Imagine if politics worked on the same investment horizons as successful businesses. Progress members would be thanking Michael Foot for Labour’s 1997 landslide. Tony Blair’s pledge card in 1997 would be held responsible for defeat in 2010. And the platform of Prime Minister Miliband would lead Labour once more to victory in 2030.
Of course, politics does not work like that. It is more immediate. To win next May, Labour must speak to the concerns of the British people in 2015 and make a real difference from day one. But neither is it as crazy as it sounds. Resolving the problem Ed Miliband has identified – how for too long the gains from growth have bypassed the pockets of ordinary people – requires not short-term fixes but fundamental change in the structure of our economy and our model of growth, sustained over a long period of time.
Growth is a necessary prerequisite to creating a fairer society, but it is not on its own sufficient. The challenge of our age is to generate growth that is sustainable over the long term, balanced across sectors and regions, and inclusive so that all can benefit. It is to create ladders of real opportunity, so that people can meet their aspirations. For this we need real reform: a more productive, decentralised and innovative economy generating more well-paying jobs, supporting entrepreneurship, and producing more goods and services people around the world want to buy.
The mistake that the government is making is to view the ‘cost-of-living crisis’ as a narrow issue that will lose salience as the economy returns to growth. Ministers have started to believe their own publicity. They have started to believe that a long-delayed return to consumer-led growth and a housing bubble in the south-east is something to boast about. Never mind that the economy stagnated for three wasted years. Never mind that output per head is still six per cent below its peak. Never mind that borrowing is almost £200bn more than planned. Never mind that 1.4 million jobs are on zero-hours contracts.
Household incomes remain squeezed. Even if wages for all were rising in line with the average, it would still be many years before households have recovered the ground they lost. There are actions that the government can and should take today to ease these pressures. Labour might have to wait a year to be in office, but increasingly we are setting the agenda on issues from energy prices to childcare costs to housing. Our priorities will make an immediate difference to people’s lives.
But the challenge of ensuring the proceeds of growth are fairly shared runs deeper than that. It is the struggle for our nation’s economic future. As a country, we have to think relentlessly about the future, to shape the future, to own the future. If we do not own the future, we do not control our destiny. On one side are those who believe that a return to business as usual is good enough for Britain – with unbalanced growth, stagnant exports, short-term decisions, insecure work and unfair rewards. On the other are those who understand the long-term structural and institutional change needed to secure our nation’s future. It is why I recently launched Agenda 2030, Labour’s long-term plan to earn and grow our way to a higher standard of living for all. It frames the platform for our party’s success in 2015, and our nation’s prosperity into the future.
Instead of leaving the shape of our economy to chance, Agenda 2030 sets out a clear destination: a high-productivity, high-skilled, innovation-led economy. Instead of viewing the size of the state as the central economic challenge for the nation, it understands the role active government can play in raising productivity, stimulating innovation, supporting entrepreneurs and creating more balanced growth. Instead of fearing the pace of global and technological change as a threat to our prosperity, it views it as a source of real opportunity. Instead of seeing social and environmental goals as limits on prosperity, in Agenda 2030 they are a spur for innovation as economy strengthens society.
Agenda 2030 is built on four pillars. First, we must liberate the talents of all. There is so much potential in Britain. I see it every day in the schoolchildren in my constituency, in the budding entrepreneurs I meet in our towns and our cities. But too much of this potential is trapped. This makes us weaker as a society and poorer as a nation. More than any other, Labour is the party that understands our mutual dependency: that we achieve more together than we can alone. Our challenge is to create the platforms of support so that people can achieve their dreams.
It is why we have focused on giving the next generation of entrepreneurs a fair chance – by reducing barriers to entry and making markets more competitive; fixing broken markets in energy and banking; cutting and then freezing business rates; and getting tough on a late payment culture. We have promised the biggest decentralisation of powers and budgets to our towns and cities so that those with the best information and the sharpest incentives are making the decisions. We will ensure that all our young people have the skills to succeed by introducing a new National Baccalaureate and ensuring that all students study English and maths to 18.
And we will reform apprenticeships, working towards a system where they are all Level 3 and last at least two years. We will also increase the number of apprenticeships by putting employers in control of both skills standards and the money, and in return asking that they create more high-quality apprenticeships in their sectors and supply chains.
It has always been a moral imperative for Labour to ensure that people from all backgrounds and places can advance and become all they can be. Today, in a world where China is producing almost seven million graduates a year, it is an economic necessity.
Second, to compete in the world and generate more, well-paying, jobs our economy must have innovation at its heart. We must be solving tomorrow’s problems today. That is why Labour will continue to invest in our science base and develop our national system of innovation, including building on institutions like the Technology Strategy Board and the Catapults. It is why we will back the 2030 decarbonisation target and give the Green Investment Bank borrowing powers to support the development of low-carbon goods and services.
Third, we need business and government to take a longer-term view and work more effectively in partnership together. This means an ambitious cross-government industrial strategy to generate the jobs of the future, supporting the development of industry in sectors where we have a competitive edge. It means establishing a proper, independent British Investment Bank supported by a network of regional banks to help small businesses get access to the finance they need. It means setting up a Small Business Administration, inspired by the American example, to improve support for small firms and give them a voice at the heart of government. And it means rules of the game that encourage and support business to focus on long-term value creation. Here we will implement the recommendations of George Cox’s review into tackling short-termism in British business.
Fourth, and finally, Agenda 2030 requires us to engage with the world around us in a positive way. This means engaging with our European partners to reform the European Union and make it more focused on growth. Labour has led calls for the appointment of a commissioner for growth to drive change. And it means using our membership of the European Union to boost exports to emerging markets. Labour’s position gives certainty to business and stands in sharp contrast to the Conservatives who are playing fast and loose with Britain’s national interest for their own internal party reasons. Instead of fighting for a better deal for British business, the United Kingdom Independence party would have us walk off the field, meaning that our firms would still have to comply with rules and regulations that we could not influence.
To grow our way out of the ‘cost-of-living crisis’ means long-haul reform. It means winning in 2015 with a programme for 2030, to reshape Britain’s economy and change our model of growth: to unlock trapped potential and raise productivity across the economy; stimulate innovation and put the weight of government behind our nation’s strengths; and ensure Britain remains open and engaged with the world beyond our shores. We won three elections from 1997 by speaking optimistically to people’s dreams and aspirations, by owning the future. We can do so again in 2015.