Labour is proposing a sensible restructure of British capitalism

Labour’s first 100 days in office should lay the foundations of radical social democracy in Britain

Attention has shifted to how a Miliband-led administration would govern the country (Getty)

The 2015 general election is probably the tightest race since the Second World War. The polls have refused to move in the Conservatives’ favour, despite a slew of positive economic data coupled with relentless efforts to tempt voters with tax cuts. A Labour victory – either an outright majority or the largest party in a “centre-left” coalition – remains a plausible outcome.

Unsurprisingly, attention has shifted to how a Miliband-led administration would govern: over the last seven days, the party’s plans for reforming markets and the economy have come under intense scrutiny. The Labour leadership insist picking a fight with big business is to the party’s strategic advantage; since the 2008 crash, trust in banks and major corporations has plummeted. Ordinary workers rail against the runaway rewards still enjoyed by the wealthy, many of whom are allegedly cushioned by tax avoidance schemes, as the “squeezed middle” continue to struggle in the era of austerity.

Much of what Labour is actually proposing for a restructure of British capitalism – higher infrastructure spending, investments in skills, innovation and science, modest rises in the minimum wage, a major expansion of apprenticeships – are eminently sensible, centrist measures. Whether stridently confronting the serried ranks of Britain’s “wealth creators” is wise electoral politics remains to be seen. What matters are less personal attacks by individual business figures, and more the perception that Labour is a party that knows how to spend money, rather than how to generate growth in a dynamic market economy.

Labour's plans health ought to ease the immediate pressures on the NHS (Getty)

Labour goes into the election campaign with a fiscal plan more credible than the Tories'. Because they allegedly made “tough” public sector cuts early in the Parliament, Conservative ministers have got way with commitments on tax without proper explanation of how they will be funded. The only means by which the Conservatives can reduce taxes further is, indeed, to shrink the state to 1930s levels. Labour have an opportunity to emphasise its economic competence given the avowed intention to balance current spending.

Those who urge greater radicalism point out there is little point in winning office just to be “responsible”; credibility should never become a straitjacket. Labour’s aim is to drag the centre of gravity in British politics leftwards. This is particularly important if the party is governing with a small majority or even as a minority administration. It will need to project not only technocratic skills, but the ability to generate renewed political momentum, tackling the big challenges shaping Britain’s future.

One clear priority is economic growth. To improve the UK’s long-term growth performance rebalancing the economy while avoiding the threat of perpetual stagnation, Britain needs a comprehensive industrial strategy rather than incremental Whitehall tinkering. Global trends such as the reversal in “off-shoring” jobs abroad give Britain renewed opportunities to make things again, providing more decent, well-paid jobs. That requires an effective structure of regional banking, large-scale public infrastructure programmes focused on house-building, a massive expansion in the availability and quality of apprenticeships, alongside funding of public assets benefiting all regions, not only London and the South-east.

Second challenge: funding public services. Labour goes into the election with a substantial lead on health. The party’s programme ought to ease the immediate pressures on the NHS, increasing the numbers of nurses and doctors, improving GP access, and ending top-down reorganisation. Yet no one should fool themselves the NHS will be transformed overnight. The structural pressures are enormous. Labour have to forge a new public consensus on “tax and spend” to plug the funding gap. This ought to involve a hypothecated NHS tax or levy, combined with the progressive reform of national insurance. It isn't just about more money either: reforming England’s healthcare model emphasising community-based provision necessitates taking on vested interests without falling into the trap of “public sector good, private sector bad”. This is what Nye Bevan assiduously avoided when the NHS was founded in 1948.

Headed by Shadow Business Secretary, Chuka Umunna, Labour insist picking a fight with big business is to the party’s strategic advantage (Getty) (Getty Images)

Third, Labour’s historic goal of social equality. The financial crisis and Coalition cuts have significantly disadvantaged low income households. Child poverty is rising ominously, but tragically mobility is falling. The legacy of the post-1997 government was major progress in poverty alleviation. But there were evidently limits to “redistribution by stealth”. In today’s constrained environment, Labour will need to tackle economic and inter-generational inequality by imposing progressive levies on unearned capital, wealth, property, land and asset-holding, funding ambitious programmes that boost life opportunities. Spending priorities should include early years’ education alongside increasing the incomes of the poorest families. An expanded version of Labour's “baby bond” - a capital endowment for every young person at 18 - will directly tackle asset-based inequalities that severely constrain life-chances. The aim must be to unleash a new wave of social aspiration across Britain.

Whatever the precise outcome in May’s election, Labour’s first 100 days in office should lay the foundations of radical social democracy in Britain. Domestic priorities are well and good, but achieving the party’s mission requires a UK firmly at the heart of Europe. Labour has an unprecedented opportunity to end years of vacillation and drift in European policy. If it has the confidence to act boldly, Labour can govern successfully – even with the most slender of parliamentary majorities.

Patrick Diamond is a former adviser to Tony Blair and Gordon Brown, and University Lecturer in Public Policy at Queen Mary, University of London.