The scale of Labour’s election loss in May came as a shock to many of us, myself included. But in retrospect, the polls had warned us that Labour substantially trailed the Conservatives on economic competence for much of the last parliament. That simply meant voters were loath to hand us stewardship of the UK economy, the world’s fifth-largest with a GDP of £1.8 trillion, and the one in which they all desire to live and thrive. To reheat the Clinton campaign’s old truism, “It’s still the economy, stupid”.
This has been further confirmed by several brilliant former PPCs who couldn’t withstand the Tory tide in this election. North Cardiff’s Mari Williams told the story of small business owner reluctantly voting Tory. Nick Bent told a breakout session at Progress conference in May that that the Conservative message of a strong economy being needed to fund public services cut through with the Warrington South voters he was fighting to win over.
Whichever one of our leadership candidates wins in September, part of their challenge will be that a concise message is still more elusive for Labour than it is for our opponents. The eternal Tory idea that growth is merely a matter of slashing taxes, spending and red tape is simplistic, but simplicity unfortunately lends itself to soundbites. As social democrats, we are mindful that there is a bite-point at which taxes and regulation hold back aspiration and investment in a market economy, but we must also balance that with other social priorities the Tories do not share – properly-funded public services, a social safety net, employment rights, consumer protection and a clean environment. So we must be crystal clear – we are not the Conservatives, but nor will we ever ask for one more penny of tax or impose one more line of regulation than is strictly necessary to achieve the stronger, fairer Britain we need to build. We implied that this time by ruling out a National Insurance rise and pledging to freeze business rates, keep Corporation Tax the lowest in the G7 and set up a Small Business Administration. But we need to go further and make it sink in.
Having said that, we also need to dispel the idea that public and private are always at loggerheads. Our education system trains the workers and innovators of tomorrow and our NHS keeps them fit for work – the public preferred us to run both. We wanted to establish a British Investment Bank, to lend to our intrepid entrepreneurs and spur growth when the high street giants wouldn’t. Energy market reform was always going to be a hard sell with the Big Six, but it wasn’t just households that struggled with energy bills – it was small businesses too. And many of the major investments in technology, the green economy and transport infrastructure that will be essential for Britain to thrive as a 21st century economy will involve state backing.
I also felt business was an example of where we needed to project vision and avoid being seen to define ourselves by what we opposed. Labour got into public bust-ups with companies like Alliance Boots and Sports Direct, which we saw as poor corporate citizens. But we didn’t seem as able to counter-balance it by publicising good examples in the same way, companies that could be the leading lights of the moral economy we were fighting for. If we ever criticise, we should praise at least two others in the same breath.
However, these questions of policy and tone are not for the leadership alone. Installing a few pro-business spokespeople at the helm while sticking to our comfort-zone patter on equality and public services on the doorstep won’t be enough. As LFIG committee member Karen Landles said at one of LFIG’s events in early 2014, Labour should sound as articulate about private sector growth as we do about the NHS. Workshops and talking points could be offered to CLPs, councillors and activists to ensure that fluency on these issues diffuses throughout the party, an effort I think LFIG could be well-positioned to be at the forefront of organising.
Finally, Labour also needs to continue its efforts under the Future Candidates Programme to recruit PPCs from private sector backgrounds for 2020 – as Stella Creasy said when she addressed LFIG’s annual summer party in the City recently, we must be “of business”, not just pro-business. The Smith Institute just reported that in May Labour actually doubled its share of MPs with business experience compared to 2010, an encouraging result, but there’s more to do. Some great candidates we hoped would join the Labour benches, including Victoria Groulef in Reading West who was supported by LFIG members, did not have the chance to break through against the rising blue tide.
The answer to this £1.8 trillion question – what will a Labour Party once again trusted to manage our market economy need to sound like? – is something Labour needs to decide in this summer’s leadership contest and spend the next five years implementing. I look forward to watching that debate unfold, and am proud LFIG will be on hand to facilitate and shape it. I know that Labour can meet the challenge.
Elliot Bidgood is an LFIG member and works for a social enterprise. Tweets at @ElliotBidgood