Perhaps no six words have done as much damage to sensible policy making as these: ‘beer and sandwiches at Number Ten’. Not only does the phrase encapsulate an idea of social partnership as a cosy labour movement cabal, but as it was coined in the seventies (ironically, as an attack by Labour’s Harold Wilson on Downing Street meetings hosted by Conservative PM Edward Heath) it is also linked to a time of trade unions overreaching their legitimacy and ultimately creating the context for Margaret Thatcher to hasten their long decline.
Whether we use the label social partnership, industrial partnership or corporatism, the UK’s aversion to this way of governing policy and organisations has held pretty firm ever since – which is a pity. For not only have just such arrangements survived and indeed thrived in other countries (most notably Germany) but there are strong reasons to believe that some form of modern partnership is exactly what we need right now.
In part this is because at times of adversity we need to find ways to share out and legitimise hard choices, but it is also in line with the steadily growing enthusiasm among some Coalition ministers for a form of industrial policy, an enthusiasm which was evident again today in Vince Cable’s speech. A third ingredient may be a general shift in boardrooms away from free market fundamentalism, as witnessed this morning by news that Barclays plans to get out of the tax ‘structuring’ business. I even think the great British public – most of whom were either not alive for, or don’t remember, the Social Contract of the mid 1970s – would be receptive to the idea that Government could work with business and employee organisations to develop a plan for long term economic renewal, and that all companies (not just a few mutuals) should be encouraged to engage employees as partners in shared enterprise.
The barrier to this possibility getting a serious airing takes me to the one of the problems with political authority, which I may touch on in my RSA annual lecture tomorrow. David Cameron may share his party’s long running hostility to any sniff of corporatism, but were he to float such an idea, even in the most modest of terms, he would no doubt be shot down in flames by true blue forces in his own party and among the opinion formers of the Telegraph, Spectator and Conservative Home. I suspect many in the public would admire the PM if he reached out beyond his natural supporters (this was after all the style of his early leadership) but, as last week’s reshuffle suggested, this is not a fight he relishes right now.
For Ed Miliband the problem is that industrial partnership is only possible with intelligent, moderate and authoritative trade union leaders and if such beasts exist they are doing a great job of hiding it. The TUC is the closest we have to the kind of trade union organisation which could participate usefully in developing a tripartite industrial strategy but the Congress has always been weak in comparison to its largest members, something which trade union consolidation has only exacerbated. Miliband could, of course, call for trade union leaders to wake up, smell the coffee and act in the interests of the country and their members, not just an activist core. Again the voters would probably be impressed but, like Mr Cameron, Mr Miliband probably doesn’t have the appetite or security for this kind of battle with his ‘allies’.
There are, of course, perfectly intellectually robust arguments against any form of corporatism, but perhaps the most urgent reason at least to discuss some new economic partnership is the sense in post- Olympic Britain (grab it now, it won’t last long) that we can still be a nation which pulls together. That the narrow and rigid base of our major political parties makes such a debate so unlikely is not unconnected to the reasons public faith in politicians is at an all-time low.
A small moment of controversy at yesterday’s Scottish Renewables conference concerned nuclear power.
Guy Doyle, Chief Economist of the Energy Unit at Mott MacDonald, presented findings from a major research project on the costs of various sources of energy. As he said, this is a very inexact science given the range of important unknown variables like the cost of oil and gas, improvements in renewable technologies, the upfront cost (including cost of capital) of new power stations, not to mention heated debate over the externality costs which should be attached to different forms of energy. However, using the most robust assumptions available, Doyle argued that new nuclear still looks like one of the cheapest sustainable energy sources in the medium (2020) to long (2050) term.
In questions a young woman asked: ‘given that Siemens have pulled out of the nuclear industry and given the problems France is having with its attempts at new nuclear, aren’t the industry’s prospects and any hopes for new cheaper, safer types of nuclear swiftly receding?’. Doyle responded by saying that Russia, China and South Korea all seemed to have quite economical nuclear for their home market, but the question remains over whether a combination of public opinion, stricter regulation and access to investment funds might kibosh plans for an expansion of nuclear in the UK.
No doubt the questioner will feel her doubts have been confirmed by today’s news that EON and RWE have withdrawn from the project to develop a new nuclear power station for Anglesey. As Robert Peston points out, the Coalition’s reaction – which is to argue that the other projects are still on track – may be too sanguine. The nuclear sector wants more certainty about future income streams, but certainty is something in short supply right now.
Much in the energy sector is on hold until the conclusion of the Government’s already delayed Electricity Market Review. The review has to achieve the difficult balancing act of keeping prices (and subsidies) down, while securing supply and delivering on carbon reduction targets. The sector and its investors say they want predictability above all. But the more the Government provides long term price guarantees the greater is the danger of tying itself into unnecessary cost when prices, stocks and technologies change.
Standing back, there is a connection between the nuclear story and lengthening queues at petrol stations. Our immediate need for energy is absolute and visceral. In the short term, we panic and protest if we think we will be without fuel, and even minor power cuts are a reminder of the utter dependence of modern life on the steady flow of energy.
