This Government is more Old Labour than it thinks

Middle England is ready for much more radical change and boldness from this Government

LAST NIGHT our shiny new Secretary of State for Trade and Industry, Stephen Byers, made his first Mansion House speech to an eager City audience waiting for assurance that the Mandelsonian agenda would be safe in his hands. A fair indication of his speech could be had from Andy Grice's pre-speech coverage in yesterday's Independent, which confidently predicted that it would anger left-wingers who, we were told, would see it as another attempt by the Government to abandon Labour's traditional commitments.

The "arch moderniser" Stephen was boldly to assert that wealth creation is more important than wealth redistribution, and one traditional old Labour MP was quoted as saying: "The tax and benefits system must be used for some redistribution of wealth. The fact is, if you are creating wealth you have got to use it in the most positive way possible, which means giving it to people of lower means."

But the idea that Labour has only just woken up to the fact that you need a dynamic economy to create both work for your people and wealth to sustain the physical and social infrastructure of society, is bizarre. Labour governments have always sought to try to regenerate the real economy.

In the past this was always seen as rebuilding the traditional manufacturing base that had invariably fared poorly during the intervening periods of Tory government. Now that our traditional manufacturing base has shrunk to such a small proportion of the British economy, Labour's emphasis is geared to producing a highly skilled workforce who can shift successfully from one sunrise industry to another as they rise and decline.

But this revelation that the nature of the British economy has changed is not something that Labour has only recently awoken to.

In the first months of Neil Kinnock's leadership of the Labour Party in 1983, he and I co-operated closely to co-ordinate the campaigns of the Labour Party and the Greater London Council which were emphasising the importance of building a "high-skill, hi-tech" economy both in London and nationwide. Neil Kinnock launched the GLC's campaign in 1984 with a speech in which he said: "Labour must become the party of production, not merely a party of redistribution".

Following my election to Labour's National Executive in 1987 I became a member of the Productive and Competitive Economy party, preparing Labour's economic policies for the 1992 election. Under Bryan Gould's chairmanship we reviewed the whole long history of Britain's economic decline and came up with a complete package of radical policies based on creating a highly educated workforce for modern, hi-tech industries.

I can't recall any meeting in the two years the working party met at which anybody suggested that we could simply rely on redistribution of wealth to create the kind of society we wanted to see.

Nor is it the case that these views existed only in the rarefied atmosphere around the leadership. Throughout my 12 years in Parliament I have attended the weekly meetings of the Socialist Campaign Group of Labour MPs, where the followers of the true faith lurk in the primeval Labour undergrowth, and yet I have never heard anybody at any of our meetings oppose the need to create a modern, dynamic economy.

Our criticisms of successive Labour leaders have been about the levels of taxation and public spending and the scale of redistribution. No one has ever suggested, at any left-wing meeting I have ever been to, inside or outside Parliament, that wealth creation is not relevant to the politics of redistribution.

So what is the point of difference between what Stephen Byers said last night and traditional Labour values, that leads anyone to think that this is some significant shift in Labour Party policy? Perhaps it is the influence of the spin doctors. Here was a perfectly normal speech that could have been made by any Labour Trade and Industry secretary, including Tony Benn or Frank Cousins, but if it can be sold to the press as some redefining of Labour's traditional values, or - even better - as some subtext to the "great project", then it takes on a new significance.

The Byers incident is in many ways typical of all that has happened in the projection of government policy. Since Labour came to power Gordon Brown has dramatically increased taxes, and after a slow start has begun the expansion of public spending to restore the damage done in the years of the Thatcher junta.

In the field of industrial relations, the introduction of a minimum wage and a basic package of trade union rights has begun to shift the balance of power in the workplace. Somewhat hesitantly a massive programme of constitutional change has begun which will lead to Britain becoming a devolved, decentralised and more democratic modern European state. Once the reforms to the House of Lords have been carried through, then the huge majorities in the House of Commons for a lowered age of consent for gay men and the banning of blood sports will no longer be thwarted by an outdated and undemocratic assembly.

Yet anybody who had done no more than glance at the headlines in British papers during this last year and a half or so would have assumed that the New Labour Government had firmly rejected a hundred years' tradition of fighting for social justice, as the spin doctors placed their deceptive and demoralising gloss on virtually every action of the Government in order to appeal to some mythical mid-market tabloid reader in Chipping Sodbury.

In reality middle England is ready for much more radical change and boldness from this government. But then perhaps all our spin is really designed to reassure barons such as Rupert Murdoch - and Wall Street and other interests - than any domestic political constituency.

This does not mean, as anybody who has read the writings of Roy Hattersley can confirm, that there are not passionate debates going on inside the Labour Party about levels of tax and public spending and the degree to which wealth should be redistributed. These debates will continue. But unlike the great ideological schism that has torn the Conservative Party to pieces, Labour's rows will be about how far and how fast we are to go. If only we could retire the spin doctors, we'd also no doubt be a lot happier as we went about our business.