Wednesday 9 June 2010

Six steps to reawakening Labour England

John Denham spoke last night on how Labour could speak to England, addressing Labour's failure to win more than 10 seats in the South, South-East and South-West outside London in the context of the English result, where the Conservatives won a majority of seats, with Labour winning 28.1% of the English vote.

You can read the full speech on the Fabian website, and a detailed Guardian report Rebuild welfare state to win back southern England on the speech.

Beginning his analysis, Denham revealed the content of a note to Peter Mandelson at the end of the first week of the campaign, which set out his analysis of why a key group of former Labour voters were "deeply resistant" to voting Labour again.

These are families who regard themselves as hardworking, aspirational, but not well-rewarded.

They are usually both working, on average wages, so with a combined income which takes them above tax credits (total household income 40-60k).

They are likely to rely on their cars and may have to pay for their own car use at work.

They give us credit for improving public services – indeed they may work in them.

But in their view they ‘get nothing’ from the government, while other people who work less hard, or don’t deserve help (including migrants) get help with housing, council tax, tax credits.

In the last year they may have lost work, or had hours cut. But because their partner works they got no help when they needed it’ unlike those who don’t work so hard.

They want their kids to get on (and they will) but child care is expensive, university is expensive and apprenticeships hard to come by.

They are not racist, but they can’t see why we give benefits and housing to Polish migrants (as we do) when families like theirs are struggling.

Our future offer does not include them. If they work in the public or private sector all they can see if wage cuts and job losses..They may not like the Tories much, but it is hard to see how a change could be worse.’

I've picked out six of the arguments which Denham suggests could be important parts of an English recovery for Labour.

1. Don't try to make a segmented offer to electoral groups

"All current post-election analyses,, including this one, need a health warning ... But I think one conclusion stands out. The more we dig into the detail of the different voting patterns of different groups of voters, the more we can see the futility of attempting to respond by an equally divided and segmented appeal to each group".

Denham argued that the creation of New Labour had been value-based, but that in government the party had ended up making "the fatal choice: To have different messages for different media and different audiences based on a perception of narrow sectional concerns. It ultimately undermined our coalition; encouraging each to look only at their own self-interest".

2. Rethink New Labour's political economy

"For a long time it was possible to produce jobs, and the wealth for redistribution, by running a pretty liberal free market economy and spending the proceeds.That strategy is no longer available. In the end it produced an unbalanced economy. The very flexible labour markets which generated jobs, and which were often integral to public service reform, also created the labour market in which millions find working life more insecure and less rewarding. And for some time to come, the resources for either services or redistribution will be hard to come by".

"To meet the needs of southern voters – and those in other parts of the country – we will need more radical action. We will need a more active state, to restructure and support a successful economy, not less. We will need to look again at how labour markets can combine flexibility with greater fairness; and we will need to take a fresh look at how collectively owned institutions – from pension funds to mutuals – have a value measure in more than sheer economic efficiency; a value measures in the security and in depends they give to their owners".

3. Enshrine reciprocity - and the popular "fairness code" - by rebuilding a broad, contributory approach to social insurance

"I believe passionately that our society is too unequal. The evidence is pretty clear that we can only achieve the type of healthy, well educated, secure and happy society we want if our society also becomes less unequal.

But not everything which makes us more equal is necessarily seen as fair.In the last year, the Fabian/Rowntree research established beyond doubt that British people have a strong and deep sense of fairness. But it is a robust, common sense view of fairness; one that says that responsibility and hard work should be rewarded; that what you put in should be reflected in what you get out. Yes, we should always look after those who need most help, but effort and responsibility should be clearly recognised".


"We must acknowledge how unfair are seen arbitrary limits on who gets extra support, whether with our trust funds, EMA or free computers. But there are limits to the politics and morality of making the existing system tougher; of creating more losers rather than more gainers. If such a heavy dependence on means-testing inevitably fuels the resentment of those excluded we must create something different. And however hard it may seem in the current economic climate, I believe we have no alternative but to set out on the long-term journey to create once again a system of wide social insurance, on which security and support reflect the contribution made".

4. Address fairness to regions

"According to Oxford Economics, only three regions of the UK produce more tax revenue than is spent in them: London, the South East and the Eastern Region ... This is a difficult issue to raise ... In time, when the deficit is reduced, and growth is firmly established – and it may take another Labour Government to do both – I will argue that the south needs to keep enough of its tax revenues to ensure that we have the resources to tackle the inequality, absolute and relative, within the South. And that the south needs to retain sufficient of its tax revenues to secure the active government support for R and D, innovation and a high value added economy on which the wealth of the whole nation depends".

5. Take identity seriously

"At CLG I developed a modest proposal for the Government to support, nationally, the growing trend to hold local, inclusive, celebrations of St George’s Day. I wanted to reflect this popular movement; but also to ensure that the English identity did not slip back – faced with the thugs of the EDL – into a narrow and racist identity.The proposals went right across Government; but was vetoed just before its launch by Downing Street who were concerned it would cause problems north of the border.

