“What about the workers: has the government done enough to secure working people's support for a fourth term?”
PROGRESS LECTURE, 21 MAY 2008
'What about the workers: has the government done enough to secure working people's support for a fourth term?'
Thanks Anne [Moffat] for agreeing to chair.
Thanks to colleagues at Progress for inviting me to address what I know is one of Labour's most influential forums.
And thanks everyone for coming tonight.
I know there's a rival attraction about to get under way in Moscow, and it can't have been an easy choice for people to make.
Chelsea v Manchester United, or listening to me!
Come to think of it, I think I would prefer the former too.
But it is a great pleasure to be able to address you tonight. I could discuss some of the huge challenges facing the trade union movement in adjusting and adapting to a fast changing labour market, or the Conservative Party's efforts to reposition themselves after so many years of political failure. But those are issues for another day. Instead tonight I want to offer some thoughts on what the government has achieved, where it has gone wrong, and on the route forward to the next election.
I know the Prime Minister hasn't exactly been short of advice in the past few weeks - not all of it welcome - but I think it's right that the views of ordinary working people, the bedrock of Labour support, are given a proper hearing.
My argument tonight is this:
If Labour is to secure a historic fourth-term - and of course it can still be done - then it has to start conveying a much clearer sense of what a Labour government is for.
Not retreating to the failures of the 1970s or 1980s, nor falling into the trap of a 1,000 policy launches and initiatives - headline news one day, forgotten the next - but finding the courage once again to make the case for the most enduring Labour values: equality, fairness, and social justice.
Because when policies have been truly aligned to principles, the government has delivered its biggest achievements - and along the way really captured the imagination and the support of the British people.
From the minimum wage to the historic pledge to end child poverty, from the decision to increase national insurance to fund the NHS to the legislation on civil partnerships, Labour has been best, to coin a phrase, when it has been boldest.
Appealing both to the heartland vote and the progressive, non-conservative majority of Britons.
But before I set out that argument in more detail, it's worth setting out some historical context.
The TUC and the Labour Party have a slightly odd relationship.
We can claim with some justification to be the Party's parents.
A mass party of labour was not entirely our idea, but it only became viable when its supporters persuaded the 1899 Congress that it should call a conference to set up the Labour Party.
It is a matter of some debate about where the current family relationship is now.
Some say the Party has grown up, left home and sees us as John Monks put it, as embarrassingly elderly relatives, who they dutifully come to visit in our seaside retirement home once a year.
Others think it is more that the Party is going through its difficult teenage years, and while it wants to constantly rebel, it's secretly grateful to be able to rely on the security that the trade union movement can offer - as it did during the early 1980s, when the Party was staying up late and experimenting with all kinds of self-destructive substances.
But while the Party has changed immensely, so has the trade union movement.
The rise of white collar and public sector trade unionism means that there are now more unions in the TUC that are not affiliated to the Party than are.
They value their political independence just as much as those with strong Labour roots value their affiliation.
My job is not to favour one model over another, but to maintain the unity and breadth of the TUC.
Not every country with a similarly diverse and pluralistic trade union movement has a single trade union centre like the TUC - and an urge to seek consensus when possible.
So formally the TUC is completely independent of the Labour Party. We have no political fund and do not campaign for any party in an election.
We seek to have good relations with all the parties and influence their policies, not forgetting that we no longer live in a two party duopoly, particularly outside England.
But when a good proportion of our member unions are affiliated to the Party, and we have such an intertwined history, it is inevitable that we have a special relationship with Labour - fraught though it can sometimes be.
When Jack Jones was once asked about the future of his union's relationship with Labour he memorably said, 'murder yes, divorce never.' He may have been speaking about the affiliated tradition but he captured something wider.
And of course all trade unions recognise that they are part of a progressive social movement that stands for justice at work and in wider society.
There is no difference between Labour affiliates and non-affiliates when it comes to opposing racism and poverty, and arguing for the importance of good public services and an active state.
So tonight I want to talk about how Labour can best appeal to people at work - certainly something it needs to do rather better, going by the results on May 1st and subsequent opinion polls.
It's a time for analysis and action, not inertia.
There were welcome signs of a fresh start in last week's draft Queen's speech package, and in righting the wrongs of the 10 pence tax debacle.
And, after six years of stalemate, a prospective agreement on equal treatment for agency workers was announced yesterday between Government, CBI and TUC.
It has been supported by the TUC Executive Committee and goes for ratification to a General Council meeting tomorrow.
The agreement signals a massive step forward - a hugely symbolic development in the battle to root out unfairness in Britain's workplaces.
It is the result not just of a unified trade union campaign, but of a genuine desire among backbench Labour MPs to meet a widespread public demand for change.
