Writing a book with a provocative title has its risks. In This Time No Mistakes: How to Remake Britain I argue that the government must escape the serial mistakes of the past 45 years of trying to shrink the state and promote a self-organising market. The aim is unworkable in theory and practice, engendering a series of disasters ranging from monetarism to the Truss budget.
Instead, Britain must strike out anew. The project must be a high-investment, high-productivity economy. The state does not crowd out business investment: public investment crowds it in. Inequality and social division are not prices worth paying for growth; they actively impair it. The mission should be to build a “we society”, incorporating not just an income safety net but decent housing, nutrition, transport and provision of health and social care, ladders of opportunity and the creation of a purpose-driven, innovative stakeholder capitalism. An agile state would lead the charge.
The hope was that a newly elected Labour government might take heed, especially if it won a landslide. But after making more mistakes in its first 100 days – a milestone it reaches this week – than any postwar government, the title sounds like a cry into the void. Audiences around the country don’t spare me their sense of intense disappointment at the never-ending stories from “freebie-gate”, made more intense by the outcry over removing pensioners’ winter fuel allowance, scrapping the cap on social care bills and voting to retain the two-child limit on benefit payments. Double standards can be expected of the Tory party – but not Labour. Why does a rich country, notwithstanding 14 years of misgovernance, face such self-imposed “tough” choices? What is Labour’s vision for the country?
Part of the problem is that the party’s leadership relegates the importance of ideas and political philosophy because, allegedly, they do not constitute good “retail politics”, don’t play well in focus groups and open up the threat of attack for being of the left. It is safer to duck argument over ideas and be a managerial party focusing on delivery. It is a first order mistake Clement Attlee, Harold Wilson or Tony Blair did not make – and certainly not Margaret Thatcher. Ideas are the lifeblood of politics. Without a philosophy, the politician blows in the wind and has no definition.
Blair might have been the quintessential centrist, but he knew that as a Labour leader he had to house it in a distinctive philosophy that had leftwing roots. He declared that it was not socialism that endured, but its ethic – of acting together to promote better outcomes for every individual. We must have one another’s backs. But that ethic of socialism had to be combined with a demand that individuals (and firms) accepted reciprocal social responsibilities, so “the rights we enjoy reflect the duties we owe” – as his rewritten clause IV, which used to commit Labour to common ownership of the means of production, distribution and exchange, now states. It was a “third way” for which he was prepared consistently to argue despite the brickbats from right and left. It might not have lived up to its potential promise – although he left British public services in much better shape than he found them – but he handed on to his successors a viable political framework on which to build.
Combining an ethic of socialism with a hard-headed social liberalism is progressive gold. The former is what drives the creation of strong societal foundations; the latter informs the building of ladders of opportunity. To complete the “we society” there needs to be a state committed to the high public and private investment without which there is neither the wherewithal nor growth to fulfil the ambition.
It is hard to properly gauge the intent of a philosophy-light government. It was quick to freeze infrastructure projects around the country for all their evident need, but 100 days in it has yet to grip multiple social crises. Thus one of the totemic policies of the failed “me society” decades was the sale of council houses at aggressive discounts to incumbents without an explicit requirement that any sale must be matched by a newly built replacement. To reward the current generation of tenants while neglecting the next by shrinking the council house stock by 4.4m over 45 years has been social vandalism. It should be stopped.
But there are signs of a progressive philosophy emerging. Keir Starmer’s speech at the Labour conference, restating his commitment to economic growth and investment, as well as cultural pleasures, echoed Anthony Crosland, the archetypal liberal social democrat. His The Future of Socialism, now nearly 70 years old, was as radical a critique of Labour’s clause IV as Tony Blair’s. His vision was of public investment-led growth that would deliver not only wellbeing for all but more “gaiety and liberty in private life”. A few days later, Starmer said that he believes in borrowing for public investment.
It is a refrain being taken up by Rachel Reeves, although the jury is out until the 30 October budget. “Invest, invest, invest” is her commitment, she told the Financial Times. In Liverpool to promote a 25-year £22bn commitment to invest in carbon capture and storage technologies, she attacked Tory spending plans that leave public investment falling to a derisory 1.6% of GDP by the end of the parliament.
The open question is how much any rewrite of the famed fiscal rules in the forthcoming budget will allow public investment to be lifted to a benchmark 3% of GDP, making a real impact on growth. A review of the pension system to promote more British investment is in full swing. Taxation will rise to relieve the worst pressure on public service delivery. This Thursday’s employment rights bill, marking Labour’s first 100 days, with commitments to offer better sick and maternity pay, and more protection against unfair dismissal, is a decisive improvement in Britain’s workplace settlement.
There have been too many avoidable mistakes since Labour came to power. Now it is beginning to roll out progressive policies – but they would have more purpose if part of an overarching philosophy. The party does aim to build a strong social floor, ladders of opportunity and a high-investment economy, combining socialism and social liberalism. It is a compelling vision, and to argue for it would reveal the government’s direction of travel. It could even mean fewer mistakes.
• Will Hutton is an Observer columnist. His latest book is This Time No Mistakes: How To Remake Britain
