A musing on the departure of David Miliband which isn’t really about him, but about New Labour, and how it died, and is sort of irrelevant now, whatever the comings and goings of the officer class, but will come back, but be all grrrrr, not all cuddly.
Also, this is a longer version of an article that’s going on Comment is Free at some point, but was said to be a bit long and insidery, according to the editor, but I like insidery and long and tedious, and you should too, so screw the readership, here’s the whole thing.
Like most significant political ideas, New Labour expired in a back room while vigorous efforts were being made to assert its continued vitality to a bored audience in the stalls.
Yup, forget the departure of Mr Miliband (D), New Labour died sometime in late 2007, passing on as the British economy teetered on the edge of recession. The cause of death is disputed. It was not excess of exuberance - New Labour did not spend ludicrously too much (It did spend too much, but by only a little, and even then, mostly on worthwhile things) nor the inflation and bursting of a bubble (New Labour was involved no more than anyone else in the developed world) nor was it the suicide of capitulation to market neo-liberal dogma (For all the brave talk of changed paradigms, the left response to the crash is still requires free movement of people goods, and money. Once that is granted, liberalism prospers, neo or otherwise).
No, New Labour was killed off, not by the accession of Gordon Brown, nor the departure of Tony Blair, but by the sudden, sharp ending of an era of forty consecutive quarters of economic growth.
At that point, the compromise that New Labour offered social democrats and market buccaneers – that it was possible to have both a strong, growing state and a political environment that supported and encouraged business choice, and did not attempt to restrict or guide those who would profit by those choice – became less than viable.
Currently, the ‘New Labour; debate doesn’t even feel particularly important.
One of the strange things about being in an extended global slump is that the position of the “Neo-Liberal” becomes, for all practical purposes, indistinguishable from that of the traditional tax and spender, or tax and borrower in the short term. Something has to be done, and away from the Austere rigour of the Mellonites and the Austrians, that something involves printing, borrowing and spending money. Lots of money. Lots and Lots and Lots of money.
On the left, this solves all sorts of problems. Social Democrats of all stripes and flavours like the sound of public coin being distributed, especially when there’s a damn good excuse to do so.
To a certain extent it doesn’t even matter if you want to make like an Austrian. Run a counter-productive fiscal policy, as the British government has done, and you find that you can’t even reduce borrowing levels significantly, so long as you’re running a facsimile of a modern welfare state.
In other words, your political parties would like to apologise: Normal political discourse is suspended while we try to restore economic growth.
What does this mean for New Labour and our small, brave band of ancestor worshippers? It means that going around muttering about tough choices appears both politically clichéd and economically redundant (I know, because I’ve muttered with the best of them). For now, for the next couple of years, there aren’t any tough choices. The correct policy response is a leftish comfort blanket. The Tories are stupid and wrong, and spending money is the right way to go, and there’s nowhere else for money to go for now but gilts, and just, gosh, let’s party like it’s 1937.
Sure, we can argue about immigration, or public service structuring, or some such, but basically, the question New Labour answered just isn’t being asked now. There’s no need for the left to worry about the most equitable way of sharing proceeds of growth, because there ain’t no damn growth, and that is the only problem that really matters.
Were a Labour government in power today, even a fiscal hawk like me would be urging Ed Balls on, demanding bigger VAT cuts, lower corporation tax rates, even some “Collect £200, Proceed directly to the shops, do not pass go” Super-Monopoly card for the low paid. (Actually, I’d probably be saying, would be “noo, spend more on vocational education, and infrastructure, and an industry bank, and on tax breaks for companies in the north, and on universities, and R&D”, because I’m cussed, and something of a bore).
What joy it is to be on the left in a recession!
Ah, and there’s the catch. This happy state of suspended economic reality will not last. It cannot. Indeed, it must not, because the longer it goes on, the worse things will be afterwards.
The wonder of global capitalism is such that not even a government as bone-headedly, willfully stupid as that led by Mr Cameron will be able to stop growth returning eventually. All they can do is delay it, and leave us in a weaker, more vulnerable position when the recovery eventually comes. When it does return, the question of choices will become relevant again.
When will this be? Let’s be pessimistic, and say no significant growth occurs until 2015, leaving the next Labour government with a pretty unpleasant inheritance. We’ll have a big debt and a stubbornly high deficit. Other countries will be growing faster than us, and so there will be places to invest more attractive than gilts.
That implies there won’t be a lot of room for stimulus, and the costs of failure will mean that even to reduce the deficit gradually over the 2015-20 parliament will require iron fiscal discipline.
If we’re not to enact absurdly painful spending cuts, that probably means tax rises. Even within that, there’ll be huge pressures on what to spend our limited resources on. Do we try to protect services spending, or do we try to invest in future growth potential, via the sort of innovation friendly new-industrial agenda Labour has been quietly developing through its policy review?
It’s at this point that a very different New Labour political position will begin to be relevant to our politics once again.
It won’t be as glossily optimistic as the early Blair era, or as bombastically self-confident as the triumphal tractor statistics of 2006. Indeed, it might be positively dour and earnest. A Jam tomorrow, family hold back, harsh medicine sort of politics, with only the slimmest of sugar coatings to get the medicine down.
I’m about as right-wing as they come in the Labour party. As a junior new Labourite, I got used to being called a shallow populist and an electoral sell-out. Now though, the most relevant critique is the complete opposite.
I tell people what I think a Labour government will have to choose between, how hard it’ll probably have to cut and how much it’ll have to tax to do even the smallest bit of good, and they shrink in horror, asking “How on earth do we sell that?”.
So, New Labour is dead, but it’ll be back. I suspect though, that we’ll emerge from the political suspension of the slump as a small bunch of flint-eyed tight-fisted zealots planning an austere recovery, not grinning populists disbursing growth funded goodies.
It’ll be less sexy, but probably better governance. (Think of the Swedish Social Democrats, 1994 style, who proposed faster deficit reduction than the right while the economy grew)
As to how to sell such unpleasant medicine?
Well, we’ll just have to find a way.
After all, the alternative is being Francois Hollande. We don’t like to talk about him any more.