labour, less those who would be less likely). Among “lost Labour” voters, the voters we lost in 2010, this figure rises to 19%. While we would not suggest that this translates directly into votes – voting is a complex decision based on a variety of factors – the impact is a positive one, and clearly would assist Labour, if implemented alongside the right policy programme.

• 60% of women oppose All Women Shortlists, as do a majority of Labour supporters in general (53%). While the majority of Labour supporters (57%) approve of positive discrimination in favour of women, more than a third of these (20%) think that AWSs are the wrong way to achieve gender balance. In addition, 33% of those supporters (and 39% of women in general) feel the issue of female representation has been “blown up out of all proportion” and favour no positive discrimination at all.

• Solid support for primaries among Labour voters – 69% of supporters say they would register to vote in a primary, with London voters in general (where the first primary is indeed proposed) showing virtually the same 19

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propensity to register to vote (59%) as the national average (60%). Even if an annual fee of £1 were required to be paid to register, the figure fell only to 47%. For example, if even half of those actually registered, with a first-preference 2012 Labour mayoral vote of 889,918 this would imply around two hundred thousand participants; and the funds raised would go some way to helping cover the cost.

In short, the polling evidence provides us with a very interesting contrast to some of Labour’s – and trade unions’ – current assumptions about both reform of the union link and the current candidate selection process.

And this brings us to the first of our proposals, which is principally about those two things.

The proposals

1 Deliver on the promised radical overhaul of Labour’s selection processes and power relationships with unions

During the last two decades, real change to the party has been somewhat thin on the ground and the Miliband leadership by no means bears sole responsibility for this.

However Labour Uncut’s contention was, and is, that its Refounding Labour programme, whose name promised that it would do just that, failed to do much more than tinker, because it started neither with any kind of radical objective nor any real admission of the problems which continued neglect of the party since 1997 has caused.

The good news is that, as this chapter was being written, Miliband has recognised this and embarked on surely the most fundamental change to party structures in perhaps its whole history. The announcement on 9 20

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July 2013, in the wake of the Falkirk selection fiasco, of proposals that union members would no longer have a vote in party matters unless they joined the Labour Party, in conjunction with a donations cap and a piloting of election primaries in the London election, represents a long overdue change.

This moves the conversation, in part, from setting a strategy to delivering on it. But that delivery is now absolutely essential. This cannot fizzle out – a failed attempt to deliver change is almost as bad as no attempt at all. The public, who are looking to invest their trust in a capable leader, need to see that, in the little laboratory of a leader’s own party, they can make things happen. Otherwise, why would they trust them to run the country?

In addition, this one set of proposals is the start, not the end of change. For example, the proposed US-style primaries for the London mayoral election - where registered supporters get to choose the candidate – represent a pilot, although a rather important one.

These primaries are important for three reasons: first, because it is testing something on a very large scale. If it does not work, it will be a very public – not to mention expensive – failure. Second, it clearly improves the probability that the candidate ultimately selected will have an appeal to the wider supporter base, and not just the few hundred members of the average local party. After all, in a safe seat under a first-past-the-post system, these few hundred members are effectively choosing a MP on behalf of tens of thousands of voters.

Third, and vitally for Labour, it is an opportunity to shake up and renew the stagnating London Labour party, dominated for a generation by Ken Livingstone and a major centre for the kind of divisive ethnic 21

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politics which we describe in the next section.

But the final test of the reform would be to have radical change in the way parliamentary candidates are selected.

Indeed, the whole issue came to a head through a parliamentary selection – Falkirk – and that whole process seems still untouched as a result of these proposals, even if the change may realistically come too late for the next general election in 2015.

A successful programme must secure the following:

• An end to the electoral college and block votes at party conference

The OMOV campaign which we mentioned earlier was highly controversial at the time – it reputedly almost cost John Smith his leadership – but in reality it was still relatively modest. It only applied to a third of the votes in leadership elections and left an electoral college in place, whereby MPs, MEPs union members and party members all had a say.

Even then, it left untouched the union block vote at party conference and the later National Policy Forum, where decisions remained – and remain – subject to horse-trading with a few union leaders.3 There is no reason why members of the party, including the new affiliate members joined from unions, cannot be the sole arbiters of both leadership elections and conference.

• An affiliation fee which reduces the risk of bankrupting the party – it may sound obvious, but in the past Labour has tried providing full memberships at a subscription rate less than the marginal cost per member of maintaining them. Basic maths says that, especially in its current financial position, this is suicidal for the party. If the cost of maintaining a member is more than £3, the affiliated membership fee must rise accordingly.

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• Affiliated membership subscriptions must tightly regulated and either be paid directly to the party, or their release must be automatic and not rest with the union – there must be no question that Labour could be held to ransom at a moment of crisis, or we are back to square one.

Additionally, one of the recommendations of the current government bill on funding and campaigning4 is that affiliation numbers should be regulated and independently certified, and this is also important to add credibility to the process.

• Whether primary-based or not, a simplified parliamentary selection process which is fairer and not open to abuse – current selection processes are dogged by special cases at every turn, some multiple times. The question is often that of degree, not of principle.

As one example, Labour Uncut is in favour of positive discrimination on gender grounds. However, the polling evidence noted earlier, showing a majority of women and Labour supporters against, does raise the question of whether the justifiable desire to intervene necessitates the rather blunt and exclusionary instrument of an All Women Shortlist (AWS), noting that there is already intervention in favour of women at the nominations and the shortlist stages5.

Aside from the unarguable impact on the fairness of the process in excluding good male candidates, particularly local ones, there is an important side issue: there have very clearly been cases of successful efforts – not to mention attempted efforts, such as Falkirk West itself – to use AWSs as a means to engineer exactly the kind of stitch-ups the party is trying to stamp out).

In addition, we also give positive bias towards ethnic minorities, affiliate-listed, union-listed and local candidates, in doing so the process has become, by any 23

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reasonable standards, complicated and bureaucratic to an almost Kafkaesque extent (and that is just the parliamentary process: the Euro-selections, with their list systems of candidates and so-called “zipping” of male and female candidates, are virtually incomprehensible to all but the most diehard activist, as well as providing a job-for-life for anyone at the top of the list).

It is, conversely, more difficult to be selected on the whole if you work, say, in the (non-unionised) private sector or the armed forces and do not belong to one of the above special cases. Ironically for those who wish the process to reflect the make-up of modern Britain, this process is hardly going to result in a list of MPs that even reflects the party, let alone the country.

The reality is that the “party of the many, not the few” requires potential candidates to be a member of one or more demographics, some based on attributes that they cannot change such as sex or race – or worse, selective “clubs” such as union candidate lists – in order to have sufficient brownie points to enter the process.

Like some old-fashioned corporate cartel, we create barriers to entry into our selections, albeit inadvertently.

We should break them down.

We need a sensible balance between the desire to right past wrongs and ensure open access on the one hand; and the importance of avoiding a patchwork quilt of quotas and special cases on the other. Primaries are one way of wiping the slate clean, but primaries are not the only answer, either (and also have their drawbacks, such as cost).

All that is really necessary is that the system be simplified, and some of the special cases rationalised or dropped.

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Everyone, self-evidently, cannot be a special case.

2 Comprehensive rejection of identity-based electoral politics

There is a second way in which Miliband can show he leads a twenty-first century party: he can clean up another aspect of Labour’s approach to democracy, both internally and externally.

For years, Labour has practised a politics in Britain’s cities which is clearly at odds with Miliband’s notion of the “New Politics”, and it centres around its relationships with the different ethnic communities.

Rather than dealing with them simply as groups of individuals, irrespective of race, colour or creed, we contrive to play “rainbow politics”, looking to appeal to different ethnic or religious blocs.

In itself, it is often seen as a harmless marketing tactic – segmenting the population along cultural lines rather than those of age or income – although one wonders how healthy it is for society to constantly reinforce, rather than ameliorate, the idea of “difference” in ethnic and cultural identity on a political level. But that is a more nuanced debate for another time.

At election time, though, this phenomenon can have a more pernicious side; we treat communities as homogeneous voting blocks, rather than groups of individuals. In other words, communities look to deliver whole blocks at the behest of one community “leader”, and Labour willingly goes along with this.

There are currently fourteen constituency Labour parties in “special measures”, meaning normal candidate selection is suspended and a reduced process is imposed by the national party. One, Falkirk, is because of voting irregularities around the interaction of unions and party bodies.

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In the wake of Falkirk, Labour Uncut’s Kevin Meagher asked a rather pertinent question: what about the other thirteen?6

They are also down to voting irregularities from other kinds of stitch-ups. But there is a key link: the majority of these are to do with the way Labour manages its relationship with various ethnic communities. Firstly it deals with (often self-styled) “community leaders” to attempt to deliver blocs of votes.

When it comes to internal selections, such practices have been, in a relatively small but important number of cases, accompanied by manipulation of membership; comparable to Falkirk, but along ethnic lines and usually to favour a community’s preferred candidate.

Such practices, unlike for external elections to government bodies, are not illegal. But they are undoubtedly wrong.

The phenomenon of identity politics happens in a big way the West Midlands (five out of the thirteen are there); it happens in both Oldham seats and in Slough.

And these are only the areas where things have got so out of hand that parties are put into special measures.

There are surely other cases where things have not reached that point and, indeed, anecdotal evidence suggests this may well be the case7.

But perhaps the prime example of this politics has been in London. In 2012, Ken Livingstone memorably played identity politics in the mayoral election; while assiduously courting the votes of Muslims across London, he at the same time managed to upset the Jewish community to the extent that he veered perilously close to an outright boycott by the Jewish vote.8 We have seen – and rightly decried – the divisive 26

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politics played by George Galloway in Bradford West; but we have a worrying tendency to play similar games ourselves.

Another example has been the slow disintegration of Tower Hamlets Labour Party – with both Bethnal Green and Poplar and Limehouse CLPs having been in special measures for some years – and whose breakdown ultimately helped bring about the election of an independent, directly-elected mayor, who jumped ship from Labour.

In that case, the dodgy goings-on in Labour’s own internal politics reportedly spilled over into actual democratic elections, where all sorts of voting irregularities have been reported9. Unlike party selections, laws exist to prevent such irregularities, and democratic countries rightly hold breaches to be extremely serious.

The woes of Tower Hamlets’ long-suffering residents can, thankfully, no longer be laid directly at the door of the Labour party. But Tower Hamlets’ current out-ofcontrol administration is still a monster that Labour created.

It is but the most obvious example of a divisive and unhealthy politics, a politics which should have ended with Ken Livingstone’s defeat at the polls. It has not; but we have the opportunity to end it now.

It is mostly, but not wholly, down to encouragement of systems of clan politics, where votes are assured by a community “leader” on behalf of a community. But we cannot decry abuses of voting procedure when in government, as responsible state guardians of democracy, while simultaneously merely containing, rather than addressing, similar problems in our own party selections.

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The most well-known examples have been in Labour’s relationship with Pakistani and Bangladeshi communities, but it is not restricted to them – Indian Sikh communities have also seen similar problems.

We cannot, in short, declare that Falkirk was a travesty while ignoring a parallel problem which goes wider and deeper.

It is not even necessarily popular in those communities themselves; to the uninitiated, it makes Labour look the hegemonic incumbent in some Tammany Hall fiefdom.

As David Goodhart convincingly argued10 after Labour’s resounding defeat in Bradford West, younger members of those very communities may come to heavily resent being told how to vote and react against it. In that particular case, young Muslims ended up voting for Respect’s George Galloway, after a nakedly sectarian campaign11 led by a candidate whose fringe politics managed to tap into this anti-Labour feeling.

Our contention here is that it is simply not acceptable for local parties to be in special measures for decades.

It creates whole areas where ethnically-divided council chambers and parties are taken as normal. They should not be and the longer it goes on, the longer it will take to fix.

The current state of things does not solve problems; it merely keeps a lid on them.

This, by the way, is not a criticism of the party organisation, which does its best to meet political objectives with the limited resources it has. It is a criticism of the political objectives set by politicians and the focus on ends irrespective of means over a long period.

Miliband could make a huge step forward by 28

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announcing two things: first, that this kind of politics would no longer be tolerated. And second, that these parties would be reviewed, reconstructed or even abolished if they failed to meet the standards that Labour expects from its members, officers and councillors. That Labour would work with these communities to re-establish the local parties in a way which is acceptable to both local and national parties.

It is not an easy task, and one which may well meet with local resistance. But the status quo is also unsustainable.

It is time to address “the other thirteen”.

3 An inclusive party with a broad funding base

The third way – if you’ll pardon the expression – in which Miliband could demonstrate his will to lead a broad coalition is to create a truly inclusive party.

It is a truism that the public is disengaged from politics, and it seems highly probable that the days when 10% of the population were members of a political party are dead. The figure, according to Mark Ferguson at LabourList, is now a paltry 1.1%12.

What is not a direct corollary from that is that there is no way out of a terminal further decline. What is required are more imaginative ways of engaging existing members and a way of broadening our appeal to potential members – and funders – to whom we do not currently speak.

In fact, increasing membership and becoming a party with broader-based funding is surely the only way Labour can find a way to be the “people’s party”.

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How to remodel the party

As commentator and Labour Uncut contributor Anthony Painter has pointed out13, the combination of wellorganised electoral campaigning for which the party is rightly renowned with the community-organising approach which Miliband has introduced – rather than the two working separately, which seems to be the current model – could prove a very positive marriage:

“In terms of operations, it is clear where the Conservatives are heading. They will fight a big money, big systems, big data, negative campaign. It is easy to see why Labour will have to do it differently for financial reasons. But that is not the only rationale. A party that is porous, connected, embedded, and a participant in local and online-enabled democracy will be a source of enduring strength.

Resuscitated local parties will contribute to a rejuvenated local democracy.”

In other words, Labour will ultimately never win that kind of a battle with the Tories. But why should it want to, when it has an opportunity to grasp a new and better way of doing things?

It will take time, yes – it is unlikely to be fully in place by 2015. But the seeds can be planted now, and with the party reform package currently under discussion, Miliband really has the perfect opportunity in which this could be realised.

How to broaden the party’s appeal to potential members and funders

Our polling has already shown that the union link reforms make traditional Labour identifiers more likely to vote Labour by a net of 19%. It is a logical next step that we should then use that increased attractiveness to a wider base to draw in these supporters to become full members.

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And with new members come new sources of funding.

Here are some ways we can do this.

• Reaching out to private-sector workers – First, while the Collins proposals aim to help meet that goal by involving union members fully in the partyorganisation - a great step forward, uniting power with true, widespread engagement and responsibility for the first time – they also have a major drawback; if successful, they create a Labour party in the unions’ own image: predominantly public-sector.

We should fully welcome that opportunity, but we need to balance it, too. Part of Labour’s historic problem in forming a broad-based party has also been the lack of involvement, or at least active involvement, from members hailing from the private sector. In part, this problem is exacerbated by the failure, by and large, of British unions to establish themselves in large parts of the private sector.

This does not necessarily endear the party to the large majority of people who work in that sector, which has a knock-on effect both at the polls and on membership.

We can try and ameliorate that effect by reaching out to recruit people who work in the private sector directly from the party.

The criticism of unions and some commentators of the current party is that “working-class” members are being marginalised in the party, and particularly in MP selections.

But this neglects the reality of modern day Britain, in two ways: one, because it omits the fact that the number of people nowadays describing themselves as working class is much reduced, and many would likely describe themselves as middle-class.

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And two, because many who would describe themselves as working class might still well work in the private sector, might not be unionised or might be selfemployed. It is not only wrong but hugely counterproductive for Labour to stereotype potential members along these lines.

In short, we cannot credibly try and “genetically engineer” the membership of our party by only looking for certain “types” of people and excluding others. The point is to target all demographics and exclude none – after all, anyone can believe in universal Labour values such as social justice.

First, we should recognise, as the pamphlet Labour’s Business pointed out in 201214, that the noises which Labour has been making over the last couple of years have not always exactly sounded genuinely enthusiastic about the role of the private sector or of wealth creators. And, even before that, there were few business donors for the 2010 campaign and not a single major businessperson ready to endorse its economic policy.

Rather than happily thinking that this represents some kind of positive achievement of “purity” for the party, as some party figures and commentators have done, it might be useful to reflect upon why this is. It is not for the want of seeking funds.

No, it is sadly because they did not want us; not the other way around. Instead, Labour has simply replaced one supposedly vested interest (business) with another (unions), whose funding has increased to compensate.

A toning down of the rhetoric in Labour’s pronouncements about business would thus be a very helpful boost for the party, not just in terms of membership and donations, but also in terms of 32

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securing endorsements for its manifesto when the time comes.

• Business and personal donations should no longer make us lose sleep – More importantly, unlike unions who constitutionally have access to the levers of power within the party which allow them to exert a real influence (and nothing wrong with that as long as it is open and transparent, but it is often not), business donors have typically neither sought, nor been given, assurances of quid pro quo.

In any event, the proposed £5,000 donations cap means that Labour can seek donations of up to this size from businesses and individuals without having to feel any kind of nervousness about the idea of encouraging “big money politics”. That, indeed, is the whole point of the cap.

• Reform of party meetings and accommodation of members’ schedules – Third, we should reach out by reworking the endless committees of our local party structure, which at the moment is more likely to put people off than encourage them to participate. In particular, private sector workers may well find themselves with less regulated and more challenging working hours, preventing them from easily attending a few meetings per month. More thought needs to be put into how those without free evenings can be enlisted to help the party in other ways.

• Engage with ongoing political party funding reform, but work independently of it – Fourth, there have been various attempts to reform party funding in stop-start cross-party talks. At the moment there are changes proposed as part of the lobbying Bill. There will be more.

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It may sound obvious, but we have no idea what the outcome of this tortuous process will be. If we win something which benefits us, great, that’s a bonus. But we cannot build our house on sand by expecting that it will fill the gap in our finances. We still need to broaden membership in an open and transparent way.

Despite this, one thing still works in our favour: our proposals, properly implemented, will mean that the emphasis is now on the Tories to reform their own funding.

It is hard for them to argue for big and unrestricted donations if we have a model based around small ones, which is what Miliband proposes.

Broadening out of the party cannot be completed overnight

This is not a job which can be – or should be – completed prior to the next general election. It is a long haul. But the important thing is to show a direction of travel. And, in the unhappy event that Labour were to lose the next election, at least the foundations would be set for a healthier party membership and funding base, and a win in 2020.

The proposals described would certainly help create a party which better reflected Britain, rather than just a portion of it. There is nothing that would please David Cameron more than a Labour party which insisted on keeping itself firmly rooted in its traditional core demographic: the unionised public-sector.

Equally, there must be nothing which would make Tory elders splutter into their sherry more effectively than a Labour party aiming to push their membership outwards into their target demographic, the political centre. It would be particularly galling for David Cameron, who depends upon that very centrist demographic to balance out the heavy ballast of his party pulling him off to the right.

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Conclusion

Labour can win the next election. But it will not be won just with a good policy programme.

That is essential, but what is also essential is for Ed Miliband to go into it projecting an image as a future prime minister leading a healthy, open and inclusive party.

We can argue until we are blue in the face that our system is parliamentary and not presidential, but it won’t wash.

In the age of twenty-four hour rolling news media, the credibility of party leaders as a future prime minister is scrutinised like never before. And any failure of party is used mercilessly as a stick to beat us with, as we witnessed in Falkirk.

But this is not about focusing on superficial, presentational aspects for the digital age; spin, if you will. Leadership is about much more than good presentation. If François Hollande, a man who looks more like your local bank manager than a charismatic leader, can get elected a few miles across the Channel, it seems clear that personal style and appearance is something we can obsess too much about.

Indeed, there are indications that the public is starting to see through glossy presentation by politicians and are looking for something more “real”. Either way, this is not an area anyone can make much headway with. You are who you are.

No, what is important is not so much how you look and what you say. It is what you do.

Miliband can take a job well done of sorting out his own party to the country and say: “look what I did here. I have done something people thought I couldn’t. I can do the same with the country if you’ll let me.”

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Miliband already has some government experience and achievements to his name. But making a decent fist of a middle-ranking ministry did not make him a household name. Being the leader of his party has.

He should pay no attention to the lobby or even his colleagues inside the Westminster bubble, for whom this is dull party work and far removed from the important business of governing. It is not. True leaders roll up their sleeves, start with modest things and work up to big ones.

If the worst happens, and Labour fails to win in 2015, at the very least the party will have been left in a serviceable state for the 2020.

And either way history, especially our party’s history, is crystal clear on this point: you will not get to do one thing – government – unless you can make the other – party – work.

Rob Marchant is an activist and former Labour party manager

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3 Regaining economic credibility

by Jonathan Todd “If you don’t like what is being said, then change the conversation“ Don Draper, Mad Men

We need to change the conversation

It is inevitable that the economy will be central to the next election. More specifically, even three years on from my first Uncut piece “the emerging politics of deficit reduction”, the deficit and debt remain the core prisms of economic debate.

YouGov polling finds a consistent majority consider the government’s cuts necessary - a support rating never less than the mid-50s since the poll began at the start of 2011.15 Equally, the lead that David Cameron and George Osborne enjoy over Ed Miliband and Ed Balls on trust to run the economy has widened over 2013.16 This is all in spite of the reality that Osborne is failing to close the deficit. His record is calamitous and destructive.

But this record will not transfer into support for Labour on the economy so long as debt dominates the conversation.

Labour must kill this conversation and make a new one on a topic better suited to us.

The broad stokes in which politics is painted mean that, almost no matter what happens to public finances, Osborne will be winning if he can say: “You will borrow 37

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more than me. Your excessive borrowing caused this mess.

You haven’t changed and can’t be trusted.” This claim is the backdrop to the www.costoflabour.com website that the Conservatives launched in response to Labour campaigning on the cost of living.

The trick is to stop Osborne winning by rendering this claim unbelievable. If you accept that politics is stuck in a conversation that Labour must lose - and as we approach the final third of this long parliament, we see more evidence of an entrenchment than a shift17 - then there seems little option than to change the conversation. The ‘cost of Labour’ website is indicative of the hook that Labour will remain stuck on if we attempt to move the political conversation on without taking the steps necessary to properly close down the debt focus of this conversation.

Why you can’t spend more

There are some voices who advocate opposing the Tories by rejecting all cuts and increasing spending to develop growth.

Quite apart from the fact that this enables our opponents to paint the party as a spendthrift bogeyman addicted to debt and reckless in spending, economically, this makes limited sense.

On the face of it, spending more looks like a Keynesian solution to the current problem. But it is in fact a misreading of Keynes18 to advocate stimulus, no matter what its contents. Labour spokespeople sometimes give the impression that a stimulus in the form of twenty billion paperclips would do the trick.

This is nonsense.

While Keynes showed that national economies do not 38

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work like household budgets, there are limits to his basic medicine. And Labour should avoid endorsing the idea implicit in the rejection of all cuts - that policy should be oblivious to the cost and scale of public debt.

Our economic judgment is that even if Labour were to form a government on those terms, upward pressure on the cost of British debt would soon be exerted, inevitably diverting resources to financiers and away from the public services that we would rather see a Labour government looking after.

We have no desire to see Miliband brought low as an Anglo-Saxon Francois Hollande19 - a record that would long hang heavy round Labour’s neck. Which brings us to the political reasons it would be madness to advocate increased spending at this time.

It is true that opposing the cuts would enable Labour to clearly differentiate itself from the governing parties.

However, the truth is that this strategy, whilst appealing to the socialist faithful, is unlikely to secure sufficient popular support to create a Labour government.

