New Labour Leadership Must Put People, Not Markets, at Centre of Politics

There is no sound quite like it in politics – the noise of politicians retreating from previously entrenched positions, anxiously putting distance between themselves and unpopular policies. There is something excruciating about the sight of people that were part of a corporate decision-making process, suddenly deciding that ‘I didn’t know about it’ or ‘I didn’t really agree with it’.

That is a sound we have been hearing from senior figures in the Labour Party since its defeat in May, including from some of the leadership candidates. The Iraq war is the most obvious example, but there are others. I would like to focus on one dear to my heart, the European Agency Workers Directive.

In 2004, the Labour government took the correct but brave decision to accept its legal obligations and allow free movement of labour from the eight Central and Eastern European countries that had joined the EU. Unfortunately, that brought into sharp relief a fundamental flaw in the UK labour market, namely the activities of employment agencies.

Mrs Thatcher had deregulated agencies so that anyone could set one up, free to pay low wages and ignore working conditions. That only became a headline issue with the influx of labour from the new EU member states, particularly from Poland. Exploitation became rife and there were no end of horror stories concerning working and living conditions. Furthermore, established labour forces found their wages being undercut and even their jobs taken over. Sometimes entire labour forces would be sacked and replaced by agency workers (not necessarily migrant workers). Tragically, the positive case for the benefits of immigration was lost in this sea of exploitation and resentment. Inevitably, the beneficiaries could only be the political right.

Naturally, the government was told this by trades unions, MEPs and MPs. I personally constantly sought to bring this situation to the notice of cabinet ministers and No. 10. The fact is though that nobody was listening. The government’s only significant response was to restrict the movement of labour from Bulgaria and Rumania in 2007, a classic example of dealing with the symptoms, not the cause. In reality, the agenda was about flexible labour markets, minimum regulation and listening to the CBI above anybody else.

The government could have taken action at a national level to regulate the activities of employment agencies, but chose not to. The battleground, therefore, shifted to the proposed European Directive on agency workers, which attempted to establish a relatively level playing field across the EU. The government, supported by the CBI, fought the directive tooth and nail to the extent of briefing Tory and Liberal MEPs against Labour MEPs! Eventually, the UK was forced to back down, but not before it had diluted the directive as much as it could.

Then, along came the election and ministers were confronted with an electorate angry at how their livelihoods were being undermined by among other things, exploited migrant labour. That anger was personified by the infamous encounter between Gordon Brown and Gillian Duffy from Rochdale.

This all seems to have come as a surprise to senior figures in the Party, hence the self-flagellation now that the horse has bolted. Yet, if they had listened to the warnings, it could have been avoided. The challenge to the new leadership is to create a genuine two-way communication in the Party and to learn to really listen and not just hand out policy. The furious self-discipline that the Party adopted in order to get power in the 1990s unfortunately led to a culture where constructive criticism became impossible. That has to change.

Naturally, the election was not just about migrant labour and exploitation. There was, though, a feeling of disconnection among many of the electorate. People could see the huge investment Labour had made in public services and the economy, yet their own personal experience often was poor. Their livelihoods and future pensions were all being damaged, not by any fault of their own, but by remote people who were allowed to operate by an entirely different moral compass and indeed, who were encouraged to do so by the government. People felt themselves the victim of forces that they had no control over.

Labour’s public service reform programme was important and led to better services. The downside, though, was that in its hurry to get things done, it sometimes felt as if the Labour government had reduced the world to targets and standards but forgot to include people. A central tenet of the Third Way originally was that what was important was to deliver good services, not who delivered them. Actually, who delivers is important, because it is people who deliver and they need to feel valued and that they belong.

The new leadership of the party must make people, not markets, the centre of politics. People must feel they have control over their own lives and are confident that all sections of society are operating by the same rules and moral code. Most importantly, the leadership should learn to listen.

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