Making Labour Renewal Happen: Policy options in the light of Labour's history

Liberty and Equality: What are the trade-offs? This is always a defining issue for progressives. Understandings of 'freedom' and 'equality' often vary. In the 1980s, the left had to accept that the Thatcherite emphasis on freedom (usually meaning of freedom of choice) was one they had to absorb in some form. See Roy Hattersley's Choose Freedom (1987). By and large, the journey of the left after about 1985 was to think not so much about more state power or less state power but about levels of appropriate government for different situations. That is still the case. Crude proposals about nationalisation as the solution to all problems do not enhance credibility (see 'What is Public Ownership for?' below).

In the 2020s, one of the biggest social problems that the left needs to combat is inter-generational inequality (see David Willetts's imagine2027/Labour History Research Unit talk at Anglia Ruskin University). There is an emerging consensus on the left that the most effective way to attack inequality is to concentrate on childhood and early years: everything is catch up after that. This means a focus on child support, family environment, nutrition and primary education especially. Crucially, it means increasing child benefit as well as introducing universal child care. Labour has always put the interests of children first. Harold Wilson regarded his greatest achievements as being in the field of education. The battle against child poverty has to be key to Labour renewal.

At the same time Labour has to be the party that has the courage to deal with the problem of social care for the elderly and the scandal of low pay for care workers. This courage may take the form of being prepared to work with a Conservative government to achieve a cross-party consensus that can endure for more than a generation.

What is Public Ownership for? The purpose and future of public ownership has been at the centre of all debates on the left since the nationalisation programme of the Attlee Government. After Labour's defeat in 1951, the dominant argument became that of Tony Crosland who argued that obsession with nationalisation confused means with ends. Should nationalisation or public ownership be an end in itself? Does socialism mean a planned economy? Or is the purpose of the left simply to find ways to establish decent livelihoods for all through the provision of decent healthcare, high quality education and discreet forms of state intervention? In other words: was the key aim of the left to promote equality? The Wilson-Callaghan governments of the 1960s and 1970s were thus different from the Attlee governments in that they did not (for the most part) focus on further nationalisation.

Labour between 2015 and 2019 increasingly rejected Croslandism and operated as though public ownership was an end in itself and an unchallengeable good. It felt no need to engage with previous debates on the left about the ways in which public ownership can create unresponsive monopolies and vested interests. New Labour recognised that one of the more attractive characteristics of Thatcherism was the emphasis on customer service and choice. Renewal of left wing thought requires serious discussion about the levels of appropriate government. The key question is always: how do we deliver the highest quality services to the public? The debate is not about whether public or private provision is better. It is about effective forms of mixed economy.

Labour in 2019 lacked a serious discussion of what constituted effective and appropriate uses of state power. There was, for example, no attempt to learn from Labour's history and to address some of the problems that Labour had in the 1960s and 1970s running large scale state enterprises. This contrasted with the 1980s when Neil Kinnock explored ideas about a development state (building the economy through government-sponsored research and development) and the 1990s when New Labour was open minded about the most effective forms of state intervention. Even then, things were not simple. Blair and his ministers believed they could get into power and simply flick a switch, thus producing reform. They quickly found political change was more complex, leading them to think of public provision in more complex ways (drawing on the private and voluntary sectors).

While many Labour proposals in 2019 were popular (according to polling), the party's package as a whole lacked credibility: too many voters did not trust Corbyn's Labour to deliver or to run the state well. Worthwhile policies failed because the case had not properly been made to the electorate. Corbyn's Labour failed to develop an enabling vision of the state and show how it can build prosperity. Labour's history shows there is a case for public ownership but it needs to be conducted in a more pragmatic way.

Aspiration. Should Labour abandon the promotion of social mobility and meritocratic values? Faiza Shaheen (of the left-wing thinktank CLASS) argued in her talk to imagine2027/Labour History Research Unit that we should abandon the language of social mobility and replace it simply with that of equality. Too few people rise and not enough is done to address the problems of working-class communities: the latter are treated as losers.

