The good news for the discontents of the British left: New Labour is dead. It has expired. Shuffled off this mortal coil. It is no more. I could extend the Monty Pythonisms further, but you get the drift.
The bad news: It’s got harder, not easier.
Reading my friends on the left of the Labour party, I get an occassionally odd feeling. They’re obsessed with Blairites, with Neo-Liberals. Read any Left, or Blue Labour, or whatever op-ed, and the venom for the New Labour era is palpable.
I am, or was, a Blairite. I am now a Fiscal Conservative. I am, in any plausible sense, on the far right of the Labour party. I’m like a Labour Francis Maude. Except without the parliamentary seat, or the millions of pounds, or the history of gaffes.
So take it from me. Forget it. Stop worrying about it. New Labour is dead.
But halt, ye eager copy and paste merchants of CCHQ opposition research, pause for a moment before adding my quote to your “Labour tilts left” file.
What has killed New Labour? Not a leader, nor a critique, nor this government. No. What killed New Labour is the passing of the challenges it was constructed to respond to, and the emergence of new, even harder, ones. This is as it should be. No flowers sought, or needed.
What most remains of New Labour is no faction, or a clique, or a conspiracy, but a challenge.
What does it require for us to succeed now?
This summer, I cogitated upon this, and produced as is compulsory for the worthy leftist, an article in a small progressive magazine, which was duly called seminal by a significant proportion of it’s readership (two people). I said at the time that “Until we confront the fact that the New Labour fiscal settlement is dead, we will not be able to build a political position to replace it.” and “to win again we need to conceive of a Labour mission that functions without the comfort of a painless expansion of public spending.”
It’s also why I was keen to contribute to “In the Black Labour“, whish, in essence is a call for the Labour movement to prepare for the fact that while a Demand crisis won’t last for-ever, the consequences of dealing with one will be with us for a considerable time, especially for the left. (The right can always glory in austerity for its own sake. We have to find a cause to endure it for)
Though I don’t take credit for this, I’ve been quietly pleased that the question of what the centre-left does in a time of no money has achieved ever more recognition as the essential challenge to the left.
You can see this in various forms – whether in the Shadow Chancellor and Leader reminding us all that the spending framework will be tight, or Blue Labour’s call for non-state action, or the steady drumbeat of support for things like localism, mutualism, community action and so on.
Of course, some feel finding purpose amid austerity is the wrong focus.* but if the environment we face in Government in one of sustained downward pressure on spending, that is a very different political and economic challenge to the one New Labour was designed to address. It follows that the solutions will not be New Labour solutions, though I believe they will be rooted in a similar “traditional values in a modern setting” approach.
There is perhaps more common ground between my analysis and that of the discontents of New Labour than any of us care to admit. To take Blue Labour, I think we agree that there has to be a focus on social action beyond the state. To take the left, I think we’d agree an essential challenge will be lifting living standards of poorer private sector workers.
What we can’t do though, is pretend any of this is easy, or can be regarded as hugely radical.
At root, this is my critique of Blue Labour. They think they’re developing a “New Political Economy”, when in policy terms, they’ve only produced a Peter Hain pamphlet c1989 (regional banking? more manufacturing? worker representation on remuneration committees? This is not the stuff the New Jerusalam is made of, chaps.) Since politics is in essence an applied science, it’s the tinyness of the policy agenda that echoes down the Shadow Cabinet corridor and into the lobby, not the glorious rhetoric of the Phrontisterion.**
My personal answer to this is to focus on the small, on the concrete, on the deliverable.
I think we live in uncertain, unsure times, and the left should consider our aims as being under twin constraints – first that we have few resources to throw at problems, and second that given the instability in the world around us, the electorate are likely to be sceptical of grand claims from politicians and advisers who can never seem to see a disaster coming.
This suggests an emphasis on priorities, on re-ordering spending, on recognising limits. Looking for the pressing need and the plausible difference. You could sum up the approach Scepticism about our ability to entirely transform the world, but a passion for changing what we can.
