Labour policy is wasted without presentation
Joe Wright, 2 July 2014
A glance at the economic state of Britain does not look good for Labour: GDP is up by 0.8 per cent in the first quarter, marking the beginning of what looks like a year of good economic news – perhaps even trumping last year’s rise 3 per cent growth to be the highest rate since the economic downturn. Labour’s calls for a manufacturing-led economic rebalancing is also losing traction: The Times reports ‘Manufacturing activity accelerated at the second-fastest rate in more than three years during June… the industry [is] on track to grow at a pace not seen since 2010.’
But dig deeper and little has changed. Living costs are still too high, and wages are still depressed (they peaked at 0.1 per cent above inflation for the first time in six years in the last quarter). The reason growth is yet to translate into prosperity is, according to David Blanchflower of The Independent, because of underemployment and unemployment – both of which are still far too high. Companies need to be in competition for talent in order to raise wages; this cannot happen with so many still looking for work. Underemployment also means workers are willing to work longer hours for the same pay. Wages, so the thinking goes, cannot significantly rise until we reach full employment (roughly 4 or 5 per cent unemployment).
More jobs, higher GDP etc. does not equate to rising living standards, especially not across the UK. Labour is struggling to convey this, though there has been no shortage of ‘friendly’ advice. Lord Glasman has written in The Financial Times today precisely on Labour’s failure to produce a coherent narrative: what the UK has been through and where they would like it to go. Without this narrative, the work of John Cruddas, his policy unit and the IPPR, all go to waste. This week was a good example, with Labour’s announcements on their cities strategy and further devolution to the regions seemingly falling on deaf ears.
Developing the city regions is fast becoming the biggest economic problem the country faces, for the sake of both the South East and the rest of the country. The ever greater tilt of the UK economy toward the South East, drains talent and business from other regions while placing huge pressures on small areas in the South to provide for increasing numbers of people (London house prices have soared 25.8 per cent in the last year (£) according to the latest Nationwide survey – well above the national average rise of 11.8 per cent on the year).
Devolution is Labour’s answer, which Glasman described as ‘an almost Galilean change of perspective for a party that has long insisted that everything revolves around the state. It shows a regard for institutions that can develop resilience and moral character.’ More than that it is a bold raid on Conservative principles: the party of independence and self-reliance where ‘People and communities know best, not Westminster’. But as bold as this line of thinking may be, without better communication, it too will enter the policy graveyard.