In our polling with YouGov, we asked whether this strategy would make respondents more or less likely to vote Labour. Those who’d be less likely to vote Labour outnumber those who’d be more likely to vote Labour. This gap widens among those who voted Conservative in 2010 (19 per cent less likely versus 3 per cent more likely) and Liberal Democrat in 2010 (25 per cent less likely versus 5 per cent more likely).20 This seems highly unlikely, therefore, to be a strategy that would successful reach out to the votes that Labour will need to form a government in 2015.

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Why a return to growth won’t solve Labour’s problems

“There’s no denying”, as Ian Mulheirn has recently and rightly noted, “that the economy is stirring from its two and a half year torpor ... If estimates of the economy’s future potential were revised up by, say, two per cent, the £33bn hole in the government’s finances could all but disappear”.21 It is certainly true, as Labour has consistently argued, that growth makes fiscal consolidation easier.

While a return to sustained economic growth would diminish the number of painful choices confronting whoever is in charge of the Treasury, the political reality is that Labour is unlikely to hold this responsibility unless we show that we have learned the right lessons from the last general election. Our polling with YouGov finds that more voters feel that the Conservatives have changed for the better since that election than feel Labour has. Given that governing parties inevitably have to make decisions that upset at least some sections of the electorate and that Labour must rapidly turnaround public perceptions if we are to return to government in one term, this is a disconcerting finding.

We also note that immediately after the last general election almost half the electorate blamed that outgoing Labour government for the cuts introduced by the incoming Toryled government. 36 per cent of the electorate continue to do so - significantly more than the percentage that blame these cuts on the government that is actually introducing them.22

The blame that attaches to the last government must be attributable to the perceived profligacy of that government.

The view that Labour has not changed since that time suggests that many think that this profligate tendency remains. This is likely to be a barrier to Labour forming the 40

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next government, which is unlikely to be removed by the party seeking to explain its spending commitments in terms of anticipated economic growth.

The political case for avoiding general tax increases

Deborah Mattinson has detailed the extensive voter feedback and careful testing of language that went into the national insurance increase that Gordon Brown introduced in 2002.23 This move came after Brown had dedicated a decade cementing the relationship between Labour and prudence. While Labour may lack the extensive understanding of voters that Mattinson provided, it seems likely that perceptions of Labour’s fiscal discipline are closer to what they were at the start of that decade, rather than the end.

In consequence, what is politically necessary for Labour now is what Brown provided in opposition, not what he was later able to provide in government: a commitment to avoid general tax increases. This was required in 1997 to avoid the ‘Labour tax bombshell’ campaigning that derailed us in 1992. The possibility that Labour advocacy of general tax increases in 2015 would suffer the same fate as in 1992 - compounding the ‘cost of Labour’ theme - is large enough that the party should avoid this approach.

We’d caution against leaning too heavily on a financial transactions tax24 - though, pace the prime minster, the UK should join EU moves to create such a tax across Europe or particularly high rates of wealth taxation.25 Such steps notwithstanding any policy merits - would be too easily dismissed as anti-business and curbs on aspiration by Labour’s opponents.

Facing the facts

We might change the conversation in which the Tories 41

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present us as addicted to spending by changing what people think of our past (“It was the banks, not us”) or what people think we think about our past (“It was partly us but we’ve learnt our lesson”) or what people think about our future (“Here’s why it will be different next time”).

For simplicity, and also because there is a limit to how much repositioning Labour can credibly make this side of the general election, we focus on the future. It looks to a future in which by the next general election, public sector net debt will be more than 85 per cent of GDP.26

It is not a Conservative party fantasy that this debt must be financed. It is a reality. Which, if ignored or wished away, will only become harder to manage. Nor is this reality wholly attributable to Osborne. To a significant extent, it is the bitter legacy of an economy and tax base dangerously dependent on a golden goose - the City of London - that exploded. And, no matter what the precise causes of our predicament, rebuilding the public finances now constitutes a national priority.

Accept spending totals

The economic facts and the political truth combine to give us little option if we are to lay the foundations for a Miliband government and explode Osborne’s “you will borrow more than me” retort.

We must accept his spending envelope for 2015/16.

What, then, is the purpose of a Labour government if we are to accept these spending totals?

In a word – rebalancing.

It is quite possible to accept the spending totals proposed by the government, but to use that spending in such a way as to reveal our very different set of priorities, reflecting an alternative set of values.

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Our polling with YouGov found that 10 per cent of voters would be more likely to vote for Labour if we committed to operating within the government’s 2015/16 spending envelope.

We concede that this is less than the 17 per cent who’d be more likely to vote for Labour in the event that the party promised to keep most of the present government’s spending plans, but to borrow more specifically for public works, such as building more homes. This approach, however, makes more voters less likely to vote Labour (13 per cent) than the option of committing to the government’s 2015/16 spending envelope (10 per cent).

There is sufficient ammunition in this polling to sustain advocates within Labour for either of these approaches.

Our judgment, however, is that Labour has too much ground to make up with the public on economic trust not to go for the stronger option of matching the government’s 2015/16 spending envelope.

At the least, under either approach, it is vital that Labour are able to be clear and coherent about how all spending will be financed - whether this is in terms of rebalanced priorities within the envelope or robustly financed spending beyond it.

What is Labour for?

For all the intellectual coherence of predistribution, which underlines the importance of growing the wage share, Labour urgently needs more pub and doorstep ready messages: policies that can be quickly, clearly and convincingly explained; potential pledge card material.

We need to show that something different and better is available and affordable.

The economic growth strategy advocated here is one of a 43

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changed set of priorities within the 2015/16 budget envelope and a belief that growth depends upon sustainably rising, not household debt-fuelled spending from low and middle earners, which means putting more money in the back pocket of such earners.

In so doing, we can create scope for the economy to ‘grow from the middle out, not the top down’, as Barack Obama often argued during his re-election last year and Miliband has subsequently advocated.

The optimal economic strategy consists in the mix of tax and spending that maximises our growth rate and minimises our debt payments. Our attempts to stimulate the economy should be carefully targeted for maximum, sustained impact.

Growth that is not just a sugar rush - and twenty billion paperclips wouldn’t even give us that - but grounded in productive endeavour and genuine long-run growth potential. The role of government is now to strip away the barriers to such endeavour. Sometimes this means government doing less; sometimes more; always pragmatic.27

We should proceed, however, as the RSA has argued, with a confidence that pessimism about our capacity for longrun growth is misplaced.28 The explosion of microenterprises29, the dynamism of the digital economy30 and the record export of British-made cars31 all caution against being too downcast. Being as optimistic as we might be about our prospects, though, requires that public spending is being allocated where it will make most difference.

To create scope for this investment, we need to cut back public spending that does less to sustain growth. These cuts would contain any short-term increase in our deficit, while this investment would enable the long-term growth 44

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that is indispensible to sound public finances. This policy logic is broadly consistent with past research by the SMF32 and Policy Network.33

Labour must be a vehicle for national rebalancing and growth, not the advancement of some sectional interests over others. As we look ahead to Miliband’s Britain, there are, as we all surely know, no easy choices. Never before has J. K. Galbraith’s maxim that politics consists in a choice between the disastrous and the unpalatable been more apt.

Make no mistake, there are no free lunches in this proposal.

The steps needed to change the conversation are neither comfortable nor pleasant. But they are necessary.

Necessary to change the conversation and create a new one, and necessary to enable Labour to avoid disastrous drift to defeat.

A new type of government – reliability, pragmatism and competence

We need economic growth to manage public debt and meet the costs of ageing. This must be generated in a global economy tilting ever more to Asia. The rise of Asia prompts a more activist state, particularly on industrial policy, but the cost of ageing will limit what resources are available for this.

These conflicting demands mean that never has it been more urgent that government be reinvented.34 Our chancellor may share a second name with one of the authors of this classic text but he has given us more tawdry politics than government reinvention since coming to office in May 2010.

Economic rebalancing was promised; the RDAs were swept away in a “Maoist” fashion.35 No top down NHS was pledged; then the NHS Act squandered resources on 45

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precisely this. Work paid more than welfare under the last government but the means-testing of tax credits caused other problems. Yet, assuming the costly IT system ever works, which is a big assumption, the universal credit will create hyper means-testing at the point of transition from welfare to work: a botched job of tackling a problem that doesn’t exist, doing nothing for a problem that does.

Labour can do better than this lamentable record of incompetence and waste.

But to do so we need a strategy informed by principles for the reinvention of government. Andrew Adonis often says that the best policy is the best politics. Osborne’s policy is politics. Our politics should be driven by our policy, which ought to be the reinvention of government, informed by these principles: Principle 1 – Outcomes not inputs

We should communicate our values and assess our achievements by the outcomes of spending, not by the amount of money that we allocate to particular parts of the public sector.

Principle 2 - Achievable goals

Labour must make a virtue of simplification. Government faces many and competing pressures. It can fail when too much is asked of it - the government’s health and welfare reforms have, for example, needlessly introduced costgenerating complexity. We must be humble enough to not overreach government.

Principle 3 - Utilising incentives and structures

Incentives matter. Labour won’t secure its goals by moral compulsion any more than we get our bread by the 46

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benevolence of the baker.36 We should reward behaviour that moves us closer to the outcomes we seek and penalise those that don’t.

Principle 4 - The right institutional structures

Institutions shape markets and behaviours. Creating institutional structures and cultures that both encourage the right outcomes and minimise the development of drivers of cost to the public sector is critical to our future success as a nation.

We welcome the Labour party’s commitment to zero-cost budgeting.37 We would add that these four principles form a strong basis against which to assess each line of public spending. In contrast, the fiscal consolidation attempted by Osborne has never been informed by any such guiding principles, instead it has been an exercise in political expediency throughout. Cuts have, for example, been deepest in those areas of government considered least popular (local government, welfare). Britain deserves better than Osborne’s low politics and application of these principles would allow Labour to provide this, rising to the challenge of national leadership.

The next chapter uses these four principles to guide our exposition into ‘how to find the money’.

Because Liam Byrne was wrong.

The £740bn that the government plan to spend between April 2015 and April 2016 explodes the myth that there is “no money”.

There is plenty of money to allocate to the priorities of growth and social justice via a reduction in the cost of living. It is vital that they are.

But that money will only be in the command of Labour to spend on rebalancing Britain if we are the party of 47

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government, not the mouthpiece of a minority of special interests and ideologues.

Jonathan Todd is Labour Uncut’s economic columnist. He is an economic consultant and is working with UK Music on a ground-breaking study on music’s economic contribution

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4 How to find the money

by Jonathan Todd The key section in Labour’s manifesto at the break-through 1922 election was not entitled “No austerity” but “How to find the money.” The past, we are told, is a foreign country: they do things differently there. For one thing, they didn’t have Keynesian economics, as we came to understand it, till The General Theory in 1936.

But nevertheless, Keynesianism is not a boundless justification for endless spending and, if we are to present serious proposals for rebalancing the national economy, we must say where the money will be found.

We forget Labour’s success at the 1922 general election at our peril. The party doubled its representation at this election, rising from 57 to 142 seats. This election was fought in the wake of the “Geddes Axe”, which slashed public expenditure in an effort to restore the pre-first world war parity in government incomes and spending.38

And so comes the uncomfortable truth – that if rebalancing is to be achieved, it means spending more in areas that most represent our Labour values, but at the price of spending less elsewhere.

So where can the money that will be spent in subsequent chapters be found?

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Call time on the myth of ringfencing– use a holistic approach to achieve the best health and education outcomes

In an effort to combat their well-earned reputation for threatening the services treasured by the public, the Conservatives have ringfenced health spending.

It hasn’t worked. In September 2012, Ipsos MORI reported Labour holding a 30-point lead over the Conservatives as the party with the best policies on healthcare. Equally, despite being level at the time of the 2010 general election and the Conservatives then ringfencing the schools budget in government, Labour held a 12 point lead over the Conservatives on education at this time.39

These ringfences are an attempt to pull the wool over the eyes of a public that are too clever to fall for the trick. The public know that quality of service depends on how money is spent and not on preserving spending in certain parts of government.

This is for the simple reason that different services interact with each other, and preserving spending in a single area is no guarantee of the best results overall.

The think-tank Reform make the case that the schools ringfence is actually damaging education. In part, they do so because it necessitates larger cuts in other public services that benefit schools, such as spending by councils on early intervention into troubled families and school readiness.40

Similarly, according to Health and Social Care Information Centre figures, visits to A&E by ambulance for people aged over 90 increased by 66 per cent between 2009/10 and 2011/12, which coincides with a period of cuts to social services.

In both cases, cuts outside the ringfence (early intervention 50

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programmes/social care) deepened pressures within the ringfence (schools/A&E).

During the Labour leadership election, Andy Burnham argued: “It is irresponsible to increase NHS spending in real terms within the overall financial envelope that [George Osborne], as Chancellor, is setting ... He will visit real damage on other services that are intimately linked to the NHS. The health service needs functioning day care, and housing and meals”.41 We are now making precisely the argument that Burnham made then and which we would encourage him to revisit.

If the ringfences were dropped, then more balanced cuts would be feasible, with a net effect of reduced demand on previously ringfenced services. Preserving the ringfences is, therefore, a false economy.

The claim that health inflation runs ahead of general inflation is sometimes used to defend the NHS ringfence.

But it is quite possible that the ringfence itself is a driver of this health inflation.

The ringfence encourages big pharma to continue to name its price for its medicines. If we - as taxpayers - are to secure better value from these multinationals, we need to toughen our negotiating stance.

Removing the ringfence would indicate that the NHS is a price maker, not a price taker. The NHS should not, obviously, be paying £89 for cod liver oil capsules which can be bought for £3.50 in a high street chemist.42

And it is not just in respect of procurement that there is scope for the NHS to obtain better value. Doctors now receive an average salary of £110,000 for less work than previously. This is unacceptable.

We believe that, in order to deliver better overall outcomes,

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we can cut 2 per cent from health and 5 per cent from the Education budgets. Our polling with You Gov reveals not only that this policy enjoys the support of the public (49 per cent in favour versus 37 per cent against) but also that it enjoys particularly strong support among voters that Labour must reach out to form a government: almost three quarters of 2010 Tory voters, more than half of voters in the south outside of London. Labour has long struggled to achieve cut through with these voters - this policy would achieve that, while also freeing up resources to be reallocated elsewhere.

Differentiating trade and aid overseas – targeting the bottom billion

Because Labour should advocate a politics of outcomes, we should also move away from the current target of simply spending 0.7 per cent of GDP on development spending and towards a goal-oriented approach.

The Department for International Development (DFID) will give £1.3bn to Ethiopia in this parliament. Yet legal proceedings are being brought against DFID, arguing that its money supports a brutal programme of forced relocations driving large numbers of families from their traditional lands.

It is an absurdity that our 0.7 per cent of GDP target could be met through spending that sustains this kind of suffering. To repeat the point: the amount of spending in itself proves nothing; it is the outcomes achieved through the spending that should concern us.

Instead of persisting with the arbitrary target of 0.7 per cent of GDP, we should revisit what outcomes we want to achieve from development spending and how these may best be secured. What Paul Collier calls ‘the bottom billion’ should be our focus.43 52

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In what we know as ‘the developing world’ 5 billion people live in parts of it that are, in fact, rapidly developing. Rather than flinging aid at these countries, such as China and India, our priority should be growing our trade with them.44 This would create sustainable development through long-term relationships – the proverbial hand up, rather than handout.

Which is not to say no development assistance is needed.

But our development budget should concentrate on ‘the bottom billion’ - those people who live in the poorest countries that have not yet found the same trajectory as the rapidly developing nations.

This is not an act of pure national benevolence. These poorest countries are also those most at risk of falling victim to the kind of extremism that would enslave their people and put Britons at risk.

As Olivier Roy explains: “Simply put, al-Qaeda is parasitic upon local conflicts, which have their own logic, and tries to radicalise them in an anti-western direction so as to lure the west into the trap of intervention”.45 Rather than risk falling into this trap, the UK should seek to tackle the conditions that allow it to be created.

This means targeting our development spending upon ‘the bottom billion’; those in states most likely to fall into the local conflicts that al-Qaeda would seek to exploit. The outcome that we seek is to transition these states to the position of those developing world states that have established a clear developmental trajectory, which means that they are at reduced risk of these local conflicts.

The explicit link between our development and security objectives means that DFID should be formally re-housed within the Foreign and Commonwealth Office (FCO). We should have as few ministers - with their cars and drivers; 53

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their egos and duplication - as we need.

We believe that a 5 per cent cut could then be implemented in 2015/16 within DfID, whilst having a more effective global presence in development.

We would also go further to make government smaller by merging DCMS with BIS, as well as closing the Northern Ireland, Scotland and Wales Offices in London. This business would be managed through the Cabinet Office.

This would result in five fewer Whitehall departments under our plans than presently.

Simplicity Saves

As the cuts have bitten, more attention has focused on certain benefits, such as free bus passes, TV licenses and the winter fuel allowance, that all pensioners receive including the very wealthy. No other part of the welfare state has campaigns for recipients to repay the money.46 These campaigns have a persuasive logic: millionaires don’t need the state to pay their TV licence and such like.

Equally, the conclusion to which this leads - to means-test these benefits - is resisted as an attack on universalism.

There is a simple solution. While the state pension is taxed, these additional benefits (free bus passes, etc) are not. If the additional benefits were rolled-up into the state pension, senior citizens would be able to decide for themselves what they spent this money on. It would, however, be subject to tax, which would mean that less of it would go to richer pensioners, while poorer ones would be no worse-off. We anticipate that the annual savings associated with this measure would be around ÂŁ2bn.47 There are a number of other simplifications that would reduce the cost associated with the welfare state:

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• Ending the Support for Mortgage Interest (SMI) scheme for non-disabled working age people - saving £270m annually. Demos have recently proposed making this change as part of a move to introduce a greater contributory element into JSA48 - an argument that Duncan O’Leary and Claudia Wood develop in this collection.

• Rolling child benefit into existing tax credits system, saving £2.4bn annually.

• Halve higher rate tax relief on pension contributions to save around £6.7bn annually.

• Cap maximum ISA holdings at £15,000, saving around £1bn annually49 – combine with efforts to increase lending to microenterprises through peer to peer lending.50

• £0.5bn to be raised from charges on international students for their use of public services - as Atul Hatwal explains in chapter 10 in this collection.

Simpler tax = More tax collected

Another important form of simplification is taxation. The simpler the tax system the less will be evaded and avoided.

This forms part of the justification for a tax on mansions or land. Taxing them would be less opaque than current forms of taxation, making them harder to evade. They would also have desirable incentive effects, which we discuss further below.

In terms of tax evasion, we welcome international efforts to curb this. But there is more that can be done.

Recognising the global nature of this problem, we note that, according to conservative estimates, more than $450bn illicitly left African countries during the 2000s. We

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further note, as Paul Collier has done, that bribery takes three to tango: not just the bribed and the bribing company, but also the facilitator.51 There is a responsibility incumbent upon British banks trading in Africa and elsewhere to not be such facilitators. Best practice should be incentivised by the British government making their conduct anywhere in the world subject to large fines in the UK.

As we seek to spread best practice globally, it is important that the UK gets it house in order. Amazingly, the administration of limited companies in the UK by HMRC and Companies House is so deficient that this has been estimated to be costing the exchequer £16bn in taxes annually.52 Given the scale of these foregone taxes, it would seem that investment in staffing at Companies House and HMRC - for example, to do better than ask only 70 per cent of companies to file returns with HMRC and achieve better co-ordination between banking records and public records - would more than pay for itself in terms of increased tax collection. We might conservatively estimate a net gain to taxpayers of £2bn annually from this investment in staffing.

Government IT doesn’t have to be a disaster

This £2bn in savings through improved tax collection would fall into the same category of “pain-free cuts” that Francis Maude has called the £1.2bn in savings expected each year from 2015 due to improvements to government IT. Given government’s record of IT disaster, we might be sceptical about these savings. But £500m were delivered last year. This has become a priority for Conservative ministers.

Labour misses a trick in allowing Conservatives to lead on the digital economy. While rural Tory MPs have won billions of pounds in public funds for better broadband in 56

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successive budgets, Labour MPs have been less vocal.

Which is a contrast to the concerns of the Labour Digital Group. This group is rightly eager for Labour to be at the vanguard of digital innovation - as much in respect of savings to the taxpayer as elsewhere.

Mansion tax

A politics of outcomes is also a politics of incentives, steering us toward our desired outcomes. The outcomes that Labour should seek include full employment and intergenerational equality. Tax should be used as a lever towards these ends. Scope for reducing taxation on employment (moving us closer to full employment) would be created by increasing tax elsewhere (moving us closer to intergenerational equality).

We would favour a mansions tax, as the absence of such in the UK supports the view that sitting on land holdings, rather than hard work, is the route to riches. It has been estimated that introducing this tax on properties worth over £2m would raise £1.7bn a year but this could rise to £2.5bn a year as property values rise.53

In addition, we feel that Labour-controlled Camden council have recently made a strong case for an extension of powers to councils for extra taxation on second homes, which we’d encourage Labour to take up in government.

The right incentives for utility firms

Our focus on the importance of incentives and the desirability of reducing household bills has motivated us to consider whether the incentive structures in current systems of utility regulation are going as far as they might to encourage the minimisation of utility bills. Sadiq Khan, shadow London minister, has demonstrated a shared concern with such bills. He wants Ofwat - the water 57

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regulator - to prevent Thames Water adding £29 to the bills of Londoners to pay for a new £4bn super-sewer.54

Labour should be more forensic in diagnosing how this situation has come about. Recent think-tank research has bemoaned the use of debt-intensive finance models in the water industry.55 This research picks up on the example of Thames Water. It notes that this company “has damaged its credit rating, leading to requests to government for guarantees to enable the company to carry out” the project that Khan has written to Ofwat about.

Ofwat has conceded that since their last price review in 2009, highly indebted water companies have enjoyed previously unforeseen profits from a period of very low interest rates and persistently high inflation. The unforeseen nature of these profits means that they might be considered a windfall. Research from the Consumer Council for Water has estimated that water company profits have been inflated by £720m over the past two years due to these factors.

Given the size of the water industry relative to the gas and electric industries, and assuming that these industries are as highly geared as the water industry, implies that a windfall of £3.2bn could be taxed back by the government across these industries. We would encourage the government to levy such a tax and put in place a new system of regulation that would require such unforeseen gains in future to be shared between shareholders and household customers. This system of regulation would draw upon the think-tank research referred to and involve a sliding scale for the control of dividends: reducing household bills in line with unanticipated falls in the cost of debt. This would remove the incentive that utility companies presently have to become highly-geared sometimes dangerously so - in times of cheap credit.

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Incentivising delivery in the civil service

It is not just the citizenry or utility firms that should face sharper incentives in the direction of the outcomes that we seek. Civil servants should do too. Their remuneration should not simply be a matter of amount of time served but contribution towards the outcomes that the next Labour government makes their mission. Revision to the GPs contract under the last Labour government paid them more for less. The next Labour government should reverse this and also incorporate performance metrics into this contract.

Staff at HMRC and Companies House should see their remuneration more closely aligned with their performance in terms of tax collection. This chapter has noted that there is significant scope for performance to be improved in this regard and pay should reflect the extent to which this improvement is secured.

We need to bite the bullet of performance related pay across the public sector. This would be the norm in a private sector organisation seeking to maximise its productivity. It must be more so in the public sector. Very large estimates have recently been made of how much could be saved if public sector contracts matched equivalents in the private sector56 - if only around a tenth of these forecast savings could be secured then ÂŁ5bn would be saved annually. We advocate seeking to make savings of at least this magnitude alongside reforms to attach public sector pay more closely to performance.