I see this debate as being a post-New Labour one. Not because Neo-Liberalism is wicked (whatever it is), or because New Labour failed, but because the solutions that New Labour offered are not appropriate to our current challenges.
That doesn’t mean New Labour has nothing to teach us. For example, one lesson might be not to write off the magic of capitalism. There are people across Britain trying to build their business, expand their company, develop their product. they’ll do this even if George Osborne is an idiot, and many will succeed.
Our challenge should be to help them, and try to make more like them, not exercise ourselves about whether to sort them into wheat and chaff, sheep or goats.
Another lesson might be to go with the grain of electoral sentiment, not against it. So if people feel the state is wasteful and inefficient, don’t tell them they’re wrong, but look for ways they are right which helps us address our challenges.
So, in Welfare, the debate is trapped in an argument about the waste of universalism versus the pauperisation of targeted benefits. But the nature of society and work has surely changed in the last sixty years, and that creates an opportunity to be against welfare waste, while being for a reformed universalism.
Perhaps the role of the welfare state in a flexible, shifting Labour market is to help people through what you might call “Universal moments” – the start of your family, when income is lower than usual, a loss of a job, a family crisis – like divorce, or death or the need to care.
We may not experience all of these, but we know we will all experience some of them, and that it is right the state is there for all of us then. This would be the focus of contributory benefits, while targeting is used to ensure limited resources are spent wisely. This might allow you to find a way to reduce wefare spend on Universal befits at the higher income levels, while not sacrificing the Universal principle that build support for welfare.
I see a lot of battles ahead in the Labour party on these issues. Rightly. The choices that will be made will be painful. To take just one example, I think it’s hard to see any “rebalancing of the economy” or “building a better capitalism” that doesn’t involve further, restraint in Welfare, Health and Education spending.
Why? Because if we agree that rebalancing the economy and Private sector job growth is essential, then an Industrial Bank, Infrastucture, Skills provision and support for Business start-up and encouraging FDI all mean either spending commitments or taxes foregone. Within a need for sustained overall restraint, that has big implications for spending departments.
This is an argument we need to be damn clear about, if we’re going to “rebalance the economy” in anything other than the sort of partial, half cocked way this government is doing.
So here’s the challenge for the Left.
You might be glad to know New Labour is dead.
You may be less keen to hear that it was the last possible easy answer for social democracy.
As for the challenges we face now, well to borrow from Masterchef – “Social Democracy doesn’t get any tougher than this”.
* Extended Footnote excised from main text:
There are those on the further shores of the left reject the idea of any sustained spending restraint, seeing it as a pre-emptive defeat, not an accommodation to reality.
Others agree we need to reduce deficits, but say we should reject outgoings and focus on income, usually by of pointing to tax evasion, or a transaction tax, or some other source of funds, and arguing these would provide the funding for a new wave of social justice spending.
I disagree with much of this, because first, I think the specific incomes increases are harder than they look. (Transaction taxes are patchy, tax evasion is much easier to loudly oppose than to prevent and it’s much easier to talk about big, electorally painless taxes than to find any)
More significantly, I disagree because while I think there may well be a need for higher taxation – perhaps on wealth, or property- and for action on aviodance, this will still only protect some existing programmes, not permit expansion. The overall environment will still be one of sustained government spending restraint. We should probably think of extra income from such sources as a bonus, not a key-stone.
There is another argument that runs “we don’t need to worry about the deficit because we need to get growth now, and that means borrowing more now.”
I find myself a little baffled by having this presented as a counter-argument, because it isn’t. it’s a sequencing argument. It why I don’t think I’m arguing against Labour party policy. If we were in Government the debate would be essential, but we’re not.
Let us agree that we need further stimulus now. That doesn’t reduce the pressure to decide what we do when we _don’t_ need stimulus, or if we really can’t afford it (say if the Bond vigilantes become real or we inherit an economy which is growing sluggishly but has high debt.)