As the Prime Minister himself has now recognised, this was a problem that needed fixing.
And I hope the agreement will be seen as a real turning point not only in the battle for workplace justice, but in Labour's strategic thinking too.
Of course I recognise that Labour has been more successful electorally in the last decade than in any other period in its history. I have never argued that Labour did not need to change or modernise.
The Party cannot win elections today simply by mobilising only its traditional supporters - and I am not even sure that is a very helpful concept these days as it implies that some can be taken for granted.
Nor do trade union members make up an electoral majority.
And in any case, past elections have shown that union members are not that different from other voters.
They are more likely to vote Labour than other groups, but support among union members goes up and down in line with society as a whole.
I am not one who thinks that is there an 'old Labour' golden age, where Labour and unions agreed on everything, holding hands as they walked into the sunset together. Remember 'In Place of Strife' anyone, let alone the collapse of the Social Contract and the so-called 'Winter of Discontent'?
Indeed there will always be tensions in the union-Labour relationship in government.
Governments must work in the interests of the whole country; unions are just one - if very important and entirely legitimate - interest group.
If we always agreed it would mean that one of us was not doing their job properly.
Either we would not be setting our sights high enough, or it would mean that government was not making hard decisions about priorities.
But - and this is the bit of the speech that starts with a 'but' - I now want to be more critical.
My basic case is this:
Since the 1990's Labour has been brilliant at dealing with its negatives, and showing that it had changed - not through spin, but through substance.
But it has not been clear enough about what it wants to be - and where it now wants to go.
In other words we know what it has changed from, but not yet clearly enough what it wants to become.
This has left it ill-equipped to deal with today's political world - ironically a world made to a large extent by the Party.
Not everyone seems to grasp that today's reasons why people reject Labour are not the same as they were in the 1980s.
Yet too many seem to be in danger of using the analysis, tools and tactics that worked in the run-up to 1997 to deal with a different set of problems.
People who are not so much new Labour, as deja-vu Labour.
The support base that Labour brought together in 1997 needs convincing anew that the Party is on their side.
The Party must therefore move on, and work out what being in favour of the many not the few means today.
So let me try and explain what I mean by this in more detail.
We all know the problems that Labour had in the 1980s.
People felt it was on the side of the jobless and poor, but didn't understand business and couldn't run the economy.
It may have been on the side of the underdog, but wanted to hold people back and did not understand modern aspirations.
It was the Party of the council tenant, not the owner-occupier.
It was in favour of good public services, but would tax too much to pay for them.
And it was in the pockets of the unions.
In some ways this was an unfair caricature.
But it was deeply ingrained.
And rather than fight it, the Party decided that it was much easier to accept the electorate's and media's assessment as true, and then change.
As we all know, that led to the birth of new Labour. Tony Blair ran as much against Labour's past as he did against the Conservatives, by then failing and worn-out.
While Neil Kinnock and John Smith looked more to the successes of European social-democracy, Tony Blair and other Party strategists looked to the US and in particular Bill Clinton's technique of triangulation.
But triangulation is a dangerous weapon.
You can only run against your own past for so long before you end up undermining some of your most elemental values.
Emphasising constant change means you risk destroying the good as well as the bad.
You end up fetishising the new, and losing the labour.
No one should forget that more people voted Labour in 1992 than in 2001 or 2005.
You can see this in practice.
I have been astonished how little pride the Party has taken in some of its improvements in rights at work, and measures to increase the incomes of the low paid, such as the minimum wage and tax credits.
As a result the beneficiaries are not exactly rushing to the ballot box to show their appreciation.
And the other danger with triangulation, of course, is you concentrate on one flank at the expense of the other.
If people think you are the party of the owner-occupier, not the council tenant, the danger is you neglect council housing.
The result has been a desperate shortage of social and affordable housing.
And those who suffer at a time of high house price inflation say it's not fair. Labour is not on their side.
The government has made similar errors with public services.
Of course they needed to change and they have, helped by the big investment in public services that is only now beginning to slow.
Yet rather than take pride in genuine achievements, too often ministers give the impression that public services are fundamentally flawed, necessitating yet more reform.
On top of this public servants have been told that their living standards will fall each year for the foreseeable future - not as part of a general belt-tightening - but as a deliberate government policy to single out public sector wages.
This had led to difficult industrial disputes with public service unions determined to battle hard to defend living standards.
Labour is now paying a heavy political price too, as six million public servants sense that government, far from being on their side, just sees them as an easy target.
But what about the economy? Surely that is still to Labour's credit.
It certainly ought to be. We have near full employment, and have enjoyed over a decade of sustained growth.
But voters have short memories, and they are now feeling pain.
