Speech by Rt Hon John Denham MP, Tuesday 8th June 2010

Like a troubled sleeper trapped in a recurring dream, I seem fated to return time and time again to the problem of Labour in the South. Every time I wake I slip back and the nightmare starts again.

In 1992 we published ‘Winning In the South’ – more or less contemporaneously with Giles Radice’s more famed Fabian ‘Southern Discomfort’. It was written by the 10 Labour MPs, including Anne Campbell, in the Southern and eastern regions.  The same number we have today.

In 1992 though, we had received 19% of the vote in the South East – in 2010 17.2%. In the South West we got 17.2% of the vote; this time 15%. And in the Eastern region our vote has fallen from 26.4% in 1992 to 20% this time.

In 1992 we controlled many councils in those three regions, crucially those covering most of out target seats. Today we have overall control in just 5 councils (albeit up from a year ago), and over 78 local councils have no Labour representation at all.  Our local council strength reflected the years of Tory Government. We might hope to increase local representation in the years ahead.

But for those wanting an early return to government, the Labour Party is in a much more parlous state in the South and East than it was before the 1997 election. And if Clegg and Cameron get away with their plans to gerrymander constituencies, the next election will be even more heavily tilted towards seats in the southerly regions.

It is striking how two parts of Giles Radice’s analysis still ring true today.

Firstly, he set out how Labour had failed to win key voters whose support was vital to the election of a Labour Government.

Secondly he argued that working out how to regain support in the South should be the starting point for Labour’s recovery. Success with southern voters would bring the support we needed across the country.

Both those observations are true today.

Draw confidence from history: once the party faced up to the challenge, we applied Labour values and built a wining coalition.  History doesn’t repeat itself in a simple way.  Some responses will need to be different. But it can be done.

‘Winning in the South’ highlighted how in the 1992 election, some of Labour’s priorities seemed out of touch with many voters concerns. The 1992 manifesto had two pages on homelessness – and just two paragraphs on home ownership.

In the recent election we all again met voters who told us we didn’t speak for them anymore; we didn’t understand how they experienced or understood their lives.

There is some consensus about who deserted us in the largest numbers. Mori suggest that our support amongst C2s fell from (over 40% to just over 20%).

Party activist are more familiar today with the Mosaic data, which divides voters in a more complex set of interest groups. They tell a similar story – it was the Mosaic groups B (so-called happy families – or pretty pissed off families as we found them) and C (suburban comfort – or suburban disgruntled) who turned against us most strongly.

(If by the way, you want a good illustration of the significance of the demographic groups, you need only look at my seat – where there was a swing against Labour of over 10% and Southampton Test, where the swing was a little over 6%. Two seats in the same city – so no regional or even sub-regional differences, two long serving MPs, and similar levels of voter contact over each of the past ten years. If you discount the obviously wrongheaded conclusion that Alan Whitehead is simply more popular than me, the clearest explanation is the far higher proportion of Mosaic Bs and Cs in may seat than in Test.)

And there is a strong agreement about the issues that were raised on the doorstep.

My take on this was set out in a note to Peter Mandelson sent at the end of the first week of the campaign based on my conversations with former Labour voters who were deeply resistant to voting for us again.

These are families who regard themselves as hardworking, aspirational, but not well-rewarded. They are usually both working, on average wages, so with a combined income which takes them above tax credits (total household income 40-60k).
They are likely to rely on their cars and may have to pay for their own car use at work.
They give us credit for improving public services – indeed they may work in them. But in their view they ‘get nothing’ from the government, while other people who work less hard, or don’t deserve help (including migrants) get help with housing, council tax, tax credits.  
In the last year they may have lost work, or had hours cut. But because their partner works they got no help when they needed it’ unlike those who don’t work so hard.
They want their kids to get on (and they will) but child care is expensive, university is expensive and apprenticeships hard to come by.
They are not racist, but they can’t see why we give benefits and housing to Polish migrants (as we do) when families like theirs are struggling.
Our future offer does not include them. If they work in the public or private sector all they can see if wage cuts and job losses..
They may not like the Tories much, but it is hard to see how a change could be worse.’


