Domestic Policy

Rohan McWilliam

by Rohan McWilliam

Key Points:

  1. Rebuild Progressivism and trust in politics
  2. Reconstruct the national economy
  3. Build a different kind of growth model and do not be afraid of public ownership
  4. Class still matters
  5. Bring poverty and age back into the national conversation
  6. Enhance locality but remember that Westminster is crucial

1. Rebuild Progressivism and trust in politics

The tragedy of the Labour Party since its foundation in 1900 is that the history of the party in opposition has been larger than its history in government.ix Since 1918 progressives have found themselves split between the dominant Labour Party and the Liberals (later the Liberal Democrats).x Labour won significant majorities in 1945, 1966, 1997, 2001 and 2005 but the history of the last hundred years has been one of domination by the Conservative Party. There has been a deeper problem because the Conservatives have styled themselves as the ‘natural party of government’ and historically have been trusted to a greater extent than Labour. Labour has been at its most effective under Attlee, Wilson and Blair when it persuaded the electorate that it possessed the competence and know-how to govern in the national interest.

Starmer’s mantra ‘country first — party second’ thus makes a lot of sense in rebuilding trust. At the same time it is vital that Labour is seen as the home for progressive principles.xi The party needs to operate as a broad church (although the divided nature of the party has frequently made people lose trust in it). This means it should not isolate the far left and should also welcome environmental activists, constitutional reformers and others. A large majority will mean that Starmer has little incentive to care about the Liberal Democrats but he should be ready to make common cause with them where possible. Distinctions between ‘Old’ and ‘New’ Labour are no longer helpful. As Eric Shaw shows, these were a device in 1997 to help prove the modernity of the Blair project.xii Labour is a traditional social democratic party in that it believes in the parliamentary road to socialism.xiii There are different kinds of left- wing activism and many of them will be extra-parliamentary. This can be positive in that the purpose of a party like Labour is to generate democracy and a feeling of political participation, a riposte to the powerlessness that many voters feel.

At a time when trust in politicians is low, Labour needs to keep its focus on the things that voters most care about and which generate a sense of belonging: the cost of living crisis, NHS waiting lists, transport links, the quality and dignity of work.xiv This will be its riposte to the rise of right wing populism that feeds off the feeling of exclusion in modern Britain. Labour should also look critically at ideas based on meritocracy. It was Michael Young (the social scientist who wrote Labour’s 1945 manifesto) who came up with the concept of the ‘meritocracy’ and elaborated on its problems.xv Too often this empowers a minority of people and leaves large numbers of people feeling left behind. Labour needs to speak to people’s aspirations and desire for social mobility but to insist that these are not sufficient. A polity where a minority does well is a sign of political and economic failure. Labour has to be party of the nation as a whole.xvi

2. Reconstruct the national economy

According to Rachel Reeves, ‘Labour’s history is one of nation-building — from municipal socialists building libraries, public baths, housing, utilities, hospitals and local parks, through to the construction of a new settlement after1945, creating modern industries, the infrastructure of a modern welfare state and raising the standard of living for all’.xvii We should note the range of achievements in this list. Labour is often thought of simply as a welfarist party: one that can be pigeon-holed as merely focused on tax and spend. As David Edgerton has observed, this distorts its history.xviii In 1945 and 1964, Labour was concerned to rebuild the economy as a whole so that it would operate more effectively for its citizens: welfare was a lesser priority (the term ‘welfare state’ was not even employed in1945). This meant that it aimed to build productivity as a route to economic growth whilst employing redistribution to build equality. Whilst the historical record shows that this approach ran into major problems in the 1970s, the sequel in the form of Thatcherism has generated serious problems: low productivity, an economy based on house prices and communities which feel left behind following de-industrialisation. Figures like Harold Wilson (now perhaps best remembered for the social legislation passed during the 1964-70 period) believed government had a role to play in the management of industry and that firms should regard themselves as working in the national interest.xix This dovetails with the work of economist Marianna Mazzucato who demonstrates how the state has often been an effective player in driving economic growth: the private sector has not driven innovation all by itself.xx

