Labour is pursuing a 25% strategy. Only the soft left can build a winning coalition

It is little more than a month since Jeremy Corbyn was elected leader. The summer of hope is over, the enthusiasm of tens of thousands has been banked for a new, more honest kind of politics. Straight talking is promised. That’s good; Labour needs some straight talking about the direction it’s heading in following defeat in May.

In May we lost everywhere to everybody. We were wiped out in Scotland because we were the party of Westminster. We lost in England and Wales because voters perceived us to be anti-austerity. They didn’t trust Labour with the country’s finances and preferred an out of touch, unfair party of wealthy vested interests to a reforming Labour Party that wanted greater equality. On a range of electorally significant issues – the economy, immigration, spending, welfare, business, public service reform – Labour had spent the five years since 2010 marching away from the views of a majority of the electorate.

2010 was our worst electoral defeat since 1918. 2015 was worse. In their conference speeches both George Osborne and David Cameron have seized Labour’s political agenda and its values. Some claim that the Tories are rattled by the Labour Party’s new lease of life. Nothing could be further from the truth. Labour is increasingly talking to itself. Despite the dramatic rise in membership it is isolated while the Conservatives speak to the country and increase their grip on power.

Labour is teetering on the brink of political irrelevance. Its electoral coalition is shrinking into the public sector and middle classes and it has become a more culturally exclusive party. It is still early days in the new leadership but there is an outline of how it intends to respond to this predicament. It looks and sounds like a politics that will attract barely 25 % of the vote.

Jeremy Corbyn’s victory was not won by the hard left which is numerically insignificant. It was won by the tens of thousands whose politics could be defined as ‘soft left’. It was their anger and despair at Labour’s lack of ambition and two crushing defeats that determined their vote. It is the soft left who will be the pivotal force in turning Labour around and beginning the long haul back to electability. In the aftermath of the previous hard left insurgency in the 1980s, the soft left had a similar role. It does not win Labour elections alone. Its combination of ideology and pragmatism, speak for a large part of the party. Its values and its capacity for innovation are vital in shaping a winning politics. Tony Blair built the best of early New Labour out of its intellectual resources and ethical socialism.

The path ahead to political renewal and electability lies through the soft left. But in a prescient article in July Neal Lawson identified a problem. The soft left as an organizational and ideological force in the party has been shattered. It has no leadership, no ideological coherence and no strategic political purpose. It has been disfigured by the tribalism of Brownism and Blairism. It is fragmented within the Parliamentary Labour Party and lies dispersed in isolated initiatives and projects. A similar fate has befallen the modernizing right. Labour will only win when these two parts of the party redefine themselves and build a coalition of the centre. Under present circumstances the lead must come from the soft left.

The recent publication by Compass of Ken Spours’ The Osborne Supremacy is the first sign of a willingness to grapple with this political reality. Spours provides a brief analysis of the rise to power of the Conservative Party since the leadership campaign of David Cameron. He identifies the potential for a decades long Tory political dominance and he provides the soft left with an outline for building a new political force to counter it.

This will not simply be a Syriza or a Podemos, nor a Green, Labour, SNP progressive alliance. It will need to be a coalition that reaches beyond this formation of progressive opinion to win back some of the millions of working class voters who have walked away from Labour. To achieve this, the soft left will have to reconstitute itself in such a way that it can manage the paradoxes of radical and small c conservative cultural values and play its historic role in Labour’s renewal and electability.

To succeed it will need to recognize and overcome the four perennial obstacles that stand between Labour and its reconnection with the country.

The first is the economy.

Anti-austerity is the cornerstone of Corbynomics. Prominent Keynesian economists back it as do many economists associated with the soft left. But there are two problems with Corbynomics.

The first is the confusion at the heart of its anti-austerity politics. In July, the Corbyn campaign set out its position in The Economy in 2020. Its Keynesian attitude toward the current budget deficit was challenged by an economist associated with Socialist Action. You can read his challenge here and the Keynesians response here.

Labour’s anti-austerity position is to avoid cuts to public services, not tax middle income earners, and not borrow for current expenditure over the economic cycle. To achieve this may mean running gigantic surpluses in the ‘good years’. The Keynesians calculate that to avoid current budget borrowing over a generous 14 year cycle with a smooth running economy would require an annual surplus on the current budget of around £90 bn, or 5% of GDP.

A number of options have been floated to help meet this extraordinary target. Richard Murphy’s Tax Gap report challenges the government estimate of a tax gap of £34bn in 2014-15 and calculates a £120bn shortfall in 2014/15. The inference is that a significant amount could be recovered by bearing down on tax evasion, but the amount has now been downplayed. People’s Quantitative Easing would involve printing money for investment in infrastructure, new homes and green industries to grow the economy. But this is something that no post war Chancellor has succeeded in doing until the financial emergency of 2008. It has now been earmarked for economic crises only. A third option to ‘strip out some of the £93bn worth of corporate tax relief and subsidies’, has also been tempered in its ambition.

The reversals and ambiguities of this anti-austerity politics reveal the limitations of a statist, ‘tax and spend’ politics that was decisively rejected by the electorate in 2010 and again in 2015. For all the talk of a new politics, it is a political economy that has hardly changed since 1983. And this generates the second much larger problem. The more Labour talks about anti-austerity, and about taxing, borrowing, and spending on its priorities, the more distance it travels from the electorate and the less chance it has of ever winning power to actually achieve the change Labour members want.