There is agreement about some common issues raised in the election, the results were strikingly complex. Of course, the election was not only lost in the South.

There were marked difference both regionally and nationally; and between apparently similar seats. BME voters were much more loyal to Labour. It is clear the Scotland experienced an almost entirely different election – described to me by one seasoned Labour campaigner as three parties competing to be most opposed to Thatcherism.

Observers have presented different grouping of key seats. The motorway man’ seats. The West Coast Mainline marginals. The free-standing smaller towns. The post-industrial heartlands.

All current post-election analyses,, including this one, need a health warning: for most sweeping conclusions we can find counter-arguments, or at least inconvenient facts which appear to challenge the assumptions we might make

But I think one conclusion stands out. The more we dig into the detail of the different voting patterns of different groups of voters, the more we can see the futility of attempting to respond by an equally divided and segmented appeal to each group.

In the 1990s New Labour rejected that approach. We adopted a different approach. A clear set of values that we promoted to all voters. A set of values that united our coalition around common interests. Not different message for different people.

It was only in government that we moved away from this approach and made the fatal choice:

To have different messages for different media and different audiences based on a perception of narrow sectional concerns. It ultimately undermined our coalition; encouraging each to look only at their own self-interest.

Our response today must avoid that mistake. We need a case for Labour based on our values. It must, of course, meet the needs of those who rejected us. But it must not be a narrow or sectional appeal.

I will look at the election from a southern perspective. The geographical south – as a place – and the political south – those constituencies, communities and voters whose experience of the past 13 years may have more in common with southern constituencies than they do with other constituencies in their own region.

Did Labour fail the South? No we did not.

I told the Fabian two years ago, that there is not a single constituency in the south – however meagre its Labour vote – which did not do better over the past 13 years than it would have done under either of the Coalition partners. And there is not a single constituency that would not have done better in the future had Labour won the election and remained in power.

We don’t need to trash our own achievements or history to have a level headed assessment of what we might have done differently or done better.

Does the South need Labour and its social democratic ideals and values?

After all, if you take that broad swathe of England to the south and east of the Severn-Wash line – it would – as an independent country – be one of the wealthiest economies in the world. Do countries get to a point where the level of incomes, the standards of living simply take them beyond the need for social democracy?

Does Labour’s core value – that we all do better for ourselves and our families in a society where we look out for each other – lose its appeal and lose its resonance?

The answer must be no.

For the south is still an unequal society. The gap between rich and poor is greater in the south than in the rest of the UK and as great as the inequalities which exist between regions. For the vast majority, the need for health and social care, for good schools, for good policing and strong communities, for a sustainable environment, remain needs that can only be satisfied, for the great majority, by collective provision.

Don’t let us believe that we do not belong here, or that we have nothing to say.

Even more important – we must challenge anyone in our party who thinks even subconsciously that the South is peripheral to Labour’s real concerns and interests.

Perhaps the greatest danger to the Party in opposition is that the centre of gravity of party thinking settles on the concerns of the areas where we did win; and not in those where we lost.

Let’s do the opposite; let’s imagine we did live in Southland; let’s ask how we would win a Labour majority of the 200+ seats in Southland, instead of the 10 we have today. And then we would start to win.

Because the case for Labour’s social democratic approach in the south will grow even stronger in the uncertain and difficult times ahead. Only our values can offer some security and certainty, enable aspirations to be met and good services delivered.

Most of our problems have arisen when we have not pursued our values as resolutely and clearly as we might have done.

There’s a certain weary and part justified cynicism when ex-Cabinet ministers make arguments now that were not so clearly heard in office.

But there was a developing critique of where we were going a long time before the election.

In 2006 I was one of a group of Labour MPs who published a pamphlet called re-building the coalition. It included other southern MPs like Alan Whitehead and Martin Salter.

It made little impact at the time.

But its core analysis bears repeating today.

‘Britain faces powerful economic and social forces at home and abroad. Unchallenged each will make our society less fair, more unequal and more divided; their power will feed out sense of insecurity. In a vicious circle, the more divided we become the less able we will be to manage those forces and regain a sense of security.  Labour’s core value – that only by working together can we all do better as individuals and families – still provides the best answer.

