Compass Conference Speech Where next for the left?

As a new generation of socialists we have to address the specific challenges of the world that we all live in and the challenge for the Left today is in how to create the ‘Good Society’ by developing an enterprising and innovative sustainable economy and a just society while also reducing the environmental impact of our activities.

Many of the challenges facing communities today are global in their nature: jobs, the environment, culture and public services. Each is impacted upon by global trends. Aspects of these issues must be addressed at international and national level. But increasingly some of the most innovative and effective responses are emanating from small countries and regional governments.

As a small, clever country Wales is in a position to respond with agility to change and to build alliances between business, government and trade unions to create jobs wealth and growth and sustainable communities. The same approach is being adopted in leading the radical reform of public services. We are building on Wales’ strength as an outward looking internationalist country.

How should Labour respond to modern day challenges? As we consider where next for the Left we must consider the big issues which define modern politics and everyday life. Big issues like employment, the environment, corporate social responsibility, public services and identity must be addressed from a modern day socialist perspective.

Underpinning all our work is our belief in the vital challenge of combating and overcoming inequality. Just as we are social animals so are we moral beings. We are bound by values and ethical judgements in everything we do. And as socialists a commitment to equality and social justice is at the core of our beliefs.

Inequality matters. There are greater levels of social breakdown in those areas where the gap between rich and poor is at its most marked. Crime, violence, drug-taking and ill-health are all higher in unequal societies. Professor Richard Wilkinson has written persuasively about the effect it has upon communities. It is not simply a matter of poverty. But as Wilkinson points out, it is the psycho-social affects of inequality, the perceptions of lower or unequal status that cause stress and chronic ill health.

As a party of the left we must give explicit acknowledgement to this cause. It is what motivates me as a Minister, and it is why I feel strongly about improving Wales’ economic performance and delivering better public services. It is why, for example I support Gordon Brown’s policy of ensuring that additional payments to state pensioners are targeted at the most needy through the pension credit system. Policies which alleviate inequality in this way is what defines the Labour party.

Together with the UK Government one of the prime ways in which we can assist in alleviating poverty as a Welsh Assembly Government is by creating the right conditions for a strong and stable economy which provides good and meaningful work to people in all their communities.

Our record since the establishment of devolution in 1999 has been remarkable. There are already clear signs that under the six years of Labour partnership between the Welsh Assembly Government and the UK Government the Welsh economy has undergone a dramatic transformation

Over 100,000 more people in employment now than in 1999. Having been 30% above the UK average when the Assembly came into being, the unemployment rate in Wales is now below the UK average.
Economic inactivity in Wales has fallen faster in Wales than the rest of the UK since 1999 - and Wales is the only part of the UK where the numbers of those receiving long-term sickness or disability benefits has fallen.
Average earnings have risen by more than 10% in real terms over the same period - over the last four years average earnings in Wales have risen faster than the UK average
Entrepreneurial activity has also increased faster than most other parts of the UK
Exports have been growing consistently faster than those from the rest of the UK as a whole over the last few years.

By building on these successes and achieving even greater progress in creating higher value jobs as well as regenerating some of our poorest communities, as outlined in our strategic framework, ‘Wales: A Vibrant Economy’. We are building the knowledge economy - what I have called the ‘Dragon Economy’ - with increased investment in the development and production of higher level goods and services, especially in and around our universities, such as the £50 million Institute of Life Sciences at Swansea University in conjunction with IBM.
We are also addressing some of the most intractable problems of long-term economic decline and de-industrialisation in some of our more disadvantaged communities. Supporting those communities and individuals to realise their full potential. Our regeneration initiatives such as that of the ‘Heads of the Valleys’ programme which I launched last year are breaking new ground by providing political leadership and a unifying vision as well as the application of substantial resources.

In considering all our policies for regenerating and developing Welsh communities we must ensure that we do so in a manner that is environmentally sustainable. Of all the challenges which face us today, that of the environment is the most pressing.

We can no longer have continued and increased emissions of green house gases such as carbon dioxide are contributing to an unnatural warming of the globe’s temperature. As a consequence we can expect rising sea levels and an increase in severe weather conditions. That is unless we take a range of measures to cut CO2 emissions.