Civil servants should be rewarded for saving the taxpayer money. They should not think that their importance is directly proportionate to the size of the ‘empires’ that they build up. But have contracts that clearly reward them for the value that they generate for the taxpayer - which is a function both of the savings that they implement and the outcomes that they secure.

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We note, for example, that it was recently claimed that Birmingham’s ICT, billing and ‘business transformation’ currently costs £120m a year when it should only cost £30m a year.57 Given that this equates to £90m a year, imagine the total back-office savings across the country if civil servants were incentivised to unlock such savings.

Incentivising civil servants is also likely to be a particularly powerful driver towards securing outcomes that have traditionally been frustrated, due to them cross-cutting different parts of government. Silo working would be much more likely to be broken down when civil servants are held accountable for performance against these outcomes and remunerated accordingly.

It is vital that we look beyond savings within departments and seek instead to mine the much richer seem of savings between departments. The current focus exclusively on savings within departments results in ministers adopting a stance of “fiscal nimbyism” - seeking only to defend spending within their department, not focusing on how this spending, whether in isolation or in tandem with other departments, might best secure desires outcomes.58

In a context less of “fiscal nimbyism” and more of shared ministerial and civil servant focus on desired, publiclyvalued outcomes, long-standing silos are more likely to be broken down. For example, between the NHS and welfareto-work programmes.

The cost of ill-health and disability among the working age population has been estimated at £62bn - £76bn per annum to the Exchequer alone.59 The minimal impact of DWP programmes like Pathways to Work in addressing this problem might be explained in terms of their limited joinup to the NHS. The primary diseases holding people back from employment and earning, such as back-pain and mental health, are low down the professional, 60

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organisational and financial priorities of much of the health system.60

The contracts of relevant civil servants should be designed in such a way as to incentivise them to break down the barriers between the lack of success of schemes like Pathways to Work and the low priority that is given to these primary diseases by the NHS. We also contend that a cross-departmental focus on outcomes would lead to less priority being given to retaining police numbers and more to improving the quality of probation services. While the continued fall in crime rates over this parliament has undermined Labour attacks on cuts to police numbers, the crime that remains is disproportionately committed by those who have previously committed crimes. Improving probation services should, therefore, be a priority.

And restructuring for long-term efficiencies

There are a range of structures that Labour should commit to putting in place upon returning to government. The savings that we can expect to generate in 2015/16 by doing so is limited. However, these structures are necessary for government to be leaner and more outcome-focused over the longer-term. Quickly putting these structures in place would communicate how we intend government to operate and ensure that the benefits would be reaped before the next general election.

The CBI estimate that between ÂŁ400m and ÂŁ600m can be saved annually by 2020 through greater sharing of services across Whitehall and local authorities.61 We would go further. We think that significant duplication remains embedded in existing structures. We are unconvinced that the Northern Ireland, Scotland and Wales offices in Whitehall remain necessary when the devolved 61

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administrations are adequately resourced to interact directly with relevant Whitehall departments. We welcome the emphasis placed by the government on the economic importance of the creative industries.62 Responsibility for this should, however, be held by BIS to ensure that the creative industries are fully integrated into the government’s economic strategy - meaning that the utility of DCMS as a separate department is exhausted.

As BIS absorbs responsibility from DCMS, we would revisit the spirit of the Heseltine Report and pass many other responsibilities down from BIS to localities. We would incentivise localities to make the most of these new responsibilities by allowing them to retain locally raised Business Rates.

We would also empower local authorities to choose between implementing flexible rents or fixed tenures for social housing. Extrapolating research from the Centre for London across England, we estimate that this could raise up to ÂŁ1.5bn annually.63 We would allow local authorities to reinvest these funds in new social housing. Increasing the supply of such housing will place downward pressure on private rents and therefore, on housing benefit expenditure.

We see the transition from spend on housing benefit to housing build as one of a number of switches in spending from the consequences of social failure to prevention of such failure that the Labour leadership already seems to favour. Others include using a compulsory jobs guarantee to reduce JSA spending; living wages to minimise tax credits expenditure; and whole person care to minimise the costs arising from poor integration of health and social care.

Transferring spending from housing benefit to house building would be assisted by making much better use of assets presently held by local authorities. It has been reported that local authorities own 11,331 acres of 62

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brownfield land, which amounts to capacity for an additional 87,000 houses, worth £13.4bn based on median house prices.64

Central government should urgently review the brownfield holdings of local authorities and place them under a duty to either build additional council housing on these sites or allow building by private housing developers or housing association on this land. In addition, central government should review whether any of its assets might be similarly disposed. We note, for example, that the Ministry of Defence has land holdings valued at £93.4bn.65 Given this, we conservatively assume that £2bn might be raised from the sale of government land assets in 2015/16.

Savings that Labour have already committed to

It is important to note that Labour has already committed to certain savings - but equally, it is vital that Labour goes much further than this. Some of the savings that Labour has already committed to were outlined by Ed Balls in his major speech on the economy in June this year:66 • Not giving the banks a tax cut, but putting a tax on bankers bonuses to get young people back to work;

• Not attacking those who cannot find work, but making sure the long-term jobless are given a guaranteed job which they will have to take up or face losing benefits;

• Not giving tax cuts to the richest, but keeping the 50p tax rate now and supporting working families by not going ahead this year with real terms cut to tax credits;

• And not wasting money fragmenting the NHS, and other services, or on vanity schools projects, but focusing on the real needs in adult social care and primary school places - and bringing public services together to save money and improve services.

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We include the £2bn that Labour expects to raise from the bankers’ bonus tax in the calculation below of the total savings that Labour might make in 2015/16.

Recommendations

The economic debate will do more than anything else to determine the general election. But it is focused on debt in a way that undermines Labour’s capacity to win it. Labour must change this conversation. We believe that bold actions remain open to Labour to make this change. The savings that these actions would generate are illustrated in the table below.

Saving

Monetary value

2% cut to department of health

£2.2bn

5% cut to department of education

£2.7bn

5% cut to the department of international development - to be merged with the Foreign and Commonwealth Office

£0.6bn

Merging DCMS with BIS

£0.06bn

Closing the Northern Ireland, Scotland and Wales offices in London

£0.03bn

Rolling additional pensioner benefits into the state pension

£2bn

Ending the Support for Mortgage Interest (SMI) scheme for non-disabled working age people

£0.3bn

Rolling child benefit into existing tax credits system

£2.4bn

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Halve higher rate tax relief on pension contributions

£6.7bn

Cap maximum ISA holdings at £15,000

£1bn

Improved tax collection

£2bn

Charges on international students for their use of public services

£0.5bn

Mansion tax

£1.7bn

Windfall tax on utility firms

£3.2bn

Reform to public sector contracts

£5bn

Sharing of services across Whitehall and local authorities

£0.5bn

Flexible rents for social housing - to be determined by local authorities

£1.5bn

Sale of government land assets

£2bn

Bankers bonus tax

£2bn

Total

£34bn

These measures would make absurd the damaging charge that Labour is dangerously profligate. They’d also create fiscal room for measures aimed at reducing the cost of living. The substance of this alternative conversation is outlined in subsequent chapters.

Jonathan Todd is Labour Uncut’s economic columnist. He is an economic consultant and is working with UK Music on a ground-breaking study on music’s economic contribution 65

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5 Universal, free pre-school childcare

by Atul Hatwal There are few policies that have been as widely anticipated as universal childcare, but that remain so far from being delivered.

Cutting costs for millions of Britons

For the parents of young children it is the cost that blights their household budget. After housing, childcare is often families’ biggest expense and in many cases makes it economically difficult, if not impossible, for both parents to work.

OECD research has calculated that childcare raises marginal tax rate faced by dual-earner British families, on average wages, from 27% to 68%.

Research by the Resolution Foundation has illustrated the practical impact of this cost in their pamphlet, “Counting the costs of child care after housing costs”67

“A middle income couple with a gross income that is 87 per cent higher than a minimum wage earning couple (£44,440 compared to £23,790) ends up only 17 per cent better off than the minimum wage couple after taxes, benefits and childcare costs. After paying for full time childcare, the middle income family’s disposable income is £26,669 compared to £22,742 for the low income family.”

With the latest figures for births in England and Wales in 2012 at an all-time high at 729,674, compared to 594,634 in 2001, the need is set to grow in the coming years.

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Boosting the workforce and Britain’s tax receipts

Helping families in this way will have major positive impact on the national accounts.

In an economy that needs to maximise the size of its workforce over the coming years to help pay for an ageing population, childcare could enable several hundred thousand parents re-enter the labour market, boosting tax receipts and growth over the medium to long term.

The IPPR predict in their brief “Making the case for universal childcare”68 that the increase in tax receipts from a parent returning to work full-time on an average wage, over four years, would be over £20,000, cumulatively raising billions of pounds of extra revenue for the exchequer.

Getting the delivery right will bring further advantages

In one sense, this is actually a comparatively conservative costing as it does not take into count the broader supply chain benefits from an expansion of childcare.

There would be gains from employment, new training routes and small business expansion as a result of the expansion of supply of childcare services.

Currently there are 56,166 childminders in England and Wales, down from 60,915 four years ago. This number currently deals with privately funded demand as well as the 500,000 families signed-up to the government’s current childcare voucher scheme.

A universal childcare programme would involve several million families. Even if many of these were previously funding childcare solely privately, there is likely to a major increase in demand for public childminding services.

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This type of expansion raises the potential for a big growth in the numbers of small businesses across the country.

Based on the current patterns of child minding services, there are a large number of micro-businesses involved.

These would be boosted by the massive expansion enabled by universal pre-school childcare.

Everyone agrees, we need universal childcare

Unsurprisingly there is a political consensus across all three parties on desirability of expanding childcare. It cuts costs or working families, enables parents to go back to work, generates billions in increased taxes and will boost employment and small business growth. What’s not to like?

It was seriously discussed by the last Labour government as early as 2008 as a potential priority. And both Conservatives and Lib Dems talk of childcare as an essential for the 21st century.

So why do we not have universal childcare?

Universal childcare comes at a price

In a word: money. The elephant in the room for every discussion about expanding childcare is cost.

Currently, the UK government spends £2.7bn a year funding 15 hours a week of free childcare for all three- and four-year-olds, alongside the 20 per cent of most disadvantaged two-year-olds. In the 2013 budget, the chancellor announced an extra £1bn of funding to enable parents earning less than £150,000 per year to claim upto £1,200 towards the annual cost of childcare.

Based on the government’s costings, the IPPR have calculated that the price for expanding coverage to all children under 5, would be £9.5bn.69 68

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If it’s worthwhile it’s worth paying for

Almost £10bn, each year, every year, is a lot of money. But then, given the benefits, can the country afford not to have universal childcare?

Even if remaining on the Tories deficit reduction path, there is ample opportunity to either raise new revenue or switch current spending to fund a policy as important as childcare.

The approach set out by Jonathan Todd in chapter 4, highlighted where new revenue could be raised to deliver a fully costed childcare programme.

New political dividing lines

The new revenue would be derived by halving the higher of rate tax relief on pension contributions (£6.7bn), cutting the department for international development by 5% and merging it with the FCO (£0.6bn), merging DCMS into BIS (£0.06), scrapping the departments for Scotland, Wales and Northern Ireland (£0.03bn) and reform of public sector contracts (£2.9bn from the £5bn available from this source).

This total fund of £10.3bn would not only pay for increased provision but also extra costs such as expanded training and inspection arrangements.

Making these funding choices would do more than simply fund childcare, they would help Labour re-draw the political dividing lines with the Tories.

The current system of pension tax relief is skewed with the Pensions Policy Institute recently calling for the system to be reformed.

Everyone who contributes to a pension receives tax relief in the form of a pension top-up that is equivalent to the amount of tax they pay. Basic rate taxpayers receive a 20% pension boost while higher rate taxpayers receive 40%.

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Typically, someone who was a higher rate tax payer in their working life become basic rate tax payers when they retire.

This means, they benefit more from the tax relief as they don’t pay it all back when taxed on retirement income.

Removing this bias in favour of the better-off to help fund young families would help re-cast the political debate on Labour’s terms: promoting equality of opportunity by closing a tax loophole that helped the better off at the expense of those with less.

The funds from DFID, merging DCMS into BIS and scrapping the departments for Scotland, Wales and Northern Ireland would further reinforce this dividing line.

To oppose the policy, the Conservatives would need to defend prioritising aid to some of the comparatively better off countries in the world and maintaining central Whitehall bureaucracy, over funding action to help reduce crippling family bills.

Similarly to oppose the reform of public sector contracts so as to free funds for universal childcare would be toxic for the Tories, defining them as indescribably out of touch with the concerns of voters.

Labour must be brave on funding

The politics of a pledge to implement universal childcare are not contentious. There is little need to rehearse at length the importance of this measure. The benefits are clear, and support is strong in the electorate.

The real choice is on funding.

On this Labour must be brave. This is the fundamental test.

As Jonathan Todd set out in Chapters 3 and 4, to regain its economic credentials the party must only propose fullycosted measures. It will inevitably involve some political conflict as those who lose out as a result of the changes.

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Universal, free pre-school childcare

But not all conflict is bad, and the right types of dividing lines are a political necessity. By being smart about the fight Labour picks to fund childcare, the overwhelming public support for this measure can be used to define Labour’s opponents as the defenders of privilege and bureaucracy rather than the enablers of popular opportunity.

Atul Hatwal is editor of Labour Uncut and director of the crossparty campaign group, the Migration Matters Trust. He has worked in communications and policy across public, private and voluntary sectors and was formerly a Labour party press officer.

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6. The party of labour needs to put work at its core

by Kevin Meagher Introduction

“Labour - the party of work - the clue is in the name”. Ed Miliband was right back in June to reaffirm the centrality of work as an article of faith. Indeed, one of the last government’s proudest achievements was to slash unemployment to the point when ministers could boast about creating full employment.

That was then. Now, Labour faces an inheritance grimly reminiscent of the early 1980s. A million young people unemployed. A million more on zero-hours contracts70, a crisis not so much of unemployment as underemployment. Then there’s impact of low-cost, high-yield immigrant labour, supplanting some of our seemingly less industrious citizens. Childcare costs that cripple working parents to the point that it is hardly worth bothering going out to work at all. And five million working age adults on benefits.

Five years of an economic funk, on top of pre-existing problems with the labour market, has left deep scars.

Nearly as deep are the worry lines across the foreheads of Labour’s shadow ministers responsible for addressing this mess without many of the policy levers and cash they had during the New Labour years.

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In shaping its future approach, there are two principal difficulties the party needs to grapple with. The first is what it is fair and reasonable to expect from people in terms of the economic contribution they make versus the entitlements they draw. The second is determining what is needed and legitimate from the state and employers to support those in work.

The politics of work

For incumbent governments, an improving economy is usually good news and logically spells problems for the opposition. In British politics the reverse may be true this time and a return to growth may be good news for Labour71, with a cyclical improvement in the economy and rise in employment easing - though, not eliminating - the veritable conveyor belt of Hobson’s choices that confronts Ed Miliband.

But the question of work – how to create it, who pays for creating it and the degree to which people are compelled to take it - remains politically explosive for Labour. Will a Labour government, for instance, bring greater compulsion to bear on people to take-up paid employment, even if they are over-qualified for the roles? How far would ministers go in freeing-up employers to create jobs? Would the party challenge the entitlements common across the public sector – especially when it comes to pensions – in order to reduce the government’s wage bill, potentially opening the way to create more jobs? After making the running on a living wage, will Labour legislate for it in the teeth of employer opposition? How far will the party crack-down, in reality, on low-cost immigration?

None of this is easy for Labour. Establishing the point where fairness and realpolitik intersect never is. That said, occupying the commanding heights of this debate is a 73

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strategic priority for the party. This is because Labour’s approach to work informs two of the party’s basic weaknesses: credibility on reforming the welfare state and the uncertain message Labour frequently sends out about encouraging aspiration.

Social security is arguably Labour’s greatest achievement - more so, perhaps, than the NHS. It relies on an intelligent appeal to self-interest which is more altruistic and, for many people, more abstract than wondering how you would cope if you fell ill. For most of us, relying on state benefits is a situation we would not wish to find ourselves in. The lurking danger, therefore, is that the more that people in the labour market have to live on their wits, with the growth of temporary and self-employment, the more they may come to resent the lack of entrepreneurial zeal in others. Indeed, there is already evidence that this is happening. Research by the Joseph Rowntree Foundation has found a marked shift from voters accepting ‘societal’ explanations of poverty towards them blaming individuals for their circumstances:72

‘Fifteen per cent of the public in 1994 thought people lived in need because of laziness or lack of willpower, compared to 23 per cent in 2010. Support for the view that people live in poverty because of injustice in society fell from 29 per cent to 21 per cent over the same time period.’

Perhaps most importantly – worryingly - for Ed Miliband these changes seem most pronounced among Labour supporters. ‘Just 27 per cent of supporters cite social injustice as the main cause [of poverty], down from 41 per cent in 1986; while those identifying laziness and willpower rose from 13 per cent to 22 per cent’. Labour supporters also increasingly take the view that welfare recipients are ‘undeserving,’ rising from 21 per cent in 1987 to 31 per cent in 2011. And nearly half of Labour supporters 74

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(46 per cent) believe that ‘if benefits were not as generous, people would learn to stand on their own feet’. The figure in 1987 was just 16 per cent.

This situation is exacerbated by the fact that 6.1 million people living in poverty now come from working households73, while 5.1 million live in workless households(excluding pensioners). Echoing this trend, the numbers living in poverty in the private rented sector has doubled over the last decade to four million.74

Positioning Labour as the party of work and the party that supports and rewards aspiration is a strategic necessity for Ed Miliband. He needs to send an unambiguous signal to the working poor –Labour’s traditional supporters - that there is no gilded cage for those who will not work. In his June speech setting out his ‘One Nation plan for social security reform’ he seemed to recognise the danger: “Our party was founded on the principles of work.We have always been against the denial of opportunity that comes from not having work.And against the denial of responsibility by those who could work and don’t do so.This country needs to be a nation where people who can work, do. Not a country where people who can work are on benefits.”

People like Mick Philpott. The father of six from Derby was jailed along with his wife Mairead earlier this year for murdering their six infant children in a house fire started deliberately to discredit his lover who threatened to take away some of the children she had with him, reducing the benefits he would be entitled to. Labour needs to be clear that paternalistic concern apart, the values of the Mick Philpotts of the world are an affront to the social democratic traditions of the welfare state, let alone the aspirant ones of modern Britain. Philpott is an extreme example, (nonetheless, one George Osborne shamelessly 75

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appropriated to build a wider argument against the undeserving poor) but that fact is simply lost on a disbelieving public.

They think he is typical of a new class of irresponsible welfare dependents who spend a life playing the system.

The left’s aversion to talking about the feckless and workshy - like Philpott – out of a misplaced sense of not wishing to stigmatize lifestyle choices - means it is not heard on other issues. Indeed, such terms are anathema to the liberal-left, but remain the terms of choice for many Labour voters; annoyed that they contribute to a system which others seem only to draw upon. The refusal to engage on terms familiar to the average voter sees Labour forced to overcompensate on other issues. The party should have felt able to come out against the government’s unjust and unworkable bedroom tax but has remained wary of doing so for months because it knows voters see the party as a soft touch on welfare overall.

The new Golden Rule on work

Addressing idleness was one of Sir William Beveridge’s founding tenets of the welfare state. He posited that work was the expectation and that providing for oneself and one’s family was a basic ingredient in making the welfare state affordable. It was long a sentiment that chimed with societal expectations, particularly with a working-class culture which prided work, effort and self-reliance. There was a basic acceptance that everyone had a responsibility to roll-up their sleeves for the common good.

The impact of Thatcherism in the 1980s, with high, structural unemployment, changed all this. Millions were left jobless with the decline of traditional industries and job-shedding privatisations. In turn, those millions were left bereft of prospects, unable to ‘get on their bikes and 76

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look for work’ as Employment Secretary Norman Tebbit infamously urged. There were simply no jobs to get in many cases and those that eventually came were lower status and low paid.

As unemployment soared, ministerial jiggery-pokery redefined the unemployment claimant count more than 30 times. Whole groups of jobless people were shuffled out of the unemployment column by the simple expedient of transferring them onto other benefits. A 55 year-old exdocker, for argument’s sake, would see his doctor to report the twinge in his back. The GP would be willing to support the docker’s application to switch onto invalidity (later incapacity) benefit, which paid more. Hence the numbers claiming it increased every single year between 1979 and 1997, peaking at 2.5 million.75 Yet as far as ministers were concerned this meant fewer people on the unemployment claimant count. Everyone was a winner. Except the taxpayer and the contributory social democratic model that underpins the welfare system.

However, throughout its time in office, New Labour catastrophically failed to popularise, or even normalise, the public’s attitude to recipients of social security by getting this figure down. There was a lot of talk about welfare to work and no lack of energy expended, with one “new deal” scheme after another. But the net result of a decade’s worth of economic growth and policy activism was that five million working age adults remained on benefits. If it were merely a case of that figure being irreducible then Labour’s position would be defendable, however the coalition has started to get that figure down, with the number of workless households now the lowest since records began.

Labour has a lot of rowing back to do to gain credibility on reforming the welfare state with a deeply sceptical public.

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The figures could hardly be starker. A YouGov poll commissioned by Uncut found that 54 per cent of voters believe ‘the policies of the last Labour government’ are responsible for welfare spending being ‘too high’. Just five per cent blame the ‘present coalition government’.

In response, Labour needs to view the future welfare state as more of a nurturing state. The jobless should expect an arm around the shoulder helping and supporting them into paid employment. But debilitating illnesses and disabilities aside, a new golden rule needs to be established: Adults should expect to be in paid employment for the vast majority of their lives. Work is normal. Work is expected. Everyone has to put their shoulder to the wheel. And the sustainability of our social security system – with its noble, collectivist values depends on this model prevailing. The polling here is equally telling. Asked which groups of welfare recipients ‘does not get a fair deal’, 32 per cent of voters opted for ‘pensioners’ with just four per cent citing ‘the unemployed.’

Again, there are signs Labour understands what needs to be done. The party’s compulsory jobs guarantee – funded by a tax on bankers’ bonuses - would place a limit on how long anyone who can work can stay unemployed.

Meanwhile the promise to restore the 10p tax rate (introduced and then rashly scrapped by Gordon Brown’s Treasury), will help incentivise take-up of low paid jobs.

As Ed Miliband explained:76

‘For every young man and woman who has been out of work for more than a year, we would say to every business in the country, we will pay the wages for 25 hours a week, on at least the minimum wage…The business would provide the training of at least 10 hours a week. And because it is a compulsory jobs guarantee, young people 78

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will have an obligation to take a job after a year or lose their benefits. And we will do the same for everyone over 25 unemployed for more than two years.’

Likewise, Labour is exploring how to enshrine the contributory principle in the benefits system, rewarding those who pay in and returning it to a true system of social insurance. As shadow welfare secretary Liam Byrne has suggested: ‘...there are lots of people right now who feel they pay an awful lot more in than they ever get back. That should change’.77 (Byrne goes as far as suggesting letting councils give priority in social housing allocations to those who work).

While the state’s role has, of course, to be an enabler, supporting people into work, it also has to be, in the last resort, a cajoler. Put bluntly, the taxpayer is entitled to see the recalcitrant given a kick up the backside rather than an arm round the shoulder if they will not take up work opportunities and contribute to society.

Compulsion applies to business and the state too

The focus on supply-side measures in tackling unemployment has seen the issue of training and skills become paramount. Yet a whirl of policy activism throughout the New Labour years failed to address one of the fundamental problems: UK employers simply don’t spend enough on training their workers and too few young people leave full-time education ‘work ready’. Employers are quick to blame the quality of state schooling - and even the moral fibre of young Britons. Yet they have been in the driving seat for a decade via the sector skills councils, charged with creating an employer-led skills system.

