With think tankers and campaigners being appointed to government, it’s tempting to think these secretive groups are calling the tune, but there are better ways to work out what Labour really thinks, says James Nation
Over the last 14 years, there was a theory some commentators that went something like this: yes, Conservative Prime Ministers might take decisions behind the black door of 10 Downing Street. But the real power and direction came from the network of think tanks behind ‘the other black door’ of 55 Tufton Street.
With Labour now in power, you might ask whither the ‘Tufton Street’ of the left? Will it be the ‘Salamanca Place’ of the New Economics Foundation or the ‘Storey’s Gate’ of the IPPR, given some of their alumni are – controversially – in government? Or what about the central influence of Labour Together following on from the election campaign?
But that’s the wrong question to ask.
First off, having been in government, the idea that an external organisation dictate your every move is for the birds. The ideas that influence political parties get developed in a contested space. For every good proposal from libertarian ‘Tufton Street’, we would consider others from a more communitarian think tank like Onward. Both sides would always hammer us for listening too much to the other.
Second, not every decision bears the imprint of a think tank or even a political vision. Consider the government’s current predicament on means testing the winter fuel payment. That policy is an old Treasury officials’ favourite. Its revival implies that perhaps ministers are taking their cues from civil service biases, rather than grand strategy.
Third, as the new inhabitants of Downing Street will find, a well developed policy report on the outside is great, until the reality of trade-offs and constraints hits you.
‘Greater state direction over the economy’
That said, of course it pays to figure out what those who work for Labour in government think. They have the ability to colour the Prime Minister’s choices on particular issues. The IPPR’s Dr Parth Patel summed up the mindset well when he recently described Labour’s objective as “greater state direction over the economy”.
It is tempting to solely focus on the implications for tax and spend. In reading past think tank reports, you can see a consensus for: a much more generous social security net; fundamental reform of the tax system with new property taxes; and support for the full equalisation of taxation on wealth and income. This latter idea, in particular, has led to much chagrin. But that’s exactly where the Chancellor wants you to focus. She wants you to think that an £18bn punitive tax raid recommended by the IPPR could be on the cards to give herself space. That way, she can attempt to make a still damaging increase in Capital Gains Tax look moderate in comparison.
Make sure you keep an eye on how Labour implements ‘greater state direction’ in other, more micro areas. Take the aim to crowd in private investment through GB Energy, where investors will want to watch the nature of any conditions attached to the commitment of equity by the state closely. On housing, Labour have rightly positioned planning reform as key to boosting economic growth. Yet many on the left also see planning as a tool of social policy, hence the worry that overall supply numbers will suffer at the expense of top-down affordable housing requirements.
In short, to the extent that we can discern a governing thought in Labour’s actions so far, don’t assume it’s Tufton Street-style institutions calling the tune. Don’t also just fixate on the big philosophical choices on tax and spend. Look for clues across public policy to find out what ‘greater state direction over the economy’ really means.
James Nation is the former deputy director of the Prime Minister’s Policy Unit and ex-special adviser to the Chancellor