So what is the role of regional governments as well as national governments? While attention has been focussed on the resolute opposition of the Bush administration to the Kyoto process, one relatively unnoticed and significant development in the USA has been the growing opposition to the US Federal government’s position on global warming led by US cities such as Portland in Oregon and Seattle in Washington, both of which I have visited in the last few years. Similarly, the Californian State legislature, including Governor Arnold Schwarzeneger has been in the forefront of legislation to cut harmful emissions from cars - and anyone who has been to LA will know how crucial that is!

So a concentration on the Federal or national policy obscures the vigorous opposition to that policy by the states and cities of the USA.

Here in Wales we are at the forefront of policies to reduce our harmful environmental impact. Wales is one of the only countries and legislatures to have a statutory duty to promote sustainable development. For example, our transport policies are seeking to encourage use of public transport and rail. The new powers granted to Wales in the Transport Wales Bill will ensure that Wales can develop integrated transport plans helping people to use public transport and more sustainable types of transport without creating further congestion and pollution.

With regard to these issues and business operations, I have argued for some time that there will be three inter-related factors which will drive most if not all large companies to be more environmentally conscious.

First will be the pressure to reduce costs. In the constant attempt to reduce costs and remain competitive, companies will introduce processes to reduce the use of raw materials and to cut down on costly waste. Such measures will include lean manufacturing and energy efficiency. A green company truly is a good and profitable company.

A second pressure will come from the direction of the consumer and the active shareholder. Ethical consumption will continue to have a significant impact upon companies’ profitability. A company which takes its customers for granted will not remain successful for long – as so dramatically demonstrated by Gerald Ratner! A considerable proportion of consumers will increasingly demand products which have been produced ‘ethically’, particularly with regard to environmental and employment issues. Increasingly many shareholders are demanding greater accountability and more say in the way in which the companies they effectively own are run. While many are cynical about corporate social responsibility, many of the best companies have embraced as it accords with their values as companies and their realisation that maintaining a good brand reputation with consumers and shareholders is of vital commercial importance.

Thirdly, improved environmental regulation will stimulate increased investment and innovation in the production of environmentally benign products.

I make it clear that I do not support regulation for regulation’s sake and I am sensitive the damage that over-zealous implementation of rules can have on sustainable growth. However, I was struck recently that GE, one of the world’s largest companies which has many operations in Wales, one of which has just one a multi-million pound contact with British Airways with help from the the Assembly Government, issued a statement indicating that environmental issues would now be one of its prime business concerns.
GE called on governments to introduce a consistent set of environmental regulations to give industry a level playing field to develop products without fear that standards will be undercut. For over a century GE has been in the forefront of industrial production. It has not previously had a history of engagement in green issues. Its new position is not only driven by concern for the planet’s future, but also by a shrewd assessment of where future market lie as it becomes increasingly important to address climate change. Governments should encourage and work with this trend.

It is not only on the subject of the environment that the relationship between government, citizens and business is of importance. Businesses continue to be important and influential players in the way we live or lives, as such their wider responsibility to society is increasing.

Now there are some on the left of who are implacably opposed to business and are hostile to the private sector. By the same token there are some on the right (and some on the left it must be said!) who venerate the private sector in its entirety and in it can see no wrong.

We are now a party which acknowledges the crucial role that the private sector business plays in wealth generation and employment. We should apply our own value-based politics in dealing with companies. We should take an informed and rational view on what constitutes a good company and a bad company and seek to encourage the former.

I have myself firm views on this. When Dewhirst the clothing manufacturer closed its operations in Wales its treatment of its staff and their communities was unforgivable. After years of loyal service to the company staff - many of whom had been made redundant several time previously - were told of their redundancy without warning. They were given the minimum 90 day statutory notice. The company put nothing into the community to replace the jobs which were once there. Though, I am proud to say that under my leadership, the Assembly Government led successful regeneration schemes in the towns affected - particular effect in Cardigan and Fishguard in West Wales.

