What it would take for Labour to become an effective progressive party again, and how they could do it

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Hannah Spencer of the Green Party is now MP for Gorton and Denton. On Thursday last week, Labour lost a very safe seat, Reform failed by a wide margin to capture a seat which they had expected to win … and the Conservatives lost their deposit.

Every party has its own explanation for the result. Reform claimed that Muslims had been coerced by illegal ‘family voting’ into voting for a Party with a Jewish leader; the Conservatives claimed that it they lost so badly because of “grievance politics between groups based on religion and race”; and Labour called the Green Party extremist and said that “the people of Gorton and Denton now have a representative who is more interested in dividing people than uniting them.”

Hannah Spencer explained her win saying,

“I don’t think its extreme or radical to think working hard should get you a nice life. And if you’re not able to work, that you should still have a nice life. And clearly, I am not the only person who thinks that.”

Many commentators have called this result a defining moment for British politics, and it is not only the Labour Party which has serious questions to answer. But Labour are the party currently in government, they are historically a progressive party, and they still have a large majority and time to act for the good of the country.

So, this article focuses on the question: How should Labour respond, if they want to remain one of Britain’s major parties?

While there are no comfortable answers for Labour, there is still a path to continued relevance, and they should take it both for their own good and for the good of the country. There are two main options open to Labour: the first is denial and doubling-down on the existing approach on the basis that it will work, it has just not been tried enough; the second is a reinvention to become a dynamic progressive party that meets the needs of UK citizens:

• Option 1: doubling down will lead to failure for Labour and for the country;
• Option 2: reinvention is immensely challenging, but absolutely necessary; so
• Labour should move quickly and determinedly to reinvent – it can be done.

If they do not, the consequences both for Labour itself and for UK citizens are dire.

Option 1: Double-down

It currently seems possible that Labour will choose the first option. In his letter to Labour MPs, Keir Starmer said:

“Over the coming months, people will feel the benefit of the long-term decisions this government is taking. Look at the good economic news we’ve had in the past week: inflation and borrowing coming down, retail sales and business confidence rising, energy bills falling. And look at the policies that are going to make a difference in people’s lives in the coming months: the landmark Employment Rights Act, money off energy bills, the cruel two-child limit scrapped, more free breakfast clubs opening, Pride in Place funding coming through, NHS waiting lists continuing to fall. It will show what we’ve been saying from the outset of this year: the country is turning a corner.”

And the Home Secretary has said she plans to ‘seize the immigration narrative’ from Reform, even if it costs the support of ‘bourgeois’ voters.

To believe doubling-down is the right strategy you would need to believe that:

• The economy is on the path to recovery and that citizens will feel the benefit of increased growth in rising real wages (adjusted for the cost of living) in just a few more months, despite all the economic data;
• The UK’s public services will be improved by the magic of market forces, in the absence of a credible approach to funding;
• Reducing immigration to the extent that is planned will not cause the ‘car crash’ that many believe is coming in the NHS and Care sectors
• That the number of people with a blind aversion to immigration outweighs the number with progressive views to the extent that the votes of the latter group can be sacrificed
• That it does not matter if Labour becomes a centre-right party with a high tolerance for racism.

To believe all that, you would need to ignore historical economic data and the forecasts from the IMF as well as the current estimates from Electoral Calculus that the chances of Labour winning a majority if a general election were called today are around 1%.

Option 2: Become the party progressive voters want

We know what people in the UK want; and, by and large, it is not unreasonable.

Almost always, the key issue is the economy and the cost-of living crisis. As Hannah Spencer put it,

“[T]hings have changed a lot over the last few decades. Because working hard used to get you something. It got you a house. A nice life. Holidays. It got you somewhere.

But now – working hard? What does that get you? Because talk to anyone here and they’ll tell you. The people who work hard but can’t put food on the table. Can’t get their kids school uniforms. Can’t put their heating on. Can’t live off the pension they worked hard to save for. Can’t even begin to dream about ever having a holiday. Ever. Because life has changed. Instead of working for a nice life, we’re working to line the pockets of billionaires. We are being bled dry. I don’t think its extreme or radical to think working hard should get you a nice life. And if you’re not able to work, that you should still have a nice life.”

Immigration has become an issue for many voters, but it is likely that many of them have been influenced – how could they not be? – by the consistent scapegoating by our tabloid press.

 

And voters want an NHS they can rely on and be proud of. It seems hard to believe that in the early 2010s the NHS was the envy of the developed world, and now it is at increasing risk of failure.