There is an historical context to this debate. During the 1980s, the left had to acknowledge that Margaret Thatcher's success emerged in part because she had helped give working-class people aspirations (especially to own their own council houses). A crucial moment of Labour renewal took place in 1985 when the advertising firm Abbott Mead Vickers offered a day-long presentation to party strategists based on focus groups. It concluded that Labour policies were simply not addressing the concerns of many voters and were thus irrelevant. Voters reacted to a rapidly changing world by concentrating on the prospects for their own families (Philip Gould, The Unfinished Revolution, pp. 46-51). Neil Kinnock had to respond to further research showing the popularity of share ownership in the 1980s. In his 1987 conference speech, Kinnock drew on a question that Ron Todd of the Transport and General Workers Union asked: ‘"what do you say to a docker who owns his house, a new car, a microwave and a video, as well as a small place near Marbella?" "You do not say", said Ron, "let me take you out of your misery, brother"'. This was a decisive moment for the left.

Thanks to the work of Giles Radice and others, the left revived itself in the 1990s when it recognised that people could be aspirational for themselves and their families but also care about the common good (defined by the provision of public services).

Striving and the work ethic are not the same as competing. People should be encouraged to work hard and do well but the left argues that people do not succeed by themselves: they need an enabling state that builds social bonds and provides high quality investment and infrastructure. Though speaking in an American context, Senator Elizabeth Warren captures this well: 'There is nobody in this country who got rich on their own. Nobody. You built a factory out there - good for you. But I want to be clear. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for'. This is what the social contract means.

Many electors have proved resistant to the idea of the state simply doing things for them. They want to provide for themselves as much as possible (though they usually support state assistance for children, the elderly, the disabled and the unwell). This is why the 2019 Broadband policy (which should have aligned Labour with modernity) came unstuck. People were used to paying for Broadband and therefore did not feel additional state expenditure was necessary. A renewed Labour needs to respect this and work with it.

The possibility of individual improvement and respect for hard work is clearly vital to the majority of people. Labour cannot win unless it respects aspiration and seeks to enhance it. It has to build a society where people of talent can succeed and be rewarded: a meritocracy. But there are problems with this as Faiza Shaheen argues. Michael Young, who coined the term 'meritocracy' in the 1950s, did not view it as a positive thing: the meritocracy, by its very nature, creates losers, a resentful under-class. The left should therefore be about 'meritocracy plus': creating the structure in which all can be released to explore their full potential but also one in which unpleasant but necessary jobs (such as street cleaning) are properly remunerated. Equality of opportunity is not enough; there must be greater equality of outcome, or, at least, fairer outcomes. Grotesquely unequal societies are inherently unhappy societies. The left has to be ready to redistribute wealth and it has to be honest with the electorate about the levels of taxation necessary to accomplish this.

The Economy. All Labour governments need clarity about how they want the economy to be run. The post-1945 solution was to create equality by redistributive taxation paid for by those able to pay (a continuation in some respects of the high taxation needed to fund the Second World War). This ran into problems when there was a tax revolt in the 1980s by middle-class people (particularly apparent in the 1992 election when Labour's modest taxation plans were presented by the Conservative party as a 'bombshell').

As often noted, since the 1990s, politics has been based on solving this conundrum: the electorate wants Scandanavian levels of public service delivered on a US tax base. One can have one or the other but not both. Politics in the modern world has taken the form of a set of improvisations to work around this problem. The New Labour solution was to not increase income tax and trust to economic growth to create revenue that could be used for public services. New Labour was an attempt to move on from the economic debate of the 20th Century where the right was interested in wealth creation but indifferent to its distribution whilst the left was concerned about the redistribution of wealth but was uncomfortable talking about wealth creation.

Labour in 2019 opted to simply tax more heavily the top 5% of earners. Voters were confronted by an offer which effectively said 'You can have a wonderful range of top quality public services AND you are not going to have pay anything extra for them'. They did not buy it. Renewal will involve Labour thinking once more about what kind of economic model will deliver a fairer world and how, in age of multinational companies and mobile workforces, to fund it.

