The Economy – Is Labour finally getting its act together?


It’s been a long time coming, but finally Labour – and the progressive left more broadly – are getting their act together and beginning, just beginning, to present alternatives to the Coalition Government’s economic strategy.

First, several weeks ago, Ed Balls and Ed Miliband launched Labour’s plan for jobs and growth – five simple policies which, although self-evidently not a fully robust strategy, would encourage investment and consumer spending now and help many small and medium businesses to take on new employees.

Such a plan – little more than a holding position in truth, but an important piece in Labour’s economic jigsaw – was a desperately needed announcement for Labour. Unemployment remains disastrously high, particularly amongst young people, over a million of whom are now out of work, and, as Mark Ferguson has expertly demonstrated, growth has been virtually non-existent across the past eighteen months.

For small businesses, there’s been little respite – and the government admits it’s done too little to turn the situation around. David Cameron’s pledge last week to funnel £95 billion into SMEs through the Regional Growth Funds and RBS, NatWest and HSBC will not inspire huge confidence at the front line of small business – previous government attempts to exert pressure on the banks had little effect in actually getting capital to the High Street. Thousands of businesses are still using this fallow period to save cash or pay down debts; most are, instinctively and justifiably, prioritising survival over expansion.

And yet, in spite of a growth-free economy and an unpopular government, an Ipsos-Mori poll in September showed that only 23% of the public preferred Labour’s economic policies, compared with 33% who prefer the Conservatives’ policies. That gap has increased by seven percentage points in 2011. Clearly, there is still a huge amount to be done if Labour is to earn back economic credibility.

That’s why it’s so important that Labour gets its narrative on business right, and that’s why it’s reassuring to see the beginnings of improvements to the party’s economic messaging. Notably, the message is now also being carried with improved discipline. Google “Labour plan jobs growth” and you’ll find details on the first two pages of results of how Ken Livinsgtone, Kate Green, Stephen Twigg, Liam Byrne, Rachel Reeves, Mary Creagh, Ian Austin, Andrew Miller and Margaret Curran have all been spreading news of the announcements. And there’s new consideration for width as well as depth in the news grid – the media interventions were made in local press outlets from the north-west to Yorkshire, the midlands, Scotland, Wales and north London. The improved comms are an important new development. Remember Alan Johnson going off the central reservation on several occasions during his tenure as shadow chancellor? It caused the party no end of media headaches – and almost certainly contributed to Labour’s failure last autumn to make an impact on the economy.

In another sign that things are improving, on Monday, new shadow business secretary Chuka Umunna gave a brief speech on the future of Labour’s relationship with small business to an assembled group of journalists at Bloomberg. It was a talk about the importance of government learning from business; about business and government both keeping an eye on more than just the bottom line or the next quarter – but rather planning for the long term; about businesses that know their community and respond to its needs, changing, innovating and growing as it does so. It was a speech about building relationships with customers, and opening conversations and collaborations to ensure competitive advantage. It could almost have been a metaphor for what Labour itself still needs to do, with its politics, its organisation and its message on the economy.

The publication of a new pamphlet on enterprise, edited by Luke Bozier and myself – and for which Umunna has penned the foreword – aims to help accelerate that improvement, and to help shift the debate away from the argument over what makes for “good” and “bad” business; that clumsy language has caused Labour huge headaches with the business community. “Labour’s Business” is a collection of twenty essays and policy proposals for how Labour can stake out ground as the party of enterprise. It features contributions from businessmen and women and public policy experts with decades of business experience for how Labour should approach enterprise under Ed Miliband, and analyses on why business must be a core value of the Labour Party in the post-recessionary age. That’s an argument the Labour Party on the whole still needs to learn to care about, and we hope the pamphlet will contribute to the growing debate in the party about how we provide better answers to the 14 million people in Britain working in small business – and how we make enterprise a safe and exciting opportunity for the people we seek to represent in the future. We hope you will join us on November 30th as we begin this debate in Westminster, or in your local CLP as we expand the conversation across the country next year.

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