Does that not ring true? Post banking crisis and credit crunch people are perhaps more prepared to day to accept that personal, family, community and national insecurity are inherent in the globalised world in which we now live.

And, if we make our case well, the recovery from defeat will be based around the strength of Labour’s values providing security in an uncertain world.

What did the impact of those powerful global forces mean for the lives of the people we asked to vote for us? And how did Labour’s response match up?

In Government, Labour set out to tackle poverty and unfairness in the workplace through the minimum wage and tax credits. It had a huge impact on the incomes of many individuals and families.

As a Government, we argued that poverty was relative not just absolute.

But a national minimum wage and national tax credits mean that the relative impact of these measures is weaker in the south – where average wages and living costs are higher - than in other parts of the country. Family tax credit is worth 27% of gross median earnings in the South East; 33.5% in the North West.

It also meant that a smaller proportion of the workforce gained from these measures (and had a vested interest in keeping them). 43 families in every 1000 working families claim family tax credit in the South East but 70 do in the North East and North West.

In the South there’s a larger pool of people who don’t feel well off, but who don’t qualify; who are more likely to look over their shoulders at those getting benefits and asking why. Let’s remember that, outside of London, it is London commuters – key to many southern marginals – who have living costs 17% higher than the national average. And that it is the south east, south west and east anglia that have the next highest living costs.

In one of the most powerful post election analyses, Liam Byrne has highlighted how about 8 million workers have seen stagnating living standards, not just in the recession, but for about four years. Disposable income grew by an average of 22% in the 12 years to 2008, but as the FT reported ‘more recently incomes have grown a paltry 1.2% between 2005 and 2008; and of course private sector earnings fell in the recession with higher than average inflation. About a third of workers are in the slow wage growth sectors of the economy who face falling progressively behind then rest even in good times.

This suggests – though it needs more analysis – that in the south there were a larger group of voters who felt their own lives were not going forward but who resented the support given to those who they saw as not working as hard.

Although our response to the recession hastened the speed people got back into work, and kept unemployment lower than in previous recessions, for many the experience simply increased their resentment against those who lived on benefit. And remember, more people experienced a period on JSA during the depths of the recession in the South East than in Scotland, Yorkshire or the north East.

Liam’s work also stresses that we will not get these voters back by simply understanding them better, or by talking to them more sympathetically. Something real has happened to their lives; their dissatisfaction was justified, and we will only regain their support if we respond with real solutions.

Let me highlight three areas  where we need to respond.

Firstly, the approach to economic policy which saw us successfully through out first years in government is no longer up the demands of an insecure global world.

For a long time it was possible to produce jobs, and the wealth for redistribution, by running a pretty liberal free market economy and spending the proceeds.

That strategy is no longer available. In the end it produced an unbalanced economy. The very flexible labour markets which generated jobs, and which were often integral to public service reform,  also created the labour market in which Liam’s millions find working life more insure and less rewarding. And for some time to come, the resources for either services or redistribution will be hard to come by.

To meet the needs of southern voters – and those in other parts of the country – we will need more radical action. We will need  a more active state, to restructure and support a successful economy, not less. We will need to look again at how labour markets can combine flexibility with greater fairness;  and we will need to take a fresh look at how collectively owned institutions – from pension funds to mutuals – have a value measure in more than sheer economic efficiency; a value measures in the security and in depends they give to their owners.

The southern economy, in particular, has benefited from, and continues to need that active state. It has a higher skilled, higher valued added economy, it is, increasingly the manufacturing centre and has many of the countries strongest innovation clusters.

The idea, promoted by the Cameron and Cable that investment in higher education, in R and D tax credits, and the rest of the innovation system is harmful is one of the damaging, anti-south policies we could imagine.

The active state that is essential to support successful market companies must also look again at fairness in the workplace. For, as we’ve seen in the south as elsewhere, overall economic growth and even job creation mean little if the rewards of work are limited and unfair and the jobs can only be filled by migration.

The second area where we need to respond is the structure of the welfare state.