In fact, the _only_ situation we really wouldn’t need to worry about the deficit from 2015 on is one where the government is either lucky or right and we get a boom from c2014 where tax takes soar. If that happens, we _can_ happily spend the proceeds of growth on rebalancing while protecting services. Hoorah. That would be good.
I’m not planning for it, though. George Osborne is Chancellor, and I am filled with Dread.
** Memo to Blue Labour; this rhetorical gap is why you’re cross with Team Ed Miliband. It’s not that he hasn’t run with your rhetoric: he has. That’s why half of you you think he has boldly seized the moment. It’s just you persuaded him to embark on this run possessing only rhetoric, not a policy agenda that means anything, which is why half of you see the lack of yardage, and are frustrated.
I think the title should read "the death of Labour". Your party is slowly committing suicide, Hopi.
A really well thought out post, Hopi. Not that that's unusual for you, though it is rare in the Labour blogosphere especially in these days of ever-louder yelling about which colour of the rainbow is best and why everyone else is just plain wrong. A measured article is a rare and welcome beast. Let's hope it's not just CCHQ's opposition research bods that are reading this!
Inefficiency in the NHS has to be something Labour could tackle. As I understand it, a combination of low technology and confidentiality rules regarding patient records means that every new admission to hospital is back at square one of the treatment process. Medical records are physically moved around in vans in hard copy. Patients spend weeks bed blocking while they wait for their doctor to get a sight of them. There appears to be no use of quite basic computer technology – emails, for example – in most hospitals. If one doctor needs to talk to another, it seems to depend upon them both being on the same shift in the same part of the building.
Some basic modernisation could surely save billions in the NHS. It doesn't need a restructuring, just a few laptops and mobile phones. Heck, a fax machine and a pager would be an advance on the current situation.
Another small, but concrete change Labour could make: abandon the comprehensive school system and allow academic selection across the board. This would put an end to selection by parental property value and increase social mobility without costing a penny. It would be popular with those aspirational southern voters who would send their kids private if they could afford it, or move close to a good state school if they could afford it, but can increasingly do neither in the age of austerity. A cost-free vote-winner that symbolises Labour 'getting' aspiration and ditching Foot-era ideology.
Damian, academic oblivion is one of the core foundations of Leftist thinking, so encouraging them to abandon comprehensive education is about the same as asking Hitler to host the local Bar Mitzvah.
Really interesting and thoughtful as always Hopi – but your extended footnote reveals some of the problems with the logic running under the piece as a whole. You basically make an assumption that the UK will never again return to reasonable levels of growth. You blame Osborne for this – but if Labour inherits a sluggish economy with high debts, why will this be? It'll be because austerity-first economics (i.e slash now for confidence and growth) has failed, so why (apart from for electoral gain at the moment, which I understand but it's a separate argument here) you'd want to inherit and replicate the logic that came with the dire fiscal position I don't know. There are things a government can do, outside of a temporary stimulus, that can kick start an economy into sustained decent growth, which is the best way to get deficits and debt down – but they require short term spending and long term restructuring of the sort you sneer at BL over. At present you're just looking down the wrong end of the telescope. As they say, you've got to speculate to accumulate. I'm not suggesting Labour take that message to the electorate (!) as I understand the political reality is more fraught, but you, nor In The Black Labour, shouldn't confuse political positioning with economic objectivity.
Because while a sudden sharp withdrawal of Public sector support in the middle of a demand crisis is harmful and stupid and likely to severely limit growth, dealing with a high deficit over time is none of those things.
I suspect we'll be enduring a sluggish growth in 2015, with some income growth at the top, but sticky unemployment and downward pressure on wages. In that scenario, with high debt, there's little case for straight up stimulus, though there is for both rebalancing and redistribution
There might be a case for short term stimulus in 2015. Personally, I think things are still that bad deficits will be so high for so long there's going to be little room for fiscal manouevre, and by that stage the Bond markets may _really_ be troublesome and threatening if more spending is the plan (they're clearly not now, and won't be for a while yet).