As the Governor of the Bank of England has suggested, we may be coming to the end of the NICE decade - non-inflationary constant expansion - with all that entails.
And on top of this, the UK seems more vulnerable than our neighbours in Europe to the contagion spreading from the United States.
The IMF has described the turmoil in the money markets as the biggest financial crisis since the Great Depression, and the fear is the full effects of the credit crunch have yet to be felt by ordinary people.
At a time when consumers are saddled with £1.4 trillion of debt, when house prices are falling, when the public finances are tighter than at any point in a generation, there is certainly very little room for manoeuvre.
And this situation is compounded because, once again, ordinary people need convincing that Labour is on their side.
People who work hard, play by the rules and pay their taxes - but feel concerned about the future, uncertain about globalisation, and alarmed at the growing gulf between rich and poor, especially at a time of rising food, fuel and energy prices.
As a trade unionist, I would argue a big part of the problem is people's experience in the workplace itself.
After all work is where most of us spend most of our time, and where our nation's wealth is created; yet is also where many of us have come to feel vulnerable, insecure, uncomfortable about change.
And Britain's workers, middle income as well as low paid, increasingly feel an acute sense of unfairness: aware that the spoils of corporate growth, of record profitability, are being creamed off by a tiny elite while pay rises for everyone else struggle to keep pace with the true cost of living.
While globalisation may be reducing inequalities between nations, within them the reverse seems to be true.
This has been a prominent theme on the Presidential campaign trail in the United States - and if I were a betting man I would suggest the same will be true here in the years ahead.
The government is absolutely right to focus on raising our skills - the best insurance policy we can take out in the global economy - but that can only ever be part of the solution.
Nobody is against 'unlocking the talents of all' - nobody could be - but for millions of people trapped in dead-end jobs, or millions of others battling to balance work with everything else in their lives, that remains little more than a distant aspiration.
That's why I want to see a Labour government make better work for all one of its key goals.
Developing a fairer, pluralist approach to employment that genuinely engages working people, that challenges trade unions and employers alike, and that befits our status as the fifth-largest economy in the world.
And I'll be brutally honest: that will involve spending a little less time talking to business, and a little more talking to workers.
Now I don't for one moment want to talk down the legitimate role business has to play in the policy-making process.
We all need UK plc to be competitive and successful - not just to provide employment, but also to generate the wealth to fund top-class public services.
But from the reform of those public services to the remodelling of our tax system, business interests have wielded a wholly disproportionate influence on policy.
A trend that has been particularly pronounced in the employment sphere.
And the upshot?
As the OECD has shown, British workers now have the second-lowest level of protection anywhere in the developed world.
Not really what you'd expect after 11 years of Labour government.
This lack of balance has given business in general - and the City in particular - far too much freedom to push its deregulatory agenda, with scant regard for the wider social and economic consequences.
In fact I would argue this phenomenon has been directly connected not just to the current turmoil in the financial system, but to many of the government's political problems.
There can be no denying that the City is a great British success story, one of our few world-class industries, and a powerhouse of wealth creation.
That much is self evident.
But there is a growing sense that is the Square Mile that is really calling the shots in Britain today.
Enjoying almost limitless power; yet sometimes behaving without responsibility.
That may sound a preposterous claim - but remember this is precisely the charge that trade unions faced 30 years ago.
And this time there is rather more evidence to support the prosecution's case.
Tax avoidance to the tune of £25 billion a year and possibly more.
Huge sums of public money bailing out a banking system that has borrowed even more recklessly than it has lent.
And a small City elite of investment bankers, hedge fund managers and private equity partners enjoying riches beyond the dreams of avarice, while outsourcing the risks to the rest of us - taking one-way bets they know they can't lose.
All this before you consider the wider systemic risk - of Britain's economy becoming fundamentally imbalanced, over-dependent on a financial services industry now struggling under the weight of its own contradictions.
But don't take my word for it.
As Ernst & Young has argued, the City has become the 'cuckoo in the nest' - crowding out investment in other industries.
Or, to quote the Evening Standard's respected City editor Anthony Hilton: 'The entire UK economy has become in effect a giant hedge fund with a massive one-way bet on financial services - and no Plan B for the day when the City goes off the boil'.
And ordinary working people - whether they are heartland trade unionists or Daily Mail readers in marginal seats - increasingly feel they have no stake in this casino capitalism.
They are angry that they are struggling to pay the bills as a super-rich minority is allowed to float free from the rest of society.
Angry that they pay proportionately more tax than people whose earnings are a hundred or even a thousand times greater.
And angry that they are now paying the price for the profligacy of others, with public money propping up the markets while billions are still being paid out in bonuses.
The tragedy is not just that this has happened on Labour's watch, not just that the government has been afraid to rethink a 'light-touch' regulatory regime that has been responsible for many of the problems.