I believe passionately that our society is too unequal. The evidence is pretty clear that we can only achieve the type of healthy, well educated, secure and happy society we want if our society also becomes less unequal.

But not everything which makes us more equal is necessarily seen as fair.

In the last year, the Fabian/Rowntree research established beyond doubt that British people have a strong and deep sense of fairness. But it is a robust, common sense view of fairness; one that says that responsibility and hard work should be rewarded; that what you put in should be reflected in what you get out. Yes, we should always look after those who need most help, but effort and responsibility should be clearly recognised.

This is a reciprocal view of fairness. It is a long way from the distributional – give more to those who need it most – deeply embedded in Labour thinking.
In the past few months the IPPR has proposed taxing child benefit for those who did not vote for us in the election. Demos proposed sharpening the taper on tax credits for the same people. Both organisations wanted to deliver more help to the poorest. But both approaches simply sharp the cliff edge between those who get help and those who feel they get nothing.

How many times on the doorstep did we hear; it seems so unfair; we work so hard yet people who don’t seem to get everything?

Again, this argument was not something we only heard in the past year. I set out much of it for Prospect in the Fairness Code in 2004. But the truth is while we increasingly to talked the language of fairness we never really considered the changes to policy that would have reflected a common sense, reciprocal sense of fairness.

This failure to entrench a popular sense of fair play compounded our problems with migration. For all the tightening we did on migration from outside the EU, the main issue – as Mrs Duffy pointed out – was EU migration. And we never did explain why child benefit or tax credits could be paid on children who had and never would live here and whose parents had made only the most marginal contribution in the way our taxes. Or why homelessness rules designed for those in real housing need could be used by people who had left their own secure homes for purely economic reasons.

We had of course made the benefits system for those out of work both more demanding and more supportive  than we inherited 13 years ago. Our manifesto commitments on requiring people to work were essentially the same as the Tories. But it was symptomatic of our fatal lack of confidence in this agenda that we barely mentioned it in the campaign.

So we need to address four issues.

Firstly, to ensure that what we do provide is as generous in the south as elsewhere; which means exploring how the relative value of tax credits and the minimum wage can be as great in the south as elsewhere.

Secondly, we need to recognise that human beings to respond to the incentives in the system. We must be hard headed about reviewing rules – like those on homelessness or family support – which encourage gaining of the system or which seem to give greater reward to those who have built up few entitlement.

Third, we must acknowledge how unfair are seen arbitrary limits on who gets extra support, whether with our trust funds, EMA or free computers. But there are limits to the politics and morality of making the existing system tougher; of creating more losers rather than more gainers. If such a heavy dependence on means-testing inevitably fuels the resentment of those excluded we must create something different. And however hard it may seem in the current economic climate, I believe we have no alternative but to set out on the long-term journey to create once again a system of wide social insurance, on which security and support reflect the contribution made.

We may not have the chance even to start this for several years. But this is where the energies of some of our best think tanks should be deployed.

The third area we need to look at examine is the deal that the south itself gets.

It is, of course, not true that Labour rigged the system to transfer money from Conservative southern public services to Labour heartlands of the north. The system for allocating resources was objective, prioritised need and deprivation.

But is it a coincidence that the surprisingly good Labour results in London came in the city region which has the highest public spending per head – around £9500 per head - of any part of the UK other than Northern Ireland. Or that Labour’s poorest results were in the regions with the lowest public spending per head – in the South, East, East, East Midlands and South West, spending per head is between £7,000 and £7,500 per head.

According to Oxford Economics, only three regions of the UK produce more tax revenue than is spent in them: London, the South East and the Eastern Region.

In short, in terms of tax paid and tax spend received, the northern regions, Wales and Scotland feel a lot more like Scandinavia than do the southerly regions.

This is a difficult issue to raise. Not least when we know that the right wing coalition is planning to make the northern regions and the devolved nations pay the brunt of their plans to cut the deficit too early and unfairly.

I will have no part on endorsing, legitimising or condoning that policy. Both the inherent needs of those regions and nations, and the state of their regional economies mean that such a short term policy will have disastrous social and economic consequences.