Labour needs to reinvent industrial strategy for the modern era and emphasise its unifying characteristics as it drives investment. It should provide an alternative to the post-1979 politics of a right that cares about wealth creation (but is too often indifferent to re-distribution) and a left that cares about re-distribution and is indifferent to wealth creation. New Labour attempted this but the strategy was undermined by the 2008 Crash but also its belief that the free market would solve most problems. Labour in 2024 needs to be ready to build relationships between business and unions (although these are unlikely to take the corporatist forms of the 1960s and 1970s).

Given the ongoing retreat from the extreme globalisation of recent years, it makes sense for Labour to look to a policy of re-industrialisation with a focus on up-skilling workers to propel new high-tech industries. There is also much to be learned also from the Preston model where the principle of ‘progressive procurement’ was employed. Preston Council devised a strategy of procuring its services from companies in the city. This kept the wealth in Preston which could then be used to build up community resources such as the town centre.xxi Similarly, the London Borough of Camden has employed a community wealth fund whose purpose is to drive investment in the locality. It invests in business and organisations whose outputs build life in Camden and is intended to ‘reduce inequality’.xxii Progressive procurement could be a major social justice tool for the next ten years. As Mariana Mazzucato (who is involved in the Camden scheme) argues, it could be used to enhance moves towards net zero energy and drive food production aimed at healthy school meals for children.xxiii

3. Build a different kind of growth model and do not be afraid of public ownership

But what kind of growth is appropriate in the 2020s? Labour has usually presented itself as a party of economic growth. It did in 1964 when it offered itself as an alternative to ‘thirteen wasted years’ under the Conservatives. This reflected a belief in national economic decline in the post-war period. In 1997 Gordon Brown focused on research and development as a way of stimulating growth. Starmer currently aims for the highest rate of growth in the G7 (with relatively little information about how this will be achieved).

But the discussion of growth has moved on in the 2020s. The concept of Gross Domestic Product is increasingly debated by economists and it is unclear how useful it really is. Apart from anything else, it says little about the distribution of income. Economic historian Jim Tomlinson argues that it may not be appropriate as a way of measuring an economy based on services.xxiv

Is growth desirable if it leads to unsustainable demands upon planetary resources and ruins the climate? Is a growth strategy consistent with progress to Net Zero? Clearly growth needs to be linked to greening the economy. The construction of GB Energy offers an opportunity to develop a strategy that resembles social democratic initiatives in post-war Europe but also attempts during the 1980s to build growth through a national investment bank; a strategy also deployed by Jeremy Corbyn in 2019.xxv This is a good example of Labour opting for the politics of production rather than just welfare. At the same time it is unclear whether green energy can produce new jobs of the sort that the post-war economy did. Modernising the economy requires a consideration of different forms of economic production.

The guiding assumption behind politics since the 1980s is that many forms of public ownership (apart from the NHS) are monopolies that are ineffective and do not work well. New Labour was the product of a generation of politicians who conceded that the privatisations of the 1980s had worked fairly well and seemed irreversible. Labour needs to recognise that things have shifted in recent decades. Energy companies have enriched themselves and their shareholders whilst increasing costs to customers whilst the environmental record of water companies is appalling. Progressives (since Joseph Chamberlain’s ‘gas and water socialism’ in the 1870s) have regarded some form of public ownership of basic utilities as an essential part of supporting the common good. Starmer will almost certainly find himself having to look at some forms of nationalisation (we know that the railways will be fully brought back into public ownership). The challenge will be that taking utilities into public ownership will cost huge amounts of money which will need to be diverted from equally necessary projects. That is the kind of calculation a progressive government will need to make.

