New Labour- rebuilding the coalition
4: How our country is changing
- Globalisation
- International Security
- Climate Change and Energy Supply
- Work alone is not enough
- Fairness and Equality
- Mass migration
- The consequences of social change
- Labour in government
Globalisation
Some of the most profound changes we have seen in Britain have their roots in powerful international forces arising from globalisation. Globalisation is transforming our economy; reshaping retailing by cutting the price of both manufactured and agricultural goods and bringing profound change to the nature of employment in many parts of Britain. Conflict, instability and globalisation have forced up the costs of oil and other energy sources raised serious concerns about our own energy security. Mass migration is affecting every developed country and, in Britain as elsewhere, is bringing both benefits and social stress. Climate change has emerged as the greatest threat to the world’s ecology and economy and public concern is growing. The world is being transformed by new communications technology. At the same time, there is growing concentration of ownership and control of all media in a limited number of private sector organisations. Neither international terrorism, nor the emergence of religion as a powerful factor in national and international politics, was widely anticipated just a few years ago.
What all these developing forces have in common is that, left to themselves, they will tend to make our society more unequal and more divided. The economic costs and benefits are unfairly shared. The costs of tackling (or of failing to tackle) climate change will fall more heavily on some than on others. Terrorism and violence can turn all communities in on themselves. Yet the more divided we become, the more we feel our society is unfair, the less we are able to work together to manage and shape these forces. Tackling climate change will require an unprecedented common effort if we are to avoid catastrophe. A divided society, on which the costs of change fall ever more unfairly, will simply be unable to meet the challenge.
We cannot wish these challenges away. Globalisation is a fact, and one that brings benefits as well as costs. But we do have choices about how we respond. We do not have to accept everything that confronts us as inevitable. We can make sure that the rules of public services or communications are defined by the public good. Our need for a strong economy does not prevent us working together to tame the excesses of powerful companies or make us accept casual, low paid employment as an inevitable consequence of globalisation or a strong economy.
Globalisation and the emerging character of China and other economies present unprecedented challenges to traditional industries such as manufacturing. We cannot insulate our industries from those challenges but we do believe we can be more creative in modernising the UK’s manufacturing base and in identifying those areas – such as performance engineering and environmental technologies – where UK skills and knowledge can enable our industries to compete on the global stage.
International security
Labour’s foreign policy has been the most controversial feature of Labour in Government. The authors of this document include those who voted against the Iraq War and those who voted for it. However, we share a common concern with the direction of recent foreign policy and believe it reflects a profound misunderstanding of causes of and solutions to some of the dominant global threats. As such it has weakened our ability to generate a strong national consensus on Britain’s role in the world.
The unprecedented threat from global terrorism has roots in a complex mixture of individual conflicts, the suppression of human rights, ideology and theology, poverty, and the historical relations between the west and many different countries. Recent policy has reflected a simplistic analysis of the causes of conflict and terrorism and has demonstrated an arbitrary and inconsistent approach to major issues including, most recently, the failure to condemn the disproportionate use of force in the Lebanon. In turn this has been reflected in the difficulty of tackling extremism at home.
No one should doubt our commitment to the promotion of democracy and human rights, along with the principles of consistency, transparency, and respect for the facts that must accompany them. We have understood and supported the need, on occasion, for armed intervention in Kosovo and Sierra Leone and Afghanistan. But today Britain’s international role is being characterised by critics as undermining international institutions and the rule of law. Support for human rights and democracy is compromised if it is linked to the right of the US and the UK to determine which election results should be recognised, which abuses of human rights should be condemned and which breaches of international law should be punished.
There are no short cuts in the promotion of human rights and democracy. Individual conflicts require understanding and painstaking even handed solutions. Action that reforms as well as strengthens international institutions will be more effective in the long run than unilateralism. And we need to consider carefully how best Britain and other nations can best encourage a positive role by the USA in the exercise of its sole super-power role.
Climate change and energy supply
Climate change is unique amongst the problems we face. The full effects may not be apparent until it is too late. It is difficult for people to accept that current CO2 levels already determine dangerous climate change for decades to come. We must do far more to explain the links between fossil fuel dependency and the range of alternative solutions. The public have to be convinced both that the transition to a low carbon economy can be achieved without significant pain and that the costs and the lifestyle changes are being borne fairly across society. The choices Government makes about taxation, transport, energy and housing policy will have a critical impact on our ability to prevent catastrophe.