The left solution in the 2020s, as argued by both Lisa Nandy and Thomas Piketty, is that we must be prepared to tax wealth and assets as well as income. This is not new territory (Tony Crosland made a similar argument in 1974) but it is inevitable that we need to think further about this. Labour's policy in 2019 to reform capital gains tax, such that it was taxed at the same rate as income tax, was a move in the right direction.

Labour in the twenty first century may, however, have a different and even more difficult question to answer: is economic growth always desirable in an age of climate change? How can we develop a Green New Deal that does not hurt workers in the short to medium term (for example, by making it difficult to drive) and produce a right-wing populist backlash as shown by the 'gilets jaunes' in France.

Consumerism. This is an issue where Labour and the left since the 1950s have never known quite what to say. British society, once wartime austerity was abandoned, was characterised by people going shopping for things they had not been able to afford before. Demands for socialism seemed to wilt in the face of the profusion of goods and the identities they created in modern society (see Lawrence Black, The Political Culture of the Left in Affluent Britain, 1951-64). Many of the goods produced in this new age of affluence were a liberation for workers; not least the washing machine. Women's lives were thus transformed in the post-war period. Labour had a hard time coming to terms with what was called the 'affluent society'. It even opposed the coming of ITV in the 1950s as it was based on advertising. It thus opposed the channel that would come to bring pleasure to its working-class voters. Nye Bevan told the Labour Party conference 'this so-called affluent society is an ugly society still. It is a vulgar society. It is a meretricious society. It is a society in which priorities have gone all wrong'. He later said that once voters had 'got over the delirium of television... then we shall lead our people to where they deserve to be led' (quotations in Lawrence Black, pp. 125-6). Ever since Bevan, the left has been divided over the issue of consumerism and the relative affluence of working-class people. The Conservatives, defining themselves as the party of consumerism, were thus able to dominate the political landscape.

Consumerism is about more than the acquisition of goods. It involves a whole approach to society in which people opt for choice. In the 1990s, New Labour was shaped by the understanding of consumerism as a powerful force. This allowed it to appear to 'own' the modern. By not raising taxation (at least directly), Labour encouraged citizens to make their own choices about their lives. Discussions of consumerism rarely surfaced in the Corbyn Labour Party and this was a problem. Critiques of neo-Liberalism cannot sidestep this: they need to think seriously about consumption. Even the poor enjoy consumer goods undreamt of a generation ago (for example, mobile phones). It is easy to write off many people as enslaved by crass forms of turbo-capitalism (and hypocritical for middle-class figures to complain about this whilst enjoying the benefits of consumer goods themselves). If people stopped purchasing consumer goods, that would put many working-class producers out of work (what Keynes called the 'paradox of thrift'). Discussions of consumerism are also often gendered and sometimes misogynist. At the same time, the left is not wrong to look critically at a society where the acquisition of goods provides people with a sense of status and importance. Defining people by how much they possess remains a banal way of talking about a person's humanity.

In the twenty first century, the debate is anyway changing as consumption becomes a force damaging the planet. Forms of sustainable consumption are therefore going to become crucial. Labour needs to address this. How we produce goods and the meanings we attach to them will change. Left-wing puritanism has a place but it must also recognise the ways in which consumerism has been an enabling force for workers.

Citizens or Customers? One of the ways in which New Labour was shaped by the Thatcherite revolution was it took on its emphasis on good customer service. As Richard Carr shows, Bill Clinton had adopted a similar approach as Governor of Arkansas where he balanced the state budget while 'improving services and treating taxpayers like our customers and our bosses, giving them more choices in public schools, child care centers (sic) and services for the elderly' (quoted in Carr, March of the Moderates, p. 120).

The left understandably wants to emphasise the claims of citizenship, considering the language of the 'customer' steeped in neo-liberalism. Customer service is, however, not something the left should fear but consider an essential part of the citizenship compact. It is really a matter of responsiveness to individual needs. Diversity and inclusiveness requires an understanding that human needs will vary and that one size fits all public services were the product of a twentieth century phase of state formation that has clearly exhausted itself.

De-industrialisation. Globalisation and the impact of Thatcherism ripped apart the economic base of Britain in the 1980s and produced 'left behind' communities. Policy makers of left and right have never been able to produce convincing strategies for dealing with this. The prevailing consensus has been about creating a highly skilled workforce whose jobs are difficult to outsource (the German model) but this has proved difficult to achieve.