The truth is that companies have been given ample rights here, but often evade their basic responsibility to pay for the training of their own employees. Indeed, the 79

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Commission for Employment and Skills says a third of employers spend nothing on training.78 The only remedy which is fair to all employers is a compulsory skills levy of some sort (already in place in construction and parts of the creative industries) and a policy Labour has shied away from for too long.

It cannot be the job of the state to underpin the failings of a significant minority of employers while simultaneously heaping responsibility for paying for the nation’s skills on the majority of responsible employers. The problem with paying for a proper skills system is a classic example of Ed Miliband’s much maligned dichotomy between ‘producer’ and ‘predator’ capitalism.

If employers should be picking up the tab in terms of skills, the government should be playing a bigger role in paying for childcare. It is now a staple requirement of a workcentred welfare state. Existing state support in meeting childcare costs is hopelessly inadequate for full-time working parents amounting to just 15 hours a week for 38 weeks, requiring working parents to pay for expensive additional wrap-around care and expensive additional cover for the remainder of the year.

The Daycare Trust and the Family and Parenting Institute’s Childcare Costs Survey for 2013, shows nursery, childminder and after-school club costs all rising at six per cent a year, more than double the rate of inflation. A nursery place now costs 77 per cent more in real terms than it did in 2003 while earnings have languished.

This needs to be a priority area for Labour, ensuring the welfare state retains a strong offer for the non-benefit claiming striving class. A growing gap between those who draw from the benefits system and those who pay for it will be disastrous. Extending the scope of childcare support in the future needs to be focused explicitly on 80

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working parents, making childcare an in-work benefit. In this instance, Labour should not get hung up about extending its universality and instead channel support to those struggling to make work pay. It would be a powerful symbol not only that government was on the side of hardworking families but that means testing – or “targeting resources” - was done with a clear purpose: supporting those willing to work.

Young people are also entitled to some guarantees from the state. The number of so-called ‘NEETs’ (not in education, employment or training) still stands around the one million mark79; the product of a scandalous failure of mainstream education to funnel young people into ‘the next thing’, whether that is work, training or continuing education.

There are also unacceptably wide regional variations. 8.3% of 16-18 year olds in the North East are not in education, employment or training while just 5.3% in the South East are.80

The last Labour Government’s Future Jobs Fund (FJF) - a one billion pound pot to subsidise jobs for the young and long-term unemployed, is exactly the type of scheme that needs resuscitating to help tackle this problem. Hastily scrapped by the current government, the FJF was later proven to have provided a pathway into sustained employment for many of its participants, with the Department of Work and Pensions own analysis showing the scheme helped many of them into unsubsidised employment.81 Labour could do worse than pick up where it left off and reinstate a super-charged version of the FJF to create 1m new jobs, perhaps more narrowly focused this time on parts of the country where employment prospects are bleakest .

Based on the previous cost per job for the FJF, this would cost upto £8bn. But for Labour, there can be no greater 81

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priority and the funds identified by Jonathan Todd in chapter 2 allow us to make this choice, specifically by rolling child benefit into the tax credit system (£2.4bn), capping maximum ISA holdings at £15k (£1bn), levying a bankers’ bonus tax (£2bn), improving the sharing of services across Whitehall and local authorities (£0.5bn) and reforming public sector contracts (£2.1bn of £5bn from this source).

If all that is left for unskilled young people is a declining pool of badly-paid, low-value roles, competing against immigrant workers on cost – brutish jobs for British workers, if you will - then we have gone badly wrong and should not be surprised by the social and political fallout that will inevitably follow.

Tackling the distribution of work

Tim Leunig had a point. Well he had half of one. The author of the infamous Policy Exchange report Cities Unlimited back in 2008 argued that too many northern towns and cities are economically unviable as they stand and we should stop trying to resuscitate them. A decade’s worth of pump-priming regeneration via the regional development agencies (RDAs) had failed to address the overall gap between London and the south east and the rest of the country. Instead, we should expand greater London and cities with real economic potential like Oxford and Cambridge.

Of course, it’s not that the RDAs failed to improve regional economies in the north and the midlands – they did. It’s just that London improved too – and at a faster rate. Since 2007, London’s GVA has increased by 12.4 per cent, double that of the next best performing region, the south west, which managed 6.8 per cent growth, while the capital grew at three times the rate of the north-west, Yorkshire and Humber and west midlands.82 82

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Meanwhile, analysis by the TUC points to a “jobs gap” between the number of people currently employed minus employment levels on the eve of the recession in December 2007. Its analysts reckon we have 158,000 fewer jobs across the country as a whole but employment is actually up 122,000 (+3.3 per cent) in London. The north-west and Yorkshire & Humber regions, meanwhile, have lost 60,000 jobs a-piece.83

Addressing this crippling and unfair imbalance requires nothing short of a Marshall Plan for parts of the country that have become jobs deserts. Rather than encouraging people to migrate south, we should see jobs and investment move northwards. This should be done by relocating whole areas of public sector activity to the provinces. London and the south east of England prosper on a sea of public cash, yet the concentration of public sector jobs in the capital is wasteful, unfair and inefficient.

Labour should dust off Liam Byrne’s 2009 paper, Smarter Government, and embrace its plan for wholesale relocation of government departments and quangos from London and the south east. The transfer of five BBC departments to Salford shows this can be done painlessly. Indeed, apart from essential journalistic functions, why not move the entire BBC to Salford? Rebalancing the economy with a fairer allocation of public spending and jobs will relieve pressures on London and the South East, particularly on the housing market, and improve the quality of life for people across the board.

Conclusion

Labour is already beginning to make the case for a tougher approach to work and welfare but often does so in a whisper and behind a cupped hand. Liberal guilt softens the impact of the party’s approach and there is a risk of a 83

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dangerous gap between Labour’s residual paternalism towards welfare claimants and the altogether harsher centre of gravity of the electorate overall – and, noticeably, Labour’s own voters.

The party needs to carve out new territory around the concept of developing a nurturing state, one that rewards effort and supports those trying to get by, but challenges those who take out more than they have ever put in, in order to uphold the integrity of the system. Re-establishing this as a golden rule is vital for the system’s long-term preservation.

The deal could be that there are stronger minimum guarantees – with Labour perhaps banning zero hours exploitation and establishing a labour market abuses body to police minimum wage and employee rights compliance - forming a tough new approach, based on an unyielding first principle about the desirability of work. A somethingfor-something offer which gets the party a hearing when it challenges this government’s more arbitrary impulses on welfare reform.

Kevin Meagher is associate editor of Labour Uncut. He is also a communications consultant and formerly a special adviser to Labour's Northern Ireland Secretary Shaun Woodward. Kevin is a former Labour press officer and long-standing party activist

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7 1m new homes in the areas people want to live

by David Talbot Housing – for Labour it often seems like the cause of, and solution to, all our problems.

Housing is the miracle policy that can solve the country’s ills: increasing home ownership, reducing rents and prices, boosting jobs in construction – the benefits are impressive.

So impressive in fact, that it’s a wonder why everybody isn’t seizing these benefits.

Which is the first clue that the reality is more complex than the debater would have you believe. How to fund building? How to ensure new homes are in the right place and of the right quality? These questions are not amenable to easy answers and are consequently frequently glossed over in debate.

But for Labour to have a credible policy on housing, it is precisely these difficult questions we need to address. It is not enough to simply join in the chorus of “build, build, build.”

Before these key issues can be addressed though, there is a preliminary question that needs to be examined: why, after thirteen years of a Labour government and unprecedented spending, do we not have enough homes?

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Labour’s record: Mixed but better than commonly perceived

It has become a truism in political commentary that during their time in office, Labour failed on housing. But a fair assessment of Labour’s record must begin by acknowledging that, amid its mistakes, the party managed some notable and lasting achievements.

Labour’s 1997 election anthem declared “Things can only get better”. And for many people, on housing, they did.

Labour deserves credit, for example, for one of its earliest pledges in its fledging days that forced landlords to bring social housing up to a “warm, weatherproof and with reasonably modern facilities” standard through its Decent Homes Programme.

Labour also ended the decades-old tradition of keeping social and private housing apart. Private sector annual build rates were higher every year under Labour than the previous Conservative administration. Homelessness was reduced by two-thirds. £19bn was pumped into improving social housing. Home ownership increased nine per cent.

All very real achievements of which we should be proud.

But the negatives are equally easy to reel off. The nation’s social housing building programme plummeted under Labour, leading to a sixty percent increase in people on housing waiting lists.

The failure to foresee skyrocketing house prices, with the consequence that owning your own home became but a distant dream for many.

In fact, the story of the last Labour government on housing is told in three acts.

At first, Labour did little on housing, focussing its attention on other issues.

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Later in the government’s life, though it became clear that housing was becoming a pressing issue.

The Treasury grasped the nettle and duly carried out a major review of housing supply. The conclusions, published in 2004, highlighted the link between housing and the economy. The authors urged planning reforms, a major increase in house supply and greater new social housing investment.

The government snapped into action and agreed to an annual target of 200,000 homes the next year, but a month after Gordon Brown became prime minister in July 2007, the stakes were raised in a new green paper.

A fresh target was set to accelerate annual house building rates to 240,000 homes a year by 2016, plus an ambition to see 3 million new homes created by 2020.

A new superagency, the Homes Community Agency, was set up to lead on social housing, and a network of new ‘ecotowns’ were supposed to create up to an extra 100,000 homes.

A great deal was achieved. The house building stats that year fulfilled Labour’s housing ambition: 224,680 homes were built across all sectors – the highest figure since 1981.

It was also the first year for at least two decades in which the number of social homes built outstripped those lost through right to buy.

It seemed that although the Labour government might have been late to the party, it was finally to cranking into gear on tackling the shortage in housing supply.

But then the financial crisis hit.

Banks stopped lending; developers stopped building; home building rates plunged to historically low levels.

Housing starts plummeted through 2008 to an all-time 87

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historic low of just 37,380 completions in the first quarter of 2009. This is, to a slightly lesser degree, the political climate in which the housing sector still operates in.

The challenge today: numbers, numbers, numbers

The legacy of the financial crash and its impact on house building is that the debate is now almost solely about the number of houses built.

Well over 200,000 new homes are needed every year to meet demand, and yet not even a 110,000 were completed in the last financial year. It is, as is uttered by many a politician, a housing crisis.

At Labour’s annual conference in Manchester in 2012, Shadow Chancellor Ed Balls grabbed headlines and applause when he signalled that Labour was back in the house building business.

Labour would use a one off £3bn windfall from the sale of the 4G mobile phone spectrum to develop 100,000 “affordable” homes, he announced.

But the plan calculated with the help of the National Housing Federation was, frankly, more symbolic than a firm policy commitment.

As it turned out, the sale of 4G spectrum delivered nowhere near the expected yield, so even the vague policy commitment was moot, but at least a direction had been set.

The announcement itself was political astute: a promise now by a party in opposition unable to act on it. It made a clear statement about Labour’s intentions, but committed it to absolutely nothing. Rather, it was a short-term answer to the much bigger question of solving the desperate housing need.

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Thus in practical terms, for all the talk, Labour still remains without any firm commitments on increasing housing supply over the course of the next parliament, let alone in the long term.

Labour’s approach: step one, a practical annual target of 200,000 new homes a year

In 2011-12 total overall new housing completions stood at just under 146,000. From the peak of private sector house building in 2007 it has collapsed from 192,000 to just 109,000 last year – a fall of 57%.

Given the desperate desire to significantly increase the supply of new homes, but the legacy constraints that cripple this oft-repeated pledge, a realistic target for a 2015 Labour government would be to adopt a target of building 200,000 homes per year.

A million homes within the parliament of a Labour government: the pledge card pretty much writes itself.

In practice this means an increase of roughly 60,000 per year driven by government intervention.

But how to do this.

Two key tools are available to a future Labour government: a direct increase in capital spending by the government and moderate accounting reform to enable local authorities to expand their building programmes.

Increased capital spending

Analysis by Shelter estimates that a 50,000 annual increase in housing supply over a parliament – 250,000 in total could be achieved by a £12bn capital injection from government. This seems a more credible costing than the pledge made by Ed Balls in 2012 to deliver 40% of the Shelter total on one third of the money.

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But how do we find the funds?

One of the approaches to financing house building that has gained traction within the Labour party within the past months is the idea of a transfer of government spending from housing benefit to building social housing.

On the face of it this offers a neat solution: switch funds away from subsidising landlords and their existing properties, to build the new homes that increase supply and reduce market rents.

Simple.

However, there is a critical flaw in this approach.

Building new homes takes time, so it will need to run parallel to maintaining current tenants in social housing.

There is no spell to be cast to magic up tens of thousands of completed homes in a trice, so the switch in spending from rental to build cannot be achieved for some years.

Meanwhile, the problem of how to fund the immediate increase in building remains the same.

Rather than add a politically unwise extra £12bn to government debt, the Uncut approach would propose financing this intervention through savings and ringfenced revenue raising measures.”.

The detail of these measures has been set out by Jon Todd in chapter 3. Specifically to fund an increase in housing, the savings from removing the ring fences around housing and education would be used (£4.9bn), sale of government land assets (£2bn), flexible rents for social housing (£1.4bn of the £1.5bn available from this source), the extra revenue from a crackdown on tax avoidance (£2bn), and the funds raised from a mansion tax (£1.7bn).

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Allocating some of the savings from education makes sense because housing is an essential component in supporting health and creating an environment where children can learn. At the 2010 general election, the then health secretary, Andy Burnham made the valid point that by committing to ring-fences for health and education, the Tories would potentially harm health and education outcomes.

Many of the problems that health and education services need to deal with are exacerbated by bad housing. Unless a holistic approach to addressing peoples’ needs is adopted, addressing causes as well as symptoms, the cost to individuals and the Exchequer will ultimately be greater than without the ring fences.

In terms of land asset sales, there is a huge amount of land owned by central and local government. Local authorities own 11,331 acres of brownfield land, which amounts to capacity for an additional 87,000 houses, worth £13.4bn based on median house prices84 while the MoD alone owns £93.4bn.85 To raise £2bn from land sales to contribute towards a new housebuilding programme would seem a conservative estimate.

Research from the Centre of London86 suggests that allowing local authorities to choose between implementing flexible rents or fixed tenures for social housing could raise significant funds: extrapolated across England this could be £1.5bn annually. Mandating local authorities to reinvest these funds in housing would contribute towards the capital injection needed and give each local authority a financial stake in the new house-building programme.

In the case of tax avoidance, this is a visceral example of how valuable services, such as housing, are starved of resources through the actions of unscrupulous elites.

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raised from a crackdown on tax avoidance to fund housing.

Rather than the cost of tax avoidance being portrayed a general loss in government funds, tying it to housing defines a specific demand from voters that is being thwarted by companies and individuals playing fast and loose with their taxation. It would make the case against tax avoiders more real for the public and the priority greater, building support for more active anti-tax avoidance action.

And a mansion tax will not only raise valuable revenue, but politically it will draw a clear dividing line between Labour and the Tories on priorities. It is a test of whether we really are in it together: should those in the super-rich league with homes over £2m contribute a little more to help fund an improvement in housing for the many?

For the Tories, who are opposed to the mansion tax, it would force them to side with the privileged and rarefied elite, against the interests of middle Britain. Most pointedly, it would define the Tories as the party opposed to broadening home ownership.

For Lib Dems, such a policy would present a dilemma – the mansion tax is after all one of their favoured proposals.

And most Liberals would agree with the wisdom of using the proceeds to fund an expansion of housing. This issue could potentially drive a wedge between the Lib Dems and the Tories in an election campaign, evening the contest for Labour and offering some common ground for discussion in the event of a hung parliament.

Funding the capital injection in this way would achieve the twin goals of avoiding an increase in the public debt and underpin the party’s political attack on the Tories.

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Accounting reform for local authorities

It is one of the nostrums of housing debate that local authorities just need greater financial freedom to borrow on the markets to fund housing. For Labour it’s an attractively easy option–no increased taxes or even deeper cuts.

But in a political climate where Labour’s reputation on borrowing is toxic, there are significant dangers. The Tory attack on Labour’s addiction to debt is as predictable as it would be damaging.

There are also practical concerns. It was excessive borrowing to fund property development that led to the crash, and the recent bankruptcy of Detroit reminds us that local government is not immune to the consequences of living beyond its means.

That said, there is a case for modest reform of the accounting procedures which govern local authorities. This reform would not transform housing supply, but would enable a small increase to contribute towards the Labour government’s overall target of 60,000 extra homes.

There are two elements to the proposed reform. The first is optimisation of borrowing to build new housing within existing caps across local authorities. The second is to index link the borrowing caps.

Optimising borrowing to liberate lending capacity within existing caps

Currently there are some local authorities that have the capacity and desire to borrow and build in excess of the amount allowed by the cap. Likewise, some authorities fall naturally below their full amount under the terms of the cap.

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work together. Those with extra cap capacity could trade with councils seeking greater borrowing options.

This would keep the aggregate borrowing total within the cap but ensure that the full scope for borrowing to build was used.

Index linking borrowing caps to maintain real value

The second accounting reform would be to index link the borrowing caps. At the moment they are set in nominal terms. This means inflation erodes their real value, ultimately reducing the number of homes that can be built. Index linking would ensure local authorities ability to borrow and build keeps pace with inflation.

Shelter estimate that the impact of these minor reforms to local authority borrowing would add a further 12,000 a year to house building.

When combined with the 50,000 increase directly funded by government, these simple reforms mean Labour will be able to promise that on its watch 1m new homes will be built.

Is 200,000 enough?

There are several other options available to boost housing supply. For example, plans to build new ‘garden cities’, more radically reform local authority borrowing options and relax planning laws would all prospectively add tens of thousands to the annual housing supply.

But while they might make for good housing policy, they would be electorally toxic for Labour. The travails of the Tories in their attempts to change planning law is indicative of how easily the political weather could blow an aspiring Labour government off course.

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The target proposed here of boosting building by 60,000 per year, to give an annual increase of 200,000, does not meet the oft-quoted minimum requirement of 240,000, it is true. But it does represent a major improvement on current projections, is significantly more than the Tories are proposing and most importantly, is politically deliverable.

Once in office, a Labour government could look again at options to increase supply, but as an opposition, the scope of what can be proposed should be limited by what is electorally possible.

Labour’s approach: step two, ensuring the new homes are where people want to live

Although the current political debate on housing is fixated on numbers, funding an expanded housing programme will not be, on its own, sufficient to deliver the increase in housing supply needed.

The estate agents’ maxim ‘location, location, location’ applies to government programmes just as much as private sales. One of the constant challenges for housing policy is how to build enough homes in the places people want to live.

There are signs in house price inflation that demand is already over-heating in the south east, whilst the housing market suggests just the opposite, over-supply, in areas such as the north east.

So the question that needs to be answered is how can enough homes be built in the south-east?

It was the former MP Nicholas Ridley; the most freemarket of Margaret Thatcher’s many environment secretaries, who in the late 1980s brought the acronym ‘Nimby’ into the lexicon of political discourse. In a elegantly devastating summary, Ridley accused middle95

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class opponents of his development plans of “crude Nimbyism”.

His judgment was that such protesters were putting their own selfish concerns, cloaked in environmental pieties, ahead of the good of the wider public. It was a judgement based on experience – embarrassingly he himself was revealed as opposing the development of new homes in his beautiful Cotswolds constituency.

This hypocrisy is not unusual. In polls 61 per cent of people believe more affordable homes are needed, but only 39 per cent support more homes in their local area. An incoming Labour government is not going to be able to wave a magic wand and solve this.

But it should be able to ameliorate it.

In the case of targetting building in the south east, there are four options to enable building to rise: • Expansion of existing towns

• Minor expansion onto greenbelt

• Optimise use of land held by public authorities

• Improved co-operation between public authorities and developers • Consistent application of best practice in planning

Expansion of existing towns

New settlements and edge-of-town development will be needed if the target is to be met.

Our towns and cities offer a huge potential for housing development and renewal. Former commercial or industrial land can be brought into housing use, and some areas of poor quality housing or poor use of land could be developed more efficiently.

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The scale can range from a scattering of small sites to large areas where redevelopment can not only contribute to housing goals but will make a major difference to the quality of life of the local populace.

This will help meet local housing need. As a bonus, contrary to popular belief, high-quality developments can increase the value of pre-existing properties. As Shelter have calculated, allowing small towns to expand by a mere 5% would lead to an increase of approximately 258,000 new homes.

Minor expansion onto green belt

As a principle, brown field land should be developed first and Green Belt protections should rightly remain.

However, the merest suggestion of liberalising this country’s antiquated planning laws is usually so divisive as to scare politicians off.

But the fact is that present Green Belt land was designated in the 1930s. In certain major conurbations it is actively forcing developers and local authorities to stretch already thin capacity of city centres to absorb more housing.

The political driver is clear. Green Belt land is a political sacred cow because 63 per cent of the public think that a quarter or more of the country has now been concreted over.

They are wrong. The vast majority of land in England remains either green space or water.

Just a tenth of England is developed, of which almost half is domestic gardens. Buildings cover less than two per cent of the land and transport infrastructure a further two and a half per cent.

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land designated as green belt has more than doubled over the past decades, rising from 721,500 square hectares in 1979 to 1,639,540 square hectares in 2011.

This is not to endorse the immediate tarmaccing of Surrey.

Rather, Labour ought to encourage local councils to use already existing laws to review and tailor the extent of green belt land in their local areas.

This could involve swaps where green belt land used for development in one part of the town is balanced by an extra green belt allocation in another. In the 1980s, Cambridge council used this approach to enable development of the science and technology industries, expanding green belt in the north and south of the city to balance increased development in the centre.

Optimise use of land held by public authorities

As part of the remit to allocate suitable locations for housing growth, Labour should also force government departments, local authorities and other public bodies to publish an audit of all land and property they own, and to then devise a strategy for the disposal of all unused and surplus sites.

A government report published in May 2012 detailed that there were sites that could hold 102,430 homes across at least 14 public bodies. The coalition government has already allocated a third of public land for an expected total of 100,000 new homes and if Labour comes to office it should see through this initiative. As a Labour government, though, we should add the caveat that any public land sold for residential purposes should include an expectation that 35% of the developed homes should be for affordable housing.

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Improved co-operation between public authorities and developers

If the requisite number of homes is to be built in the south east, a new more co-operative relationship between government, local authorities and developers is required.

It means Labour will have to temper its language towards developers, such as Ed Miliband’s call earlier this year to penalise house builders who fail to build on land with planning permission. Such rhetoric plays tough to the media and the public, but highlights a fundamental flaw in Labour’s understanding of planning. House builders, like any company, do not actively seek to tie up their money, and debt, in a land asset any longer than is strictly necessary.

Lesser, and easily available options, would be to require them to pay council tax or a “land tax” on undeveloped areas.

For local councils, the remedy is even simpler; reduce the expiry date of planning permissions. At present developers of all scale in general have three years from the date it is granted to begin development. Reformed planning application guidelines should state that the expiry date is shorter, with persimmon granted on a readily agreed – by all consultees – project completion date.

Consistent application of best practice in planning

The planning system is all too often the target of blame in explaining why housing is not built in the areas that people want to live. It’s too bureaucratic, there are too many regulations, it’s controlled by NIMBYs – the list goes on.

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in which it is used. For the multiple failures ascribed to a broken system, there are successes where the participants have made it work.

This best practice in use of the planning system needs to be applied much more widely. In the next chapter, Helen Hayes outlines the approach to planning that could change what is perceived to be a barrier to building into an enabler of the right type of development.