By comparison, when BP shut its facilities in Llandarcy and Baglan Bay near Swansea it took care to treat its workers and their community with respect. Redundancies were handled in a measured way and the company took steps to retrain staff. Subsequently, BP worked closely with government agencies to ensure that the large sites could be renovated for future business and leisure use. As BP has said, the company took much out of those communities over many years, they felt they had a responsibility to put something back.

Many companies claim that they act according to the values of corporate social responsibility. Here I am pleased to say, was a company acting in accordance with these principles. And innovative companies which operate in this fashion are exemplar companies. They treat their staff with respect. They place a high premium on developing staff’s knowledge and skills. To my mind, they operate in a way which is consistent with many Labour values. As noted earlier, I believe shareholder activism and consumer demand as well as government regulation will further drive such behaviour.

The role of government is crucial. I believe that if government is supporting a company financially, we should expect that business to deliver according to our policies and values. While we may not be able ultimately to prevent a global company deciding to withdraw from doing business in Wales and creating large numbers of redundancies as result, we can and must help those affected by those decisions. We must stand by them and help and support them. I think we have a good record in Wales of doing that. When Corus, the steel company announce in 2000/01 that they were making up to 3,000 people redundant we worked with the company, the unions and a range of agencies to help those affected. The result was that by the time the redundancies came in to operation only about 100 people were actually unemployed.

We must engage in the workplace, in partnership with business and unions in order to improve the conditions for the workforce and productivity for the firm. We continue to lead on this, with for example, our ‘Partnership at Work’ initiative involving unions, employers and public bodies looking to improve working relations in the workplace.

Just as the Welsh economy must be fleet of foot in the modern world, so must our public services be able to innovate and change to meet the future needs of our society.

The Welsh Labour Assembly Government is leading a radical reform agenda for the public sector in Wales. At this moment we are reforming the quango state. The old unaccountable system of governance is being replaced. In future the delivery of education and economic development policies will be democratically accountable to the public through a directly elected minister.

But this is not about ‘big government’ - it is about accountability and transparency. Just as companies are accountable to shareholders and consumers so should public bodies be accountable through scrutiny and challenge from their citizens. I believe passionately that transparent and accountable decision-making produces better decisions and better public services.

Clearly the reform agenda has an important role to play in help to counter the disengagement of the electorate and the attitude that “politicians are all the same.” I believe we are creating a new form of government here in Wales that is ground breaking, more accessible, transparent and also, just as importantly, more reflective of the communities we represent.
As a legislature we have exactly 50% equal representation of women and men - the first in the world. This would not have happened without the courageous decision by the Labour Party in 1997 to grasp the nettle of positive action in the selection of Assembly candidates.
We are pioneering open Government: we are the first government in the UK to publish our Cabinet minutes and to hold open sessions at venues across Wales to engage with local communities.
Our policy and legislative processes are recognised by many as exemplary in the inclusive way we engage with and consult with civil society in the formulation of our policies. (As an aside, it is interesting that we have only once been challenged - unsuccessfully as it turned out - in the courts over our legislation.)
The way we engage with young people in Wales in policy making has also been ground-breaking. For example, young people were represented on the appointment panel of the Children’s Commissioner. We have also developed an all-Wales body called ‘Funky Dragon’ elected by and for young people across Wale to engage with and inform us as a government. [This is at the apex of an all-Wales network of youth forums and schools councils across Wales.]

This is particularly important for our Labour voters in the most deprived parts of Wales. Sometimes in political debate, people in deprived communities are characterised as passive recipients of government largesse. But people in our poorer communities are taxpayers just like everybody else. They pay VAT, council tax and income tax - and often as a far higher proportion of their overall income than higher earners.

One phenomenon often remarked upon has been the fact that fewer people in poorer communities vote than those in more affluent communities. I have often wondered if people withdrawing their vote can be partly explained by the fact that government or the state have withdrawn from them. Where now is the personal, human contact represented for example by the rent collector? While this is understandable on the grounds of efficiency in cost terms services, the result has been that these services have become more remote and faceless. Reinforcing the message that these are communities in receipt of public sector largesse rather than communities of active citizens.

The Welsh Assembly Government is ideally placed to lead this change, through encouraging partnerships between communities and local authorities and other private and public sector agencies charged with providing services to citizens.