Another stumbling blcok that Labour governments have faced is the Treasury which has been excessively short-termist and tends to prioritise sound finance over almost all other factors. This has been a characteristic of all modern administrations and has acted as a block on Labour plans (although recent Tory administrations such as that of Liz Truss viewed it in the same way).xxvi In the 1960s Harold Wilson introduced the Department of Economic Affairs to focus on long-term planning. This is usually regarded as a failure, ripped apart by the economic problems of the period. Labour will need a strategy to deal with this. Otherwise, it will find itself buffeted by economic storms in the way previous governments have been.

4. Class still matters

Since the 1980s social class has proved less of a dividing line. Affluence and so-called embourgeoisement changed the old working class out of all recognition. At a profound level de-industrialisation shifted the politics of modern Britain. Large amounts of industry have decamped overseas. Service sector jobs have replaced these but many have been low quality leading to a feeling of malaise which was expressed in the 2016 Brexit referendum and the crumbling of the Red Wall in 2019. At the beginning of the century, New Labour had seemed less interested in these voters as it courted ‘Middle England’. Much of Labour’s current approach is based on reconnecting with the Red Wall.

Yet historians know this is not entirely new. In the 1950s there were reports of the decline of class feeling and Labour did not know how to respond to the more consumerist demands of the electorate.xxvii Class matters but in different ways. This is because the 1950s working class that worked in heavy industry has been replaced by one that works in catering, social care and retail amongst other things. The new worker is likely to be female and non-white. Working-class lives across the country vary if only because wages are subject to remarkable regional disparity. In 2016, the average weekly pay of workers in Blackpool was £333. This was almost half the weekly pay of workers in Southwark, London, who got £639. No wonder many Northerners feel the system is rigged in favour of the capital. Class is etched into life expectancy: the lowest class will on average live seven years less than those in the highest class. Another characteristic of the new working class (according to Starmer’s advisor Claire Ainsley) is that they are not overly consumed with hatred of the rich and only 4% cite the reduction of inequality as a priority for them.xxviii

There is a new politics of class but it contrasts with the politics of class in the Harold Wilson era where the focus was on male industrial workers. Florence Sutcliffe-Braithwaite has revealed how New Labour drew on communitarian and individualist strands which reflected an electorate that was aware of social difference and was also less deferential to the elite.xxix Progressives in the 2020s need to find positive ways of talking about the lives that workers actually live and not write them off as hopelessly reactionary if they do not share the world view of middle-class people in big cities.

Labour needs to take over the cosmetic ‘Levelling Up’ strategy of the Conservatives and make good on it (its use by Boris Johnson was always a smash and grab on Labour territory which may explain why the Conservatives appear to have lost interest in it). More radically, Labour needs to create an expectation that there should be an equality of living standards across the United Kingdom. Repairing the public realm requires vastly improved transport networks (both rail and bus) especially across the north of England, better GP and dental services and serious investment to improve the quality of town centres. Significantly, ’left behind’ voters complain about the disappearance of their local Marks and Spencer and about streets dominated by charity shops and take aways. Immigrants are often blamed for this decline even though ‘red wall’ areas have often experienced less immigration than

Labour’s history has emphasised the importance of community and the construction of happiness through a supportive environment and high quality jobs. Michael Young suggested in the 1950s the way forward for the left was to listen to people on the ground and enhance local democracy.xxxii These are the best way of asserting a politics of the common good. The left has a history of developing dense social democratic networks to enhance community life. Daisy Payling and Stephen Brooke have recently written studies of Sheffield and of the Greater London Council in the 1980s. Both pursued a politics of inclusion (based on gender, sexuality and race) which was controversial at the time but now looks mainstream and conventional.xxxiii This was achieved at a time of Thatcherite supremacy suggesting we need to think in more complex ways about how the left can frequently shape society even when out of power.xxxiv

Although unions will not have the influence they had in the 1960s and 1970s (when a large part of the workforce was unionised), it is important that Labour retains its links with unions. For all their faults, unions counter the feeling of workers that no one speaks for them (which in turn leads to workers supporting right wing populists). Historically, unions have been important in building a sense of citizenship and belonging.