But, in time, when the deficit is reduced, and growth is firmly established – and it may take another Labour Government to do both – I will argue that the south needs to keep enough of its tax revenues to ensure that we have the resources to tackle the inequality, absolute and relative, within the South. And that the south needs to retain sufficient of its tax revenues to secure the active government support for R and D, innovation and a high value added economy on which the wealth of the whole nation depends.

And given that the drive for additional funding to the most deprived regions is to close the gaps in health, child poverty and economic performance we need to find ways of ensuring that the additional investment doe narrow those gaps and not simply cushion the running of revenue based services.

For much of the next few years, we will be pre-occupied in challenging the way the Tories will use the deficit as an excuse for an ideologically inspired demolition of support for public services and taking away the vital support of active government for a stronger economy. But as we prepare for Government again we will need to ask what a new fair deal for the southern regions will look like.

As part of our commitment to localism and accountable local leadership of public service reform – which we deepened considerably over the past year – we must also let the south take its own choices. Housing was often raised in the election. We actually spent over £40bn on social housing; but the great bulk was spent renewing the social housing stock. While this brought huge benefits, including to my own constituents, few southern councils ten years ago would have set the same balance between stock renewable and new build. It was national programme based on a regional understanding of the problem.

Though the issues I’ve discussed have been primarily economic in focus, both my analysis and my prescriptions have been based strongly on values: on Labour’s values and on the value – of fairness in particular – strongly held in popular culture.

Labour’s fight back must not neglect the cultural issues either. Our main problem is an English problem. We lost seats in the south and in other English regions too.

But we’ve been very reluctant to talk about England, or to recognise the real and growing interest in English identity.

As candidates we could download PDFs for our campaign material. You could download material for Scottish Labour, and for Welsh Labour. But if you were English you could only download Labour, or British Labour material.

At CLG I developed a modest proposal for the Government to support, nationally, the growing trend to hold local, inclusive, celebrations of St George’s Day. I wanted to reflect this popular movement; but also to ensure that the English identity did not slip back – faced with the thugs of the EDL – into a narrow and racist identity.

The proposals went right across Government; but was vetoed just before its launch by Downing Street who were concerned it would cause problems north of the border.

It may seem a small point; but to meet the inability to hear conversations going on in our constituencies was all to redolent of the bigger problems of being out of touch that the election was to reveal.

National identity – both English and British will be essential to a progressive future.

The challenge of reshaping our economy, rebuilding the welfare state, and the many other challenges I haven’t raised tonight, requires more than offering the best deal to each individual family. It will require a common sense of purpose, a progressive, national and patriotic story in which the English have a full part to play.

We cannot rebuild Labour in the south without the values based approach to policy I’ve tried to outline. But we will need to do more, and let me end on some of our immediate priorities.

The first is to create the type of campaigning party, and social and labour movement which is campaigning effectively both against the right wing coalition and for positive change that Ed Miliband has set out in his campaign.

But given the state of Labour in the south, we also need to give purpose to Labour supporters everywhere.

As a lifelong electoral reformer, I’ve always cautioned against seeing electoral reform as a simple solution to our southern problems. But there is no doubt that we will gain hugely from a change in the electoral system for the Commons and a House of Lords elected, proportionately, on a regional basis.

We need to back and win any referendum on AV and a democratic House of Lords to give purpose to voting Labour everywhere.

And we need to respond to the coalition by denying the claim of the liberal Democrats to be a progressive alternative to the Tories. We know, most of us, that there are plenty of progressives in the Liberal Democrats. But so long as they sustain the coalition Labour must campaign, without quarter, to destroy the progressive mandate. There must be no hiding place for those who campaigned against the Tories and who now sustain them in power.

That’s my case.

Labour’s values are as relevant to the South as anywhere else and needed more urgently...

We need to change and develop our economic and social policies to meet the needs of the South and the deep sense of fairness and security people want.

We need to reflect a strong national and progressive case for England as well as for Britain.

We need to be at the forefront of democratic change.

And we need to win the right to be regarded as the progressive party in every corner of the South.