The politics of housing

A target of 1m new homes, principally in the south east, would clearly differentiate Labour from the Tories.

Since the 1980s, the Tories have politically owned housing.

Right to buy defined them as the home owners’ party.

George Osborne’s latest wheeze with Help To Buy, is in one sense a retread of the old 1980s routine when council homes were sold at knock-down prices.

As with Right To Buy, Help To Buy subsidises demand, lowering the effective price paid by buyers. Despite multiple warnings of the housing bubble it is likely to inflate from organisations as diverse as the Institute of Directors and the TUC, Help To Buy will likely reap some short term political rewards.

All home-owners like to see the value of their property rise.

It engenders a sense of financial security (even if it is illusory) and helps change the householder’s mindset so that spending a little more generally is not seen as such a risk.

A politically bold pledge to boost the supply side of housing would help level the playing field for Labour.

Within the broader political debate, a fiscally prudent Labour party with a fully funded pledge to build 200,000

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homes a year would present a stark contrast to the subsidised debt that George Osborne is peddling on housing.

As with all new policies, the impact would not be immediate. Help To Buy will be popular with buyers and the terms of the debate will take time to shift. But a clearly costed pledge to build 1m homes over the course of a parliament will give Labour a credible alternative to the government’s policy and secure the political high ground for when the inevitable happens and Help To Buy has to be curtailed because of spiralling house price inflation.

At that point, when the sugar rush of subsidy is cut off for aspiring home owners, the public will think again about the Tories and Labour’s critique and alternative offer will begin to truly resonate.

David Talbot is a political consultant

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8 How Labour can plan to win on housing and growth

by Helen Hayes Planning is the mechanism by which we manage physical, economic, environmental and social change. Much has been said by coalition government ministers about the planning system as an impediment to growth, but this rather misses the point.

The planning system can be efficient or inefficient – as in all areas of government, there should be no excuse for poor performance. However, the more important issues concern the values which underpin the system; the physical, social and environmental outcomes which we want the system to deliver.

There is an opportunity to define a One Nation approach to planning. This can play as important a role in delivering the homes that we so badly need as proposals to unlock the necessary finance.

What is the point of planning?

A properly administered planning system establishes priorities at national and local level. It provides the framework within which both developers and objectors can be heard. It enables technically competent decisions to be made in an open way.

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communities and investors that allows development to take place and the environment to be protected and enhanced.

When it works properly, planning ensures a fair basis for decision making. When the planning process fails, it becomes a lightning rod for controversy and a recipe for blight, uncertainty and delay.

Both planning and the professionals who operate it are much-maligned. For many, planning’s main achievement is in creating the least popular buildings, spaces and housing estates of the post-war building boom.

But good planning is a discipline with Labour values at its heart, and it is a field within which Labour has some proud achievements.

Labour’s record: Much to be proud of but an increase in complexity

Planning has been at the core of Labour policy for decades.

In 1945, the establishment of new towns, green belt and national parks under the Attlee government were practical measures to address the post-war housing crisis whilst providing appropriate protection for the countryside.

More recently, the last Labour government confronted the challenge of years of Tory neglect of our physical environment.

I moved to in 1996 when many parts of the city had an air of general dereliction about them – high vacancy rates on the high streets, crumbling streets and gap sites awaiting development puncturing all of the major routes.

Responding to this, Labour established the highly authoritative Urban Task Force chaired by Lord Rogers. On their recommendations, Labour then prioritised urban

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renaissance, successfully reversing the depopulation of city centres; and recognised and resourced the importance of good design in delivering successful, sustainable places.

Labour led the way in promoting urban renaissance, resourcing and prioritising design quality through CABE and the Planning Advisory Service. They also introduced the innovative 2008 Planning Act, establishing a new procedure for determining applications for nationally significant infrastructure projects in a timely, transparent and open way, a piece of legislation which is highly regarded by both the industry and local communities.

Inevitably, there were some issues.

The planning system became too complex, perhaps a reflection of a drive to control too much from the centre.

And some areas, notably the imposition of regional housing targets lacked sufficient direct democratic accountability while housing supply patently did not grow at the rate needed to keep pace with demand.

But overall, the country was undoubtedly in better physical shape in 2010 compared with 1996.

The challenge today

In 2013, we face challenges. Some of these are similar to those of 1996 – the impact of both the recession and the onward march of online shopping are driving up vacancy rates on our high streets. Other challenges are new, chief among them the need to deliver hundreds of thousands of homes each year to meet a rising demand from a growing population that is living longer and increasing household formation.

Getting this right will be a central test for any government.

Success will alleviate the crisis of overcrowding,

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affordability, insecurity and homelessness experienced by millions of families and individuals. It will play a major role in stimulating economic growth and save billions from the housing benefit bill.

But this is a complex problem. There are no easy solutions, despite the many pithy soundbites available.

No government can deliver on its own, and an effective solution will be to build a complex set of partnerships with local government, the house building industry and communities across the country.

Meeting this challenge is in part about the strategy for unlocking the finance to invest in new homes. But it is also about the leadership, strategic planning framework and governance which can deliver the decisions about what and where to build efficiently and in ways which will stand the test of time.

The prospect of change to our environment always provokes an emotional response.

There will always be people who have interests compromised or impacted by new development. Some people will fear that change will result in the loss of buildings, spaces or qualities which they value. Some people may be disrupted and inconvenienced.

And some people will oppose change simply because it is change.

Sometimes even in areas where the physical fabric has become so bleak that it is impossible for most people to imagine its retention, there are still those who will argue that it would be best to retain the status quo.

Accepting this, it is still important that change takes place with the support and approval of the stakeholders involved as far as is possible.

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So as we confront the biggest housing crisis since the postwar period, Labour’s approach to planning should be underpinned by three core beliefs.

First, that the core role of the planning system is to broker the gap between private interests and collective community need.

Second, that there is a direct link between good planning – both plan-making and decisions about individual projects - and economic growth.

Third, that community engagement is the arena within which informal consent can be sought and gained from communities for significant local change.

If it is undertaken in a transparent and accountable way, community engagement can play a key role in reducing risk in the planning process by building consensus, reducing opposition and providing an accountable basis for decision-making.

The Tory approach will not work even on its own terms

The coalition’s attempt to remove regulation from some aspects of the planning system as a short term stimulus is misguided. It trades off small short term benefits against long term consequences. The small number of short term construction jobs which could be generated by the relaxation in permitted development rights will be far outweighed by the long term consequences of unpopular, divisive schemes which, once they are built will be here to stay.

This approach may even fail to deliver even on its own terms. People will resist poor quality, inappropriate development which has not been the subject of proper democratic scrutiny. The resulting campaigns and legal 106

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challenges can easily frustrate the process.

Consequently, our approach needs to recognise the urgency of decision-making for housing and infrastructure delivery, but must also produce good decisions which balance quantity with quality, value with affordability and, above all, ensure today’s delivery does not become tomorrow’s regeneration challenge.

Deregulation is only a route to short term opportunism, not to long term sustainability. Even for stimulating investment in the short term, it is not the only way.

There is considerable evidence of the positive role which temporary and meanwhile interventions – pop-up shops, markets, events – can play in changing perceptions of a place, stimulating interest and building market confidence.

The importance of public sector leadership in setting out a clear vision and strategy for the future, giving certainty to the market and reducing risk is also well-understood. And the role which local authorities and other public sector organisations can play in contributing their own assets or taking a stake in development is also significant.

The Tories have made the old mistake of thinking the only policy worth pursuing is deregulation. It has blinded them to the real issues which require action.

For example, there is an abiding problem in the mismatch between the timescales required for the planning and delivery of new homes, jobs and infrastructure, and the electoral cycles within which decisions are taken.

The Infrastructure Planning Commission, introduced by Labour in 2008 has helped to depoliticise planning decisions relating to infrastructure of strategic importance, but there is a need to consider further the ways in which long term planning for infrastructure and the locations for

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new homes and jobs can withstand the local political process. John Armitt has made a very helpful contribution to the debate around infrastructure planning, proposing a National Infrastructure Commission to produce a 30 year National Infrastructure Plan on a 10 year cycle.

There is also a need to consider new ways of planning for housing growth which can avoid proposals being used to fuel election campaigns, in a situation where some local authorities face elections in three out of every four years.

Any measures which remove important decisions about the principle of development, whether for infrastructure, homes or jobs, should be accompanied by a corresponding framework to ensure that the spatial implications of these decisions are carefully considered, and that local processes for considering detailed design and implementation, drawing down the benefits of development for local communities and for compensating those who are materially affected are as sensitive, transparent and wellresourced as possible.

Labour’s new approach: Proper engagement and democratically accountable structures

There are five steps Labour can potentially take to meet the challenges we face: 1 Fully engage communities in planning decisions

2 Agree and articulate national planning priorities

3 Manage the agreement and delivery of housing targets

4 Ensure there is sufficient capacity in the planning system 5 Hold a public conversation about the communities we want

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1. Fully engage communities in planning decisions

A planning system which is capable of delivering the housing, infrastructure and jobs that we need must be based on genuine collaboration with the communities which will be changed by it.

Getting the engagement process right requires resourcing, but can help to ease decision-making, ensure fairer outcomes for the communities concerned, reduce the risk of opposition and challenge and deliver more sustainable places. Planning practice should seek to embody the following principles of good engagement: • Be inclusive and acknowledge controversy

Often there will be individuals and groups who have held strong views against development in a particular neighbourhood for a long time. Ensuring that they, along with others more sympathetic to appropriate development, are involved in an inclusive and transparent process will help develop fairer outcomes.

Typically, those who are supportive of change are less vocal than those who oppose it. It is therefore important to devise accessible, enjoyable, convenient methods of engagement which will appeal to as wide an audience as possible. This should include but not be limited to young people, women, minority communities, local businesses and possibly even those who may be the future residents of a new development.

Dissenting voices often have something valuable to say.

Inclusive, careful listening can only enrich the design process.

• Be clear about the fixes and the variables

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decisions which have already been taken and aspects of a development which cannot be changed. Consultation processes should be clear about the fixes and clear about where there is scope to influence change in order to remain credible.

• Provide high quality background information

Consultation is most effective when it is informed by useful, rigorous information on constraints and context.

There is no point asking residents where they would prefer new development to take place without that discussion being informed by an understanding of technical constraints (flood risk, transport infrastructure, environmental protections, heritage designations), policy priorities and market viability and funding issues.

Effective communication, with relevant, clearly presented information will increase the chance of consensus.

• Warm up slowly, build a dialogue

Strategic planning is about articulating, delivering and managing change, and change is often challenging for people. It is a journey, on which we must accompany those affected. A consultation process which invites input from day one, when initial proposals are under development, then builds to the presentation and explanation of the final, preferred option, will have a much greater chance of a successful consensus-building outcome than a brief exhibition of a completed proposal.

People need time to adjust to the idea of change, to formulate and articulate their priorities and concerns, and to see the ways in which their views are informing the overall plan.

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• Provide feedback and justify the final decisions It is important to recognise that local residents will volunteer their time to participate in consultation exercises, and it is important that participants feel that their input is valued and has made a difference. If a process is run in a rigorous, transparent and accountable way, most often people will respect the outcomes of that process even if they disagree with them.

The best examples of consultation and engagement involve a genuine dialogue between local residents and businesses who know their neighbourhood inside out, professionals who are able to understand the way in which the place works and suggest potential interventions, and decision makers who will ultimately determine the strategy.

Often, perhaps always, it will be impossible to satisfy everyone’s aspirations. However, an open, inclusive, accessible process which can demonstrate broad and diverse engagement from across the local community can benefit the outcome and play a hugely significant role in building confidence and credibility to underpin the formal planning process.

2. Agree and articulate national planning priorities

In the same way as the Attlee government tempered the delivery of large numbers of new homes with new protections for the countryside, there is a need for debate about the broad locations for development, the form it should take (urban extensions, new towns or villages, urban infill), the role which town centres and High Streets will play, and the protection which is given to the assets we value the most.

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Ireland already have National Spatial Strategies, as do many European nations and they can play a key role in ensuring spatial efficiency, by joining up the locations for new housing development, for example, with transport infrastructure, energy networks and employment investment. They can also play a valuable part in protecting the countryside.

The challenge would be to deliver such a strategy without imposing it in a top-down way, and without it becoming overly complex and cumbersome. The targets and broad locations which appeared in such a strategy should be democratically accountable at a local level.

A National Spatial Strategy could have an important relationship to the National Infrastructure Plan proposed

by John Armitt, in understanding and articulating the spatial implications of infrastructure needs, and providing a basis to ensure that the impact of decisions of national importance are well considered at local level.

3. Manage the agreement and delivery of housing targets

Physical development is an easy political football. A major source of delay within the planning system is the highly sensitive nature of many decisions about new development and the window of time between elections in which decisions can be taken without direct political consequences. In some local authorities, this is as short as a year, which in the timescales associated with physical development is insufficient for schemes to progress.

Within the plan-making process, there is clear evidence that the ‘duty to co-operate’ is proving difficult for many local authorities. A number of Local Plan Core Strategies, including that of Coventry City Council, have been halted as planning inspectors conclude that the duty has not been fulfilled.

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We should, therefore, think about the scale at which decisions about housing numbers are taken and a more effective articulation of the process for decision-making at this scale.

Would it, for example, be appropriate to group local authorities together within broad housing market areas?

This parallel model to Local Economic Partnerships, could take strategic decisions about the broad distribution of housing numbers on, for example, a ten year basis.

Such decisions could then feed into the National Spatial Strategy.

Within these areas, should the ‘duty to co-operate’ become a ‘requirement’ with clear outcomes which need to result from it? Could there be incentives for local authorities to reach cross-party agreement on a commitment to deliver new homes?

As long as the debate at local level focuses on the narrow, binary question of whether to build or not, we will fail to deliver the broader package of homes, jobs and infrastructure we need.

4. Ensure there is sufficient capacity in the planning system

While there are some excellent local authority planning departments, there are many which have been eroded and lack the skills, confidence and in some cases simply the capacity to respond to the urgency and complexity of the housing challenge.

Given the benefits which a well-considered planning system can play in delivering economic growth and addressing the housing shortage, engagement with the planning profession on an invest-to-save basis should be considered.

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There is almost certainly a case for more joint Local Plans.

These would enable the pooling of resources through the creation of a single team to produce and administer plans across more than one authority. There is also a need to evolve and improve the skills of many planning departments in supporting community involvement in the plan making process.

5. Hold a public conversation about the communities we want

We need a conversation about the detail of design – space standards, architecture, density, open space, community facilities, transport, parking, play facilities – to develop and articulate our shared understanding of the aspirations we hold for the communities which we will build.

This debate should also be structured and managed at an appropriate scale and could perhaps play a role in informing national priorities as well as local planning policy and decisions.

Labour has a good track record on quality and design, and we need to remember that the purpose of at least some of the red tape which the Tories are so keen to remove from the planning system, is to ensure that the decisions which are taken are well considered, subject to democratic scrutiny and can stand the test of time.

Conclusion

Delivering the homes and infrastructure we need could be as important for the next Labour government as education was for the last.

The urgency of the challenge and the long timescales associated with delivering physical development mean that post-election, Labour will not have the luxury of 2-3 years to discuss and reform the system - we will need to be ready to deliver.

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The five actions set out here offer a route to ensuring prime minister Ed Miliband is equipped for action from the start of Labour’s term.

Individually these actions will address the key issues faced in planning today. In combination they will set a national context for planning as well as a way of working that maximises consensus and community ownership of change.

Helen Hayes is a chartered town planner and Labour councillor

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9 Lower energy bills with £1000 of energy efficiency improvements for 3m+ homes

by Rachel Danae Burgin The cost of living crisis dominates our day to day lives.

Despite the stirrings of economic recovery, we live in a time where prices continue to go up faster than wages and bills are ever harder to pay. In exclusive YouGov polling conducted for Uncut, 85% of respondents said that their living standards had fallen over the past few years.

Energy bills are a key factor and as households turn up the heating this Autumn, the soaring price of energy is sure to be in the “cost of living crisis” headlines again.

But energy policy brings with it its own added complexities. We have climate change objectives to meet if we are to protect our planet and we need to secure our energy supply in an increasingly volatile and uncertain world.

Aligning these three objectives – costs for households, climate change targets and energy security – requires careful calibration of policy. It can be a difficult balance to strike, but if Labour is successful, we can harness kitchen table concerns on costs to drive support for tackling climate change and help secure our energy supply.

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Lower energy bills

The Tory green deal is failing

The Tory attempt to answer to the challenge has been the green deal. It is supposed to be the cornerstone of David Cameron’s commitment to lead the “greenest government ever” – and in theory – it promised much.

The programme offers consumers the opportunity to invest in energy efficient home improvements and pay back the cost through savings on their energy bills.

The green deal is subject to the “golden rule” which promises that consumers will never be worse off if the cost of the home improvements outweigh the savings to their energy bills.

The problem is that take-up of the green deal has been woefully low – some figures indicate that only four people have taken up the offer.

Products such as loft insulation typically cost £100-£300 and save consumers £73 per year – a pretty good deal in which the consumer will pay back the cost of the improvement over the course of a few years. But the experience of the green deal suggests that the idea of running up more debt, even where a return is virtually guaranteed, is not something that appeals to consumers.

The current programme structure is failing. Loans aren’t working, households aren’t improving their energy efficiency and bills for households remain stubbornly high.

Labour’s challenge

If Labour is serious about driving widespread take-up of energy efficiency, more than loans are needed. Some subsidy for hard pressed householders will be required, potentially to either pay for the intervention or reduce the cost with the remainder paid from a loan.

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But nothing comes for free and any subsidised intervention will need to be funded from some source.

Labour’s approach: a windfall tax on the utilities to fund energy efficiency improvements for householders

In 1997, the Labour government implemented a windfall tax on the utilities to fund training and work for the young unemployed. For the next Labour government, there is the potential to revisit this approach, but this time ring-fencing the proceeds to improve energy efficiency and reduce household bills.

A new windfall tax on the utilities

In chapter 4, Jonathan Todd has already outlined the basis for a new windfall tax. The use of debt-intensive finance models has generated previously unforeseen profits from a period of very low interest rates and persistently high inflation.

The unforeseen nature of these profits means that they might be considered a windfall. Research from the Consumer Council for Water has estimated that water company profits have been inflated by £720m over the past two years due to these factors.

As Jonathan sets out, the size of the water industry relative to the gas and electric industries, implies that a windfall of £3.2bn could be taxed back by the government across the broader utilities sector.

We would expect the utilities to adjust their behaviour following the imposition of the windfall tax, and move to a less debt-intensive finance model, which would reduce the amount of return from the tax in subsequent years.

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But even if just one year’s funds are considered, it would release substantial funds to drive take-up of a reformed green deal. £1000 of energy efficiency improvements for 3m+ homes

We would propose the £3.2bn is used to offer a £1,000 subsidy for energy efficiency improvements for householders. Either the cost of improvements, up to £1,000, could be fully funded or, for a more expensive intervention, payment would be topped up with loan, in the manner of the current green deal.

The subsidy would provide a simple and compelling reason for households to improve their energy efficiency.

Even if all the households participating in the scheme used their full allocation, over 3m would be supported.

In practice it is likely to be considerably more, with the potential for further interventions funded from revenue in subsequent years.

A new dividing line with the Tories

The politics of taxing utilities’ windfall profits to help lower householders’ bills would draw a new dividing line with the Tories.

If they opposed the policy, they would be forced to side with the fat cats of the energy and water, choosing to protect their monopoly profits rather than help reduce bills for householders. The contrast between defending the privileged few and opposing the interests of the many could not be starker.

This divide would consolidate a key Labour advantage. In the YouGov poll Uncut conducted for this publication, Ed Miliband and Labour led David Cameron and the Conservatives on who was most trusted to reduce gas and energy bills 21% to 15%.

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The six point lead is clearly positive, but worryingly, 51% said they trusted neither. This policy would practically demonstrate how Labour would help householders and the difference with the Tories.

It would vividly bring to life the political choice faced by voters worried about the cost of living and help build a broader Labour lead on an issue that is sure to dominate politics for many years to come.

The new politics of sustainability

In these financially straitened times, too often sustainability is viewed as a second tier concern. At a time when people are scrambling to save every penny, the medium term future of the planet understandably has a lower resonance for many compared to the financial here and now.

The approach set out in this policy would help re-connect sustainability with peoples’ immediate financial priorities.

It would illustrate the alignment between the economic and environmental for millions of voters, showing how becoming greener also means becoming a little better off.

For Labour this policy will help forge a new politics of sustainability: financially relevant, environmentally effective and electorally attractive.

Everything that the Tories are not.

Rachel Danae Burgin has worked in the energy industry for several years, both onsite at Sellafield and for a major City Law firm. She is on the National Executive Committee of the Labour Finance & Industry Group

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10 Re-connecting immigration and the public good

by Atul Hatwal Immigration is perhaps the most difficult of Labour’s negatives to address. Entrenched public perception is difficult to turn around in any area, let alone when it has built up over so many years.

The scale of the problem for Labour

For the public, illegal immigration is rife while the rules on legal migration are too lax. And whatever the truth might be, the voters blame Labour.

No one knows the true picture on illegal immigration

On illegal immigration, part of the difficulty in presenting the reality is that there are no authoritative estimates’ of the real position. Projections put the numbers of illegal immigrants in Britain at anywhere from 600K to 1 million.

There is no counting of immigrants as they enter or leave or any tracking while they are here. Combined with the cuts to numbers of border security officers at airports, public confidence in any government’s capability to control illegal immigration is at an all-time low.

Government doesn’t control two out of three determinants of legal migration

On legal migration, the central problem for all of the main parties is that two of the three main determinants of net 121

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migration (the total number of people coming in minus those that are leaving) are outside of the government’s control.

Britons leaving the UK and EU citizens arriving cannot be regulated. Only the numbers of people coming to the UK from outside the EU are under government control.

This means the government could stop all non-EU nationals from entering the UK, and even deport those that are here, and still net migration might rise because of increased inflows of EU citizens and reduced numbers of people leaving.

Simply shifting rhetoric towards the political centre-ground won’t work

On immigration, of all issues, Ed Milliband has demonstrated a willingness to tack to the political centre.

He has expressed regret for Labour’s record and suggested he would do things differently if he were prime minister.

But there’s a problem.

Unlike areas such as the economy, the policy levers are not at Labour’s disposal to follow through on the rhetoric.

Whereas a move to fiscal moderation can be evidenced by a commitment to remain within the government’s overall deficit and spending totals, there is no comparable policy move on immigration, even if one were advisable.

Tackling illegal immigration costs money Labour does not have

In terms of Labour’s current stance, on illegal immigration there are no plans to improve monitoring and tracking of migrants or to enhance the counting of the number of migrants coming that go beyond the current government’s existing proposals.

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Similarly, there are no plans to improve border security or increase the numbers of border control officers, despite Labour’s criticism of the cuts, presumably because of the cost implications.

Labour will face the same challenges as the Tories on managing legal migration

On legal migration, the problem of how to distinguish party policy from that of the government’s is even more acute.

Before the last election, David Cameron made great play of the Tories commitment to reducing net immigration in to Britain to below 100K per year. But that was a gamble.

Accepting responsibility for a commitment without having the power to deliver it is bad politics.

Net migration figures are lower than in 2010 but have started rising again as the economy recovers. The almost inevitable consequence is that Cameron is likely to miss his target by some degree, with immigration possibly rising to 200,000 per year as opposed to less than 100,000.

For Labour to follow the Tories in setting a similar policy goal would be ridiculous. Few things could further erode public trust in Labour on immigration but a futile pledge is one of them.

