Ed Miliband’s recess tour of Small Northern European Social-Democratic parties (Hereby dubbed the SNES’s) has not exactly set media pulses racing.
Yet it should prove important for Labour, and Britain’s, future direction.
The Ed M tour of northern Europe has not exactly been a media blockbuster. The most coverage the Labour leader got this week was for his Cameron-aping, middle-England pleasing waffle-garb about Hilary Mantel. 1
Ed’s tour of the SNES’s2 took him to Denmark, Sweden and Holland. Along with Shadow Foreign Secretary Douglas Alexander and intellectual consigliere Stewart Wood, Ed met three social democrat parties facing common economic challenges from three different governing positions, The Danes in government, the Swedes in opposition, and the Dutch in grand coalition.
Those of us who are Labour policy nerds and so eagerly followed the reports of Bloomberg’s Rob Hutton and the Times’s Laura Pitel, (who have done sterling work following the opposition leader, rather than the PMs rather more exotic tour of India), read of an Ed Miliband inspired. From corporate tax openness to childcare to the hopes of using the state to support innovation in green technology, it’s clear that Labour’s agenda is one that chimes well with the active state approach of the SNES’s.
These Social Democrat policy priorities make sense: If a future Labour government is going to do something transformative, it needs to find a way to use the state to support private sector growth, help more people into the labour market in order to lift household incomes, which will also mean finding ways to pluck the tax chicken to reduce the deficit while generating the minimum of squawking and coop-departing by pluck-sensitive business cocks.
That said, its clear too that applying a SNES social democratic model can’t simply be shorthand for a reflexively ‘classic’ Labour position. As Stewart Wood has noted, the ‘Nordic model’ is very different today than it was in the seventies and eighties. The State has withdrawn significantly, and for all the Swedish Social Democrats are proud inheritors of the Olof Palme tradition, it seems unlikely that they can, or want to, undo the market liberal reformism of the Persson and Reinhold governments. Even if they wished to, they’d struggle to find the money or the political support for such a programme, as the Nordic countries today are fiscally cautious places. If Britain looks enviously to the Nordic model, there’s a credible argument to make that the SNESs have been quietly moving towards the Anglo-Saxon model, at least in labour market, welfare and markets policies. Would the next Labour government be willing to pass pension reform, cut welfare entitlements, allow private companies to bid for schools, or encourage more markets in (well-funded) public services? The SNES’s are doing so, or will be.
Team Miliband might also want to consider the politics of the SNES’s. While there’s a clear policy agenda building among European centre-left parties, centred around the smart state supporting growth, while opposing short term European austerity, it’s proving more difficult to construct a popular governing agenda.
The Swedish Social Democrats have lost their last two elections, to a tax cutting, fiscally conservative, public service reforming centre-right party, and haven’t advanced greatly in the polls since, scoring almost exactly what they did in the 2010 Election. They are ahead of the Right of centre government today, but this is due mostly to an increase in the support for the anti-immigrant ‘Swedish Democrat’ party.
In Denmark too, the politics of growth is proving challenging. Since squeaking into power in 2011, the Social-Democrat led coalition has been accused of achieving little growth and are well behind in the polls, in a mirror image of the British Coalition’s problems. Right now, the Danish government are being attacked from the left for cutting student support in order to fund pro-business growth policies, from the right for over-generous welfare provision, and from Business for imposing new taxes. Indeed, there even hints that Thorning-Schmidt might be considering a business friendly “Turn to the right” featuring tax cuts and looser labour market regulation in the Spring.
In Holland meanwhile, The Dutch Labour party finds itself in a grand coalition with the Christian Democrats (see Note)3. The two ‘big’ parties of the post war period in Holland did well too beat of the challenge of populist of right and left, but found that this meant implementing billions of euros of cuts. The price of governing has been unpopularity, with the Labour party currently looking at losing almost half its parliamentary seats. The biggest winners? An over 50s “Saga party” which is opposing pensions reforms.4
What might Ed take from this?
First, that there is a policy agenda that is really worth following. This emphasises investment and private sector job growth, backed by state action on a broad front from skills, childcare, infrastructure to innovation policy to support growth and labour market participation.Much of this has been identified already in the UK- for example in the Heseltine review, the LSE growth commission, and various reviews for all parties, from Dyson to Adonis.5
On the other hand, creating the space to fund this properly, especially withing a tough fiscal framework, will require painful and politically difficult reforms elsewhere, including Welfare, Public services (eg tuition fees and schools structure) and pensions policy. This is even without the sort of tax increases and spending cuts needed over the medium term for overall fiscal balance reasons. If we’re going to run a serious pro-growth policy, there may well be areas where the state will need to withdraw significantly.
This leads to the final element:
This agenda will be a very hard sell politically.
One of the more obvious reforms we can make in the UK would be to reduce support for better off pensioners, as is being proposed in Holland. Doing this would likely create a huge political backlash. If you don’t prepare the ground in advance this will be seen as a huge political betrayal. If you do, though, you set yourself up for the kind of opportunistic campaign that umm, well that Labour ran in the last General Election.
Or take Student fees, as they are doing in Denmark. Now, The Danish student system is far more generous than Britain’s, but if we were to extend fees, or try and raise more through a graduate tax, even if this was to encourage more vocational educationrather than to finance Business tax cuts as the Danes are doing, there wold again be a significant criticism from the left.
Finally, there’s the question of dealing with the current Government’s reforms to public services. The Swedish Social Democrats look like they are going to have to swallow pretty much wholesale the reforms of the right, simply to be able to focus resources on the growth agenda while meeting fiscal targets. Meanwhile the Dutch left are cutting Pensions and the Danish left student support.
Are the British left willing to do the same?
Ed Miliband’s Borgen tour will rightly have inspired the Labour leader with a sense of Social-Democratic policy possibility.There is a Social democratic growth agenda there to be seized.
It should also have brought home to him the social democrat fiscal, economic and political choices he faces, both in opposition, and when he reaches Government.
- A diversion: While I’m usually all in favour of asininely pleasing the prejudices of middle England, I hate it when politicians do this stuff. Apart from anything else, it’s just bad manners for a politician to go out of their way to attack a non-politician, especially an artist, for having a disagreeable or unpopular view about something, it’s playground bully behaviour, and even worse, it puts the politicians not in the role of the bully, but the little annoying kid who lines up behind the bully and adds a few sneaky kicks afterwards. [↩]
- Yes, I made that up. I’m rather pleased with it, since you ask [↩]
- Paul Brill rightly points out that the Labour party is in coalition with the VVD, not the Christian Democrats. This is my fault, as I was trying to explain the VVD centrist/free market political position in a way that might make sense to British readers, and “Conservative-Liberal: just sounded wrong, while Free Demovrats sounded meaningless. I went for “Christian Democrat”, not realising that, erm. there was a Dutch Christian Democrat Party. My mistake! [↩]
- I’d watch that Ros Altman, Ed! [↩]
- A side note: There is little in this agenda that is, in itself, distnctively ‘left’, or at least not straightforwardly so. It represents a particulr type of ‘Business friendly’ politics, which both social democrats and christian democrats could fundamentally agree on. This might explain whay in the SNES’s there’s a broadly agreed set of political priorities. In the British context, Labour should both be wary of the Tories stealing a march, and e aware of the possibility of cross party co-operation on much of the agenda. After all, and emphasis on long-termism, for example, almost requires a reasonable degree of Tory buy-in. What more, given the fiscal choices I’m just about to mention in the main article, Labour needs to be sensitive to the possibility the Tories could pose a the people who could _really_ make all this happen, because they’re willing to be tougher elsewhere [↩]