To believe that reinvention is the right strategy you would need to accept that:

• The economy is not yet on the path to recovery and, without a change in policy, the IMF’s forecast that we are on track for the worst decade in 100 years will come true;
• The UK’s public services will not be improved by repeating the errors of the last government on privatisation and PFI;
• Reducing immigration to the extent that is planned will cause damaging staffing shortages in the NHS and Care sectors;
• That the number of people with a blind aversion to immigration does not outweigh the number with progressive views to the extent that the votes of the latter group can be sacrificed – especially if the benefits of immigration are set out clearly and confidently, and the government puts in place balancing policies to address any negative effects for workers;
• That it would be a disaster if Labour becomes a centre-right party with a high tolerance for racism.

If you accept those things then the question of how to reinvent becomes urgent.

Need to act fast

The next general election in 2029 is not far away – in order not to lose, Labour need the public to feel the benefits of having given Labour a chance at wielding power. And they need progressive voters to believe in the change.

In the book, 99%: Mass Impoverishment and How We Can End It, we set out five steps the UK should take in order to return to the path of progress:

Step 1: Democratic Reset – Constitutional Reform. Our work on Defensive Constitutional Reform puts more flesh on the bones of what must be done urgently.

Step 2: Fact-based policy-making. Our work on rewiring the UK’s Key economic institutions to ensure that their work is fact-based and aligned with delivering progress is now critically important.

Those first two steps are an essential precursor to Step 3.

Step 3: Policies for solidarity and prosperity – growing the pie and sharing it fairly. On the solid foundation of the constitutional reform and rewiring for fact-based policy, we can expect government to build a policy portfolio that will tackle and reverse mass impoverishment.

Policy formulation is complex, but there are only fundamentally four types of policy. Each policy either grows the pie or it doesn’t; and it either shares the benefits of that growth fairly or it doesn’t. That gives us these four types of policy:

I. Captured growth policies;

II. Shared growth policies;

III. Vulture policies; and

IV. Balancing policies.

The chart below helps understand both how we got into our current mess, and how we can get out.

We got into this mess in the UK because in recent decades, we have had far too many captured growth policies and vulture policies and far too few shared growth policies and balancing policies.

Step 4: Investing in the Future. It is clear, and even generally accepted, that both public and private investment in the UK have been far too low for far too long. This manifests in low economic growth and struggling public services. The underinvestment has been the result of not having fact-based policies, especially on government spending. Now is the time to reverse it, as Roosevelt did with his New Deal.

Step 5: Clean-up Capitalism by tackling externalisation. In a growing market, the best way to grow profits is to grow the top line, and businesses can do that. In a stagnant market, it is impossible for most businesses to grow, so instead they focus on reducing their costs. And too often they do that by externalising their costs to the rest of society. When a business externalises its costs, it gets us to pay for its pollution, it gets us to pay for its underpayment of staff, and it gets us to pay for its avoidance of taxes.

And because it externalises its costs, it can outcompete more ethical businesses. Because it externalises its costs, it becomes an engine for mass impoverishment. And because it externalises its costs, it gets rewarded for destroying the environment.

But if it could no longer externalise all these costs, it would cease to have an advantage over more ethical businesses. It would not have grown. It would not have contributed to mass impoverishment or environmental destruction.

In a world without externalisation, ethical businesses would outcompete unethical ones and the profit motive would become a force for good.

Those five steps remain to be taken, and they would put the UK back onto a path of progress.

But before Labour can start to take them, it needs to decide what kind of country it is trying to build — does it want to be a centre-right party with a high tolerance for racism or does it want to be a dynamic progressive party? And it needs to be able to communicate its vision and values in a way that appeals to voters. That requires clarity, courage, leadership, and communication skills.

Putting the whole picture together, to implement Option 2, this is a blueprint for what Labour must do. It would also serve as a blueprint for any other party that seriously wished to deliver progressive change to the UK.

It is not an easy task. But it must be done.

Conclusion

The stakes for the Labour Party are high. As Clive Lewis (Labour MP) put it “If we carry on like this, we won’t just lose by-elections. We’ll lose the country for a generation.” He is not exaggerating. It is even possible that it could be worse: the Liberals were regularly in power from 1860s to 1922 – but have never had a Prime Minister since.

And equally high are the stakes for the UK. If Labour blunders on, it will lose the next election. If it loses to Reform (as Electoral Calculus suggests is most likely), the UK is likely  to experience in 2029 what the US is experiencing today.

Unless Electoral Calculus are way off, the Greens cannot win alone: the probability is even lower than for Labour (and even if they could, they have little experience in government; it would be a huge challenge for them to deliver). And a coalition government with an unreformed Labour Party would be a continued failure.

We cannot afford Labour to fail so dismally; and out of self-preservation they should not contemplate it either.

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This blog was originally posted by the 99% Organisation.

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