The world has changed: but we’re still partying like it’s 1995

by Peter Watt

Since the general election it is fair to say that the Labour party, probably the left generally, has been struggling with exactly what it is there for. In simple terms, what is it that the Labour party wants to do that the government doesn’t?

The problem has been that there has been a divide in Labour’s ranks over the handling of the economic situation, the cuts, the Blair and the Brown legacy. So when it comes to key questions we struggle for coherent answers. Would we have needed to cut? Should we tax more or less? Should we defend public sector jobs? What about the role of the private sector in delivering the public services? Is there a “progressive majority”? On so many issues there is a divide on the left.

The government, in contrast, seems to lack none of this uncertainty. It makes mistakes, but at its heart it is playing a pretty mainstream tune. Mainstream in the literal sense that its overall message resonates with, well, the mainstream of voters. It’s a message of economic prudence, balancing the books, prioritising spending decision and localising decision making. It celebrates family and tradition but looks to the future. It is comfortable with enterprise and would prefer lower rates of tax.

Those “right wing extremists” have become the mainstream and the Labour party is becalmed on the fringe, apparently struggling to find answers to the problems of the day. The government is a security blanket in a scary world. And that is before we know the full extent of the Eurozone crisis.

You can see the big problem here. Those on the left of the Labour party want to spend more money on public services, on poorer people and so on. After all, that is what we do in response to problems. But voters know that there isn’t any more money to spend. They’ve had enough of an expanding public purse and expect the government to cutback. Those on the right of the Labour party know about the money problem and would like to do things differently, except they’re not sure what. And if truth were known, they also enjoyed spending money when we were in government. Underlying this is the uncomfortable truth that the public don’t trust Labour on the economy.

So what exactly does a Labour party do in government when there isn’t much money? And how can we regain economic credibility? Well, there is a report out today from the IPPR, authored by Graeme Cooke, called Still partying like it’s 1995 that begins to address this. And, frankly, addressing this is vital if Labour is to win an election again. It should be essential reading for all on the left.

The IPPR report essentially sets out how the world has changed since the dawn of New Labour. The economic crisis, changes in the Labour market, stagnating living standards, expanding numbers in higher education and so on. All of which need to be understood before any party can truly claim to be once again offering real change to voters. Yet much of our political thinking is still dominated by the world as it was in the mid 90s. Failing to fully understand this has led to the current confusion and crisis of confidence on the left. Accepting and understanding the changes will allow the left to regain its confidence and develop a distinct and unique offer.

It then sets out a prescription for how the left might respond to these central sociological shifts. First, the reform of capitalism so that people share in the proceeds of growth. Second, to recast what is seen as in the public sphere in terms of priorities, rather than just who delivers what and simply spending ever more taxpayer’s money. Third, claiming for the left some of those cultural sentiments that are generally seen as being the property of the right: like people taking responsibility for their actions, self-restraint and putting down roots. And fourth, to build electoral alliances around partnerships and alliances that share a sense of the national interest.

For me Still partying like it’s 1995 is an excellent start of the difficult discussions that the left must undertake. Personally I would add into the mix the work of Anthony Painter and others on the role of values rather than class in people’s decision making.  And also the work of Deborah Mattinson and Britain Thinks on the increasing numbers of people who now see themselves as middle class and their attitudes. Together this would make for a rich and challenging discussion and one which currently appears to be being resisted by many on the left.

Others are I know thinking along similar lines; Hopi Sen, for instance, will be publishing his excellent analysis of the same problem this Friday in Renewal. And of course the last couple of weeks have seen the publication of The Purple Book and What Next For Labour?

It seems to me that we are at a bit of a crossroads. We can choose to accept that the world has and indeed is changing and respond. Or we can pretend that we are still operating in 1995. If we do the former we will need, as the IPPR report says, to accept that:

“Pursuing social justice with less money around and less reliance on the central state requires a new statecraft”.

We might begin to move on from the election defeat and regain our self-confidence. If we do the latter, then we will probably have conceded defeat at the next, and probably the subsequent, election.

Let’s just hope that it’s not too late.

Peter Watt is a former general secretary of the Labour party.


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11 Responses to “The world has changed: but we’re still partying like it’s 1995”

  1. Nick says:

    You still don’t get it. You can wish for whatever you want, but there is one fundamental fact that Labour and the Left hasn’t or doesn’t want to look like.

    It’s debt.

    Government debt is more than borrowing. Government owes people a state pension for their contributions. It owes people a state second pension. It owes civil servants their pensions. It owes PFI. It has taken money up front for nuclear decommissioning, and so has to pay the clean up.

    All bar the borrowing is hidden. Total up the present values, so its presented on a like for like comparison with the borrowing, and its 7 trillion.

    The government can’t afford to pay that because the population can’t afford it.

    So the question is who isn’t going to get what was promised, and who is going to be taxed to pay the remainder.

