Steps to rebuilding Labour: Improve living standards

By Jon Trickett MP

Now that the initial process of MPs nominating leadership candidates has passed, Labour is about to embark on the more important task of involving its four million members and levy paying trade unionists in debating our future direction.

The leadership debate over the coming weeks must discuss in depth the reasons why Labour lost and how we win back our former voters. To do so a serious and factual assessment is needed as to what has happened to Labour’s support since 1997. Several points are particularly important to stress in looking at how to rebuild a winning coalition.

Firstly, whilst this may have been the year when the roof collapsed on the Labour government, it is clear that the foundations were beginning to crumble much earlier. Labour lost five million votes between 1997 and 2010. Four million of these came at a time when Tony Blair was Labour Party leader and when his credo was the dominant force within New Labour. We should conclude therefore that we must not retreat to Blairite formulae, perhaps relevant to the early 1990′s but long since rejected.

Secondly, it is clear from the table below that Labour’s support broke down amongst all social groups, but that the greatest levels of decline were amongst social classes C2, D and E. These groups – manual workers and welfare dependants – make up almost half of the population. Their importance to the coalition of support Labour need to win can be seen from the fact that 50% or more of these groups backed us during our 1997 landslide.

It is incorrect also to suggest that the South and South East vote moved against Labour more strongly than elsewhere. Areas with above average declines include Wales, the North East, Yorkshire and Humberside, East Midlands, West Midlands and the East. The proposition that we should focus forensically on so-called swing middle class voter in the South is erroneous.

Thirdly, throughout the recent election campaign Labour maintained an overall lead over the Tories when pollsters asked which party people most closely identify with. We failed once again (as we did in 2005) to convert these identifiers into voters.

In order to win again we need to address why support amongst these groups above declined so rapidly and correct the past policy errors to mobilise the millions of voters who still identify with Labour. This – rather than the outdated idea of triangulating to win over Tory voters – lies at the heart of rebuilding Labour’s support.

Of course our loss at the election cannot be attributed to any single factor but one thing more than any other damaged us. This was the failure to defend living standards amongst the middle and lower income earners even before the recession started.

Since 2002-03, according to IFS, median income growth was never above 1.1%. This means for the majority of people living standards rose at most by just a few pounds a week. Such sluggish income growth at a time the economy was moving forward clearly left many people feeling abandoned by the party. And from the 2005 election until April 2008, when Britain saw the return of economic contraction, “income growth was negative for the bottom 20%…and below 1% everywhere except in the top 15% [of the population]“.

The rapid expansion of credit together with the housing bubble allowed people, for a time, to enjoy rising standards of living at a time of declining and stagnant income growth. But the banking crisis then served as a sharp reminder of how much households depended on unsustainable borrowing. Consequently Labour was seen to be failing to protect the economic conditions of the very Labour-leaning “middle income” earners which could guarantee a majority in the Commons.

Given the economic circumstances we now face, the priority must be for Labour to lay out how it will protect the living standards of low and middle income earners. The failure to have done so sufficiently over the past decade, alongside Iraq, privatisation of public services, and a casual attitude to civil liberties played a key role in undermining Labour’s appeal and breaking up our wide coalition of support.

Too often those citing the need to address this problem have been told this would damage Labour being a party of “aspiration”, especially of those in the south. Thus Peter Mandelson’s infamous to being relaxed about the filthy rich

Aspiration and opportunity are central to our vision for the future. But they have to be the aspirations of the majority. Half of all workers earn below £21,300, three in four earn less than £32,500 and nine in ten earn less than £46,300. Most people aspire to job security, to their living standards increasing, a safe and clean environment, a decent home, security in old age. In these more difficult circumstances we will not meet these aspirations if our focus remains on not alienating the less than 1% of high earners paid more than £100,000. We certainly will not meet them if we are a party advocating cuts.

In the post-election period it has been said that this “phase” of new Labour is dead. The attitude from some quarters however seems to be ‘New Labour is dead, long live New Labour’. Something more fundamental is surely required if labour is to win again.

At a time of a recession brought about by the excesses of finance capital and when those excesses are being paid for by the hard working majority, the stale ideology of New Labour is no longer convincing.

The party must move on and in this the broader left has an important role to play in creating the alternative. We should take confidence that we were correct to argue that Iraq, attacks on civil liberties, reliance on the free market and a failure to increase living standards would erode Labour’s support. Of course we have not always got everything right, all too often being divided, dogmatic and puritan.

Nonetheless we live in a time when only progressive policies can resolve the problems facing the country. The left needs to find new ways of working together and to develop a serious minded agenda for these critical times. Equally, whoever becomes Leader must never again be allowed to ignore our ideas.

An alternative version of this article appeared in Tribune magazine.