Seizing this progressive moment - Peter Mandelson

Peter MandelsonPeter Mandelson, Labour's Business Secretary, has given a speech to Progress and the Foreign Press Association:

My argument today is that the challenges we face in 2010 make a far stronger case for the election of a Labour Government than at any time in the past thirty years.

Why? Because this moment needs a government with a bold mindset.

A progressive moment defined by the global economic crisis we have been living through – the worst since the 1930s – the first great crisis of this new global age, that has hit Britain hard, as it has the rest of the developed world.

Hopeful, optimistic, full of belief in Britain’s future.

Able to learn lessons from thirteen years experience of government, rather than be trapped by its past.

Showing the readiness to take extraordinary measures to prevent recession turning into depression.
Determined now, unlike the Conservatives, not to put a fragile recovery at risk.

It needs a government committed to cutting public debt, but also to protecting the schools, healthcare and childcare that count for so much.

This moment needs a government that understands the complexity of the challenges of globalisation for developed countries like Britain.

That has a plan to answer the deep-seated worries of middle Britain about where in this rapidly globalising world the decent jobs of the future will come from.

With a British Government that fully recognises our membership of the European Union as a key instrument of global progress and not the Conservative choice of isolation in Europe leading to global impotence.

Britain needs a government with the credentials to seize this progressive moment. I know that when David Cameron became Tory leader he tried to lay claim to these credentials. But either he was insincere or the task proved too great. Either way, Mr Cameron has not transformed his party.

It is of course in the nature of politics that all long serving governments make mistakes and disappoint inflated expectations.

And some governments do get exhausted.

The Major government did. Even the Attlee government, despite all its achievements – perhaps in some ways because of the scale of them – rather ran out of ideological and intellectual steam.

This government is emphatically not in that position. Look at the last year. Labour is fighting this election on ideas. It is energised, optimistic. We believe this election is about a bright, renewed, British future.

It is about how we respond to the first great economic crisis of globalisation, how we respond to the pressures of a changing global economy.

Not with the Labour solutions of the 70s. Not with the Tory solutions of the 80s and 90s. But with a new consensus. One the Tories don’t want and do not believe in. One that makes the case for Labour far stronger even than in 1997, 2001 and 2005.

2010 is quite different to 1997

1997 was largely about choices at home. This election is also about Britain’s future in a global economy. The mission in 1997 was not easy but it was pretty clear and straightforward to define.

In 1997 we made the Bank of England independent on our third day in office to cement forever a commitment to macroeconomic stability.

We moved to equip the UK as a knowledge economy with a massive boost to science and research, higher education, skills, the creative industries and the regeneration of our regions and cities.

We ended two decades of neglect of public services with a drive for transformation through both investment and reform.

We addressed social exclusion by rebalancing a deregulated labour market with the national minimum wage and other family friendly employment rights. We targeted child and pensioner poverty in particular.

And we ended a period where Tory divisions over Europe had marginalised Britain’s position in the world.

The challenge frankly had been to create an enduring political movement in the Labour party capable of delivering this.

That meant convincing people the party had changed – right down in its genes, that it had understood the world had changed, and it had to change too.

After 1997 a Conservative Party less divided by faction, with fewer ideological obsessions with tax cutting or anti Europeanism could have competed with New Labour for this political territory. But it didn’t, and in reality, under the thin veneer of change, it still doesn’t want to.

Yet that is ultimately the ground on which this election should be fought. This is where the big questions are.

The questions about the role of the state.

The questions about what makes a fair society when times are more difficult.

The questions about the role of long-termism and corporate responsibility in business- as the head of the CBI Richard Lambert argued refreshingly and eloquently last week.

The banking crisis has done more than damage our public finances and those of the rest of the developed world.

It has swept away some of the economic orthodoxies of a generation. What we have learnt is that the neo liberal nostrums of the 1980s cannot be guideposts for the coming decades of globalisation.

In economics, we can no longer assume a general compatibility between the public interest and the pursuit of individual economic self interest. Markets have been shown that they do not automatically correct their own excesses.

When I hear the British Conservatives argue that the crisis in Britain is all due to the system of financial regulation that Gordon Brown introduced in 1997, or that Labour did not fix the roof when the sun shone, I shake my ahead in disbelief at what is either ignorance or dishonesty. And I don’t know which is worse.

