The future of the left since 1884

Why it matters: A new social contract

Amidst the torrent of questions for the Labour Party, this one certainly stands out. How do we ensure that the people we seek to represent believe that politics matters – and that Labour politics will make a difference to their...


Amidst the torrent of questions for the Labour Party, this one certainly stands out. How do we ensure that the people we seek to represent believe that politics matters – and that Labour politics will make a difference to their lives?

A Labour government must achieve a whole new political promise, and way to deliver, in 2015. One nation Britain must be nothing less than a vision of a new social contract between state and citizens that is unambiguous in its commitment to end the rising inequality of Tory Britain and ensure prosperity is fairly shared. Equally, it must be a contract that gives everyone a stake – putting communities and people at the heart of politics. David Cameron’s ‘Big Society’ distorted and disfigured the themes of community empowerment and localism.  But these themes must become a central element of our one nation vision.

It’s an enormous challenge for Labour, but we can achieve it – by thinking universally and acting locally.

Confronting the division and inequality of Tory Britain

Labour’s political vision must firstly tackle the fallacy of the Conservative government’s economic ‘recovery’. Over the summer the Tory party’s jubilation over a small rise in GDP did little to cover the reality that this is the most painful recovery the UK has had in over a century.

Worse, the pain has not been shared equally. Worklessness is increasingly concentrated in specific regions, local areas, communities, and even housing estates. In Birmingham, our unemployment rate (10.3 per cent) remains over double the national average and continues to rise. In 2010, just 20 young people in my constituency had been out of work for over a year. Now that number is 295.

Instead of rebalancing the economy and reforming our industrial, business and export structure, the Government has concentrated on sowing divisions between those who are lucky enough to be born with good employment prospects (“strivers”) and those who aren’t (“shirkers”). By 2015 income inequality under Cameron will have been as bad under Thatcher – despite him spending half the time in office. The government has led a recovery of the few.

One national localism

The most important responses to a crisis always emerge at a local level. I saw it in the community reaction to the collapse of the MG Rover factory at Longbridge in my constituency in 2005. I see it now, with local food banks and homelessness projects tackling austerity policies on the ground. It’s at the heart of the kind of the community organising approach pioneered by Arnie Graf and others in the USA. It’s also central to a growing number of Labour front-bench policies. From the Shadow Department for Work and Pensions paper calling for devolved unemployment programmes, to Maria Eagle’s focus on putting local people in control of transport services, one nation localism’ has certainly gained ground.

Localism is a powerful response to both current economic and political challenges. Firstly, greater devolution is critical in a context of poor public finances – as decisions are made closer to those affected. Local decision making enables spending to address real community needs and priorities, rather than a centralised approach that can be wasteful and ineffective. Michael Gove’s forced imposition of free schools in areas where there are enough school places is case in point. But equally, localism is an important political shift – giving individuals and communities a greater say and stake in the decisions that matter to them.

This year I began mobilising this type of approach to drive local regeneration in my constituency. It aims to build community capacity to promote a new local identity, attract investment and develop a new economic vision for an outlying part of Birmingham that is in transition, and often feels by-passed by government and council initiatives. The response I’ve had from both the public and private sector has confirmed that taking a bottom-up, local approach to economic regeneration is critical.

The challenges for Labour

The ideological and practical challenges facing Labour localism are well known. It’s the seemingly inherent contradiction between our commitment to equity and the reality of localism – that a different postcode means people get different entitlements and services. And many doubt the willingness of any government to actually relinquish power to local authorities. Despite the Tory rhetoric of ‘rolling back the state’, a pervasive government centralism has been shown all too clearly in the failure of the Government to give City Deals and Local Enterprise Partnerships the resources required to unlock real local growth. This, at the same time as they pursue cuts on a scale that threatens the ability of local authorities like Birmingham City Council to have any decision making power at all.  But the Tories are not the only culprits. Labour governments have been less willing to “let go” than we should have been too.

Squaring the circle – the one nation social contract

A one nation social contract can overcome these challenges by thinking universally and acting locally. We need a universal political promise that speaks to both the most vulnerable and the squeezed middle, leaving no one behind. This will rest national policies which aim to make UK a fairer and more equitable country, which a Labour government commits to resource. Such policies – such as Labour’s jobs guarantee to tackle long term unemployment, the full-scale national integration of health and social services to provide ‘whole person care’, and tough legislation to tackle the energy and train bills affecting ordinary people – have already been established. More, particularly to tackle universal issues such as childcare and the cost of housing, are certainly needed.

The social contract would set out the responsibilities that the state has to citizens. Moving on from Cameron’s rights and responsibilities agenda, the social contract is about reciprocity – a solid bond that binds together the state, market and society in a common purpose. It would provide framework for localism, establishing the parameters in which government departments, local authorities, voluntary organisations, and businesses will work together to deliver equitable prosperity in communities up and down the UK.

How would this actually work? Take the broken financial system. At a national level, a Labour government would create a fairer economy by tackling low pay, increasing the supply of high quality jobs, building a more redistributive taxation system and ensuring tougher punishments for financial crime. But a Labour government would also drive local action. We would create regional banks with a statutory duty to promote local growth and support SMEs, fund sustainable community financial models such as credit unions, create community-controlled training and apprenticeship programmes, and empower local authorities to shape their high streets for the better.

This is just one example of how a one nation social contract might work. But if people are going to believe we mean it, we have to be consistent. We have to show we mean it. That means an unambiguous commitment to equality in what is invariably – and too narrowly – called “welfare reform”. It means rediscovering universalism to show that everyone a stake in the system; that it’s not about hand-outs to others. The Tories and Lib Dems may be waking up to that with their sudden conversion to universal free school meals for young children. We should be ahead of the game.

So a one nation social contract is about thinking universally, meaning it consistently, and acting locally to deliver it. In his seminal conference speech last year Ed said that one nation is a country in which everyone has a stake, and in which prosperity is fairly shared. Labour must establish a whole new political promise, delivered through politically empowered communities and citizens,  for a one nation UK in 2015.


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