It is also that ministers - unlike the governor of the Bank of England, the chief economic commentator of the Financial Times and even the director-general of the CBI - seem so reluctant to speak out against City excess.
Quite the opposite - because we are told that huge rewards, including those pocketed by City traders, are instead something to be celebrated.
At a time when evidence is mounting of the link between bankers' bonuses and the turmoil in the financial system, this is just plain bad politics.
As the latest British Social Attitudes Survey suggested, three-quarters of us now feel that gap between high and low incomes is too high.
Indeed on issues such as the taxation of non doms, the government has found itself consistently on the wrong side of public opinion.
With social mobility in decline as concerns about social cohesion increase, what is happening at the top ought to be an issue for any government - especially a Labour government.
To quote Robert Peston, the emergence of a new super-rich elite paying as little tax as it can get away with has corroded 'the fabric that holds together communities and the nation'.
Put bluntly, the British people are not intensely relaxed about people getting filthy rich.
So where do we go from here?
How does Labour re-establish itself once again as a party of equality, fairness and social justice?
Just what kind of policy agenda would secure working people's support for an unprecedented fourth term?
While there are clearly no easy answers, the driving philosophy now surely has to be to convey a sense of purpose about what Labour is for, and to put greater equality at the heart of that mission.
Better work for all has to be key to that.
One of Labour's greatest achievements in office has been banishing the scourge of mass unemployment.
But we have yet to take the logical next step: and move from high employment to high-quality employment.
This is not to talk down some of the real improvements this government has delivered at work, from stronger family-friendly entitlements to the raft of new individual employment rights.
Indeed we welcome many of the measures announced by the Prime Minister just last week, from the extension of the right to request flexible working to a new right to request training and a new Equality Bill.
But Labour must do more to use its power to shape, influence and improve the world of work.
That's why the trade union movement wants to work alongside government, and indeed employers, to make work better for everyone.
Enhancing people's quality of life on a day-to-day basis.
Addressing widespread fears about globalisation.
And yes, helping us break free too from the traditional British disease of low productivity.
We want our voice, as well as that of business, to be given a fair hearing; for ministers to encourage a genuinely plural dialogue about the future of work and employment in twenty-first century Britain.
And where trade unions have already been engaged by government, the results have been impressive.
We've played a key role in improving learning and skills in the workplace, especially among the hardest-to-reach and most disadvantaged workers.
And we've helped to shape the blueprint for a new pensions settlement, making the case for compulsory employer contributions, an improved state pension and a better deal for women pensioners long before it was fashionable.
My challenge to ministers this evening: to make this kind of engagement the norm not the exception.
And perhaps the most urgent task facing all of us is to address the plight faced by the UK's two million vulnerable workers - trapped in insecure, irregular and low-paid work, exploited by unscrupulous employers and agencies.
Two weeks ago the TUC's Commission on Vulnerable Employment published its groundbreaking report, establishing not just the scale of the problem we face - but the fact that so many of the abuses are taking place within the existing legal framework.
From strengthening the enforcement of employment rights to creating new protections for homeworkers and the bogus self-employed, there is much we can do together.
Hopefully, the new agreement on agency workers will go a long way to removing some of the worst abuses.
But I hope we will see a positive response to all the recommendations made in that report, including the proposal to establish a new, permanent Fair Employment Commission to oversee a new joined-up government strategy to root out unfairness and ensure rights put on the statute book are actually delivered in the workplace.
At a time when most ordinary people are facing tough economic times, government has to do much more to demonstrate its commitment to maintaining the living standards of ordinary people, including public service workers.
But it will not win the battle to convince the nation of its commitment to greater fairness for those at the bottom unless it discovers a new boldness in challenging the corporate and personal greed at the top, and being seen to do so.
That means a new commitment to tax fairness, clamping down on the loopholes currently being exploited by the super rich and the City.
I acknowledge that this won't be easy for Ministers.
It will mean standing up to the inevitable backlash from the powerful business lobby, rejecting the worst downsides of our flexible labour market, and rethinking the low tax, low regulation orthodoxy that has gained such a grip on our political life over the past quarter of a century.
In short: reconfiguring the DNA of New Labour for a different age.
Recognising that the tools and thinking that delivered the 1997 majority no longer work; redefining the modernisation agenda for the voters of tomorrow rather those of yesteryear.
But if ordinary working people are to be enthused by the prospect of a fourth Labour term, if a new progressive coalition is to be built in the UK, this is the kind of journey that will surely have to be made.
It all goes back to what I was saying at the beginning.
About showing what a Labour government is for, about having the confidence that the values of equality, fairness and social justice are overwhelmingly the values of the British people.
Thanks for listening.
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