John Healey says that where others would do nothing, Labour is giving real help to see everyone through very tough times
LABOUR councils are the new frontline in the battle through the recession. Our policies are showing that Labour is on the side of British families and communities in this period of economic and financial pressure. Gordon Brown has been bold, but it’s not just national government showing decisive action and leadership. Labour in local government is doing the same.
I recently spent a morning on a whistle-stop tour around three east London Labour boroughs. Hackney, Newham and Greenwich have decided to freeze their council tax this year to help their residents through the downturn. They’re also stepping up the frontline services people need at this difficult time. Newham is investing in new jobs search support. Greenwich is building two more major leisure and learning centres. And Hackney is extending free swimming to all under 18s and over 60s. Common to all is a commitment to provide real help for people during these tough times.
This is a time of unprecedented uncertainty and instability. Within the space of a few months, we have seen major banks go bust, the biggest one-day fall in the history of the Financial Times Share Index and the largest one-day rise in the Dow Jones, oil prices soar to $150 dollars a barrel, then drop to a third, and the Britain’s lowest-ever interest rates.
No government can prevent a downturn in these circumstances. No country can insulate itself from such global economic shocks. The test for political leaders is how they react and whether they are willing to act to help people and the economy through difficult times. That’s as true for local leaders as it is for national ones. The Prime Minister says the Labour Government will “do whatever it takes” to keep the banking system safe for savers, workers, pensioners, homeowners and businesses.
The reason the Government has acted quickly is simple: our Labour values. When we see the threat to the livelihoods or wellbeing of ordinary British workers and families, Labour principles prevent us from leaving them to face such problems on their own. We believe we have a duty to all in our country, which drives us to offer real help in tough times. And we feel the concerns of the most vulnerable most keenly, because while City bankers grab the headlines, the vulnerable in our society bear the brunt of this downturn.
We believe in an active state at national and local level. This doesn’t mean the state can and should do everything – or even most things – but we are not ideologically neutral on the role of the public sector. The present problems underline the need for active government and responsive public services to protect the poorest, correct flaws in the market and secure the proper role and contribution required from the private sector.
In contrast, the Tories remain bound to an ideology which demands a smaller state that does less and less. In the modern world, this would fail the people who need support now and confidence for the future. And it would fail the country. This is the reason for the indecision and inconsistency David Cameron and George Osborne have shown in the current crisis. It is not just their lack of judgement; it is their lack of belief in government itself.
No one can say for certain how the downturn will develop. I expect it to be similar to the early 1990s, with jobs being lost rapidly now, then regained much more slowly. But the areas and people at most risk may be different. Areas reliant on financial services, construction or any single industry are vulnerable. The slowdown will hit different areas in different ways to different degrees.
So there is a big opportunity for local government to show what local leadership can mean. For Labour councils, this is a responsibility, as well as an opportunity. Labour councils are putting our principles into practice in the steps they’re taking to support communities and show people we are on their side.
Wakefield council has been quick off the mark in helping under-pressure homeowners with interest-free loans of between £2,000 and £15,000 to pay off mortgage arrears.
Lancashire council has stepped up its welfare rights work, so 333 more residents are now getting pension credit and 229 more the income support they are due.
And in my own area, Rotherham council and I staged a credit crunch summit last September with 20 advice organisations. More council backing for credit unions and a bigger “rent in advance” scheme resulted, providing 150 people with loans of between £400 and £600 to prevent them falling into the homeless trap.
Some of Labour’s areas are still living with the legacy of recessions in the 1980s and 1990s when the Tory Government failed to support those who were hardest hit and failed to prepare for the other side of the downturn. Intergenerational unemployment, low ambition and entrenched disadvantage are the scars in communities left to fend on their own in the past.
The Tories condemn our commitment to maintain investment in public services and oppose the borrowing necessary for action to support the economy. Boris Johnson’s decision in London to scrap billions of pounds worth of transport projects, which would provide jobs in the short term and economic growth in the long term, is typical of what the Tories would do if they were in power now. In fact, Cameron has said that if the Conservatives were in government, he’d cut £5 billion of public spending from April.
The Tories haven’t changed. They seem determined to do what they did in the ’80s and ’90s: let the recession take its course and leave any upturn to the market. But we won’t repeat the mistakes of previous recessions. That’s why we’re committed to continue investment in skills, schools, transport and regeneration – especially in those areas of the country where people need the most support to get into or stay in work. And that’s why Labour councils are working to keep people in their homes and in work and to strengthen support in local communities.
Our Labour values make us determined to use the power of government at every level to offer real help through the tough times ahead.
John Healey is local government minister and Labour MP for Wentworth. A version of this article introduces Leading the Way: Labour Local Government’s Response to the Credit Crunch, published by the LGA Labour Group