That's my great fear – a Japan style trap, with few good answers, with low growth austerity the best choice out of a bad bunch. the problem is we can't bully this government into a sensible economic policy in the meantime. My expectation is they'll learn to be just not-stupid enough to deliver patchy growth by 2014-15. It depresses me that this is also my _hope_
There has not been a sudden withdrawal of support . I would be interested to know why you feel it is right that support for the private sector should be withdrawn at a greater rate than support for the Public Sector, good for the ecionomy ? Or do you want to borrow even more so we can all avoid suffering ?
Honestly Hopi , I have a living to make and I can`t spend all that much time on it but I would tear you into tiny pieces on this ground. You are going to have to start making sense .
You are not right of anything you are just a bog standard Labour Social Democrat ( which is fine ) and nothing you say even begins to earn credibility.I suggested to you before the terrible difficulty of those hard yards , the voters who do not like or trust you. Loyal core pepes find it hard to believe that they have to give up so much for just a few and that will not chnage .You are placating them.
If you had children you would know better
Sorry but there it is . If this is the story , bring on the election.
Hopi,
Re: http://www.hopisen.com/?p=4387
First neo-liberalism, has made it to wikipedia so it must be real.
https://en.wikipedia.org/wiki/Neoliberalism
“Neoliberalism seeks to transfer control of the economy from public to the private sector, under the belief that it will produce a more efficient government and improve the economic health of the nation.”
In a single breath Hopi Sen accepts the premise of Neoliberalism
“So if people feel the state is wasteful and inefficient, don’t tell them they’re wrong, but look for ways they are right which helps us address our challenges.”
Nothing like conceding the intellectual premise of your opponents, an act that is repeated in ‘In the Black Labour’.
“Of course, some feel finding purpose amid austerity is the wrong focus.”
Swallowing the oppositions agenda wholesale, is reckless in the extreme.
“To take the left, I think we’d agree an essential challenge will be lifting living standards of poorer private sector workers.”, Neoliberalism has achieved the opposite for the last thirty years, and Browns attempts at redistribution through tax credits is a huge failure.
“What we can’t do though, is pretend any of this is easy, or can be regarded as hugely radical.” Given the constraints you are accepting it might well be impossible, and reversing the trend of the last thirty years, could be regarded as radical.
“I think we live in uncertain, unsure times, and the left should consider our aims as being under twin constraints” more constraints, just because you can not conceve of an alternative, doesn’t mean there aren’t any.
“Not because Neo-Liberalism is wicked:”
John Schmitt and Ben Zipperer (2006) of the CEPR have analyzed the effects of intensive Anglo-American neoliberal policies in comparison to continental European neoliberalism, concluding “The U.S. economic and social model is associated with substantial levels of social exclusion, including high levels of income inequality, high relative and absolute poverty rates, poor and unequal educational outcomes, poor health outcomes, and high rates of crime and incarceration. At the same time, the available evidence provides little support for the view that U.S.-style labor-market flexibility dramatically improves labor-market outcomes. Despite popular prejudices to the contrary, the U.S. economy consistently affords a lower level of economic mobility than all the continental European countries for which data is available.”[wikipedia]
It looks pretty wicked to me.
“that doesn’t involve further, restraint in Welfare, Health and Education spending.”
I think we have established that your view is quite myopic, and certainly not shared by the left.
“There are those on the further shores of the left reject the idea of any sustained spending restraint, seeing it as a pre-emptive defeat, not an accommodation to reality.”
Yes! – You don’t have a clue about my economic position.
“say if the Bond vigilantes become real or we inherit an economy which is growing sluggishly but has high debt.”
More constraints, for which I don’t accept the premise.