It may seem a small point; but to meet the inability to hear conversations going on in our constituencies was all to redolent of the bigger problems of being out of touch that the election was to reveal.

National identity – both English and British will be essential to a progressive future".

6. Support electoral reform

"Given the state of Labour in the south, we also need to give purpose to Labour supporters everywhere.As a lifelong electoral reformer, I’ve always cautioned against seeing electoral reform as a simple solution to our southern problems. But there is no doubt that we will gain hugely from a change in the electoral system for the Commons and a House of Lords elected, proportionately, on a regional basis.We need to back and win any referendum on AV and a democratic House of Lords to give purpose to voting Labour everywhere".


Do read the whole speech - and let us know what you agree and disagree with in the analysis and proposals.


_______ said...

The welfare state needs to be more universal, more reciprocal, and offer more choice, in order to satisfy southerners. The values of solidarity, reciprocity and individual empowerment should guide for restructuring and reforming the welfare state, to meet 21st century aspirations, demands and expectations.

Perhaps a universal housing cost credit for all working citizens, that is taxed according to income and regional location, could provide much of the answer, and simplify and replace a system of multiple different benefits.

threepenguins said...

Looks like the beginning of a Lega del Sud. It is hard to see how the bulk of the comments could be said to apply more in southern England than elsewhere, though it may be the sense of resentment is higher down there. Certainly, a demand that their tax revenues be spent there would go down well in the suburbs of Milan. Are the people of the south really so crass? Personally, I doubt it.

Sunder Katwala said...

Liberator - thanks. the housing credit idea is interesting.

cambusken - in context, it was made as a much, much more nuanced argument than the "Lega Sud" label would imply, don't you think?

"This is a difficult issue to raise. Not least when we know that the right wing coalition is planning to make the northern regions and the devolved nations pay the brunt of their plans to cut the deficit too early and unfairly.

I will have no part on endorsing, legitimising or condoning that policy. Both the inherent needs of those regions and nations, and the state of their regional economies mean that such a short term policy will have disastrous social and economic consequences.


And given that the drive for additional funding to the most deprived regions is to close the gaps in health, child poverty and economic performance we need to find ways of ensuring that the additional investment does narrow those gaps and not simply cushion the running of revenue based services.

donpaskini said...

What is particularly horrifying about Denham's analysis was that in his account, he heard for the first time from his constituents about why they might not be voting Labour **during the short campaign period**. He should have been having these conversations with people for years before the election, not discovering with 3 weeks to go that there was a problem.

And his response to this is a load of top down tinkering - state funding for St George's Day or whatever gimmicks, plus reforming the welfare state by taking from the poorest.

The lesson of the election is that Labour can't and mustn't be a party which only does community campaigning at election time, or that sees changes in central government policy as the only way to persuade people to support them. Until John Denham and his fellow travellers get this, I don't think he's really got anything useful to contribute. How many times has he been out canvassing since the election? I bet it is fewer then the number of these kind of out of touch contributions that he's wasted time writing.

Sunder Katwala said...


Denham has made many of these arguments over a long period, such as in his Prospect piece "The Fairness Code" in June 2004, which he references, and last summer in response to the Fabian/JRF attitudes research. So the idea he is responding to an argument he just came across in the short campaign isn't right I think

Cantab83 said...

So what is John Denham advocating exactly and why?

If I have read your article correctly, John Denham's argument is that people in the South are suffering as well and need special treatment in the form of targeted subsidies. Here, though, is the problem with that argument. Why are they suffering when they still have jobs and they earn more than people in the North? The answer, surprise, surprise, is that they need to have double income households in order to pay the mortgage. So the problem ONCE AGAIN is housing.

And what is John Denham's solution? Well according to this article it is apparently to increase subsidies to people living in the South so that real average incomes rise even more. The problem is, it won't work. Such subsidies will only go towards inflating the housing bubble in the South even more, and consequently increase regional inequality in this country. Then you will need even more subsidies to counter the additional problems caused by the first ones. That is a classic positive feedback scenario.

If you want redistribution in the South then it must be done locally, and financed locally, with a negative feedback mechanism built in to counter the original cause of the problem. That means using some form of taxation to dissuade people and jobs from moving to the South in the first place while at the same time funding the economic consequences of their movement. There are a number of ways this can be achieved. A Mansion Tax to tax excessive wealth is one. Local income taxes are another. Increased business rates for more affluent areas another. Then give the proceeds of these taxes to local councils and other public bodies in order to increase the salaries of key workers in the South. At the same time use part of the proceeds to build more houses in the South to reduce housing costs.

If John Denham's BIG IDEA is to 'buy' Labour support in the South by unbalancing the UK economy even more, then I'm afraid that is too high a price to pay in my opinion.