Ed Miliband’s commitment today to set out concrete policy steps in this next year is certainly needed. But the really essential point is that they must deal with the fundamentals, given how dire and precarious the state of Britain has now descended into. The worry is that both the main parties are now fixated on symbols which, though important in themselves, are not central to the current pressing concerns of most of the general public. The Tory party has impaled itself once again on the EU question, as though withdrawal from Europe were somehow a panacea for the cure of Britain’s woes – an idea so fanciful, whatever one thinks about the EU, as to be risible. The Labour party has adopted the theme of ‘One Nation Britain which certainly draws on the injustice and hurt of profound inequality, but gives very little sense of the huge structural transformation that is needed if both national and individual prosperity is to be restored. Above all, sheltering beneath a popular and heart-warming slogan cannot be a substitute for confronting the profound failures that are daily pulling down Britain.
The single most important point for Labour to make, and one for which the whole country is waiting, is that prolonged austerity is self-defeating; even the government’s own OBR has recently predicted that on current policies the structural deficit will still be £99bn in 2015, only £10bn less than it was in 2010 – a policy of ruthless attrition with virtually no reward whatever. Labour should commit instead to create a million jobs within 2 years, funded either by diverting QE into direct public investment in infrastructure or housing, or by taxing the 1-2% super-rich, or by borrowing a very modest £0.15bn at ultra-low interest rates to raise £30bn to turn the economy around.
Second, the drastically hollowed-out UK economy (with a deficit in traded goods this year of some £110bn, or 7.5% of GDP) should be repaired by switching from over-dependence on financial services, which produced the epic crash of 2008-9, to a massive programme to reinvigorate British manufacturing. There is no other way to safeguard British living standards and to restore a full-employment economy.
Third, Labour should commit to radical reform of the banks to ensure they serve the real interests of British industry, not their own self-interest through wasteful and destructive financial speculation and tax avoidance.
Fourth, Labour should make clear its commitment to re-draw the boundaries between state and markets by ensuring that the objective of market efficiency is properly balanced by the ethos of public service and community interest, either through regulation, taxation or public ownership as most appropriate.
Fifth, the yawning inequality of income, wealth, power and opportunity must be addressed by whole company pay bargaining, tax on extreme wealth, a new charter of employment rights in the workplace, and a classless and open education system.