Deindustrialisation has reshaped traditional Marxist arguments about class. The political identities of 'working' and 'middle' class (which took a distinctive form after the 1880s) had a shelf life of barely one hundred years. Increasingly, the vocabulary of working-class identity has been replaced by references to the 'precariat', the 'underclass', 'chavs' or the 'left behind'. The left also started to fall out of love with the traditional white working class in the 1970s associating it with racism and patriarchal attitudes. Formal class politics in the age of Brexit have been replaced by populism which the left has not known how to respond to.

The effect of these is that the stable identity of class that had created the Labour Party changed. If Labour has been a party in decline since the 1950s, it is partly also because the workforce has changed. We are more aware of women in the workforce (who have always been there) and of the diverse ethnic nature of the population. A working-class person is now more likely to be a woman of Pakistani descent than a male factory worker. Immigration has been a problem for the Labour movement, producing racism and arguments about who the party speaks for. The Green New Deal remains the best option for addressing the issue of de-industrialisation.

Housing. How do we create a property-owning social democracy? New Labour failed to build sufficient houses (partly because it had bought into the Thatcherite consensus on the issue). This has left the younger generation excluded from the property market and having to cope with sky-high rents and frequently unaccountable landlords. For the younger generation of the 2020s, this will be a key issue. The regional concentration of such concerns – afflicting the south east of England far more than any other part of the UK – will also need careful management. Labour's proposals for house building in 2019 were some of the most effective parts of its manifesto.

Brexit. Labour will now have to accept a Brexit negotiated on terms it will not like. The precedents are difficult here. Since the late 1950s, Labour has always been divided by Europe. Gaitskell was opposed to Britain joining in the 1950s. The 1975 EU referendum exposed deep divisions within the party which ultimately led to the creation of the Social Democratic Party. From 2016-19 there was a tension between Lexit figures around the leadership and a largely Remain-supporting membership. Unless Brexit proves a total disaster, rejoining will be very difficult, not least because the UK will not be able to get the relatively favourable terms it enjoyed up to the end of January 2020. It was, however, only in the mid-1980s that support for remaining in the EU became a mainstream position in the Labour Party. It had campaigned under Michael Foot to leave. The promise of Jacques Delors's social Europe in the mid-1980s was a game-changer. In the 21st Century this still points to a future based on co-operation with the EU on trade, essential supply chains and environmental standards but Labour may draw on the Euro-scepticism of figures like Michael Foot and Peter Shore in the early 1980s (though Foot became less Euro-sceptic in his later years).

Party Democracy. The Bennite tide in the 1970s and 1980s and the Corbyn surge were based upon the demand that the party be accountable to its support base rather than allow decisions to be made by MPs and union grandees. All political parties have moved in the direction of having the leadership elected by the membership. In the case of Benn and Corbyn the purpose was to move the party to the left and make Labour members feel they were genuinely contributing to the public good. The downside is that this kind of activists' democracy is not the same thing as the larger democracy. It risks dragging the Labour party away from the concerns of the actual electorate. This is accentuated by the first part the post electoral system. Britain's political parties have been dragged both to the left and the right.

John McDonnell reflected on this problem in February 2020 when he described Corbyn's Labour as 'caught in a vice' over Brexit: caught between a Remain-supporting party membership and a Labour electorate that supported Leave: The Guardian, 16 February 2020.

Labour cannot fudge this issue: is it to be the party of Labour activists or the larger number of potential Labour voters? Despite the remarkable increase in Labour membership under Corbyn, membership of political parties remains a minority pursuit. A comparable problem is that most workers are not in trade unions and that union membership is now heavily concentrated in the public sector. This raises questions about how representative union membership is anymore. If Labour merely expresses the views of public sector unions, it fails the country.

Labour MPs have a mandate from the electorate in a way that unions and party members do not. The latter need to have a say in the leadership and in decisions but to sideline Labour MPs is a betrayal of democracy. A widened activist base only works if those activists are engaged in a conversation with voters to understand their goals and aspirations.