The climate change threat and the security of our energy supply are inextricably linked. Labour has a good record of international leadership on climate change policy but needs to do more to develop the practical policies to increase energy conservation, develop sustainable energy technologies and increase energy self-sufficiency. The most economically effective response to climate change is to reduce energy consumption through increased energy efficiency. In decoupling economic growth from carbon consumption we can gain global markets for sustainable energy technologies. Public subsidy for new nuclear build cannot be justified.
Work alone is not enough
Ten years ago, in a country scarred by mass unemployment, the simple aim of getting people back to work seemed ambitious enough. Although many people have been brought back into work, the hard core of the unemployed and economically inactive have proved harder to help. In the poorer paid parts of the labour market family incomes have risen sharply through tax credits, but we have not yet enabled enough people to raise their ambitions and or enjoy a different quality of employment. There is no doubt that lives have been improved, but we have not helped those lives to be transformed to the extent that we want to achieve.
In other parts of the economy, rising living standards have been accompanied by growing insecurity in work and the decline of the best standards of pension provision. Balancing work, family, travel and housing costs can be hard.
There are more people in work than ever before, but this no longer seems enough. In a globalised economy we will have to work hard to maintain high employment levels, but labour market, housing, transport, pensions and child care policies will need to ensure that work does bring the chance of a decent home, family prosperity and a secure retirement.
Fairness and Equality
British people as a whole are better off than ten years ago. But the way the rewards fall often seems unfair. Within the generations of a single family we can find pensioners who struggle, home-owners with new housing wealth and young people who cannot afford any decent home.
Welfare reform has had a positive impact on the lowest income families by enabling many people to get back into work, and by raising the incomes of the poorest pensioners. All families have gained from the investment in health and education. But there are parts of life that are central to family security – like pensions, social care, and job loss – where we have not yet managed convince all middle income families that the support they gain is a fair reflection of the investment they make.
Ten years ago the dominant housing needs were to provide security against the sky high mortgages and repossessions of the Tories, and to tackle the huge backlog of repairs and modernisation in social housing. Today, the issues are very different. In many parts of the country high prices are making access to the housing market very difficult, and many buyers rely on family help. Long queues for social housing are developing once again in some regions. Although Labour can claim to be acting on both, these new housing challenges need to become a more central part of the story we tell about modern Britain.
Despite some progress, our society remains profoundly unequal. Many people, not just the poorest, need support to enjoy equal life chances and their aspiration of security for themselves and their family. Of course, the levels and types of support that different people require will vary, with the poorest needing the greatest help. The practical response to the family waiting for social housing will be different to the measures that help first time buyers. The pension problems of the poorest are different to those of the middle earner. But our commitment cannot be limited to those who fall below a means-tested threshold. It must be to all those whose life chances are unfairly denied by the powerful forces that shape our society, and to provide that support in a way that fairly rewards both need and effort.
In the 1990s, New Labour needed to show that it had accepted the crucial role of the private sector and of markets. We need to maintain that commitment. Even so, we were able to win support for our criticism of ‘fat cats’ and of undeserved rewards. Today, those Labour criticisms are muted, even though the public are as prepared to be critical of private companies that fail them as they are of poor performance in the public sector.
Freedom from discrimination and unfair treatment is a key aspiration for Britain in 21st Century. Whilst Labour has made great strides in the last ten years it still has to embrace this agenda with enthusiasm. Whilst much of the basic legislation is in place, it is increasingly out of date and ineffective. Thus there is still a gap between the aspiration of equality and the reality. This is most clearly shown by the stubborn persistence of the gender pay gap, matched by a race pay gap and the almost total exclusion of people with disabilities from the labour market Modern Britain cannot hope to flourish without tackling this affront to both social justice and economic efficiency.
Mass migration
Compared with many European countries Britain can take some pride in our management of post-war immigration, with the great majority of people coming from former Commonwealth countries. But the pace and nature of migration has changed over the past few years. Large numbers of refugees and asylum seekers, illegal migrants, legal migrants for work, settlement and family reunion, and migrants from the accession states have together had a noticeable impact on both urban and rural areas. The change has been sufficiently marked and rapid to generate insecurity and concern amongst many people whose response is not primarily racist or hostile to newcomers. They are uncertain about where the country is going. The change has underlined that Britain’s transition to a multi-racial, multi-cultural society with a clear sense of national identity and shared values is far from complete.
The twin pressures of rapid cultural and ethnic change and the uncertainties of the wider world have undermined our shared society of Britishness and Britain’s place in the world. The old stories of what it meant to be British aren’t adequate for the modern world. Confusion about what we stand for is shared by the longest established and newest parts of the communities.
