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Leaders set out new party agenda in The Purple Book, which details bid to regain fiscal credibility over public spending cuts
The first concerted attempt to map out a new agenda for Labour urges greater economic credibility on public spending cuts. The proposals also call for the breakup of an overcentralised state and fresh public sector reform, including a requirement for schools that fail for three successive years to hold a parental ballot on new ownership.
The policy ideas are contained in The Purple Book which was released on Wednesday. They have already been the subject of hostile briefing by some party members who are fearful that the initiative represents an attempt by Blairites to regain political ground lost following the leadership defeat of David Miliband by his brother Ed .
The authors include six former cabinet ministers and eight current shadow ministers, including some of the leading lights of the new intake. Ed Miliband, still struggling to convince the electorate of his leadership credentials, has written a foreword for the book, but one of the authors, Lord Mandelson, accuses him of killing off New Labour without having anything to replace it, leaving the party "prone to clutch at straws and grab at any passing fad".
Overall, the book tries to avoid reheated Blairism since it accepts the Brown and Blair governments both placed too much faith in the value of a globalised market, misread the signals on the squeeze on living standards and offered a top-heavy state that disenfranchised too many communities. Overarching themes are greater decentralisation and the mutualisation of the economy.
Eyecatching specifics include the removal of 50% pension tax relief, mutualising of some major banks, including the 600 branches of Lloyds TSB, and directly elected mayors in six major English cities without holding referendums on the issue. A hypothecated NHS and social care insurance, merging income tax and national insurance, is proposed.
The shadow housing minister, Caroline Flint, proposes housing asbos, banning evicted tenants from living within five miles of their former home. The abolition of the department of communities and local government is proposed along with handing councils far greater power to raise taxes.
Intellectual defeat
The shadow foreign secretary, Douglas Alexander, the 2010 election strategist, concedes the party faces a huge task to regain power.
He admits frankly: "The market failure of the global financial crash has ended up damaging the electoral position of the centre left much more than the centre right."
He argues that "the scale of the intellectual defeat in the 1992 election defeat for the left cannot be overestimated" since it "led Labour to adopt an apparently uncritical account of globalisation" in part to show Labour understood the force of market economics.
"As a result, the global financial crisis has left Labour looking like it had confused good times with a good system," he writes, arguing that Labour appeared as an uncritical friend of a big state and disengaged from issues of waste and fairness in welfare.
He says voters will only trust Labour in 2015 if the party can show how it will bring public sector finances into balance over time and ensure public spending is efficient and effective.
Tristram Hunt, one of Miliband's advisers on the policy review, directly confronts the deficit. He writes: "Our starting point must be the acceptance of this uncomfortable political reality that the public has accepted the [coalition] government's explanation of the financial crisis."
He said trying to use statistics to persuade the public why the deficit arose was not going to work: "Politics is not an empirical social science: it is about people's perceptions and emotions, their hopes and insecurities.
Directing an incredulous public to the relevant graphs is not a winning strategy. There is nothing progressive about running a large budget deficit or wasting money on interest payments that could be invested in schools, hospitals or Sure Start centres. Labour will not find its voice until it sets out how more clearly."
Mutual model
Labour, Hunt says, faces a political crisis since the idea of accepting free market capitalism and redistributing proceeds had been stretched to its limits by New Labour and has now run its course.
He proposes a more co-operative mutual model of ownership that can reinvigorate the private sector.
Meanwhile, Mandelson calls for a more vigorous industrial policy and a commitment to lower taxes.
Jacqui Smith, the former home secretary, proposes that prison officers be rewarded for their ability to prevent reoffending, suggests victims should, within limits, be able to recommend the length and type of sentence, and proposes directly elected crime commissioners to represent part of a force area within police authorities, rather than a single crime commissioner for each police authority. She says: "Currently, those working with offenders rarely find out whether their efforts have been successful."
Proposing the removal of the 50% tax relief on pensions, Rachel Reeves, the shadow pensions minister, argues: "Those on lowest incomes are under-saving yet they have to pay 80p to save £1 compared with those on highest incomes earning over £150,000 who only have to pay 50p."
The former health secretary Alan Milburn proposes that parents of children in schools where performance is consistently poor should have a right to choose an alternative school armed with an education credit worth 150% of the cost of educating the child in their current school.
Stephen Twigg recommends experiments with compulsory voting and closed primaries of Labour supporters for the election of its candidates. He criticises the party's election rules, suggesting union levy payers should automatically be registered as party supporters, describing the 9% turnout in last year's leadership contest as paltry .
Key figures in future Labour?
Tristam Hunt Elegant historian, specialising in Victorian cities and English civil war. He was a member of the young Blairite shock troops and unexpectedly won Stoke North. He has spent time nursing his seat and restoring constituency morale, and has been advising the party on policy review. He admits he is still finding his feet in parliament, but understands politics and is seen as a potential star.
Rachel Reeves Economist who has worked at the Bank of England and for the British embassy in Washington. She is regarded as having authority on a subject that is crucial to this parliament – fluency in media appearances. And she is willing to speak her mind.
Liz Kendall Former adviser to Patricia Hewitt and now Labour MP for Leicester West. She has played a big role in Labour opposition to the health and social care bill, infuriating the health minister, Simon Burns, with her tweeting tactics. Probably more pro-reform than she appears. She pushes a strong family agenda, a subject on which Tories acknowledge vulnerability.
John Woodcock Former adviser to John Hutton and briefly a communications adviser to Gordon Brown. He is pro-defence and strongly in favour of the markets. A serious-minded New Labour figure rooted in the party, he is currently MP for Barrow and Furness and a shadow transport minister.
- Labour
- Economic policy
- Public finance
- Public sector cuts
- Public services policy
- Ed Miliband
- Peter Mandelson
- Tony Blair
- Gordon Brown
- Pensions
- Banking reform
- Banking
- Financial sector
- Housing
- Elections past
Patrick Wintour
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