So what is Labour to say?

Short of leaving the EU and banning international students (almost half of immigrants to Britain are students) with the £18 billion of fees they pay in to our economy, there is little Ed Milliband can do to deliver on his rhetoric.

If anything, the Labour leader’s current stance is actually worsening the party’s position. Accepting culpability for a perceived problem that he is powerless to address is a UKIP dream.

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Another way is needed.

The challenge

Labour must achieve two goals if it is to neutralise public concern about the party on immigration. First, demonstrate how it would improve security to build public faith in the ability of government to properly manage immigration.

And second, show at a practical level how the right type of immigration benefits Britons.

As ever, this will require money. Common to achieving both goals is the need to convert the general economic benefit of immigration (the office for budget responsibility identifies immigration as a major driver of economic growth) into a specific revenue stream; funding for action that can clearly establish the link between immigration and the national good.

Labour’s new approach on immigration

There are three parts to Labour’s new approach: defining a source of revenue and then using the revenue to tackle concerns on the integrity of the immigration system and ensure everyone shares in the benefits brought by immigration. (a) Funding a new approach on immigration: the rationale

Migrants come to the UK to contribute and to get on with their lives with the overwhelming majority staying in Britain only for a temporary period.

They will tend to pay more in tax than the cost of public services used (almost 40% more according to a UCL study of eastern European migration87) and rarely claim benefits.

For example, despite the scare-mongering about the potential impact of Romania and Bulgarian migrants, the 124

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latest government figures show that 9 years on from when the eastern European migration began, just 1% of working age benefits are being claimed by migrants from these countries88.

Options for raising new revenue from migrants coming to Britain to work are limited on grounds of fairness and feasibility, not to mention EU law for European migrants.

But there is one group of migrants where there is a basis for action on revenue that would tackle an anomaly.

International students comprise almost half of all migrants with 70% coming from outside the EU89. Based on typical fees and living costs, they will frequently have incomes equivalent to that of British higher rate tax payers.

Researchers for the Complete University Guide recently found non-EU international students pay a significant premium over their British and EU counterparts.

For example, fees for an undergraduate clinical course, such as medicine, will be capped for home and EU students at £9000 per year, but non-EU students will pay upto £35,000 per year. For taught post-graduate courses, while domestic and EU students pay fees in the range £2,000 to £27,500, non-EU students will pay £7,900 to £38,500.

According to the gostudyuk website, which advises international students on what to expect when studying in the UK, living costs are cited at £12,000 per year, though in the bigger cities will frequently be more. When added to tuition fees and costs for academic books and activities, this means international students will often require a minimum disposable income of £30,000 per year.

The equivalent for someone working in the UK would be a pre-tax income of over £40,000 per year.

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Because international students’ income is derived from outside the UK (albeit often topped up with part-time work in Britain) their tax contribution is not comparable to migrants who come to Britain for full time work.

And with most international students leaving the UK after their study – over 4 out of 5 according to the latest Home Office research – there is no subsequent tax contribution either.

In this context, there is a rationale for a contribution from international students towards public services. (a) Funding a new approach on immigration: £0.5bn per year could be raised from international students’ contribution to public services

There are currently 303,000 non-EU students in higher education, 31,500 in further education and 18,200 in independent schools90 giving a total number studying in Britain for over a year of 352,700.

Although the effective income of many international students is significant, as with all groups there will be some with comparatively modest means. To ensure affordability, we would suggest a contribution in line with the minimum level for someone working in the UK.

With the minimum wage set at £6.31 per hour, the annual tax paid on an income of £12,305 is £1,118.84.

For simplicity, we would suggest an annual contribution from international students towards public services of £1,000 per year. Even for those students on the lower priced courses (e.g. £10k per year) with living expenses of £12k, the contribution would still only constitute an increase in costs of less than 5% of their current expenditure.

The total amount raised from non-EU students studying in Britain for over a year would be £353m.

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In addition, according to the government’s education exports strategy, there are approximately 750,000 international students who come to study English in the UK91. Although these students will be in the UK for less than a year, and so are not recorded in the government’s net migration figures, the duration of their stay can last upto 11 months and they are certainly a distinct group to tourists.

Assuming the proportion who are from outside the EU is 70% - the same as in higher education - this would mean 525k are non-EU. On the basis that a typical length for an English language course is 3 months (1 term), a quarter of the annual contribution towards public services would seem appropriate. This contribution of £250 would raise approximately £131m given the numbers in the government’s education export strategy.

This means the total that could be raised from non-EU international students in contributions to public services would be £484m. These funds could then allow resources to be re-allocated to ensure public concerns on migration are addressed and establish the direct link with the national good.

Although there will be understandable opposition from the education sector and international students groups, the crux of the problem is this: either action is taken to fundamentally re-define the immigration debate or the steady drift to public hostility to immigration will continue and immigrants will vote with their feet.

Already this year the number of international students coming to the UK fell for the first time in history. The drop of 25% cost British academic institutions £169m in lost fees.

In this context, while extra cost is always unwelcome it is ultimately preferable to the shunning of the UK by migrants, with the catastrophic attendant economic consequences.

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(b) Action on illegal immigration: 8,000 extra immigration officers to rebuild trust in government’s ability to properly manage migration More than rhetoric from Labour politicians on regret for past policy, practical measures are needed to demonstrate that Labour understands the public’s concerns. Actions speak louder than words.

A significant component of public concern is that neither party, but Labour in particular, are not serious about preventing illegal immigration or enforcing the rules for legal migration.

In exclusive polling for Uncut conducted by YouGov, the public were asked which was the bigger problem: poor enforcement of rules leading to illegal immigration or lax rules that permitted too many people to legally settle in the UK. The answer was unequivocal: 60% believe illegal immigration is the key problem, while 23% thought it was insufficiently rigorous rules.

Without confidence in proper border security, the public will remain hostile to immigration.

One of the concrete ways Labour can address this and differentiate itself from the government is to significantly increase border security resources using funds from the new revenue stream. With the new resources available from the international students’ public service contribution, this could fundamentally change the way border security is delivered with: • 4,000 extra border security officers at UK ports and airports to bolster checks and security, drawing a clear dividing line with the government’s reduction in officer numbers • 3,000 extra immigration officers to track and monitor migrants who are judged to be at risk of over-staying.

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This would be the first time any government has proactively managed over-staying – the biggest cause of illegal immigration – and once again mark a clear delineation from the government’s approach

• 1,000 extra immigration officers to accelerate processing of the backlog of immigration applications so it was cleared within one parliament (as opposed to 37 years, which was the projection by the Home Affairs Select Committee). This would clean the slate on pending cases, so that the only relevant immigration figures were new arrivals and exits. It would also help change the culture within the immigration services which seem to be permanently overwhelmed and constitute a tangible deliverable on immigration that the government cannot match

The annual cost for these proposals would be £229m92, more than doubling the current number of immigration officers from 5,600 to 13,600 and enabling Labour to draw a clear contrast between the government’s gimmicks such as the “go home” van and Labour’s practical action on security.

That these officers were directly funded by contributions from legal migrants would evidence the benefit of legal migration for the British public. c) Action to connect legal migration and the national good: Boost incomes by raising personal allowances by £50

Funds from the new revenue stream can be used to establish the connection between immigration and national benefit by reducing tax payers’ personal allowances.

From the £484m per year, after the expenditure on increased numbers of immigration officers, £255m remains.

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this would enable the threshold to be raised by £50 for every tax payer.

For the first time, all tax payers would personally share in the benefits from immigration. The more international students were attracted to the UK, increasing the £18bn that they already plough into the economy, the greater the benefit Britons will feel in their individual household budgets.

Conclusion: a new settlement on immigration

The combined impact of these measures on security and personal allowances would recast the immigration debate.

Practical, costed policies would help Labour show rather than tell the nature of its new approach.

Although it is unlikely immigration could be turned into a positive for Labour, at minimum this package would enable Labour to change the focus of the debate in the 2015 election which is centred squarely on Labour’s past rather than the party’s offer for the future.

Given a chance to implement these policies and a track record of delivery, for Labour the contours of the immigration debate at the 2020 election might be very different.

Atul Hatwal is editor of Labour Uncut and director of the crossparty campaign group, the Migration Matters Trust. He has worked in communications and policy across public, private and voluntary sectors and was formerly a Labour party press officer.

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11 Getting welfare to work

by Duncan O’Leary & Claudia Wood That Labour is in a tight spot on welfare hardly needs saying. The party has become associated in the public consciousness with a system that people think costs too much and produces the wrong results.

If anyone doubted this, the findings from Labour’s Uncut’s YouGov poll tell the story. A majority of the public agree that the biggest problem with the system is that “too much money goes to the wrong people”, compared to just 11% who agree that “the system is insufficiently generous to those in real need.” People are more than twice as likely to agree that welfare spending is too high rather than too low.

When people are asked to attribute responsibility it is the last government that gets the blame, not the current one.

Among those who believe that welfare spending is too high, 54% attribute this to “the policies of the last Labour government” compared to just 5% for “the present coalition government.” The remainder either blame all sides equally or no-one at all.

Some of this can be attributed to Labour’s approach to opposition. The party has fallen into the trap of tactical opposition to spending cuts without clarity about its real priorities or how to pay for them. Universal benefits were first described a “bedrock of our society” before proposals were brought forward to means test pensioner benefits.

Child benefit reforms were criticised as a “shambles” and “unfair” before front benchers admitted that reversing 131

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them would “not be a priority” in government. Labour is against the “bedroom tax” but doesn’t have an alternative.

On welfare Labour gives the impression that it is opposing ideas without a credible alternative. No wonder the coalition is winner the battle of hearts and minds for welfare reform.

However, the party’s problems run deeper than the last two or three years. Analysis of public attitudes over a longer timeframe demonstrates how support for the welfare system plummeted from the mid-1990s through to the late 2000s. For example, the proportion of the population agreeing that ‘the government should spend more money on welfare benefits for the poor, even if it leads to higher taxes,’ peaked in 1989 and has been on a downward trajectory ever since. More people disagreed than agreed with the statement for the first time in 2007.

Some of the decline in support for the system (on a range of measures from spending to the deservingness of benefit claimants) began prior to Labour taking office in 1997, something that New Labour’s critics often forget.

However, as the party in government for much of the period in which public support fell so dramatically it is unsurprising that the public apportion blame to the last government rather than this one.

Entitlements

Labour must now work out how to win back trust. This cannot – and should not - mean a race to the bottom on welfare – proposing further cuts benefits when there are not enough jobs for people to move into. Instead, it needs a constructive alternative which resonates with people’s instincts regarding the basic principles of welfare. One red herring to be avoided is simply blaming the media for creating a false consciousness regarding welfare reform. As 132

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the Labour Uncut/YouGov poll shows, people are sceptical about media misrepresentation of the system and rightly so (one in four agree that the biggest problem with the welfare system is that “politicians and the media too often distort the truth about the system”).

Analysis of over a decade and a half of newspaper coverage, in a report for the charity Turn2Us found that media coverage of the welfare system tends to be negative and disproportionately focused on benefit fraud. But there is little evidence to suggest this has got any worse during the period in which support for welfare has drained away.

In fact, as support for welfare system fell during the 1990s and 2000s, the number of negative newspaper stories about welfare actually decreased. 93 Rather than imagining that clever political language or more accurate reporting can be enough, Labour must look at the system itself and why it has been losing public support.

What people want is not complicated: it is a system that is there for them when they need and which encourages the right behaviour in others. These two things are connected, as the recent downturn demonstrated. People who had worked all their lives found themselves out of a job and reliant on the system for the first time.

Many were shocked to learn they were entitled to just £71.70 per week – and for just six months for those with more than £16,000 savings in the bank or a partner in work.

Meanwhile, others without the same track record of work were entitled to exactly the same amount, and for an indefinite period if they had neither savings nor a partner to support them.

This system produces two sources of disillusionment. First, the lack of generosity convinces many people that the 133

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system is not really for people like them. The payments are too low to be cover many people’s living costs in any meaningful way, so welfare becomes about ‘them’ rather than us. So ingrained is this problem that even those who support the system deploy the hashtag #HappyToPayYourBenefits in social media exchanges.

There is no sense that people have paid into a system over time and are therefore entitled to support by right, not simply thanks to the generosity of others.

The second problem with the current system is that it does nothing to distinguish between those who have contributed and those who have not. Worse, in attempt to allocate funds to the worst off, it penalises those who have managed to save. These things infuriate people who are willing to buy into collective systems, but want reciprocal arrangements that encourage others (who can do) to do as they are doing. Taken together these things – low payouts and the absence of reciprocity – mean that Beveridge’s system of ‘social insurance’ no longer acts like an insurance system: it doesn’t protect people when they need it or reward people for positive choices.

Welfare-to-work

The inadequate, distrustful regime of financial support is mirrored by the regime of back to work support. This is critically undermining its effectiveness at getting people back to work.

People walk through the doors of jobcentres hoping for access to decent jobs and specialist advice, but often encounter neither. They are confronted with a gatekeeper, whose role of checking eligibility, wielding penalties for non-compliance can undermine any semblance of a positive or helpful relationship. A comparison we might draw is whether we would have the same relationship with 134

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GPs is we knew that at any time they might withdraw our eligibility for healthcare.

Going to the same people for compliance and support does not bread trust or engagement. This has certainly become worse under the current government as the penalty regimes around out of work benefits have become more stringent and even the subject of performance targets.94

Beyond the jobcentre lies the Work programme, which has been increasingly tasked with taking a similar role to the jobcentre – a place of mandatory work experience and monitoring of activity. Unsurprisingly, successive evaluations of Work programme have shown targets have been missed, with those hardest to reach – disabled and those on probation for example – least likely to be helped.

As of June 2013, less than 1 in 7 of those going through the Programme found work, with the figure dropping to around 1 in 20 for the disabled (the target was one in six for this group). Analysis shows that in around half of the areas the Work Programme operates, people would have been more likely to get a job if they hadn’t taken part in the programme.95

The flaws which beset the Work programme are numerous, but at their heart is a problem which sums up the coalition’s attitude towards the unemployed. Job-seekers are not seen as customers, requiring top-class service from a system most have helped pay for. They are benefitclaimants, whose attendance on the programme is mandatory and whose default response will be to cheat the system. Just like the Jobcentre, the Work programme has been made a policeman, wielding conditionality and penalties rather than driven by the principles of good public service. Recent press stories of a Work programme provider giving disabled job seekers a code of “LTB” – Lying Thieving Bastards – highlight the problem well.96 135

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Getting people back to work – especially those who have been out of work a long time – requires their motivation and buy-in. Just as we people ultimately need to want to exercise to be healthy, or to learn to succeed in education, job seekers need to be partners in their journey back to the workplace, making choices for themselves. Is it any wonder that back to work rates are so low if people are seen as passive recipients of a service – worse, infantilised and treated as if they cannot be trusted?

While the coalition’s welfare reform agenda has exacerbated the problems laid out here, it did not create them. Simply opposing the coalition’s plans, without offering credible alternatives, will not be enough to reverse trends set in motion 20 years ago. These trends are shaking the very foundation of the welfare state. On the one hand, financial support is viewed not as ‘for us’ but ‘for them’.

On the other, back-to-work support is seen less as a public service, and more as a policeman – not helpful and deserving of cooperation, but compulsory and underpinned by mutual mistrust.

The alternative

So what can Labour do to tackle these dual issues? Most of all, it must convince people that a Labour welfare system would encourage the kind of behaviour we all want to see in each other: working and saving where we are able to.

This means finding ways to restore the contributory principle in welfare, with higher entitlements for those with a track record of work. Demos has proposed funding this through cutting spending elsewhere, for example by ending the situation where the state pays the interest on people’s mortgages when they become unemployed (this would save £0.3bn). A more generous system for those who have worked would help make the system more 136

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relevant to people and more in tune with people’s sense of fairness.

The corollary of all this is that positive behaviours should also be punished as little as possible. Unavoidably, means testing does this, when savings count against people. So Labour should re-think its proposals to means test the winter fuel allowance, for example. People could simply receive the payment later in life, when fuel poverty is a much bigger risk, if the money needs to be found.

More positively, Labour should rethink how to reward and support saving among the low-paid. This means learning the right lessons from previous policies like the Savings Gateway about how to make schemes attractive, affordable and as uncomplicated as possible. Funding to back new initiatives in this area could be found by targeting some of the existing, generous tax breaks for saving that disproportionately benefit the well-off.

Beyond entitlements, Labour needs to grasp the idea that welfare is a public service that must help people as well as just check up on them. It is clear that the conditionality regime – of penalties and mandatory placements – needs to be separated from the support regime of getting people ready to work. Both are necessary, but need to be done by different people – and possibly different organisations alltogether. This is the only way that the latter can take on board the principles of good public service and be effective in engaging with and getting the most from job seekers.

This should sit alongside a process that engages much better with people’s own needs, aspirations and circumstances. At the moment, the support people get is dictated by their assessment of eligibility for different welfare entitlements: conflating the gate keeping with the supporting function. Instead, a more sophisticated personal assessment of how far someone is from the labour 137

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market, considering the range of barriers they might face, is needed. This would then be followed by the right combination of skills, health and psychological support to get them back to work. The current black and white assessment of being “fit for work” or not is miles away from such a vision.

Delivering the requirements of this assessment for each individual means greater diversity of the Work programme offer. Regional monopolies of prime providers and the under-use of local third sector specialists is unlikely to achieve this, but there is much to learn from personalisation in other services. Personal budgets for job seekers (varying in size based on their needs assessment) and a co-authored “back to work plan” to work out how to spend the budget would be more effective at addressing individual needs and securing active participation from often demotivated and disengaged groups.

Payment by results (a top down regime) would be replaced by, or at least complemented by, choice - job seekers bringing their personal budget to a provider and reward would be from the bottom up. Such a regime would require improved information and support to make choices, but this can and has been achieved in social care.

The result would be the most helpful organisations, with track records of getting people into sustained work, are likely to flourish. Those offering low value experience and with an attitude of “LTB” would quickly go to the wall.

Job-seeker engagement with the back to work process would be massively boosted – and half the battle won.

Conclusion

If all this sounds too ambitious then there is some consolation in the Labour Uncut/YouGov polling. The public are willing to give Ed Miliband a hearing. When people are asked which leader is closest their own views on welfare 138

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30% say Miliband, compared to 32% for Cameron. When asked who is most likely to ensure that welfare benefits reach ‘those who really need them rather than those who do not’ the gap is down to just 1% between the two leaders.

Those figures suggest there is all to play for and, with two nearly years left of a fixed term parliament, time for Labour to move from opposing the coalition to looking like a government in waiting.

Duncan O’Leary and Claudia Wood are Deputy Directors at Demos think tank

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12 Public services: hard choices and harder ministers are needed next time

By Kevin Meagher Introduction

What does a party wedded to state solutions do when the money is gone? This is Labour’s dilemma as it shapes its offer ahead of 2015. But this is not just a question of electoral tactics - getting past Tory accusations of Labour profligacy – it goes to the heart of how Labour governs in future.

Shorn of the ability to finance its way to socialism, the party needs to be sure about its direction next time, more realistic about what it wants to achieve, clearer in whose interests it governs - and more confident in taking on its enemies. Nowhere are these questions more acute than in the approach to managing public services.

Here, Labour has to learn new lessons and unlearn old ones. In future, clarity and determination are needed to make policy work without recourse to significant new spending, the quintessential approach of the New Labour years. Future Labour ministers will face the uncomfortable experience of making hard choices and standing up to, rather than appeasing, vested interests. In short, there has to be an end to the ‘spend, don’t offend’ approach to managing public services and buying-off special interests.

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New means – and greater resolve - are needed to achieve the same ends as before – a more equal, progressive and prosperous society – albeit this time with considerably less money to pay for it.

Where New Labour went wrong

Throughout the New Labour years, the answer to the question ‘how do we improve public services?’ was simple: spend more money. To make them improve a lot, spend a lot. Blairite or Brownite, it didn’t matter; the default position was to invest. This was an approach tested to destruction. But while ministers often overspent and certainly over-legislated, paradoxically, they often undergoverned at the same time; heaping reform upon reform with insufficient time for the changes to bed-in properly.

Clearly, you have to put money into the Whitehall fruit machine to make the lights come on, but you still need to know which buttons to press. This is what governing is about; the wisdom and determination to make a limited stake count.

This was often lost on Labour ministers who were ostensibly trying to reform public services. Take the police.

Measurable crime halved under Labour (for a variety of reasons, not least the longest unbroken spell of economic growth in 200 years). Police numbers also rose, while Parliament passed twenty odd pieces of criminal justice legislation.97 Although the police had everything they could possibly need from Labour ministers in terms of resources, they still barely made a dent in tackling antisocial behaviour - the bureaucratic term for describing thoughtlessness and thuggishness - which flourished.

In 2010, the then Chief Inspector of Constabulary, Sir Denis O’Connor, found that “ASB does not have the same status as ‘crime’ for the police”98 and that forces were tolerating a 141

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damaging “degree of normalisation” around drunken behaviour and vandalism that should not be accepted. In response to this inertia, a demoralised general public simply voted with their feet, with just a quarter of the estimated 14 million annual incidents of anti-social behaviour getting reported. Yet these still accounted for 45 per cent of all calls to police – one call every 10 seconds.

A similar story has emerged in the NHS, with massive extra resources – effectively the doubling of the NHS budget under New Labour – still leaving behind scandalous failures of management, quality control and accountability, as the Mid-Staffordshire and Morecambe Bay cases make clear. In a major report99 last year, the Care Quality Commission, the body charged with regulating standards of care in the NHS, reported on an alarming deterioration in the attitude of nurses and carers, one that had become “task-based, not person-centred”, while there was the worrying trend that “the unacceptable becomes the norm.”

Meanwhile, reforms to their contracts in 2004 saw GPs receive a 58 per cent pay rise, (taking average salaries to £113,614), although the National Audit Office later found there was no productivity increase in return.100 At the same time, nine out of ten GPs – these princes of public service – opted out of providing out-of-hours care altogether, leaving a perverse outcome where they had fewer responsibilities in return for a massive pay rise.

Then there was education. Rather than deal with the problems of failing teachers and coasting headteachers, Labour ministers instead tunnelled around them by embarking on massive (and expensive) structural reform to schools instead. No-one seemed willing to focus on the stubborn workforce failings in parts of the profession (17,000 failing teachers, according to Ofsted101) and tackle 142

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these head-on by reforming school management and the teaching profession in order to make the system focused on educational outcomes rather than teachers’ varying inputs; demanding better performance for the millions of kids with precious few prospects in life. Instead, ministers tip-toed around the whinging teachers’ unions rather than telling their members to buck up their ideas.

And who could forget the self-aggrandising generals and admirals? They demanded ever more military hardware, regardless of the cost or efficacy, with defence ministers meekly signing-off whatever they wanted, leaving what was, on some estimates, a £38 billion black hole in the department’s finances by 2010.102 A good Labour defence minister was a pliant one.

A similar pattern emerged with tricky issues like immigration and welfare reform. Again, it was deemed career-limiting for Labour ministers to do what should have been done on both these issues: curtailing illegal immigration with verve and manage welfare costs (especially during an unprecedented period of economic growth, when the bill for working-age benefits should have come down). However, a procession of Labour ministers managed neither, treading gingerly through these roles, ever fearful of upsetting powerful lobbies, or liberal opinion, thus leaving deep-rooted problems unresolved.