The soft left lacks an alternative to top down, ‘tax and spend’. It needs to develop a new political economy that is pro worker and pro business, combining financial prudence with economic radicalism, and founded on partnerships, reforming institutions of economic governance, and supporting people to develop the skills, power and knowledge they need to act as economic citizens. It will need to grasp the extraordinary economic and social transformations in production and consumption that are being driven by digital culture and the new information and communications technologies. And it will require radical new approaches to politics and government that disperse power, reforms both the state and public services, and devolves tax raising powers, resources, and decision making to our cities, towns and communities.

The second obstacle is welfare.

The last five years have seen Conservative welfare reform run into the sand and a Labour Party unable to pose a radical alternative. There has been a great deal of unnecessary suffering but Labour’s tendency to defend the system has only reinforced the view that it is ‘soft on welfare’. Our welfare system is broken and distributes only humiliation and poverty. Large sections of the public have neither faith nor confidence in it. It needs changing not defending.

Labour’s 25% politics argues that redistributing wealth on the basis of need is a sign of a civilized society. The majority of the electorate agree the vulnerable have to be protected but they believe deeply in what’s called procedural justice which is based on the principle of reciprocity. The unjust person is the one who takes too much and shares too little. Many have lost trust in our welfare system because they believe it offends against this cherished principle of contribution. They believe it rewards those who don’t put in and so don’t deserve it, while it fails to reward those who put in and do deserve. The right wing press hasn’t created this attitude, it’s fed off it and reinforced it.

The more Labour uncritically defends the system based solely on distributional justice, the more voters it alienates. The soft left needs to give the system of social security a fundamental rethink and return to the first principle of contribution – if you pay more in you get more out. And it will need to reconfigure the welfare state around helping people to help themselves, and investing to prevent social problems rather than wasting money on reactive, high-cost services. This new covenant between the state, social institutions and citizens will need to invest power in local places, building collaboration among public services and organisations, and pooling funds to stop inefficiency and avoid duplication.

The third obstacle is immigration.

Labour’s 25% politics welcomes immigration as a universal good, despite the concerns of a majority of people in the country that no British government is able to control our borders and manage the high levels of immigration. Labour’s failure to adequately respond to this decades long popular anxiety has two sources. The first is the left’s anti-racism of the 1970s and 80s, which defined opposition to immigration as racist. It was often so then, it is very much less so now. Concern is expressed across all ethnic groups.

The second is the liberal market economics of New Labour which viewed any challenge to free movement as reactionary. Labour’s 25% politics of immigration mimics old New Labour. It is as inevitable as the weather and the British people should just get used to it and shut up.

The soft left needs to take up the issue where Ed Miliband left off. Shortly before the election, a MORI issues poll showed Labour was more likely to be trusted on immigration than all the other major parties including UKIP. Alongside retaining the best parts of his agenda there are two further areas to address. The first is the need to focus on developing social integration and the second is the reform of the free movement of labour.

As things stand Labour’s current position on these three issues will contribute to a 25% share of the vote. They are not simply about policy, but also about cultural values. Labour now stands for universalist beliefs like peace, equality, sustainability, and justice. On the other hand the majority of people tend to hold values that are more rooted in everyday life such as hard work, duty, reciprocity, honesty, loyalty, fairness, decency, patriotism. Labour’s universal values are the acquisitions of an increasingly middle class and higher educated party. Its more traditional values have been edged out and are slipping toward UKIP, which is now the most working class party in Britain.

One of the great strengths of the soft left has been its ethical socialism. It needs to return to its traditions to make a contemporary political language that connects with both the radical and conservative cultures of our country and so provides a foundation of cultural values for a national coalition.

The fourth obstacle is leadership.

There is an unwritten rule in politics that a party leader must inspire public trust and confidence and look and sound like a potential Prime Minister. Labour has chosen to elect an anti-leader committed to listening and campaigning, but not to leading. This sits awkwardly alongside a politics that the French call Dirigisme, which means ‘to direct’. Labour has always had a weakness for telling people what to do, and for a command and control, state driven politics, and the new leadership is no exception. This combination of ambivalence about leading and moral certainty about politics will be the source of serious difficulties in shaping am electorally viable offer to the country governed by reliable, responsible and accountable leadership.

Labour needs energy and hope. It needs innovation and change. It needs the tens of thousands of younger members who want a politics that has nobler ambitions than spinning and triangulating a way into power. But it also needs a politics that is more than just the revivalist dreams of a charismatic movement.

Labour has to build its own internal coalition and turn outward and engage with the whole people of the country. Achieving that shared purpose will mean letting go of the purity of a 25% politics where values are taken as fundamentalist political positions. Values guide us in the messy business of political compromise and negotiating with other people who might not share our interests. Used in this way they are vital in building a reforming and winning electoral coalition with the broad mass of people.

This task of renewal and coalition building begins with the soft left. As Ken Spours concludes in his pamphlet, there is a long road ahead. ‘There is a lot to learn, but given the speed of the Osborne supremacy, and the convulsions taking place within Labour, there is not a great deal of time to do it.’

Jonathan Rutherford is a member of the Independent Inquiry into why Labour lost. He worked on the party’s policy review 2012-14.