Labour must turn ‘make Brexit work’ into an ambitious and compelling story

The Brexit vote opened up the Tory Party to millions of working-class voters. They wanted a new model of government and a new model of the economy. The Conservatives promised them levelling up and they have broken that promise. With its tax cutting budget, the new government under Liz Truss is repeating past failures. The Conservative coalition is breaking apart. This is Labour’s chance to build a winning national coalition. It must turn ‘make Brexit work’ into an ambitious and compelling story about the reconstruction of the national economy across the UK.

The new age of geopolitics

The advance of globalisation into national economies has halted. Governments were once promoting the free movement of goods and services by getting rid of domestic regulations and the transactional costs of national borders. Now they are concerned about national economic resilience, national strategic assets, redesigning supply chains and reining in national companies that do business with rival countries.

Governments are being forced to intervene to offset market failure and take the first pragmatic steps in responding to the breakdown in their domestic social contracts. Nowhere is this more necessary than the UK where governments went further than other OECD countries in globalising the economy, selling off strategic national assets, marketising the public sector, and failing to keep control of key industries.

The country is in a chronic state of disrepair. The British state is failing. The pillars of social order, an affordable and sufficient supply of food and energy, are under threat. The energy crisis is structural, there will be no quick fixes. The sheer scale of the challenges are daunting.

In step with the new paradigm change in policy making, Labour is tentatively signalling a new corporatism focusing on economic growth and productivity. But the old approach of growing the economic pie and then redistributing it won’t repair the broken covenant between government and citizen. A new model of economic growth is needed that improves the economic security and wellbeing of households. It will require state-led action but also social and economic development from the bottom up.

Seven proposals for national reconstruction that will make Brexit work and improve people’s lives

1. Rebalance the sovereign national economy across the UK

Labour must be the party of the national economy. The function of the national economy is to supply every citizen with the basic goods and services that sustains daily life: the food we eat, the homes we live in, the energy we use and the care we receive.

The most effective way of improving national resilience is by upgrading and repairing the everyday economy which binds the whole population together in the shared necessities of life. A new Companies Act can re-evaluate company stakeholders and introduce employees on boards to create a fairer balance between the interests of capital and labour.

2. Put culture and belonging at the heart of a new Labour model of economic growth

People’s resilience and their readiness to act comes out of a sense of belonging and pride in their cultural inheritance. Parochialism is the wellspring of solidarity, but it requires safe neighbourhoods. Crime and antisocial behaviour shatters the sense of belonging in a community. Labour has to prioritise crime and address the widespread dismay at boarded up high streets, unsafe, ugly neighbourhoods, the loss of local shops, festivals, fairs and markets that once gave local places their unique character and history.

3. Don’t separate economy from nature and land.

Labour needs a new language and politics of nature, land and the environment that speaks about access to the natural world and improving the quality of people’s local environment, as well as global change. An environmental covenant recognises that human beings are both of nature and have responsibility for it.

Adaptation and lessening the impact of climate change, alongside a revolution in domestic, sustainable energy production are essential steps toward national energy security will drive forward national reconstruction. A similar systemic approach is required to develop domestic food production through a food strategy and a pro-worker and pro-nature approach to farming.

4. Invest in vocational education

Vocational education has suffered grievously from class bias, business neglect and long term government failure. A ready supply of cheap, EU migrant labour ‘capped wage inflation in some sectors’, and contributed to incentivising the low skill, low wage, low productivity economy.

The end of free movement brings a tighter labour market and an opportunity to develop a national and devolved system of vocational education and training, fit not only for the automation and artificial intelligence of the new digital machine age, but for developing the everyday economy of retail, utilities, care and public services.

5. Improve the capitalisation of development banks

A UK wide ecosystem of venture capital and entrepreneurial activity is a vital component of economic growth and levelling up, but it remains concentrated in the South and areas of existing prosperity. The British Business Bank and the UK Infrastructure Bank are both underpowered and undercapitalised. In the following decades the whole country needs irrigating with capital through regional banking to rebalance the national economy, grow local enterprise, connect with innovation, and create wealth.

6. Reform governance through devolution and reform of the central state

National reconstruction needs new approaches to governance and leadership, brokering and convening bodies and organisations across society and economy in new forms of common good politics and partnerships.

While the dispersal of power and brilliant local social innovation encourages local people to take local control, this alone cannot redress the structural faults of the economy nor generate a new model of growth. It will require a strong developmental state which uses its legislative and executive power to take on vested interests and monopolies and mandate change for the common good. Labour’s political challenge is to create reciprocal relationships between central government, the devolved administrations, regional mayors, local councils and local communities.

7. Set up a council for social and economic development

There is a role for a new kind of Social and Economic Development Council that will drive forward national reconstruction from the centre. It would provide continuity across changing administrations, collecting and holding data for public access, and providing expert advice and support on levelling up.

Successive governments can be structured to work toward national social and economic development by requiring the Treasury to have regard to its development missions in the annual budget, or by specifying that the Charter of Budget Responsibility must set out a commitment to delivering these missions.

Ready or not, change is coming

In the following decade, the country needs stability and security to absorb and support radical changes in technology and economic organisation. To conserve what is good will mean radical changes to modernise the everyday economy, take on incumbent elites entrenched in the neoliberal economy, and rebalance regional inequalities. The country needs a new national story about its resilience and its future opportunities, a mood of hopeful, constructive ambition that rises with the crisis and thinks and acts anew.