5. Bring poverty and age back into the national conversation.

Historians show that conversations about poverty tend to be cyclical; it has a habit of being rediscovered every now and then. In 2024 poverty is not necessarily high in the public agenda although it is there is in different forms. There is an awareness of the gig economy with men and women having to take on two or three jobs just to survive.

What is peculiar about the present time is the politics of age. Younger people are entering a world where the odds are stacked against them. They battle for insecure employment and are challenged by exorbitant rent for poor quality housing (there is an outbreak of mould in Britain which reflects landlords failing to maintain property). The act of getting on the property ladder becomes ever more difficult.

At the other end of the life cycle, there is a crisis of social care. The care needs of an ageing population are not being met. Frequently, this crucial work is undertaken by poorly paid workers who are themselves struggling to earn a living.xxxv Labour needs to define its agenda through the development of a social care service, a problem that politicians have promised to look at but which has proved difficult to resolve.

Clement Atlee
Labour has always shown an awareness of how poverty can exist in the middle of affluence as Peter Townsend’s sociological analysis showed in 1979.xxxvi One of the greatest achievements of New Labour was the dramatic reduction of child poverty which has expanded since 2010. Labour needs to deal with this both for reasons of compassion but also because of equality. Progressives since 1900 have registered the importance of both maternity and child rearing (if sometimes for reasons of so-called ‘national efficiency’).xxxvii Many social problems will be resolved if children get an improved start in life, including access to food. This is why Sadiq Khan’s policy of free school meals is so important. Labour since the implementation of the Beveridge report by Attlee has seen its approach as being about the empowerment of people from cradle to grave. Labour in the 2020s should view itself as part of this ongoing mission. This does, however, mean it needs to reconsider its resistance to re-building Sure Start and the abolition of the two-child benefit limit.


6. Enhance locality but remember that Westminster is crucial

Harold Wilson smoking a pipe
The rise of metro mayors seems to have been a big success if only because they can personalise local government in a way that contrasted with what went before. Labour has tended to shift to a policy of devolution (including assemblies for Scotland and Wales introduced by Tony Blair). Devolved power can enhance focus on priorities such as the construction of more houses to meet the needs of a rising population. That said, central government will always play a role. The short-lived 1924 Labour government (its first time in power) has now been rethought because it managed to push through the Wheatley Act which allowed for the development of public housing.xxxviii


Images: 1. Clement Attlee, public domain; 2. Lord Harold Wilson (cropped). Original image by Allan Warren, available on Wikimedia Commons under Creative Commons Attribution-Share Alike 3.0 Unported license.



ix Mark Garnett, Gavin Hyman and Richard Johnson (eds.), Keeping the Red Flag Flying: Labour in Opposition since 1922 (Cambridge: Polity, 2024).

x David Marquand, The Progressive Dilemma (London: Heinemann, 1991).

xi For the history of the complex word ‘progressive’, see Emily Robinson, The Language of Progressive Politics in Modern Britain (Basingstoke: Palgrave Macmillan, 2017).

xii Eric Shaw, ‘Retrieving or Re-Imagining the Past? The case of ‘Old Labour’, 1979-94’ in Jonathan Davi and Rohan McWilliam (eds.), Labour and the Left in the 1980s (Manchester: Manchester University press, 2018), pp. 25-43.

xiii Eunice Goes, Social Democracy (London: Agenda, 2024).

xiv Jon Cruddas, The Dignity of Labour (London: Polity, 2021).

xv Michael Young, The Rise of the Meritocracy, 1870-2033 (London: Penguin, 1961). For a recent critique of meritocracy, see Michael Sandel, The Tyranny of Merit: What’s become of the Common Good? (London: Penguin, 2020).

xvi Richard Carr, One Nation Britain: History, the Progressive Tradition, and Practical Ideas for Today’s Politicians (London: Routledge, 2016).