Labour must lead the process of forging a new British identity for the 21st century, one that defines what we hold in common alongside our diverse national, ethnic and religious identities. We must manage the pace of change; and dealing rapidly with the potential conflicts that undermine shared values and common interests.
The consequences of social change
The crime challenge has changed too. The dominant concerns of the 1990s – car crime and burglary - have been cut sharply as we implemented our slogan of ‘tough on crime, tough on the causes of crime’. But both low level anti-social behaviour and more serious violent crime have proved far harder. The underlying problems of social exclusion, marginalised communities, and dysfunctional families have proved more intractable than we first believed. No one would accuse Labour of not acknowledging the problems or of not making some attempts to tackle these problems, but at this key moment our original confidence in our ability to tackle the causes of crime has wavered. Reform of the criminal justice system is needed but we are in danger of placing an implausible faith in the policing, the courts and the penal system to solve our current crime problems.
At the same time, modern Governments are confronted by an increasingly important set of issues about personal and individual behaviour that seem to lie outside traditional politics. The failure of the CSA was preceded by the widespread failure of many men to behave responsibly towards the children they had fathered without attracting social opprobrium. Obesity is a problem that appears to be personal yet requires a public response. In areas like these there is no common consensus on which Government intervention in personal lives might be justified.
Labour in Government
When New Labour’s politics were formed it was easy to criticise the tired incompetence of the Tory Government. But after nine years, we need an honest appraisal of the strengths and weaknesses of our own style of government and management. New Labour was first elected with the slogan ‘what matters is what works’. We might have added ‘what doesn’t work matters’.
In Government, we seem to have gradually moved away from a pragmatic evidence based approach to public sector management that built on our experience of success and failure.
We have invested heavily in health and education and there have been noticeable improvements in most of the areas we have targeted for change. But with significant new investment unlikely, Labour needs a better story about how it believes public services should be run. Too often we have confused our own targets with real measures of what the public wants, claiming credit in one area only to overlook public dissatisfaction in another. More recently, we have confused the public’s desire for services tailored to their personal needs with a desire for market choice and competition in services. New providers and contestability can bring improvements in services, but it is doubtful whether the current strategy of basing every service on choice and competition will prove any more successful than central direction. Labour in power has not yet found how to drive up standards whilst keeping the active support and commitment of public service staff.
Confusion over ‘choice’ is the clearest example of the way Labour has lost its way on public service reform. It was an important and defining moment when New Labour defended the rights of parents to choose their child’s school. It marked a break with a past with the idea that parents should put up with failing schools for some ill-defined common good. But over time the ‘right to choose’ has become confused with the idea that parental choice can be relied upon to drive up standards. We are in danger of imposing a dogma as unjustified as the one we challenged ten years ago and in the face of evidence that choice policies have increased social and ethnic segregation.
Choice and diversity should be part of any model of public service reform, but they are only part of the solution. Contestability – the ability to introduce alternative providers when existing services fail – has been effective in challenging complacency but there is no basis for the idea that internal markets will produce the best public services. The protection of the public interest, sound management, inspection and accountability and proper attention to the most disadvantaged need to be built in from the start, not added to a flawed market system.
Many of these problems have been exacerbated by the decision-making structures within the Government which are now so centralised that they cannot operate effectively. Cabinet Government has never really functioned since 1997 and much of the Government machine, both political and professional, is effectively excluded from key decisions.
Difficult and complicated social problems can rarely be solved by a reliance on legislation and central direction. Effective change depends on the working relationship between central and local government, and between government and voluntary organisations and the private sector. New Labour in power has often set out to develop such partnerships only to retreat to a more centralised approach when things get difficult; decentralisation has often been offset by onerous penalty and inappropriate inspection regimes.
We all have a role in creating a Britain that is fairer, less divided and better able to manage the powerful forces we face. The way Britain is governed must it make likely that people can work together in the common good. Power must be spread both within Westminster and between central and local government and local communities.
The repeated problems in delivery of large centralised services – tax credits, NHS IT, the CSA and others have caused real damage to Labour’s reputation. Too often, political priorities and timescales are set without proper regard for the practicalities of implementation or a sufficiently careful analysis of the underlying problem. It may be that some subtle complex problems need less ambitious and more decentralised solutions and the decentralisation of responsibility for both funding services and regulating service delivery.
Part 5: The political challenge