Yet on any objective criteria, immigration policy under Labour was a disaster, with Labour offering no conceptual framework for how many people it thought appropriate to come into the country, memorably underestimating the effects of EU expansion in 2004 by a factor of nearly twenty (13,000 people a year were expected to come to the UK, but the actual figure peaked at 252,000 a year by 2010).103 Similarly on social security reform Labour offered a 143

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welfare-to-work approach that favoured the former over the latter, with five million working age adults still left on benefits during a decade of growth and rising employment.

These were all failures of risk-averse ministers putting public relations ahead of public policy. Although cash went in and useful reforms to public services were made throughout Labour’s time in office, hard choices were too often avoided. Ministers instead preferred to validate their achievements by focusing on their inputs; how many extra nurses, police officers, teaching assistants, new hospitals and renovated schools they had funded; not what the actual results of all that investment meant in practice for pupils, patients and public alike.

Few ministers gazed to the horizon, making policy with a long-term view, or to mix metaphors, very few oil tankers were turned around. Abiding by the diktats of the 24-hour news cycle was the primary motivational impulse for ministers – and the surest way of pleasing the shorttermists of New Labour’s high command. When Frank Field was made welfare reform minister in 1997 with an instruction to “think the unthinkable,” his proposals around ending means testing with higher basic taxpayer contributions were cut to ribbons by the Treasury and abandoned by Number Ten until he resigned fourteen months later. Why court controversy and risk the wrath of the spin doctors by making hard-headed, long-term decisions when there is no short-term political payback?

Why indeed when there was always money to buy-off vested interests, create new quangos and fund grandiose new programmes.

Too many Labour ministers last time around found themselves in this bind; bewitched by the age of spin, and didn’t do the hard work that real change demands.When 144

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the buzz of the press launch had faded and the television cameras had gone away, there was often too little interest in the spadework of bringing about change. Too many Labour ministers politicked rather than governed.

Next time around

In future, Labour ministers need to adopt a different approach. Denied the option of throwing money at initiatives, they need to become better at delivering change through governing more effectively and with a clearer purpose. They need to make their limited stakes count.

They need to be surer of what they are trying to do and clearer about the obstacles that stand in their way. There needs to be a totally different ministerial tradecraft, one that is more focused on delivery and more resolute in taking on and beating vested interests, even friendly ones.

More resilient when they are, inevitably, rebuffed at first.

Labour should show its mettle on reform early on by finetuning the government machine. The department of culture, media and sport simply provides a perch for the arts and sports establishments to lobby for their narrow interests and should be scrapped with its regulatory role on matters like broadcasting returning to the Home Office (as was the case up until the mid-1990s). Similarly, the department of energy and climate change, unable, seemingly, to get a grip of the former or do much about the latter, could be folded back into the Department of Business and Defra, from whence it came. The Northern Ireland, Scottish and Welsh Offices should be merged in a new department of the nations. The devolution settlement has long made their continued existence anomalous.

Back in 2009, Liam Byrne’s paper, Smarter Government, set out ambitious plans to relocate nearly 250,000 civil servants and quango employees currently clustered in London and 145

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the south east. But why stop there? Why not a wholesale devolution of government departments to the provinces?

Why can’t we have ministers sat in Leeds, Manchester and Birmingham, commuting to Westminster when they are needed, just like everyone else based outside London has to do? The principle is already well established for Welsh and Scottish Office ministers after all.

Some urge more radical reform. The Local Government Association has recently set our proposals for a comprehensive “rewiring” of government, merging the departments for communities and local government, transport, environment, food and rural affairs, energy and climate change, culture, media and sport and relevant parts of the home office - to create a new ‘department of England’.104 The LGA argues this will tackle Whitehall’s silo working, drive out new efficiencies and address the inequities of the Barnett Formula which gives the devolved nations a better deal that England’s regions.

What is clear is that there needs to be a genuine commitment to localism next time around, embracing stronger local decision-making. Labour’s previous version of localism meant showering councils and NHS trusts with cash, but the largesse was accompanied by big, thick Whitehall strings. In contrast, the Tories have passed down new powers (particularly with their ‘city deals’) but no new cash. Clearly a synthesis of both of these approaches would be the ideal. Miliband could start by appropriating the best bits of Michael Heseltine’s No Stone Unturned paper which argues for a massive refocusing of public money - and decisions about how it’s spent - in the locales in which it’s aimed.

To maintain departmental coherence in the new impoverished Whitehall Labour ministers will inherit, Ed Miliband should appoint a minister for reform in each 146

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spending department to help keep it marching in-step with the government’s overall priorities. This could also create a self-correcting mechanism against ‘producer group capture’ and keep colleagues delivering the government’s priorities, not clicking their heels to profligate defence chiefs, or wasteful NHS bosses or incompetent chief constables.The overall number of government ministers should be cut too. You know you have too many when the current local government minister’s list of responsibilities includes ‘community pubs’.

Next time, Labour’s ministers need to be sat at their desks (wherever they may be) pushing through reforms from conception to roll-out. They need to focus on deliverables, holding officials to account, keeping projects to budget, demanding performance and making policy work, even at the edges of their departmental empires.They should eschew grandiosity, knee-jerkery and announcement-itis (the bad habits of New Labour ministers). Crucially, they should make better judgements between what may be desirable and what is actually feasible (NHS ICT projects and ID cards spring to mind here). Policy should be made in a more strategic way and ministers should speak the ‘language of priorities’ - knowing a thoroughbred idea from a civil servant’s hobby-horse.

Theresa May is a lodestar for the approach future Labour ministers should take. A Conservative Home Secretary may be presiding over falling police numbers, but she is still able to brag that reported crime is also falling; pricking the bubble that policy delivery is solely a matter of the resources deployed. But apart from questioning the efficacy of spending it is clear that she has quietly taken control of a nightmare department, famously described by her Labour predecessor John Reid as “not fit for purpose” through diligent, unshowy management.

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May has done what a procession of Labour home secretaries would not do: she has been clear about her priorities and stuck the course; in her case taking on the police, shaking up the service’s governance with the creation of elected police and crime commissioners and the antiquated pay and conditions of officers through the appointment of the reforming Tom Winsor as the chief inspector of constabulary.

Labour ministers dodged the same challenge. In fact, unlike other public services, police performance targets were actually scrapped, apart for the single watery invocation to ‘raise public confidence’.105 Yet ministers didn’t ask why there had been a loss of public trust in the first place. No chief constables were sacked for poor performance under New Labour, the copper’s friend.

Labour’s Home Office ran up the white flag when it came to sorting out policing. To be fair, the focus after 9/11 was coloured by security concerns, but Labour ministers didn’t pay attention to what the force was doing – or not doing – on other fronts. It’s only now we get a sense of the rottenness at the heart of parts of our police force.

The boldness of May’s approach is all the more commendable because she has casually forfeited the equity a Tory home secretary used to enjoy with the police. She has deliberately taken on ‘one of her own’ in order to drag the police into the modern age; where the small matters of productivity and measurable results matter. May has also succeeded on smaller, but totemic issues like deporting Abu Qatada, whose barnacle-like presence in the British judicial system has been a mark of governmental failure form more than a decade.

There is nothing revolutionary in this approach. It is simply a question of application; hard work and determination on May’s part; and a less centralised and less neurotic

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Downing Street operation. The prime minister’s delegating style and weaker Downing Street operation gives space to effective ministers driving through reform to get on with the job. Rejecting the micro-management of the Blair years, with watchful spin doctors quizzing why departments were drifting into difficult waters, is one of this government’s useful reforms. Only the failings of Andrew Lansley have been punished, and this was due to his consistent mishandling the politics of his NHS reforms not their content – and Cameron only moved after giving him ample chance to sort out the poor presentation of his proposals.

There are obvious lessons Prime Minister Miliband can draw upon as he appoints his frontbench team. His shadow cabinet is full of talented and experienced exministers and Whitehall insiders. There are eleven former full cabinet ministers in the shadow cabinet106, (excluding ex-ministers of state and other ministers) as well as a range offormer Whitehall insiders blooded during the New Labour years.

It is, in fact, one of the most experienced opposition frontbenches since the Second World War (and certainly far more so that Tony Blair’s shadow cabinet of 1997, of which only Margaret Beckett and John Morris had previously served as ministers).Yet despite this array of talent and experience, Labour policy remains sketchy, a work in painfully slow progress. All that executive experience has, so far, delivered very little in terms of a new prospectus for the party. And too few of them seem to understand that the Whitehall they may inherit in less than two years is a dramatically different place to the one they left behind in 2010.

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The vested interests

The changed landscape that will greet Labour ministers in 2015 necessitates a new approach that is bold and imaginative but also realistic and rooted in the practical.

Austerity will remain a reality after 2015 and those pushing through reforms in spending departments will face strong opposition. Nevertheless, the approach to public services should be clear, consistent and loyally followed. It should be guided by the desire to provide high-quality, universal outcomes and position Labour firmly on the side of the user and customer. Ministers should be intolerant of anything, or anyone, who gets in the way of achieving this goal. Productivity, savings and outcomes are the watchwords for the post-2015 public sector.

Labour can help itself here. The Blair-Brown faultline at the heart of the last Labour government saw two tribes intent on undermining each other at every opportunity. As an approach to government it was criminally self-indulgent.

The obvious lesson is that there must be no repeat. Instead, there needs to be unity of purpose at the top of the government and a clear direction at all times, especially when it comes to public service reform. Miliband, a promoter of talent where he finds it, should be merciless in expunging Labour’s fondness for cabalism, a crippling affliction that tarnished not only the Blair-Brown years, but Wilson’s and even Attlee’s governments’ too.

At the same time Miliband should leave effective ministers to get on with the job. He should allow them time to make their mark and recognise that a minister under fire from the vested interests orbiting their department is probably doing a good job. Better induction and training would help ministers find their feet quicker, a point former home secretary Jacqui Smith has previously made.107 Stronger political management of policy formulation, implemen 150

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tation and communication would be a good thing too and Miliband should bite the bullet and appoint more ministerial special advisers, regardless of the short-term political criticism the move would generate. He should also beef-up Downing Street’s operation so it can deal with cross-cutting issues and drive the Whitehall machine more effectively. The rewards are worth it, as David Cameron – with a lackadaisical Downing Street operation - surely now knows to his cost.

Miliband’s challenge is to create a sense that the government’s approach to public service reform is unified and not open for lobbying, prising apart Blairites from Brownites. It will help avoid the pitfalls of ‘cognitive dissonance’ that have bedevilled previous Labour governments. The reaction of the public sector unions to Labour’s tentative commitments of pay restraint explains why this is so important. When you aggregate pay, pension, working conditions and job security, a public sector worker, pound for pound, is often better off than their equivalent the private sector. It’s an unpalatable message to sell to the public sector unions, despite being self-evidently true. But in ensuring that public services are excellent for all, Labour should not be afraid to take on the unions, professional bodies, trade associations and other organised lobbies who often put their members’ interests ahead of the public’s. The emphasis should no longer be on appeasing producer groups but on improving customer care and outcomes.

There are no shortage of groups Labour will fall out with – whether ministers tread softly or they do not. Five years of austerity has set an expectation among some – however unrealistic – that Labour will somehow provide a softer option. A reviving economy will soften some of the edges off austerity but there is no alternative model waiting to be implemented that does not lead to economic ruin and 151

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political destruction for Labour. The party should instead occupy the moral high ground on customer care focusing on a new politics of outcomes.

The issue of targets looms large here. Resented by clinicians, teachers and other public sector professionals for skewing outcomes, there remains massive resistance to targets-based reform. Yet the question of how to eradicate postcode lotteries in service provision remains. Targets may be pernickety and create red tape and even perverse disincentives and ‘earned autonomy’ for improving parts of the public sector is all very well, but there is a need to deal with the parts that remain below par. Implementing smart targets that taper-off if public services show they consistently delivering against expectations might be one way around this problem. Ministers should not spare the lash for parts of the public sector that continue to fail.

Conclusion

What is clear is that Labour cannot spend its way to public service excellence. Ministers, therefore, need to be prepared to push services harder, take on their vested interests, demand better performance, drive our inefficiencies and generate real accountability at all levels of delivery. If Labour ministers want to do something different, they need to get in the discipline of not doing something they are already doing. A minister for public service reform in each spending department will help do that, avoiding expensive follies and departmental distractions and keep ministers marching in-step with Downing Street and the government’s overall priorities.

Labour’s approach to governing demands toughness and clear-sightedness. It is also, perhaps, a recipe for unpopularity – not, perhaps, in the class of Gove and Lansley – but perhaps not far off. Labour ministers need to 152

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be ready for this. The ‘spend, don’t offend’ style of the New Labour years simply isn’t an option any longer. This is not to make confrontation an article of faith, simply to recognise its inevitability in the new straitened Whitehall.

It may be anathema to ambitious Teflon-coated Labour politicians but it is necessary to govern effectively in these barren times. Labour ministers will have to get their hands dirty in future. Post-2015, the gap will no longer be between left and right or new vs old Labour; it will be between the realists and the idealists. The former may claim the mantle of radicals but those who do not embrace the new realities of governing are the true conservatives.

For Labour after 2015 necessity is the mother of invention.

While there are fewer resources to repeat the policy activism of the New Labour years, it is still possible to make a difference in government. After all, as GK Chesterton put it: ‘there is but an inch of difference between the cushioned chamber and the padded cell.’

Even without the bulging coffers that New Labour enjoyed, a future Labour government is still worth having and can be demonstrably social democratic. Through a willingness to make hard choices, and by being clear in who’s interests it governs, it is still possible to make ‘small state socialism’ a cause worth fighting for.

Kevin Meagher is associate editor of Labour Uncut. He is also a communications consultant and formerly a special adviser to Labour's Northern Ireland Secretary Shaun Woodward. Kevin is a former Labour press officer and long-standing party activist

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13. We need an in/out EU referendum on May 7th 2015

by Anthony Bonneville While Labour Uncut is absolutely convinced of the case for remaining within the European Union, the issue of how we this should be achieved is a little more complex.

This is for the simple reason that, when it comes to Europe, there is one question that dominates all others: should there be a referendum?

It is not enough to choose remain in Europe. How we go about doing this will speak much of our relationship with the electorate. As an added dividend, the right approach could also throw a timely spanner in the works of the Tory machine.

In pure policy terms, the Labour party is almost wholly united on the merits of staying in Europe as an active member, not just a sullen wallflower.

Simply asking ourselves the questions about the consequences reveals the worrying impacts of an exit.

Do we really want the City of London to be Europe’s financial centre or an offshore racket?

Will British firms be more likely to attract inward investment from countries such as China and India, with the UK inside or outside the EU? 154

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Are businesses likely to find replacement markets to the 27 countries of the EU so simply?

Conversely, the potential benefits of a Europe that works much more effectively are salutary.

For example, we believe in protecting the environment.

The EU Emissions Trading Scheme could play a potent role in decarbonisation. Do we want to reap the benefits it offers?

Would British households and businesses pay less for gas and electricity if the single market in energy functioned better?

How much of British environmental policy could be scrapped if we could get a stable carbon price through EU policy?

The case for Britain in Europe, pushing for a union more focused on practical benefits for all its citizens rather than grand theoretical political projects, is compelling.

But it is a case that is not being made.

The media is largely hostile and in the hurly burly of daily political debate, it’s understandable that Labour politicians prioritise issues more immediately relevant to voters.

So we need to put Europe back on the agenda. A clear Labour commitment to a referendum with a date set would do that. A referendum, and a deadline would force quiet pro-Europeans (distant cousins of the quiet bat people) to come out and say it loud: “We need to stay in Europe!�

Furthermore, the politics of a commitment to a referendum present a tantalising opportunity for Labour.

The Tory backbenches are already fractious. Cameron is tacking right in reaction to the threatening success of UKIP. Over 100 backbenchers have voted against three line whips 155

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on a range of issues including privatisation of the forests Lords reform and, of course, Europe.

David Cameron is already committed to support staying in Europe. A sizeable minority, perhaps even a majority of the wider Tory party, though, would oppose.

This would create a substantial bloc of opposition within Cameron’s own ranks, with the issue that has long been a hot-button for many Tories uniting diverse rebels such as Douglas Carswell and Bill Cash.

Labour whips and advisers of 1990s vintage will remember the knock-on effect as Eurosceptics became more and more willing to rebel on the thinnest of pretexts, as long as Europe could nominally be worked into the motion.

In this way, Labour support for referendum on Europe could provide a devastating blow to an already weak government struggling to hold together a coalition, On the pro-European side, a broad coalition could be assembled bringing together unions, business organisations and civil society groups, a true example of One Nation politics.

For Labour, which has had a difficult relationship with business (most recently evidenced over summer with the climbdown on attacks on Next and Tesco over immigration), this is a rare chance to redraw the dividing lines of political debate.

Labour would be the party standing with business. The Tories would be left making the difficult case that business people did not know what was good for their own firms.

For those who recall the damage done to Labour’s 2010 election campaign by the letter from businessmen criticising the party’s national insurance policy, the irony would be rich.

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The next election will be fought on essentially conservative (with a small ‘c) terrain. The economy is likely to be recovering and the contest will be around who can best nurture the seedlings to bloom.

In this context, the idea of taking a huge gamble on leaving the EU with unforeseen consequences begins to seem suicidal.

Referendums are essentially conservative affairs. Those making the case for change generally face the more difficult challenge. Their opponents, meanwhile, will be busy conveying the risks of any move from the status quo.

As popular as Nigel Farage might be as an anti-politics caricature, can he really command the kind of trust needed from the wider electorate to win the case for exit?

The experience of the Yes to AV campaign is indicative of the shift that occurs when the notional becomes a real choice. Their large poll leads evaporated, turning into a crushing loss.

And the EU exit camp barely even have a lead in the polling today. If the pattern seen during our last referendum on AV repeats itself, the scale of defeat for the anti-camp would settle the European question for a generation.

For all the worthy talk from Labour about the need not to promote uncertainty by talking about a potential future referendum, the political reality is that a referendum at some point is inevitable. David Cameron is looking to 2017, partially as a measure to buy time ahead of the next election from his rebellious backbenchers.

Labour’s actual choice on this issue is whether to follow and start campaigning when the referendum is called or to lead by committing to a referendum with an earlier date.

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Such a commitment would transform the political landscape. All talk of Ed Miliband’s difficult summer or Labour’s policy drift would be swept away.

The boldest version of this policy would be to set the date for the referendum on May 7th 2015, the day of the next election.

It would define the election, with a united front of Labour, Lib Dems, business groups, unions and civil society campaigning together. Ranged against the pro-camp would be a bitterly divided Tory party. Think about it: David Cameron would be forced, in the middle of a general election, to oppose his own party on the defining issue of the campaign.

All that has happened in this parliament so far would be rendered irrelevant.

There are obviously risks inherent in such an approach.

However, given the state of the polls and Labour’s position, maybe the time has come for a major play that resets the political clock.

If Labour went down this path, it is almost certain there are the votes on the floor of the House of Commons to pass the necessary legislation – a majority of the Tory party, ministers included, would likely vote in favour.

Now is the time for political courage from Ed Miliband.

Labour needs to lead on Europe.

A commitment to a referendum on the day of the next election would offer the party, and the country, that transformative leadership.

Anthony Bonneville works in investment banking

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14. How to avoid the Hollande headache

by Paul Crowe In May 2012 Francois Hollande was elected president of France on a wave of popular support. The socialists had won the presidency for the first time in 17 years, led by a bookish intellectual who many so-called political experts had written off as lacking the charisma and steel for the top job.

The comparisons with Ed Miliband were difficult to avoid.

Labour’s leader was the first British politician to visit President Hollande, received at the Elysee palace before even David Cameron.

One year on from his victory, Francois Hollande was the most unpopular leader in French history. His poll ratings had plummeted and the French media talked of a lame duck presidency.

The reason for this abrupt change in fortunes was down to one thing: delivery.

The French public do not believe the president and his team know what they are doing. Hollande’s flagship 75% top rate of income tax still has not been implemented, following a ruling that it was unconstitutional by the French supreme court.

Few trust that he will be able to deliver his signature pledge of fall in unemployment by the end of 2013. An August opinion poll found 84% of the French public thought he would miss this target.

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Even the left-wing daily Libération recently dubbed the president and his prime minister, “the apprentices.”

If Labour’s leader is the next prime minister, he must arrive in office with a clear view of how Labour’s programme will be implemented to avoid Hollande’s fate.

The preceding chapters have answered two fundamental questions: what does it take for Labour to win in 2015? And to what end?

They set out how Labour’s negatives can be neutralised and the policies that bring to life Labour’s alternative vision for Britain.

But, for Labour to do more than just win an election; to avoid the Hollande headache and actually change the country, a further question requires an answer: how will Labour’s priorities be delivered?

The temptation for an opposition is to assume away delivery as something to be worked out in government.

After all, there are tens of thousands of civil servants tasked with turning manifesto commitments into practical delivery.

This temptation must be resisted. The hard work of government, in an environment where implementing change is frequently challenging, must be embraced if we are to truly make a difference.

Understanding the problem

There have been two important reviews of delivery in the past year by think tanks: one conducted by Reform and the other by the IPPR. Both of these looked at the effectiveness of government departments.

Although they approached the subject matter from slightly different perspectives, both raised common issues which 160

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undermine government’s capacity to deliver projects effectively.

Three core failings emerge, highlighting the management problems not just in the civil service, but in the Ministerial sphere.

• Accountability – the drawbacks of the civil service’s traditional modus operandi where a little knowledge of a lot of areas is prized in staff, are well documented.

Constant rotation of senior staff to build this broad knowledge base is frequently identified as a problem.

But recognising a problem as deep seated doesn’t make it any less prevalent or damaging. As one former coalition minister told Reform,

“There is a difficulty in tying success and failure to individual responsibility within the organisation…I had examples of projects that were going quite badly wrong and needed to be put right and I’d get a team in and they’d say, ‘Oh Minister, I’ve only just taken over a month ago and the person who was responsible has moved on to do x,” and that isn’t very satisfactory because it makes it difficult to objectively judge the capacity of the Civil Service to deliver.”108

But it is not only the civil service that is guilty of poor accountability for delivery. Ministers are ultimately accountable for the implementation of policy and they are rotated as frequently, if not more so their departmental staff.

Worse still, the rise and fall of their political star will have a fundamental impact on delivery. Where the minister is seen to be in the ascendant, so projects are prioritised; but where the star is falling, their projects can be allowed to run into the sand as civil servants wait out the time before their inevitable departure. The 161

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absence of clear, consistent political direction within a department can be as big a delivery problem as the changing cast of senior civil servants.

• Performance management – the difficulties in linking individual performance to successful delivery, even if staff were not rotated, is another problem that is repeatedly identified, not least by civil servants themselves.

The IPPR report cited the Civil Service People Survey 2012 which found that “Only 37 per cent of civil servants agree that ‘poor performance is dealt with effectively in my team’, only 43 per cent agree that ‘my organisation as a whole is managed well’, and a meagre 29 per cent agree that ‘change is managed well in [my organisation]’.”109

Once again, the problem is mirrored on the ministerial side of the divide. As one coalition MP commented to Uncut, “The most difficult thing about doing this job, whether you’re a minister, a backbencher or whatever, is that you never know whether your boss thinks you’re doing a good job.”

Promotion is not tied to the delivery of particular projects, which are often out of sync with the political cycle of reshuffles. Media comment and perception weigh more heavily in decisions on political promotion than a track record in delivery

• Skills – the mix of skills in departments is often inadequate to meet the needs of delivery. The Reform report quoted one non-executive director as saying “Once you’ve got legislation on to the statute book there is no real depth of feeling about delivery.”110 For ministers, there is a related problem of management over-stretch caused by minimal support in their private 162

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office. It means ministers are overwhelmed and lack the advice to make the right delivery choices.