As a policy problem, energy is one of the toughest containing many of the ingredients for challenging decision making; acting for the long term, managing unquantifiable risks, balancing public private collaboration with the need for competition etc. Public attitudes pose another difficulty; policy makers face unrealistic expectations and under most scenarios need to encourage significant behaviour change, particularly around demand management. Yet the energy debate tends to be dominated by energy wonks, vested interests and people sitting astride a very big hobbyhorse (peak oil conspiracy theorists on the one side, pathological wind farm haters on the other).
I had a brief deep dive into energy during my time in Number Ten when Tony Blair decided it was a key strategic priority (this was the beginning of a shift in official thinking about nuclear). This convinced me both that energy – clearly and honestly explained – is an issue which can engage any thoughtful citizen and that raising public awareness is an important part of element of making good policy.
As David Cameron tries to put Number Ten lasagna and Gregg’s pasties behind him, and perhaps seeks to place the fuel ‘crisis’ into a wider perspective, he could do worse than making energy policy a major public talking point.
‘Sell the sizzle not the sausage’ goes the old advertising phrase. Political strategists too have been creative in exploring the stretchable space between substance and message. As a former member of the New Labour junta I am hardly in a position to complain, but the Coalition publicity machine does seem to have gone into a super-fast spin cycle since the New Year.
There is a good example this morning. Normally in Government when ministers are told there might be a problem they will ask their officials to check the facts closely before admitting anything publicly. It is interesting to see the logic reversed as it has been this morning by Chris Grayling, the employment minister, and Damian Green, the immigration minister. Writing in the Daily Telegraph the ministers give the clear impression that there is a major problem with migrants illegitimately claiming benefits. The ministers’ article gets a predictable front page splash with the implication that this problem of benefit abuse involves 370,000 people.
But as a searching interview of Chris Grayling by John Humphries revealed on the Today Programme, the evidence of actual wrongdoing is much, much smaller. Indeed of the 370,000 only 2% were found to be making fraudulent claims. There is a large batch of cases in which the claimant is yet to be fully identified, but on the surface at least, there isn’t any very strong reason to think the proportion of fiddlers will be much higher in this group.
It is unusual for ministers apparently to seek to alarm the public about an existing policy, but even more odd when the factual basis for the concern seems so tenuous. Two of the Government’s vulnerabilities right now are unemployment (which is high and rising) and immigration (which is also high and rising despite a high profile Coalition commitment to reduce it). In the short term, at least, it isn’t clear Government can do much to put either trend into reverse.
Put the two challenges of rising unemployment and immigration control together and the populist script writes itself. Facing this danger – reinforced by the continued toxic salience of immigration in opinion polls – ministers may well have decided that it was vital to show they were getting a grip on the issue. I will leave others to decide whether presenting the public with alarming, but arguably misleading, statistics is a price worth paying to pre-empt allegations of complacency.
The Grayling/Green article is the second high profile example of the Coalition volunteering concern about its own policies. The first was David Cameron’s recognition of the inequities of removing child benefit from households containing a higher tax payer. I am not for a moment doubting the sincerity of the Prime Minister’s concern but it is noteworthy that not only did the Chancellor almost immediately confirm his intention to implement the change but, as Gavin Kelly pointed out, it is hardly credible that Mr Cameron has only just noticed a flaw (namely that a household with a single income of £45k will lose out while one with a combined income of £80k might not) which must have been apparent from the very first time it was floated by officials.
There is no reason why ministers cannot acknowledge problems with their own policies, indeed it could be seen as welcome candour. But aspects of both cases (the ministers’ apparent indifference to the impression created and Mr Cameron’s ‘discovery’ of the perverse impact of benefit withdrawal) suggest that the Coalition has of late been listening rather too carefully to the spin doctors’ advice.
Given the tough policies it is pursuing the Coalition’s popularity is holding up pretty well and most of the media continues to give it the benefit of the doubt. In these circumstances spinning can feel like an easy game to play. But as the weather of public opinion changes the political wicket takes spin less and less well.
Regardless of disagreements about the pace of spending cuts, there is no question the Coalition is trying to do something tough and brave with its austerity programme. Given the pain being suffered by ordinary folk, the credibility of the Government is important not just to its political aspirations but to national morale.
Modern politics inevitably involves creative communication, but selling a sizzle will stop being such an effective strategy once people start noticing the frequent absence of sausage.
Yesterday the Prime Minister and leader of the opposition, being the clever types they are, took it in turns to put each other on the defensive. Mr Cameron attacked Mr Miliband over Labour’s stance on public sector strikes while Mr Miliband condemned Mr Cameron on youth unemployment. Business as usual in Westminster, meanwhile, out in the world the gloom deepens.