    Then you have the deficit. The overspend.

    Look at it this way. You can confiscate all of Richard Branson’s assets and money. You then sell them off. You can’t sell it to people in the UK, because that takes money out of the economy and moves it to the government, so to get new money, you sell it to the Chinese.

    So that billion you have just raised? It will have gone by Friday. 2 days. Gone – forever.

    So whose going to pay for the overspend at the weekend?

  2. swatantra says:

    Yet another good article from Peter, who has now become the enfant terrible of the Party. Many in the Party continue to wear those rose tinted specs and their view of the world is an optical illusion. They need to go down to Specsavers and get a pair from the real world range.
    ‘The Left’ are basically in denial as to the real state of the world. There’s is a socialism of jeruasalem and buttered scones and warm beer.
    Peter’s world and mine is of a socialism which tackles the problems of self responsibility and work ethic and gets on with solving those problems.

  3. aragon says:

    When the left leaves the field of battle and becomes cheerleaders for the right, it is not surprising political centre move to the right.

    The neo-liberal project of the last forty years has ended in a train crash, with the banking system not fit for purpose and a society that does not work for it’s population.

    The left need to frame the debate not ape the neo-liberals (New Labour).

    Yes, Pursuit of efficency and Globalisation have led to chronic underinvestment in the country, both economic and social.

    While I can agree with much of the IPPR’s (still partying like it’s 1995) aims (we all support Motherhood and Apple Pie), I do think it lacks imagination, and we should look to the economic golden era of the post World War II world. When the welfare state was created, and Britain had a belief in the future.

    The left needs to provide a vision to re-frame debate and measures to implement it, to address wealth distribution etc.

    Of course we want good jobs etc, but how do we deliver them, in the context of Europe and outsourcing. Are their alternatives ? What about mitigation etc.

    At first glance the IPPR seem to provide analysis and be light or wrong plain wrong on solutions, it is still too wedded to a Neo-liberal framework.

    Where’s the raw meat ? Time to read it again…

    And of course Labour have the Albatross of New Labour – in power when the banks collapsed and subsequent rescue, the NHS and PFI etc – hanging around it’s collective neck.

  4. amarjit says:

    Answer is simple follow the New Labour agenda ,then you win elections. Go further to the left and pander to the unions that’s how you lose.

  5. Aidan Skinner says:

    Actually, some of us on the left want to fundamentally rebalance the economy away from corporations and back towards working people. That doesn’t necessarily mean more taxes and transfers, and yet…

  6. BenM says:

    “But voters know that there isn’t any more money to spend.”

    No, thet’s what they’re told by the deficit hysterics like yourself.

    They, like you, are wrong.

    And the economic damage is incalculable. As we are now seeing.

  7. Richard says:

    Feeble article way off the mark.

  8. james says:

    Peter, you say that “voters know that there isn’t any more money to spend. They’ve had enough of an expanding public purse and expect the government to cutback.” But if people really felt this way, we’dhave a majority Tory government rather than the Liberals propping them up in coalition, and Cameron would have said before the election that he would accept ministers that came to him with spending cuts to frontline services – not only accept but encourage them…

    You say that “much of our political thinking is still dominated by the world as it was in the mid 90s” – and I’m sure this is correct. Certainly much of what you have written in the last year has demonstrated a mid-90s attitude: arguing for an acceptance of government spending plans, for example.

    Far from voters accepting “there’s no money left” there is a great deal of concern about affordable credit being made available to firms by a banks that we pretty much own. This is an issue of lending, not spending – but it is surely fertile territory for framing debates on self-restraint.

  9. Glad to see the representatives of the Flat Earth Society out in force today in the comments. Good show, not so much 1995 as 1495.

  10. BenM says:

    @Nick

    “Government debt is more than borrowing. Government owes people a state pension for their contributions. It owes people a state second pension. It owes civil servants their pensions. It owes PFI. It has taken money up front for nuclear decommissioning, and so has to pay the clean up.”

    I fear you don’t understand debt at all.

    Debt has many characteristics, one of he most important of which is maturity.

    PFI and Pensions are liabilities whose maturity lies well into the future and not all at once. There is no crunch from that direction.

    As for the national debt itself, the UK has one of the most healthy maturity profiles in the G8 -an average of around 14 years. Again, nothing to write home about, let alone start off a wild nonsensical panic.

  11. David says:

    @Ben

    You’re confusing debt and liquidity. Whether you need to pay today or tomorrow, the money’s still owed. Given Debt/GDP at 75% and a structural deficit of >3%, unless we tackle the problems now, we will have unsustainably high Debt/GDP at your average maturity – a real problem

    As an aside, worth noting that hte LibDems advocated higher spending when Debt/GDP was at c40%. If we hadn’t been prudent then, we’d be in a way worse position now…

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