The IPPR report is blunt about the problems, “Working with small private offices means that Ministers have insufficient capacity for providing strategic leadership of their departments. Precious time is taken up with fire fighting and managing departmental processes.

Ministerial overload is a common problem.”111 The collision of patchy delivery skills in the civil service with ministers who are permanently engaged in crisis management means effective management is too often an aspiration rather than a reality.

These issues in accountability, performance management and skills must be addressed in some form if the next Labour government is to avoid the failures that have characterised the myriad of failed initiatives such as the NHS IT system112, the Home Office’s eBorders system113 and the NHS reform programme114.

Taking on the delivery challenge

So what, realistically, can Labour do?

Wholesale reform of the civil service, before delivery gets underway, is obviously out of the question.

However, the point at which the political meets the administrative – the connect between ministers and the machinery of government - can be improved with some adjustments to the way Labour prepares for and structures the delivery of its policies.

Specifically, Labour needs to • Pick deliverable policies

• Establish a transition team to prepare for delivery before the election 163

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Establish a new delivery unit in Number 10 to work with departments in the implementation of flagship policies

Pick deliverable policies

Labour needs a clear focus on a simplified list of the policies that will define the government.

The scale of government can be overwhelming: hundreds of thousands of employees, almost ÂŁ1tn of annual expenditure and constant demands from all quarters for more action.

In this context, it can get easy to contract initiativitis. As Kevin Meagher has set out in chapter 12 on public services, this was certainly the experience of the last Labour government. New initiatives were announced with little thought about what was needed to ensure delivery. For media hungry ministers, the press release announcing the new programme was normally the full extent of their active engagement.

It needs to be different next time.

We need to do some thinking in opposition about what we can really achieve in office.

This will result in a more streamlined, more focussed programme of change. Additionally, choosing these prioritised policies will spotlight the key minsters responsible for their delivery and make it clear to senior civil servants that these projects are not going to be blown away by the political wind. This should help to address the accountability issue identified earlier.

The process of prioritisation is not simply one of picking favourite policies though. Each project must be reviewed and evaluated for its potential to be delivered effectively well in advance of gaining power. This will ensure that, on

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gaining power, those minsters in the spotlight have every opportunity to succeed.

Of course, this review should not just evaluate individual policies in isolation. It must consider the balance of policies, matched against the capacity of government to deliver the package as a whole.

How to flag problem policies

There are two stages to reviewing projects in this way. This first is to develop an understanding of the complexity of delivery. The second, to evaluate the political consequences of this complexity

There are many different ways of evaluating programmes which will give a view of the several moving parts in implementing a policy; for example there is the European Quality Management Foundation or Balanced Scorecard115.

These are just two of the many tested methodologies, extensively detailed in management texts so we will not go into details here. Suffice it to say that the tools are there for the party to review its policies and there should be no shortage of volunteers from Labour’s friends in business to apply these frameworks to rate policies in terms of delivery complexity, if required.

What comes next is where the real value will be added.

The most complex policies need to be evaluated against the political time and capital required for implementation.

Specifically, how much parliamentary, ministerial and party time will be required in the policy’s implementation?

And how much of the government’s reserves of good will with backbenchers, minority parties and the public will be expended in the process of implementation?

The answers to these questions will determine whether the political commitment and pain of a policy can be delivered, 165

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and whether it will end up destabilising the government’s broader delivery programme.

Consensus preserves political capital

The Olympics were an incredibly complex project to deliver. Billions of pounds being spend through hundreds of different contractors to deliver to an immovable timetable.

They were always going to take a lot of political time and require the type of focused operational leadership provided by leaders like Sir John Armitt. But because of the shared political commitment across the parties and the clear metric for success (stadia and facilities built on time and to budget) paradoxically, the political capital required was comparatively low.

To ensure the project was sufficiently funded and the budget increases required were passed did not require the parliamentary equivalent of trench warfare, where the minutiae was bitterly contested.

Adjusting delivery plans did not spark immediate hand to hand political combat. Consequently, ministers did not need to be as intrinsically involved in each decision as they need to be on more contentious programmes.

Admittedly, if one of the major contractors had fallen catastrophically behind on implementation, there would inevitably be political consequences, but even the disaster of the G4S’ security recruitment did not shatter the political consensus and passed off without the type of furore there might have been.

NHS reforms, on the other hand…

Contrast the Olympics with the government’s NHS reforms.

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Given their scale and complexity, a pre-election delivery review would have triggered alarms on both the political time required and the capital needed to implement them.

The total absence of consultation and agreement on the plans meant it was obvious enormous amounts of political capital would need to be immediately expended to secure the reforms passage through the House of Commons.

The depth of inevitable opposition to the reforms from other parties, and health service groups meant implementation would be contested every step of the way.

It was patently obvious that the depth of opposition would potentially lead to the reforms being re-defined in middelivery, adding cost and diverting the policy away from its intended objective.

These red flags would not necessarily have stopped the government implementing the reforms. But better planning would have meant more time and political resource devoted to delivery and the scale of the current disaster could have been avoided.

Labour needs to be careful to not repeat the government’s mistakes

The debate around Labour’s commitments for 2015 is intensifying and already there are potential policies being discussed where delivery will be incredibly difficult.

One example is the proposed integration of the NHS and social care systems.

In policy terms, there are clearly many advantages to a rationalised system that addresses an individual needs in a joined up way. The health outcomes will likely be better and it has the potential to be the type of signature reform that will as Andy Burnham suggests, rank along-side the foundation of the NHS.

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But it will require extraordinary amounts of political time and capital to implement.

As with the government’s NHS reforms, there is no crossparty consensus behind the policy. Although supported by several health service groups, there will inevitably be groups that benefit from the current arrangement that oppose change.

To engage in another upheaval of the health system, immediately following the NHS reforms, will strain change-weary staff and managers and mean that health service will have been in a constant state of revolutionary change for an entire decade.

Opposition will come at a political and operational level and the complexity of delivery will dominate government activity.

To successfully navigate the integration of health and social care through implementation will require substantial personal commitments from Ed Miliband down, and within the civil service delivery team it will require the best managers from across government to be recruited to ensure the project delivers.

None of this means the policy should not be in the Labour manifesto. But, if it is to be adopted, then Labour’s other policies will need to be commensurately simpler and easier to deliver to ensure adequate resources are available.

For example, as a result ambitious yet complex delivery pledges in areas such as universal childcare and 1m+ homes – both suggested by Uncut and widely canvassed as potential Labour flagship policies – would be much harder to deliver and might have to make way.

It is this approach to delivery in the round that is essential if Labour is not to enter government over-committed, under-resourced and destined to fail.

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Establish a transition team to prepare for delivery before the election

Once the policies have been chosen, there is a lot to do in order to get the programmes ‘shovel ready’ so they can be kicked off immediately after the election. Four years passes very quickly in the context of large programmes, and it is a common mistake to waste vital months in establishing momentum.

Thus our recommendation is to pull together a transition team, similar in nature to those created by both parties during the US Presidential elections.

The purpose of the transition team is to plan for the implementation of each manifesto pledge, and put in place the organisation and stakeholder structure to get the programme moving fast from day one.

The team needs to bring together a mix of the skills needed to manage politically sensitive programmes. Within the Westminster bubble there are two models of political adviser: policy wonk and spinner. To this there needs to be a third added: programme manager.

As with wonks and spinners, the programme manager needs to have acute political antennae and a commitment to the party. But unlike much of the rest of the Westminster village, they must understand how big programmes work and what it takes to deliver successfully.

Within the transition team, a political programme manager should be assigned to each key manifesto pledge and be tasked with working through the detail of a delivery plan for the commitment, before the election.

The plans will be brought together under the aegis of the transition team director, who reports directly to the leader, and help define the requirements for delivery that need to 169

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be addressed immediately as Labour becomes the government.

For example, the plans will detail the human and technology resources that are needed, the dependencies with external organisations or authorities that need to be secured and highlight the political pinchpoints where legislation is needed.

At a practical level, the plans will define what ministers and departments do in the critical first few weeks of government and where the prime minister will need to be personally involved.

A new prime ministerial delivery unit in government

When Labour takes the reins of office, the nature of delivery needs to change if the same old problems are not to bedevil the implementation of Labour’s priorities.

This is why the implementation unit, currently located in the cabinet office, needs to be transformed. It should sit in Downing Street as a delivery sister to the policy unit. The transition team can move from opposition into the delivery unit from where they can monitor and manage the delivery of their plans.

The critical element of this super-charged delivery unit will be the lines of accountability for delivery. The political programme manager will be directly responsible for the delivery of the programme plans. They will be from Number 10 but be based primarily in the department that has lead responsibility for delivery of the manifesto commitment.

The delivery unit programme managers will bridge the skills gap, supporting ministers who, not unreasonably, may have little experience of programmer delivery. The 170

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programme manager would be responsible for putting together the programme team, and have line management authority over civil servants in the team. They will be in place for the duration of the programme and report up through the delivery unit director to the prime minister.

The programme managers will be responsible for operational delivery while the cabinet minister will continue to be politically accountable, reporting back to the prime minister on progress through cabinet.

This new structure will tackle the issues of constant rotation of staff and politicians, establishing long term ownership and maintaining the direction of the policy commitments that will define the Labour government.

The changes are evolution rather than revolution

In one sense the changes seem radical. Political appointments into delivery functions in the civil service and an extension of direct control by Number 10 appear to be a major shift from the old vision of an impartial civil service.

But, in reality, many of these changes commonplace across Whitehall, albeit in a piecemeal form. For example, there is already heavy political input into the appointment of the directors of government’s major programmes. In addition, the widespread use of consultants has been enthusiastically embraced by ministers of all parties to bring in their preferred political advisers, even if they technically do not qualify for Special Advisers or have already reached their quota.

And the close attention of Number 10 in the business of departments that are delivering the government’s key programmes is hardly new.

The changes proposed formalise some of what has already happened and establish a delivery process for key 171

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commitments that is consistent and enables any overlaps or synergies between different commitments to be managed. For example, Uncut is proposing a major programme to generate 1m new jobs. This would have clear links to other pledges, such as on housing and childcare, which will both themselves generate tens of thousands of new jobs.

If left to individual departments, or existing crossdepartmental committees, the past track record of government does not build confidence in effectively coordinated delivery.

Time for a culture change within Labour

Delivery is not the sexy part of politics. It involves plans, project meetings and seemingly never-ending reporting on progress. But as prosaic as all of this is, it will be the difference between a Labour government that changes the country and one that flounders in the manner of president Hollande.

Labour needs to act now to set itself up for success in government. This means drawing in delivery expertise into the heart of the manifesto development process, and committing to a new structure of delivery in government.

It also means recognising and rewarding MPs and ministers for what they have delivered in office as much as for how many media soundbites they achieve.

Most immediately, it means there needs to be something of a culture change within the upper echelons of the party.

Words are spoken about the importance of delivery and planning, but frequently it is just lip service.

Planning and management are things that specialists do or that are outsourced to consultants and professionals. They are simply not viewed as ‘politics’.

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This must change.

The disciplines that drive effective delivery such as quality programme management are needed in politics just as much as the established policy and press roles.

Without a delivery perspective in the manifesto development process, the party could find itself saddled with an impossible agenda. Public expectations will collide with the government’s inability to implement what has been promised.

Even with judicious selection of policy, the merry-go-round of civil servants and ministers and mish mash of skills in government mean successful delivery is often more a matter of luck than design.

The lessons of successes like the Olympics, and disasters like NHS reform, are clear. Political management needs to mean more than machinations in the House of Commons and extend into the detail of delivery.

Only if Labour make this change and embrace the political necessity for more hands on management will prime minister Ed Miliband avoid developing a president Hollande style headache.

Paul Crowe is an entrepreneur and Labour Uncut’s business columnist.

He is a director of a business placed amongst the top 40 fastest growing British private companies in the Sunday Times Fast Track 100 and has worked in programme delivery across public, private and voluntary sectors

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Notes 1 2 3 4 5 6 7 8 9

10 11

12 13 14 15

YouGov Party leaders tracker: http://cdn.yougov.com/cumulus_uploads/document/lhnabrjag 7/YG-Archive-Pol-Sunday-Times-results-260413.pdf from “Majority Rules” – YouGov/Peter Kellner, http://www.progressonline.org.uk/wpcontent/uploads/2013/05/Majority-Rules.pdf “The myth of the trade union block vote” – George Eaton, New Statesman http://www.newstatesman.com/politics/2013/07/myth-tradeunion-block-vote Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill (HC Bill 97) http://www.publications.parliament.uk/pa/bills/cbill/20132014/0097/cbill_2013-20140097_en_5.htm#pt3-l1g36 There must be one woman nominated in each branch or affiliate, and the shortlist is required to have equal numbers of women and men.

“Labour’s real problem with ‘tolerated entryism’” – Kevin Meagher, Labour Uncut http://labouruncut.co.uk/2013/07/05/labour%e2%80%99s-real-problem-withtolerated-entryism/ “More Labour Woes” - Rotherham Politics (non-partisan political blog from Rotherham) http://rotherhampolitics.wordpress.com/2013/07/03/morelabour-woes/ “Ken Livingstone: Jews won’t vote Labour because they are rich” – Jewish Chronicle, 21 March 2012 http://www.thejc.com/news/uk-news/65425/ken-livingstonejews-wont-vote-labour-because-they-are-rich “Postal vote fraud claims investigated” – BBC News http://news.bbc.co.uk/2/hi/8659864.stm “Making sense of Bradford West” – David Goodhart, Demos http://www.demos.co.uk/blog/makingsenseofbradfordwest “George Galloway and the rise of sectarian politics” – Daniel Hannan, Daily Telegraph http://blogs.telegraph.co.uk/news/danielhannan/100148228/ge orge-galloway-and-the-rise-of-sectarian-politics/ Tory membership slumps under Cameron (and Labour’s membership numbers aren’t rosy either) – Mark Ferguson, LabourList http://labourlist.org/2012/07/tory-membershipslumps-under-cameron-and-labours-membership-numbers-arentrosy-either/ Remaking Labour - Anthony Painter, Progress, August 2013 http://www.progressonline.org.uk/2013/09/04/remakinglabour/ “Labour’s Business”, 2012 – Ed. Alex Smith. I wrote Chapter 3.

YouGov Poll Tracker on the Economy

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Notes 16 17 18 19 20 21 22 23 24

25

26 27 28 29 30 31

32

33 34 35 36

37

YouGov found that 37 per cent of voters backed Cameron and Osborne in December last year. In July, this year they found that 39 per cent of voters do. Support for Miliband and Balls was 26 per cent both in December 2012 and July 2013.

See, for example, Atul Hatwal, ‘The polling that shows why Labour’s lead is soft’, Labour Uncut, 22 May 2013 Such nonsense would be obvious to readers of economics sympathetic to Keynes. For example, Lindbeck, Assar and Snower, Dennis J, 1994, ‘How are product demand changes transmitted to the labour market?’,Economic Journal, Royal Economic Society, vol.

104(423), pages 386-98, March.

For more on Hollande, see Christine Ockrent, ‘What’s wrong with France?’, Prospect, June 2013 These relatively small percentages are explained by larger proportions of the electorate who would or would not vote Labour in any case.

The Independent, 19 August 2013 You Gov Poll Tracker on the Economy Deborah Mattinson, Talking to a Brick Wall, 2010 A large proportion of the additional taxation that Compass, for example, proposed to raise through their Alternative Spending Review (2013) came from a financial transactions tax.

Michael Meacher makes the case for such taxation in his new book - The State we Need (2013) OBR, Economic and fiscal outlook. March 2013 Such pragmatism in economic policy-making is the central argument in Anatole Kaletsky, Capitalism 4.0, (2010) Adam Lent, Generation Enterprise: The hope for a brighter economic future, RSA, September 2012 Lord Young, Growing your business: A report on growing micro enterprises, BIS, May 2013 NESTA, A manifesto for the creative economy, 2013 The UK recently became a net exporter of cars for the first time since the 1970s.

Ian Mulheirn with contributions from Gavyn Davies, Richard Lambert, Evan Davies, Dan Corry and Gerald Holtham, Osborne’s Choice: combining fiscal credibility with growth, SMF, (2012) Graeme Cooke, Adam Lent, Anthony Painter, Hopi Sen, In the Black Labour, Why Fiscal Conservatism and Social Justice go hand-inhand, (2011) David Osborne, Ted Gaebler, Reinventing Government: How the Entrepreneurial Spirit is Transforming the Public Sector, (2000) The closure of the RDAs was described by Vince Cable as “Maoist”.

Adam Smith famously said: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from regard to their own interest.”

Ed Balls told Labour Party conference last year: “Because we all know that there can be no post-election spending spree, in our first year in government we will hold a zero-based spending review that will look at every penny spent by government:

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38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55

56 57

58

59 60 61 62 63

carefully looking at what the government can and cannot afford, rooting out waste and boosting productivity.”

I also compared contemporary politics with the 1922 general election in May’s edition of Progress magazine Ipsos MORI Political Monitor, September 2012 Reform, Must do Better: Spending on Schools, May 2013 http://conservativehome.blogs.com/thetorydiary/2010/06/ even-andy-burnham-thinks-george-osbornes-nhs-spendingpledge-is-irresponsible.html The Spectator, 20 July 2013 Paul Collier, The Bottom Billion, Why the Poorest Countries are Failing and What Can Be Done About It, 2007 It is welcome to note that Chuka Ummuna has led a trade delegation to China and Liam Byrne has this year published a book on the economic importance of China’s rise.

New Statesman, 7 February 2013 This point was made by Steve Van Riel in Progress magazine in February this year.

This is based upon savings equally those previously reported to be associated with means-testing pensioner benefits. See, for example, ‘Vince Cable calls for tax on pensioner benefits’, 6 March 2013, Daily Mail Duncan O’Leary, Something for Something: Restoring a contributory principle to the welfare state, Demos, (2013) These measures all come from SMF, Osborne’s Choice: combining fiscal credibility with growth, SMF, (2012) This peer to peer suggestion was not made by the SMF but our thinking is that it would provide an alternative saving vehicle to ISAs, which would also target funding on SMEs who are less likely than larger firms to receive finance from more conventional sources.

Quoted in Global Witness, Anonymous Companies, May 2013 Richard Murphy, 500,000 missing people: £16bn of lost taxes, March 2011 The Telegraph, 25 September 2012 Evening Standard, 27 August 2013 Centre Forum, Money down the drain: Getting a better deal for consumers from the water industry, (August 2013) The Taxpayers Alliance cite a figure of £53bn in their Bumper Book of Government Waste (2013). http://www.thechamberlainfiles.com/battle-of-the-birminghamintelligensia-david-bailey-versus-sir-albert-bore/ This point is made by James Page, ‘Spending review 2013: Taking on the union’, Institute of Government, 6 March 2013 Working for a Healthier Tomorrow, DWP, 2008 This observation has been made elsewhere by Ben Jupp CBI, Budget Submission 2013 Maria Miller, Speech on Arts Funding, 24 April 2013 Centre for London, Home-Work: Helping London’s social tenants into employment, 2012

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Notes 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84

85 86 87 88

89

Channel 4 website, ‘Could selling off Britain’s assets cut the debt?’, March 7 2011 This figure also comes from Channel 4 Ed Balls, Striking the right balance on the economy, 3 June 2013 Counting the costs of child care after housing costs, Vidhya Alakeson, Alex Hurrell, Resolution Foundation, 2012 http://ippr.org/images/media/files/publication/2011/12/ making-the-case-for-universal-childcare_Dec2011_8382.pdf Making the case for universal childcare, Ben-Galim, IPPR, 2012 This figure of one million has been reported, for example, in the Financial Times, 5 August 2013 As I argued on Labour Uncut on 25 May 2013 NatCen Social Research for the Joseph Rowntree Foundation, Public Attitudes to Welfare 1983 - 2011, (April 2013) Joseph Rowntree Foundation, Monitoring Poverty and Social Exclusion, (November 2012) This figure is also taken from Monitoring Poverty and Social Exclusion, (November 2012) Public Accounts Committee - First Report, Support to incapacity benefits claimants through Pathways to Work, (8 September 2010) Speech on 6 June 2013 The Guardian, 6 April 2013 As reported in The Guardian, 2 August 2012 ONS, Statistical Bulletin: Young People Not in Education, Employment or Training (NEET), May 2013 Department for Education, Data on 16- to 18-year-olds not in education, employment or training (NEET), July 2013 As reported in The Guardian, Friday 23 Novemer 2012 ONS, London’s economy outperforming the rest of the UK - Infographic summary, 13 March 2013 See TUC Press Release, ‘UK has a ‘jobs gap’ of 158,000’, 15 August 2011 Channel 4 website, ‘Could selling off Britain’s assets cut the debt?’, March 7 2011 This figure also comes from Channel 4 Centre for London, Home-Work: Helping London’s social tenants into employment, 2012 Assessing the Fiscal Costs and Benefits of A8 Migration to the UK, Christian Dustmann, Tommaso Frattini, Caroline Halls, University College London, Centre for Research and Analysis of Migration, 2010 NINO Allocations To Overseas Nationals Entering The UK, Department for Work and Pensions, August 2013 Higher Education Statistics Agency, figures for 2011/12 http://www.hesa.ac.uk/content/view/1897/239/ In the absence of comparable breakdown in statistics for Further Education and Independent schools, assumption that the non-EU proportion in these sectors is also 70%

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98 99 100 101 102 103 104 105 106 107 108 109 110 111

112

113

114

115

Further education and Independent schools figures from International Education: Global Growth & Prosperity, BIS, July 2013 ibid Based on an average salary for an immigration officer of £26,079 (UKBA, 2012) and a total cost of employment £28,644 http://www.turn2us.org.uk/PDF/Benefits%20Stigma%20in%20 Britain.pdf http://www.theguardian.com/politics/2011/apr/08/jobcentresbenefits-sanctions-targets http://www.bbc.co.uk/news/uk-politics-23080963 http://www.bbc.co.uk/news/uk-21196616 Full Fact, How many criminal justice bills were produced by Labour?, 21 February 2011 As reported on Left Foot Forward, 23 September 2010 Care Quality Commission, State of Care, November 2012 National Audit Office, NHS Pay Modernisation: New contracts for general practice services in England, (February 2008) As reported in the Daily Mail, 16 May 2011 The FactCheck Blog, ‘Defence Review: the £38bn question’, 19 October 2010 As reported by the BBC News website, 22 June 2012 Local Government Association, Ten Point Plan to revive England’s economy and public services, 2 July 2013 As reported The Telegraph, 6 March 2009 As Labour Uncut noted on 30 May 2013 As reported by the BBC Nws website, 17 July 2009 Whitehall reform: the view from the inside, Andrew Haldenby, Tara Majumdar, Greg Rosen, Reform 2013 Accountability and responsiveness in the senior civil service: lessons from overseas, Guy Lodge, Susanna Kalitowski, Nick Pearce, Rick Muir, IPPR, 2013 Whitehall reform: the view from the inside, Andrew Haldenby, Tara Majumdar, Greg Rosen, Reform 2013 Accountability and responsiveness in the senior civil service: lessons from overseas, Guy Lodge, Susanna Kalitowski, Nick Pearce, Rick Muir, IPPR, 2013 http://www.computerweekly.com/blogs/editorsblog/2012/09/everybody-lost-in-nhs-it-disas.html http://www.computerworlduk.com/news/publicsector/3360381/home-affairs-committee-slams-e-bordersprogramme-as-huge-disappointment/ http://www.theguardian.com/society/2012/oct/13/davidnicholson-fears-nhs-reforms http://www.balancedscorecard.org/bscresources/aboutthe balancedscorecard/tabid/55/default.aspx

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