I want to talk to you about the role that Labour can play in righting the wrongs so evident in Britain today. It will be done, not by dividing the country but by unifying it. I will take as my cue Disraeli’s famous One Nation speech in Manchester in 1872. Although I am not a Tory, I recognise that in the past many Tories disliked excessive individualism and reliance on market forces and wished for a fairer distribution of economic rewards. This attitude hardly exists among today’s Tories, who have morphed into Nineteenth Century Whigs, Disraeli’s sworn enemies.
Disraeli’s idea of one nation did not mean putting sticking plaster over real divisions in society. He recognised that the privileged would often resist making their fair contribution to society and would need pressure put on them to do the right thing. Above all, believing in One Nation means a sense of social responsibility from the major parts of society. It won’t just happen by itself, Labour will have to work hard and build alliances with enlightened employers and trade unionists who wish to revive their movement to make it relevant once again to all those employees who are unable to see what trade unionism can do for them. We need businesses that are not just focused on shareholder value and unions that accept responsibility for their part in the wellbeing of firms and for the running of the economy. In other words, we need meaningful social partnership to manage conflict, resolve differences and identify common ground for devising solutions to the problems that this country faces.
However, this will mean tackling the interests of those who do not wish to move in such a direction. Businesses that have lazily assumed that they can reward senior managers as they please and are responsible to no-one else but their shareholders. Businesses that rip off the taxpayer by not paying their workers enough. Landlords who charge excessive rents. Unions that think that wages are their only legitimate concern and that they have no responsibility for helping the economy back on its feet. We may need to legislate to bring the operation of businesses within the sphere of social responsibility. Landlords charging exhorbitant rents will also need to be tackled through rent control. We will work tirelessly with trade unionists and unions that want a greater say in vocational education and in the governance and direction of their businesses, in the first instance making alliances with businesses that already recognise the value of employee involvement and putting pressure on the others through the dynamism that such businesses will generate.
We have a dysfunctional economy plagued by excessive addiction to a free market approach to practically every social issue and a lack of ability and willingness on the part of too much of business and the trade union movement to practise social partnership. This must change. We cannot go on allowing business to do what it wants without taking responsibility for its actions. Too much of our economy has an easy ride and not just the City. Low value added businesses that do not invest and who pay their workers less than they need to live on employ millions of people who are subsidised by the taxpayer. Often they live in properties owned by landlords to whom the taxpayer pays a rent subsidy. These businesses and landlords are extorting rents from taxpayers and by allowing this we are subsidising a failed model of doing business, thus reinforcing failure.
We cannot go on subsidising failure. Firms that do not pay their workers enough to live on are a failed business model which the taxpayer is actually encouraging rather than discouraging. They are distorting the economy and preventing us from moving to a high value added economic model. There is nothing wrong (unions please note) with paying an apprentice less than a qualified worker until he or she becomes fully productive, but far too many firms are not interested in providing skills to their workforce, they are happy to bumble along selling poor quality goods and services made by poorly paid workers. We should be subsidising firms that are innovative, make good use of their workforce and are involved in developing the abilities of their workforce. The state should use its power to encourage better behaviour within its own supply chain. We can’t withdraw subsidies from bad businesses overnight, but this has to be our long term objective. We simply cannot tolerate, let alone subsidise, failed business models.
How can we do this? Due to the failure of the banking sector we now own a substantial chunk of Britain’s banks. We will use these banks to loan to the kind of businesses that we would like to succeed. Businesses that innovate, that train their staff and welcome employee participation. We will use these banks to generate economic confidence once more, encouraging firms that are hoarding cash to start investing it, providing incentives where necessary through our own ‘people’s banks’.
One Nation means a drastic lowering of high relative inequality which is one of the scourges of modern Britain. High inequality leads to poor health, education and social welfare outcomes. It blights mental health and leads to increased crime and low aspirations amongst a large proportion of the population. We will greatly expand the Inland Revenue to squeeze tax avoidance amongst the well off and make sure that the very rich are contributing to One Nation. The amount wasted on so-called ‘scroungers’ is dwarfed by the taxes avoided by the very rich, some of whom actually do very little work themselves. A new higher rate on income tax and the institution of a progressive property tax, plus higher banding on council tax will all be our priorities in our drive to create a fairer Britain. No doubt sections of the press will scream blue murder, but my job as Labour Party leader is to lead and persuade, not to cringe before press barons.
Labour will also exert pressure on the trade union movement to play a more constructive role in British society. Despite admirable grassroots initiatives there is too much inertia at the top of some unions. They prefer to remain within an oppositionist comfort zone instead of engaging with some of the important issues that affect their members. These include training and job security and the governance of the firms for which they work. In other words, they will need to act more like those unions in our neighbouring countries who see themselves as essential pillars of the society, taking their own responsibility, not just for looking after their members but for the well-being of the firms which employ their members. Social partnership also means taking a leading role in proposing solutions for society through negotiation over the future direction of the economy with business organisations and with the government. Some backward sections of business might resist some of these measures but Labour will work with enlightened employers and will legislate if unions can demonstrate that they are serious about these issues. When the time is ripe, hopefully within the next parliament, we will propose legislation to promote industrial democracy, selected levies for vocational education and a payroll levy to ensure that unemployment does not lead to the loss of workers during a recession. We cannot afford to lose skilled labour and firms need a way to retain it in tough times. How soon we can do these things depends to a great degree on how enthusiastically the union movement is willing to work with us.
We are serious about creating One Nation but are under no illusions that it will be easy. We will need to build alliances with like-minded individuals and groups and not be intimidated by those who feel that privileges are threatened or those who feel that they can dictate public opinion through their media outlets. We will start now by reaching out to and involving those who would like to work with us in building alliances for improving the workplace and modernising their businesses now. Creating a society in which everyone has a stake does mean overcoming some entrenched interests. Disraeli recognised this and described how it could happen through the collective action of working people allied with other sections of society who are not happy with the current worship of market forces by so many of the elite in politics, business and the media. Although unfettered market forces have manifestly failed this country, few have found the confidence and courage to challenge their hegemony. Our answer is that we can do this by building alliances with those who want change and isolating and then persuading those who do not.
Building One Nation is not about cheap references to Disraeli while ignoring the substance of what he said. It is not about slick public relations designed to do nothing more than wrongfoot the Tories for a few weeks. It is a long term project to reduce inequality, make the economy more efficient and just and to involve working people in the running of their own firms. A start on this project by the Labour Party is long overdue, but at last it is beginning.
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