by Kevin Meagher
“There is nothing right-wing about fiscal conservatism”, begins “In the black Labour: why fiscal conservatism and social justice go hand-in-hand“. The policy network’s much talked about pamphlet argues that to rebuild its reputation for economic competence, Labour has to learn to love big brother in the shape of embracing fiscal rectitude.
It is a hard-headed but reductive prognosis for a centre-left party. It seems a bit like having a car without any petrol. You can point it in the direction you want to travel in, but you have no means of ever getting there. So what, ultimately, is the point of the car?
That is, in essence, the dilemma this argument, elegantly and persuasively made by the authors (including our own Anthony Painter), presents Labour with. When does a party – a democratic socialist one (in the words of “new” clause four) – stop being the very thing it professes to be? How elastic are our principles, our thinking, and, most importantly, the trust of the people who vote for us if we embark on a self-denying ordinance on public spending?
First off, I agree wholeheartedly with the authors that Labour needs to respond to the current political and economic realities. Yes, the electorate is never wrong, and, yes, when they tell us they do not trust us as much as the Conservatives to run the economy we have to internalise that hard fact.
But a political party should not behave like a supermarket reacting to its competitors’ price cuts. Our economic policy must surely stem from our philosophical beliefs and the needs of the communities we serve. These are not factors that can easily be dismissed. Harold Wilson’s dictum that Labour is “a moral crusade or it is nothing” remains potent.
Nor can we forget that an active state and sustained social spending remains the main agency for bringing about a more just society; correcting the failures of a market economy that does not provide social goods or greater equality.
What are the advocates of “black Labour” really saying? Is fiscal conservatism (their phrase) primarily a ploy, a piece of nifty brand positioning? Is it a pragmatic recognition of the cold facts of life, medicine that just has to be knocked back before we can move on? Or is it, as the authors seem to suggest, to become an article of faith for Labour, something we are encouraged to believe in from first principle?
The first point is fair enough; Labour has to sound more engaged in tackling the deficit than perhaps it has been in the past. The second point will take some accepting, but lays the basis for an intelligent discussion within the party. The third, however, is nonsense. The assertion that fiscal conservatism and social justice go “hand-in-hand” is a claim too far; a clumsy splicing of two objectives that, while not always in conflict, are far from symbiotic.
It was the recognition of the gap between the two which led New Labour to the private finance initiative; an acknowledgement that massive capital investment in rebuilding schools and hospitals was necessary following the Tories’ two decades worth of systematic underinvestment in public services during the 80s and 90s. There was no time to wait until the public purse could pay for it all; change had to happen now.
Not to do a disservice to the authors, they rightly suggest that when spending alone is not an option any time soon, then reforming the state so that the government gets more bang for the taxpayers’ buck is the logical next step.
In fact “tough prioritisation”, ‘bold reform and well-targeted investment’ is more effective in driving social justice than public spending alone, they claim. They may be correct, but we have been here before. Tony Blair, insulated with a 179-seat majority, was reduced to complaining that he bore the “scars on his back” from efforts to reform the public sector. Were Tony Blair and Alan Milburn too soft? What makes that task of public service reform any easier in the future?
Would advocates of Black Labour scrap Trident? Means-test pensioners’ winter fuel allowance? Pay for the next expensive wonder drug licensed by NICE that extends a cancer patient’s life? The list of agonisingly difficult choices in government is endless.
This is not to say it is wrong to expect greater reform and value for money; in fact Black Labour is quite right to make exactly that case; I only point out that it is easier to wish it than to deliver it. Labour established over its 13 years in government a new, modern social democratic state combining public sector reforms and sustained extra spending.
As a result of trebling its budget, the NHS became one of the most efficient health systems in the world. Spending on education doubled, with school standards rising fastest in disadvantaged areas. Reported crime fell 43 per cent on Labour’s watch, thanks, in no small part, to an extra 16,000 police officers and 17,000 community support officers. In contrast, the Black Labour conception of the state is only vaguely sketched.
Eschewing public spending as a central plank of any social democratic offering leaves Labour in the position of making a vague promise to its supporters of “jam tomorrow” and the creation of a decent society in slow, uncertain increments. It simply will not galvanise members or voters behind the party. It is not enough to promise change is on the distant horizon; political trust is evidential. Progress happens or it does not. It is all very well hoping things will get better in the future and asking people to make sacrifices in the short-term, but as John Maynard-Keynes pointed out, ‘in the long run we are all dead.’
The bigger question that Labour needs to discuss first is whether you can have a credible social democratic programme for government which doesn’t involve sustained levels of state spending to make life better for people. In that respect, Black Labour puts the cart before the horse, demanding fiscal restraint first before answering the bigger question of how a Labour government arrives at its historic goals through new, more circumspect means. This is the bigger conversation the party needs to be having.
It is true Labour has made little headway in regaining its reputation for economic competence over the last year. But the reasons for that are both profound and mundane. The sheer scale of global economic uncertainty and the daily tales of unimaginable financial horror engulfing the world, are driving voters into the arms of the devil they know. When asked to stick or twist at this stage of the political cycle, it is hardly surprising that voters give the government the benefit of the doubt, a point Andrew Rawnsley made yesterday.
It will take Labour time to earn the right to be heard. Emphasising the failures of Osbornomics and articulating a plan for stimulating the economy must remain the core script for now. An abasing mea culpa will not restore trust with the electorate; it will simply see voters stick with the real thing rather than opt for Labour’s belated carbon copy austerity alternative.
If Labour abandons its social democratic moorings in order to hitch itself to George Osborne’s neo-liberal express, then the party is doomed. Yes, Labour needs to raise its game with business. Yes, it needs to build its credibility on deficit reduction and should, in due course, spell out its post-2015 spending priorities. And, yes, there will be some hard realities for the party to stomach over the next few years.
But amid all this, Labour must remain a moral crusade, committed to shaping a better world; a recognisably social democratic party.
Or it will be nothing.
Kevin Meagher is associate editor of Labour Uncut.