Giving up the day job

26 Jan 07
ANN ROSSITER | Barring a political earthquake, Gordon Brown will be prime minister in six months’ time.

Barring a political earthquake, Gordon Brown will be prime minister in six months’ time.

His legacy as chancellor is clear: despite recent ‘record’ inflation of 3%, the country has enjoyed unprecedented stability, unbroken growth, historically low inflation and record employment.

But how will he fare as PM? He is reputed to want to hit the ground running during his first 100 days. However, as he found out during a trip to India last week, when he became embroiled in the Celebrity Big Brother racism row, events can quickly overtake even the best planned strategy.

And there’s a newly confident Conservative party to deal with under David Cameron.

Brown has talked about building an enabling state, one that gives people opportunities rather than trying to provide for them. To deliver this vision though, he will have to tackle four main challenges in those first 100 days.

The first is ending child poverty. It was a national scandal in 1997 that one in three children lived in poverty in one of the most affluent countries in the world, their life chances ended before they even reached primary school. Child poverty has been cut significantly and all three major parties are now committed to ending it — a remarkable political consensus. But cutting poverty is getting harder and the government missed its latest target (albeit narrowly).

So what can Brown do? Increases in Child Tax Credit and child benefit are essential, but cannot be the sole solution. Peter Mandelson once famously said that New Labour was ‘intensely relaxed about people getting filthy rich’.

But Brown will have to recognise that you can’t achieve Scandinavian levels of child poverty with US levels of income inequality.

So, as well as ‘raising the floor’, by increasing the minimum wage and Child Tax Credit, he will need to think about ‘lowering the ceiling’, although he should avoid the siren voices calling for an increase in the top rate of income tax.

Also essential are long-term measures to close the gap, such as increased investment in education and skills and greater use of parenting classes.

The second challenge is improving public services. The government has invested heavily and made some headway — but not enough to meet rising public expectations. There is a clear rationale for giving citizens more ‘choice’, but Brown needs to do a better job of selling it.

Too often, choice has been seen as the enemy of the poor, pursued dogmatically. It should be about improving quality by letting go of central control and giving the poorest in society the choice that the richest have always had.

For this to work, consumers will have to be properly informed, the best public services will need to be given the freedom to expand and public providers must be given a level playing field.

The third challenge is to deliver full employment and social mobility. The strength of the labour market is a key achievement for the government. But to reach its ambition of an 80% employment rate requires an additional 2 million people in work. The New Deal programme for unemployed people has worked best over the past decade where it has provided more individually tailored support, through, for example, Pathways to Work for disabled people. Brown will have to move Welfare to Work beyond its traditional ‘one-size-fits-all’ approach and give frontline workers much more freedom.

Related to this is one of Brown’s key themes in recent months — the drive to make Britain a world leader in skills. The recent Leitch Review showed that poor skills hold back UK prosperity, employment and social mobility. Brown should implement the Leitch proposals to create a market in skills by ensuring funding follows the learner rather than being allocated to colleges in block grants.

The fourth challenge is the environment. There is real appetite for radical action to tackle climate change. But the way to do this is through greater use of market incentives, such as carbon trading, rather than ‘command and control’ regulation. This is the way to marry economic growth with sustainable development.

So, for example, Brown should examine David Miliband’s recent idea of personal carbon allowances to match the market in carbon developing for businesses.

Significant progress has been made in each of these areas over the past decade. But more still is needed and many ideas are being generated to this end. The Social Market Foundation will be among those putting forward solutions in the coming months.

But the key uniting theme is that, for future progress to be made, Brown will have to let go far more than he has in the past and resist the temptation to micro-manage if he is to make a reality of his vision of an enabling state.

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