They ignore the fact that the UK entered the global crisis with the second lowest level of public debt of any nation in the G7.

They ignore the fact that the banking crisis was an international regulatory failure born of a rigid attachment to free market dogma that is now shown to have failed in certain key respects.

They have forgotten that the Conservatives led the deregulatory charge, starting with Big Bang in the mid-1980s.

If New Labour had a fault, it was that we treated the application of this commitment to financial deregulation we inherited in too unquestioning a way.

And when they insist that they have a credible plan for recovery, it is worth remembering that at every step what they propose would have cost this country dearly.

Northern Rock left to go to the wall. No economic stimulus. And a clear commitment to cut public spending faster and strip demand out of the economy in a way that would imperil a still fragile recovery.

On the main measures of economic hardship in a recession, this government’s record is in stark contrast to the Tory response of the early 1990s.

Lower rates of unemployment, housing repossessions and business bankruptcies.

This did not happen by chance. It happened by choice. Britain had a Government and a Prime Minister that have the boldness and imagination to act.

Every time I hear George Osborne and David Cameron appeal to the values and interests of Middle Britain I think of the jobs, homes and hopes in Middle Britain they would and still could, so casually put at risk.

As I go round the country, I find that people don’t think Britain is “broken”. They do want to know how we will prosper in tougher conditions than ever.

They ask: “If the Chinese can produce everything we can, at a tenth or a quarter of the wages, where are the decent jobs of the future going to come from? How are my kids going to get ahead?”

In this election Labour is presenting a new progressive answer to these concerns about future jobs.

Because, in fact, in the globalising world we are well placed to compete and win jobs.

With the growing middle class in Asia, and the opening up of new markets for high tech goods and knowledge based services in areas like health, education and sustainable energy, there are manifold opportunities for Britain.

But to succeed in this, we have to develop new private sector sources of growth for the British economy outside financial services, and in every part of Britain.

And the reality is that these jobs are not going to emerge out of the air. They require a government ready to take a strategic approach to skills, technology, science, and infrastructure.

Again, out on the doorsteps, or on the factory floors, people get this. They see it as common sense, as recognition of economic and industrial reality.

We need a government with a positive commitment to work in partnership with business to develop new sources of growth.

Making sure the leading edge research in our universities makes the journey to new commercial technologies.

Making sure British companies can get help with venture capital or export strategies.

Making sure that we don’t miss the boat in the way we have in the past on wind power or nuclear energy because we failed to think about what would really make the difference to the viability of those industries here – rather than just assuming the market is always right.

Do the Conservatives get this? For all Ken Clarke’s warm words and bonhomie, I don’t see this in David Cameron or George Osborne.

For them it’s the old Tory mantra – cut taxes, whatever the consequences for the deficit, whatever the implications in public spending, and that’s the way to secure growth.

In some ways it’s understandable. At their age, David Cameron and George Osborne have spent their whole adult lives in the most ideological Tory party in history. They spent the 80s saying “there is no alternative” and presumably they still believe it.

What else explains their “bargain basement” approach to competitiveness? The view that government can only get in the way of enterprise.

The view that Britain can only be competitive on the back of high unemployment, low wages and low skills.

But what we need is a new business model for Britain: a government with a clear strategic view, that will focus single-mindedly on building new sources of competitive strength for Britain.

And a business sector that buys into the values of long termism and corporate responsibility that we need to see this through.

Let us set aside frivolous political manoeuvres. I will be setting out in this campaign a long term progressive compact with business. This is, in my experience, what most businesses want.

Who will best protect frontline services?

Which brings us to the other key point about the difference between now and 1997, 2001 or 2005: the future prospects for public services.

Because a government that puts cutting taxes first has to have a convincing story to tell on public services. And this Tory party doesn’t.

After 1997, under New Labour public debt as a proportion of GDP fell to the lowest in decades. This allowed us to put in place on a sound basis the largest programme of catch up investment in public services this country has ever seen.

In 1997 we said we would save the NHS and we have.

When Mrs Thatcher saw public services she saw vested interests. George Osborne sees just a mountain of waste.

Well, I’m proud of the fact that in Britain today there are far more people doing decent jobs that make for a decent society: teachers, classroom and nursery assistants, doctors, nurses, paramedics and workers in social care.

In the years ahead, to pay down public debt, there will need to be some painful public spending cuts once the economic recovery is soundly locked in.