I am not Blue Labour, I don’t work for Labour.
Ed can’t get the rhetoric right, or the arguments or the policy.
Of course the left has to be realistic about economic balance and should be as tough on welfare cheats as tax cheats, but when discussing what the state can afford to spend, we shouldn't concentrate exclusively on things like benefits.
Can we afford nuclear weapons that are for a former perceived enemy and of no account against those who threaten us today? They may persuade the likes of Blair and Cameron that they are world figures but it is nothing but meaningless posturing. Obama has politely signalled that in reality we are second division.
Saving £26bn by not renewing Trident would make it much easier to make sensible and humane decisions on welfare.
Most people work in ordinary borings SMEs in established markets. Hauliers, Skip Hirers, Engineers. Lots of these people are my clients. What sort of things did you have in mind to help, I could use a hand myself?
reduce welfare spend on Universal befits at the higher income levels
What level? Right now a family with three children on £36,000 are about to lose £2800 out of their net income .A pay cut of over 10% to people on budgets. How much further were you planning to go?
What do you think might be acquired by taxing the rich,closing loopholes and all that ? Any figures and any evidence from past exchequer receipts you can offer?
What further “stimulus ?“ Lets say we maintain taxes at about 38% of GDP and allow spending to drift upwards to 55.5%. That would mean that very nearly a pound out of every three spent would be borrowed .Would that be your recommendation ?
Why does this increased borrowing have to go to the Public Sector ?
I know a blog is a record of a mind in action not a policy draft , but as an invective against empty gestures it does have a teeny flaw. Ed Milliband is trying to hide his lefty tramp stamps for the interview proces but he has previous , as do you.
How you intended to convince people it was not an expedient branding excercise .
You did selling once Hopi , would you buy this package ? Checkable specifics build trust , where are they ?
The two fundamental points that have to be got across is that the only way to reduce the deficit and debt is by growing the economy and that reducing public spending when the economy isn’t growing will make things worse not better (as is now all too obvious). Since the LibDems have abandoned Keynesianism Labour is the only party that can lay claim to this argument.
The problem Labour has is that it has to present a convincing analysis of what went wrong and take its share of responsibility – I don’t think that this analysis is what the Tories say, but in the absence of anything convincing alternative I’m afraid the public thinks that it is, and that means that we are not even invited to the party when it comes to discussing next steps. If I could summarise what Labour got wrong last time I think the main points are as follows:
We swallowed the Thatcherite logic of deregulation and free markets pretty much hook, line and sinker. GB may have made some noises early on about the “supply side”, not allowing booms in housing process to distort the economy as happened under the Tories (look at his first budget speech) and about how he was pushing for tighter regulation internationally – but I’m afraid all of this didn’t amount to very much. During Labour’s time the economy increasingly became more not less orientated to the City of London and a bubble based on consumer debt was allowed to grow with little challenge, all because this delivered the golden eggs to pay for increased spending on health and education etc.
There was little or no thinking about how the overall economy should develop and/or how the state should intervene to encourage/direct such a development. There is a debate to had about what type of intervention/direction is most effective – but we didn’t even get that far.
The extra public sector spending wasn’t particularly well controlled or managed. Far too often because the economy was growing and the funds could be made readily available we didn’t get anything like an adequate return for the extra money being spent. The cost of infrastructure projects were not well controlled and far too much was spent on admin, bureaucracy and consultants. The nitty gritty of proper management really just wasn’t considered by the politicians, who were more concerned about the kudos of announcing new projects and avoiding nasty arguments about where the additional funds were being spent.
On the first two points I don’t think the Tories actually have much to say, since most of them still pay homage to the deregulated world of the blessed Margaret, as opposed to many social democrat economists who have plenty to contribute. But that said Labour has to have its mea culpa moment on this if it wants to be invited to the debate. Tony Blair had the vision to see this many years ago in different circumstances – I am still waiting for Ed.