xvii Rachel Reeves, ‘Foreword’ to Nathan Yeowell (ed.), Rethinking Labour’s Past (London: Bloomsbury. 2022), p. xiii.

xviii David Edgerton, ‘As Labour elects a new leader, some thoughts on Labour’s misunderstood history’ (accessed 17 June 2024).

xix David Edgerton, ‘Harold Wilson’s Lessons for Labour Renewal’.

xx Marianna Mazzucato, The Entrepreneurial State: Debunking Public vs Private Sector Myths (London: Penguin, 2013).

xxi Matthew Brown and Rhian E. Jones, Paint Your Town Red: How Preston Took Back Control and Your Town Can Too (London: Repeater, 2021).

xxii The Camden Community Wealth Fund (accessed 24 June 2024).

xxiii Mariana Mazzucato, ‘Britain is stuck in a cycle of underinvestment. The next government has to break it’, New Statesman, 21-27 June 2024, p. 23.

xxiv Jim Tomlinson, ‘Growthmanship in the Twentieth Century’, Political Quarterly, vol. 94 no. 3 (2023), pp. 64-641.

xxv Richard Carr, ‘Responsible Capitalism: Labour’s industrial policy and the idea of a National Investment Bank during the long 1980s’ in Jonathan Davis and Rohan McWilliam(eds.), Labour and the Left in the 1980s (Manchester: Manchester University Press, 2018), pp. 90-109.

xxvi On the 1920s, see ch. 3 of Peter Clarke, The Keynesian Revolution in the Making, 1924-1936 (Oxford: Oxford University Press, 1990).

xxvii Lawrence Black, The Political Culture of the Left in Affluent Britain, 1951-64: Old Labour, New Britain? (Basingstoke: Palgrave Macmillan, 2003): Jon Lawrence, Me, Me, Me: The Search for Community in Post-war England (Oxford: Oxford University Press, 2019).

xxviii Claire Ainsley, The New Working Class: How to win hearts, minds and votes (Bristol: Polity, 2018), p. 68, 81.

xxix Florence Sutcliffe-Braithwaite, Class, Politics and the Decline of Deference in England, 1968-2000 (Oxford: Oxford University Press, 2018).

xxx Deborah Mattinson, Beyond the Red Wall: Why Labour Lost, How the Conservatives Won and What will Happen Next? (London: Biteback, 2020); Sebastian Payne, Broken Heartlands: A Journey through Labour’s Lost England (London: Macmillan, 2021).

xxxi Nick Garland, ‘Social Democracy, the Decline of Community and Community Politics in postwar Britain’ in Nathan Yeowell (ed.), Rethinking Labour’s Past (London: I.B. Tauris, 2022), pp. 137-157.

xxxii On Michael Young, see Lise Butler, Michael Young, Social Science, and the British Left, 1945-1970 (Oxford: Oxford University Press, 2020).

xxxiii Daisy Payling, Socialist Republic: Remaking the British Left in 1980s Sheffield (Manchester: Manchester University Press, 2023); Stephen Brooke, London 1984: Conflict and Change In the Radical City (Oxford: Oxford University Press, 2024).

xxxiv See the arguments in Jonathan Davis and Rohan McWilliam, ‘Introduction: New histories of Labour and the left in the 1980s’ in Davis and McWilliam, Labour and the Left in the 1980s, pp. 1-22.

xxxv Madeleine Bunting, Labours of Love: The Crisis of Care (London: Granta, 2020).

xxxvi Peter Townsend, Poverty in the United Kingdom: A survey of household resources and standards of living (London: Allen Lane, 1979).

xxxvii Anna Davin, ‘Imperialism and Motherhood’, History Workshop Journal no 5 (1978), pp. 9-65.

xxxviii David Torrance, The Wild Men: The Remarkable Story of Britain’s first Labour Government (London: Bloomsbury, 2024).