Who can people trust to do this best? Labour has spent the last thirteen years investing in Britain’s vital public services in order to restore their strength after 18 years of neglect under successive Conservative governments.

For a decade, Tory modernizers – such as they are - have been insisting that their past record on public services explains the suspicion British voters have of the Tory brand.

They have battled to change the perception that the Conservative Party does not believe in public services.

And yet what is the platform that their Party takes into this election? Tax cuts and spending cuts that can only cut deeply into the services people value.

What’s more, the British people can trust Labour to be radical reformers of public services – because they have always been the deal: investment for reform.

In the years ahead there will have to be step change in public sector attitudes to productivity and value for money if we are successfully to protect front line services with fewer resources.

That is why we are strengthening citizens’ rights to high quality services by introducing credible and enforceable service guarantees.

The progressive dividing lines

So I would summarise the progressive case for Labour like this.

First, we “get it” about the modern world. Our leadership’s depth of experience and our energy and ideas give Labour an edge that frankly other parties cannot match.

We have shown in the past two years that we have the intellectual grounding, the toughness and resilience to learn the fundamental lessons of the global banking crisis and recession.

We have broken free of past dogmas.

The Conservatives remain deregulators by instinct, tax cutters regardless of the cost to public services and regardless of the potential damage to a fragile recovery.

They’d scrap the Regional Development Agencies that have played such an important role in regional renewal over the last ten years – or all this “regional stuff” as David Cameron so blithely put it recently.

They have no strategy to help create the decent jobs of the future. They don’t think that’s what government is there to do.

Secondly, Labour has a basic instinct for fairness and this is vital in difficult times.

We believe that genuine enterprise and hard work deserve high reward. We believe in opportunity, not levelling down: but opportunity for the many not the privileged few.

The next decade must involve tough decisions on tax, and we can’t shy away from them. But we will always choose the fairest course. And we will not promise tax cuts on a false prospectus, which we know the country can’t afford.

Thirdly, the modern case for Europe strengthens every day. Europe is a multiplier for British strength and influence – on banking regulation, on the rules and openness of our biggest market, on climate change, on global imbalances.

The Conservative Party does not get this simple point. If I can borrow a leftist expression for one moment, the Cameron position seems to be “capitalism in one country”.

They are parish pump politicians for a global age.

David Cameron chooses to sit alongside the xenophobes and homophobes in the European Parliament.

He rejects cooperation with mainstream Centre-Right allies like Chancellor Merkel and President Sarkozy.

And this from a party that used to think statecraft was its birthright. This parochial policy alone should disqualify them from high office.

Conclusion

As Tony Blair remarked last week, “Time for a Change” is the oldest but most vacuous of political slogans. Yet in this election, this slogan appears just about all the Conservative Party has to offer.

Emphatically, unreservedly, unequivocally, Labour is not a government exhausted by 13 years of office.

Rather it has shown itself capable of more bold and innovative thinking in the months since the banking crisis than the Conservatives have managed in a decade of policy reviews and reinventions.

Just look at the Conservatives.

No change, just confusion.

Cut the debt or cut taxes? Preserve frontline serves or…. uncosted tax cuts? Are they telling us what they believe? Or what they think we want to hear?

When they seek to bribe with one hand, ask what they want to tax or cut with the other.

What happened to their boasts about sending clear signals to the markets? What happened to “tough medicine” in an “age of austerity”.

You don’t know where you stand with the Conservatives.

Except… you do because we’ve been there before. And that’s why they pose a clear and present danger to Britain’s fragile economic recovery. Because the new Tory growth plan sounds a lot like every old Tory growth plan.

The same Thatcherite mantras of a smaller state and lower taxes that Britain rejected in 1997 and 2001 and 2005.

A bit like the briefcase, David Cameron’s ideological baggage turned out to be following along behind in his car. It was all about the angle of the photograph…or how you airbrushed it!

Our plan for the future draws on our experience of office but is not trapped by it. We are determined to learn from our mistakes as well as build on our achievements.

Labour’s argument is not “better the devil you know, back safety first”. After “time for a change” that’s the second most vacuous argument in politics.

Rather, the case for Labour in 2010 is that we have the experience and depth, the instincts, the leadership and the energy to take this amazing country though a period of national renewal towards a bright and optimistic future.

Labour represents the coherent, credible and progressive change that Britain now needs. And that’s what we are going to go out and fight for in this election.