Two visions for Labour’s future
We are the authors of two arguments recently described as competing visions for Britain’s economic future. On one side, “An Honest Day” makes the case for building a state that can act – rather than merely compensate – to restore the idea that hard work and doing the right thing will create a better life. On the other, “Manchesterism and the Productive State” argues that public power should intervene to bring down the cost of life’s essentials. Some have cast these as two camps ready to do battle. We see them differently. To us, they are not extensions of old arguments but expressions of a new tradition: one that treats reviving the country’s economic dynamism, and confronting those who extract from it, as the precondition for democratic consent.
The public has no interest in a battle of Labour tribes. Blairite, soft left, hard left, old right: these are labels for a world that has passed their adherents by. Nobody opening an energy bill, waiting for a bus that never comes, paying half their wages in rent or wondering why work no longer buys a secure life is asking which of these is coming to their aid. They are asking whether politics can still change the conditions of their lives. These people, and that question, are our focus.
Our diagnosis is the same. Britain pays too much for the basics because the state has lost control of the foundations of ordinary life and enterprise depend on. Housing, energy, water, transport, care and local infrastructure have become too expensive, too fragile and too extractive. Government then spends ever more compensating people for costs it has failed to remove at source. That is the maintenance of decline, and left unbroken it leads to only one political outcome: a total takeover by the forces of populism.
The answer is where our ideas can converge. This lies in remaking what the state is for – not distributing while the pie shrinks, but creating the conditions for cheap and reliable essentials, where contribution is rewarded, extraction is disciplined and Britain can build the productive assets it needs. A state that sets out to be productive before it has become capable will fail. It will hand its new public corporation the same planning delays, legal timidity and procurement failures that already frustrate reform. But a state that recovers its capability and then refuses to use it for its people has won a barren victory. One of us has written about how the state recovers the power to act, the other about what it should do with that power where the market has stopped serving the public. A state that wants to be productive must first become capable. A state that has become capable has no excuse not to be productive. We believe in the power of markets. We want more challengers, more productive risk-taking, more firms able to scale, more entrepreneurs building in Britain – rather than selling early and leaving.
But we are also clear-eyed about market failure. That is why we insist that where fake capitalism is at play in structures that could never meaningfully be competitive for everyday people, and where the resulting prices cascade through the whole economy, public power should act directly. First, however, we need bold reforms to remove the structural blockers that currently ration supply. In practice, that means combining the machinery of reform with the institutions of provision. We must strip away the vetoes that stop homes, grid and infrastructure being built. Then we must ensure that building actually happens and the gains are passed on to households and firms. In water, for instance, that means creditors, not the public, take the pain when failed ownership models collapse. In energy, it means public capacity that can help anchor prices and lower system costs by competing, alongside major market reform and faster grid delivery. In housing, it would mean serious planning and land value reform matched with regional public housing corporations able to build at scale.
None of this is a licence for fantasy economics. Borrowing to pour money into a broken system is not radicalism. It is surrendering to a lack of vision. A truly ambitious government should invest to build revenue-generating assets that lower the economy’s cost base, under independent scrutiny and a sequenced capital framework, alongside reforms that make Britain cheaper to build in. Two arguments, written apart, turn out to point at one settlement. An honest day’s work should once again buy a decent life. Keeping that promise will require a state that can build, enable and provide. A country of common foundations, competitive enterprise and thriving innovation. Market fundamentalism versus blanket state control is the last war. Those who would refight it are wasting time this country simply does not have. The old loyalties were made for a world that has gone. The opportunity before us is to leave them there and build something new, equal to the moment and worthy of the British people.
[Further reading: Six things we learned from the Mandelson files]