In the short term there is the unfolding European sovereign debt crisis (today saw yet another failure by European leaders to agree a credible collective strategy). Major British banks are still highly vulnerable to default so any idea that the UK will be sheltered from the collapse of the Euro is almost certainly wrong. In the medium term we have no realistic path back to the kind of growth that would enable us to manage down national, corporate and family debt without years of pain or the ever present risk of a slide back into recession. As he prepares for his autumn statement next week, George Osborne’s scope to make choices may be restricted to deciding in what order to put the bad news.
Over twenty years as a policy analyst and commentator I have tended to disagree with people who claim public services are getting worse. The problem is usually that they are not getting better as fast as we would like, or that they have fallen behind comparable services in other sectors. But now we are beginning to see genuine deterioration. This is not just in those non-statutory areas, like libraries, youth and community services which have borne the brunt of local government cuts. Monday’s EHRC report on domiciliary care was just the latest in a string of damning reports. The prospects for vulnerable older people are clearly deteriorating and there is no foreseeable reason to expect this process to stop. Whatever steps are taken to improve public service efficiency and engage volunteers in the community, further years of austerity are likely to see this decline in service levels and social outcomes spread to other core areas of provision.
In the face of the crisis and the danger that, in time, declining living standards and services will lead to social conflict and even political extremism, we desperately need national leadership on a different plane to that on offer right now. Leadership to give us hope and a sense of national purpose. Leadership to challenge us – from the self-serving overpaid company executive to the apathetic unemployed youngster and every one of us between – to be part of a national mobilisation to protect our most vulnerable citizens, keep our communities going and show the creativity, collaboration and risk taking which must be the foundation for economic success. Imagine a society in which almost everyone had a story to tell about what they were doing to help the nation pull through.
But when it comes to political rhetoric we are all so jaded that this leadership will not come from conventional oratory. Our political leaders need to go miles outside their comfort zone. In particular they need to recognise that political point scoring and playing to their own dwindling band of party loyalists is not only irrelevant but an abdication of the duty of public service. If they don’t we might eventually reach the same depressing conclusion as the Greeks and Italians and seek to replace politicians with technocrats.
Like all my blog posts this is no more than shouting in the wind. Perhaps it’s time I took my daily pill and had a nice lie down. It’s not as if I know concretely what it would take for our leaders to convince us we should respect and respond to them. But I think I would know if I saw any sign of it happening. It might start with greater humility, more recognition of the inherent uncertainty right now in all policy options, a willingness to work across party lines, the courage to appeal concretly and directly to the nation even at the risk such an appeal will initially fall on deaf ears.
Every politician I know says they came into politics to serve and to make a difference. That’s why I tend to defend the political class even when it’s friendless, like over expenses. But desperate times call for desperate measures. Over the years, I have heard so many politicians say they wish they could break out of the binds of intra-party trade-offs, inter-party adversarialism and media management and find a way of connecting with the public.
If not now, when?
I had an interesting conversation yesterday with a number of people trying to work out how to respond to the idea of the Big Society. As I said yesterday, the report on Monday of the ACEVO Commission on the Big Society is likely to provide plenty of ammunition for those critical of the implementation of the idea, but this conversation was more at the level of principle.
Essentially the Big Society contains two ideas, one which is traditionally associated with the right and one which is more comfortable to the left. The former comprises a critique of the state, the latter a recognition that people should be expected to act in ways which do not simply avoid harming others but contribute to the public good. A problem for the right is that most evidence suggests civil society tends to be stronger in countries which have a relatively generous welfare state. A problem for the left is that in practice the way public services are organised – at least in England – too rarely creates feelings of empowerment among either staff or the public.
Part of the intellectual terrain over the next few years will therefore be a tussle between Conservatives seeking to show how a withdrawing state has created spaces for community initiatives while a left in search of a new narrative will need to demonstrate it has moved beyond the rampant statism of the Brown years and has credible plans for a strong, efficient and enabling public sector. The interesting thing right now is how weak, and lacking in much more than anecdote, both arguments sound.
But the thing that really stuck me was when someone quoted from the socialist thinker RH Tawney, who said in 1931 of the first Labour Government that ‘it asked too little and promised too much’ (when I checked the quote I found it had been used in a speech last year by David Miliband).
One of the things that David Cameron’s Government has in common with Margaret Thatcher’s is a message that people need to change. For Mrs Thatcher it was that people needed to be independent and enterprising, from Mr Cameron it is that people need to be more responsible and community-minded. In contrast Labour – whose ideology should have at its heart the idea of social citizenship – lacked any such over-arching exhortation. Instead Labour’s message was ‘leave it to us, we will sort it out with policies, plans, targets and tax credits’ – interspersed with occasionally delivering a shrill and populist telling off to anti-social youths or the work-shy.
It is not easy to challenge people to be wise and responsible citizens, especially with a 24 hour media constantly on the lookout for an excuse to accuse politicians of pomposity or hypocrisy (witness this excruciating interview with Francis Maude). But it is an essential task of political leadership and will be vital if the Coalition is to have a positive tale to tell through the coming years of austerity or if Labour is to find a way of connecting with people beyond its Northern heartlands.