Why Labour must seize the moment for a new kind of growth

The new Government must take a bold approach to inclusive growth if it is to fulfil its electoral mandate, writes Annabel Smith

© Number 10/Crown copyright

© Number 10/Crown copyright

After a seemingly endless General Election campaign, the frenzied speculation is over and now comes Labour's historic moment to get on with the job.

With possibly the biggest in-tray of urgent policy challenges since the aftermath of the Second World War, they know it won't be easy. The party's leadership is all too aware that this landslide election victory comes at a time when the public's faith in politics is at rock bottom. YouGov polling and voting patterns suggest that many voters' main reason for voting Labour was to ‘get the Tories out'. In his first speech as Prime Minister, Starmer spoke of the need to restore the bond of respect between people and politics and to repair the fabric of the country that has been unravelled through 14 years of economic stagnation and ideologically-driven policy decisions.

Labour's wide but shallow coalition of voters should not lead it to adopt an overly cautious approach: quite the opposite. Labour must be bold in pursuing policies that can make a tangible positive difference to people's lives, particularly, as Starmer said, ‘to create wealth in every community'. The last decade and a half has been characterised by political and economic volatility on an unprecedented scale. Rather than protecting people from the worst excesses of this, the policy responses and behaviours of successive leaders have only served to exacerbate them, leaving us all the more vulnerable to structural economic forces on a global scale.

Britain now has some of the highest levels of regional inequality in the developed world alongside stark rises in poverty, paired with low productivity and investment. Since 2019 we've seen pay levels barely shift, life expectancy fall, and economic inactivity rise. None of this is inevitable and reflects the policy choices of successive governments. To improve people's living standards and secure a second term, our new government will need to be bold in committing to a new model of growth – one which enables us all to have a meaningful stake regardless of where we are born or the circumstances we're born into. We call this inclusive growth.

The good news is that a huge amount of thought and practice on how to make this change happen has already been going on over many years. At the Centre for Progressive Policy, we have long advocated for an approach to organising our economy that recognises the levers needed to tackle inequality are the same that will stimulate better economic returns. That social policy on working conditions, health and education is as important as economic policy on planning and investment in growth. And that we need an approach to tackling regional inequality that goes far beyond the smoke-and-mirrors levelling up project, with regions and communities in the driving seat. Crucially, we haven't just been thinking – we have also been doing. Through our Inclusive Growth Network, we have been working closely with places up and down the UK over the past four years to help local areas deliver this vision for and with communities, and to show an incoming government the art of the possible in a challenging context.

All of this has taught us that making inclusive growth happen is difficult but eminently deliverable. Through a mission-driven, active and enabling government, inclusive growth must be woven into the machinery of the state at the national, regional and local levels. This means rejecting the idea of ‘inclusive' being a ‘nice to have' and continuing with a business-as-usual approach – leaving the nuts and bolts of governing as they are. Instead, the approach to delivering on the economic growth mission needs to be fully embedded in complex policymaking, in strategy and accountability, in how we measure success of decisions and interventions, and in how difficult financial decisions are made.

World weariness in the institution of politics may have played a role in Labour's landslide, but it now has an opportunity to deliver the meaningful improvements to people's lives it needs to sustain its electoral coalition into this parliament and beyond.


Annabel Smith is director of place and practice at the Centre for Progressive Policy


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