The Heartlands. Clearly, Labour needs to look to re-build its 'red wall' in the north of England and find a way back in Scotland (although the latter may, realistically, be a lost cause). Genuine renewal needs to recognise that this is not enough. The alarming possibility for Labour is that it now faces a similar political situation to the 1930s when the Conservatives (in the form of the National Government) commanded a higher share of the working-class vote. As labour historian Ross McKibbin has suggested, the Conservatives in the 1930s could claim to be the party of the working class. Labour renewal requires the recognition that the party is now in a similar situation.

The left of centre needs to recommit to directing state resources to the recovery of deprived areas. This involves building on what the March 2020 Budget proposes for infrastructure. Labour is already looking at the positive roles for the state in economic development (see Mariana Mazzucato's The Entrepreneurial State

The solution to immigration, a key factor in the Brexit vote in Labour heartlands, is not to reduce immigration. That is ethically and economically wrong. Rather, it requires a Fabian approach that increases the minimum wage and directs greater state resources to those areas with higher levels of immigration (including health, education and infrastructure).

Progressive Divisions. Since 1900, progressives have been divided between Labour and the Liberals/the Liberal Democrats. The result has been that long periods of Conservative rule have been the norm. The division between progressive parties, including the Greens and the Scottish Nationalists, has to be addressed. In the 1980s, Eric Hobsbawm called for a rainbow alliance against Thatcherism which never quite happened. In the mid-1990s, Blair seemed to be moving towards a rapprochement with the Liberal Democrats (with Roy Jenkins drawing up a new system of proportional representation) but this ended when Labour won a landslide majority in 1997. The participation of the Liberal Democrats in the coalition government 2010-15 has heightened suspicions of Labour supporters.

This does not change the reality that, when the right of politics is united and the left is divided, the right will always win. As David Marquand and Ross McKibbin have both argued, the politics of twentieth century Britain were shaped by the failure to recreate the Edwardian progressive alliance after 1918. We still live with that legacy. The 2020s will require creative discussion to deal with this problem. Merger with the Lib-Dems is not going to happen. A Lib-Lab pact (similar to the 1906 election) will be difficult to engineer but it has to remain a possibility. Proportional representation will be key to creating a progressive re-alignment.

The Conservatives. Following the delivery of what was in many ways a Keynesian budget by Rishi Sunak in March 2020, the terms of trade in politics have changed. Borrowing to invest (a strategy Labour promoted) is in. Boris Johnson proclaims himself a 'Brexity Hezza' (a Brexit-supporting version of Michael Heseltine who promoted state intervention in industry and deprived areas). The age of austerity appears to be over. One reason why Labour failed in 2019 was that Johnson spiked its guns by promising more spending. Whilst Labour will rightly point out that Johnson and Sunak's spending pledges are inadequate, it is foolish to suggest that the Tory strategy of 2020 is the same as that of George Osborne in the 2010s. This has been augmented by the dramatic government response to Coronavirus in March 2020.

Labour had the same problem in the 1950s. It wanted to argue that the Conservatives were the same as they had been in the 1930s; figures like Rab Butler and Harold Macmillan proved them wrong. Labour will need a more sophisticated way of opposing Boris Johnson who has always profited from being under-estimated. It might ponder Blair's period as opposition leader, 1994-97. The Tories never figured out how to attack him. Labour must not make the equivalent mistake with Johnson in the 2020s. Attacking Johnson for incompetence rather than malign intentions will be more fruitful.

Wanting It. There is no getting away from this. The only way to get into power is to really want it. By 1997, Labour was desperate for power and was prepared to do whatever it took to get there. Tony Blair proved the perfect candidate to have a conversation with voters who no longer felt that Labour spoke to their aspirations. Do Labour members really want power and thus bring change-or would they prefer to simply be virtuous?

We must face the future-but, just occasionally, it does not hurt to look back. We must look at Labour's past with honesty and without resort to myth. That is the value of history. The Labour Party is flawed in so many ways but it is also represents hope and possibility: 'the better angels of our nature'. Labour has renewed itself in the past and can do so again.

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