The Left will be judged by its competence and efficacy in these areas. But it will also be judged at the ballot box on its attitude to important issues of culture and identity.

The progressive Left has often been uncomfortable with the politics of identity, quite rightly seeing the obvious dangers such as parochialism, sectarianism and racism. However we are social animals and all have a biological and psychological need to ‘belong’, or to ‘attach’ to others as described by the British psychologist, John Bowlby. And as old certainties about identities such as social class and identity often based on geographical community break down due to economic and social changes, so we will need to create new identities. We all have multiple identities: for example, I am passionate about my city of Swansea and about being Welsh. But I am also British and when I travel in the USA I am also strongly aware of being European as well.

Globalisation appears frightening to many who are on the receiving end of financial decisions made by faceless multi-national corporations and local democratic institutions are often helpless in affecting those decisions. But part of the globalisation process is of course the countervailing development towards the local and the regional. It is often forgotten that regional or provincial government is increasingly the norm across the world as power and decision-making is decentralised away from national institutions. Devolution in Wales and Scotland is of course part of that process. And local and regional cultures have shown remarkable resilience and persistence during the 20th century in the face of increasing globalisation as the Dutch academic Hofstede has shown.

We need to be confident and comfortable about our own complex inheritance and we need to celebrate this diversity. Here in Wales we have a rich Anglo-Welsh cultural tradition as well as a rich Welsh-speaking tradition both of which spring from our history. For example, the brilliant artist, Ceri Richards who grew out of the amazing cultural richness of the Welsh-speaking mining working-class community of Dunvant in my constituency in the early 20th century. (More recently, the TV writer Russell T Davies, author of ‘Queer as Folk’ and ‘Doctor Who’ has sprung from a similar background in Swansea.) Or the painter Ernest Zobole, who was rooted in and described the endless variety of the Rhondda valleys. While of and from their local communities both artists painted in and would be recognised as working within the European tradition. I believe it is only when we are confident about our own sense of identity, and of our own culture can we truly be accepting of others. On the matter of citizenship, it is important for the future democratic legitimacy of devolution that Welsh citizenship is not defined by one’s cultural background. To live in Wales is to be a citizen of Wales. It should simply apply to all those who live in Wales, wherever they were born, wherever they were brought up

We can draw upon many examples from our past where Wales has strongly embraced the changes brought about by previous periods of international engagement. In the nineteenth century Wales led the charge in an earlier period of globalisation during the industrial revolution. Raw materials and commodities from Wales, north and south were shipped across the world. At the same time, people flocked from all over Britain and Europe to the south Wales coalfield in search of work, in so doing creating the rich vibrant culture of the Valleys. This ‘Coal Rush’ during the 19th Century has helped create the rich diversity for the Anglo-Welsh culture that we have today. That is why you will find no more passionate Welshman today then someone with the archetypal Welsh name of Tyrone O’Sullivan, who led the worker’s buy-out of Tower colliery!

Wales has also been at the forefront of innovation. In 1839, Sir William Grove, a Swansea lawyer, invented the fuel cell, which is now at the heart of the hydrogen economy. In transport Richard Trevithick developed the first working steam railway at Merthyr Tydfil and Telford built the first suspension bridge across the Menai Straits.

In the 20th century Wales has had an honourable tradition of support for international causes. These include the strong support for the International Socialist brigade during the Spanish Civil War, especially from the south Wales miners and the Wales anti-apartheid movement in the ‘70s and ‘80s. Wales has also been a place of refuge for those escaping repressive regimes such as Pinochet’s Chile and Saddam Hussein’s Iraq.

It is this openness and international outlook in Welsh society that the Welsh Assembly Government seeks to develop. It underpins our policies in developing our trading links with the world and by continuing to encourage the brightest and best from around the world to do business and to settle here.

The challenge we face today is to how to achieve a dynamic economy through sustainable growth which provides good long term jobs for people in all parts of Wales, at the same time as we continue to develop a healthy, thriving population and a healthy thriving democracy. As a government we must use all the tools at our disposal to achieve these aims and throughout our concern must be to overcome the inequality which blights so many people’s lives and potential. With our new powers and new purpose the 3rd Assembly term we will focus our attention ever more keenly on these areas.

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