Beyond ‘big state’ vs. ‘small state’

TO: Labour’s next Leader

FROM: Ivan Lewis

RE: The role of the state and the ‘Big Society’

The role of the state will take centre stage in the battle of ideas and will shape the terrain on which the next election will be won or lost. I urge you to develop a new narrative and programme for government that takes us beyond the outdated ‘big’ versus ‘small’ state debates of the past and seeks mainstream majority support for the “progressive state” of the future.

Your challenge is twofold. Firstly, you must expose a coalition government that is engaged in an unprecedented ideologically motivated attack on all manifestations of the state. The government has to tackle the deficit in a serious way but very different choices could have been made about the timescale and balance between taxation, spending and support for growth.

Secondly, you must develop a credible and imaginative alternative vision of the role of the state in a 21^st Century Britain and globalized world. Neither the post-war settlement, nor the state we constructed in the New Labour years should be straitjackets as we develop our vision of a progressive state for the future.

New Labour’s Legacy

The bridge to the future has to begin with the past. The trashing of New Labour’s legacy cannot go unchallenged. We should be bullish about our record in using the power of the state to mend the broken Britain we inherited in 1997. Historically low NHS waiting times, improved educational attainment, neighbourhood policing and reduced crime, significant reductions in child and pensioner poverty, greater fairness at work, the minimum wage, a radical early years strategy and civil partnerships didn’t happen by chance. When the financial crisis hit state intervention nationally and globally opposed vehemently by the current Prime Minister and chancellor prevented the world from going from recession to depression and saved many jobs, businesses and homes.

However, we also have to be honest about our failures. We built an over-centralised state that too often appeared to nationalise every societal problem. We created quangos and agencies controlled by Whitehall not accountable to the public or local communities. We established new local delivery structures that were no better and sometimes worse than local government. The curse of Whitehall departmental turf wars continued to undermine our aspiration for easy access to integrated public services in every community. When responding to genuine national security concerns we paid insufficient attention to the importance of public consent as we introduced measures that changed the balance of power between state and citizen. Overall, we could and should have achieved more on welfare dependency, affordable housing and social mobility.

The Progressive State

You should make it clear that a fair and successful Britain depends on achieving the right balance between state, citizens/families, civil society and business. Such an equilibrium requires a progressive state which promotes individual aspiration, balanced growth, community security, solidarity and greater equality, while guaranteeing social protection in return for social responsibility. A state that is subject to transparent standards of fiscal discipline and new forms of public engagement and accountability.

You should encourage debate and policy development focused on a number of key issues:

A New Social Contract which is explicit about the rights and duties of citizenship enshrines and enforces the principle of “something for something” and maintains a commitment to a cash transfer system which includes elements of both universal and targeted support. There should be a new right to information for every citizen covering social security and public services – empowering people but also “myth-busting” about benefit levels and other state support in order to restore public trust in the fairness of the system.

Democratic Engagement which enhances the legitimacy and credibility of the state. Truly radical electoral reform would introduce compulsory voting as an expectation of citizenship. Public engagement, using a diverse range of modern media resources, would ensure voters were aware of and could influence the options and choices available to politicians. Measures that fundamentally change the balance of power between state and citizen, such as ID cards, could in the future be the subject of referenda.

Devolution of Power and Resources to local government and local communities should be integral to a progressive state. Lead professionals with pooled budgets, working with the private sector and civil society at a neighbourhood level, should have the freedom to tackle issues such as worklessness, health inequality and poor educational attainment. Giving communities and individuals greater control over the resources allocated to their area through participative and personal budgets should be encouraged and developed. Radical devolution will require a fresh appraisal of the balance between local and national taxation and the role of elected members.

Public Service Reform will be in the wake of coalition government changes that put power in the hands of GPs, police commissioners and headteachers and governors of independent state schools. Our response should be to redistribute power to patients, communities and parents. As pioneered in the NHS Constitution, all providers of public services including private providers should be required to meet certain non-negotiable standards related to tackling inequality, community benefit and good employment practise. New governance models based on cooperative and mutual principles should be developed and promoted.

Civil Society Organisations have a crucial role to play in a progressive state as service providers, intermediaries and campaigners. We should champion the elements of the ‘Big Society’ that seek greater community participation, ownership and control. But the big society will only flourish alongside a progressive state and is consigned to failure and public cynicism in the hands of the small state ideologues of the coalition.

Private Sector Growth requires state investment in infrastructure, skills, science and technology, research and innovation. In a global economy it also benefits from a state that is willing to pursue an active industrial policy. In the aftermath of the financial crisis and in the context of the climate change emergency there is no doubt that we need a more balanced and sustainable economy both in terms of regions and sectors. The same crisis demands a private sector reform agenda that creates a new ethical framework for domestic and global markets. Transparency about business models, governance arrangements, directors’ remuneration and equal pay for equal work can no longer be labelled as burdens on business but are the reasonable expectations of “Corporate Citizenship”.

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You will have to demonstrate that the progressive state is affordable and sustainable while exposing the economic and social costs of the current government’s alternative. But I hope you will help move us beyond the debates of the past, crystallise the values we stand for and most importantly regain the support of the mainstream majority.

This memo, and the others in the series, were first published by the Open Left project at Demos