Jon Trickett: Jeremy will help us sweep away economic dogmas and the old elite

It is has been argued that as a nation we have become deeply pessimistic. That, for many, it is easier to imagine the end of our planet through global warming or a nuclear accident than it is to imagine that we could create a better world. This is a damning indictment of Tory Britain in the 21st Century. 

For 30-plus years, the closed circle that runs Britain has been in thrall to a destructive economic dogma in which social needs are secondary to unconstrained markets. Our industrial bedrock has too often been left unprotected, while London’s turbo-powered service sector is relied on to drive our economy. And we’ve been too relaxed about people getting filthy rich, on the absurd belief that by some magical alchemy their wealth would “trickle down” and benefit us all.

Britain’s economy has become dangerously unbalanced, as the centres of wealth creation shifted decisively to the south and enterprises and industries in Britain’s regions were left to die, robbing communities of prosperity and purpose. Westminster promised to redistribute the spoils of London’s booming financial sector, but this could not be sustained after the onset of financial instability and crisis.

As a result, we’ve seen poverty grow as wages stagnate and jobs become less and less secure. We’ve seen runaway inequality as too many chief executives use their companies for short-term gain, awarding themselves enormous pay packets and extracting value rather than creating it. We’ve seen social mobility seize up, as getting on in life has come to depend less on one’s own talents and efforts, and more on a special rate mortgage from the bank of mum and dad. 

We were encouraged to believe that all this was unavoidable – that it was the inevitable outcome of economic forces bigger than us. In the words of Maggie Thatcher, we were made to believe that There Is No Alternative. But this statement is simply incorrect. The market triumphalism that has blighted our communities for 35 years was a political choice cunningly disguised as economic necessity.

It was Thatcher that set this in motion. And, while Labour did much to mitigate the worst effects, we could have done more. Now the old mantras no longer work, and the economy needs a wholly new direction. Even some Tories are now breaking with the austerity myth. For Labour, Jeremy’s astonishing victory last summer should be a wake-up call: we need to break with this past.

From the Brexit vote to the IMF’s own critique of neo-liberalism, the signs are abundant that we are in a moment of real danger. Our existing political and economic arrangements are no longer sustainable. 

We have had such moments before. In 1945, our country ravaged from six years of war, Labour redefined our social contract, putting in place the welfare state and Keynesian economic management that would make the second half of the 20th century the most prosperous in history.

The country faces a very different set of problems to the ones it did in 1945, and clearly the post war solutions no longer apply. But we once again face problems of an enormous scale. And they require answers as radical as those Labour introduced in 1945.

At the core of our answer must be an approach that makes the economy work for people. Our economy is the collective pool of our efforts and endeavours. It should serve us, rather than bending us to its every need. We need to rediscover the idea that its ok to intervene in markets to protect wider community interests, and forget the idea that markets are a substitute for the state rather than a complement to it. 

This doesn’t mean a return to a centralised state – Labour have no desire to replace a market overlord with a bureaucratic one. It means putting faith in people and harnessing their talents by giving them a genuine say in how our economy is run. 

But devolving power will not be enough unless it is backed up by resources and an industrial strategy to rebalance and revitalise our economy.

If the Government cared to look they would see Britain’s enormous potential in the industries of the future – advanced manufacturing, healthcare technologies, low carbon and renewable energy. With our world leading universities, our natural renewable resources, and, above all, the talents, enterprise, and inventiveness of our people, we could lead the green energy revolution. But to do so we need a Government with a long term commitment to nurturing industrial strength, not constant vacillation driven by priorities elsewhere. 

Labour’s economic team will give clear-sighted and single-minded priority to a drive for jobs, growth, competitiveness and prosperity. That’s why Labour will create a National Investment Bank, overseeing a network of regional banks, and backed up by £500bn to lead a huge programme of investment in infrastructure and industry in all corners of the country. The figures are large, but the model is tried and tested – successful models for the National Investment Bank already exist in Germany.

Our industrial strategy will be complemented by corporate governance reform to ensure that enterprises are run by those concerned with their long-term growth, rather than people out to make a quick buck.  

We will also reverse attacks on trade union rights and strengthen workplace protection – this is the only enduring way to end the pattern of stagnating wages and increasingly precarious and casual employment. 

Together, these reforms – and more – will fundamentally change the way our economy works.

It is not a failure of the imagination that makes it easier to imagine the destruction of our planet at the hands of humanity than to imagine a better, more just world. It is the failure of old economic dogmas and the old political elite. Labour under Jeremy offers a chance to break with both.  

Jon Trickett is shadow Secretary of State for Business, Energy and Industrial Strategy.