The Man from the IMF, He Says: “Increase public spending on Investment and follow the LSE Growth Commission”.
Tag Archives: Labour
FUTURE SHOCK: GOVERNING AS ONE NATION LABOUR
1. Future Shock examines the powerful forces of political opposition that a Labour government could face after the next General Election as it grapples with slow growth, the legacy of austerity and tensions over the E.U. It argues that Labour has to foster a powerful social movement if it is to successfully drive radical reforms.
Tony Blair: Labour must search for answers and not merely aspire to be a repository for people’s anger
The centre has not shifted to the left, says Tony Blair. Labour must resist the easy option of tying itself to those forces whose anti-Tory shouts are loudest.
The paradox of the financial crisis is that, despite being widely held to have been caused by under-regulated markets, it has not brought a decisive shift to the left. But what might happen is that the left believes such a shift has occurred and behaves accordingly. The risk, which is highly visible here in Britain, is that the country returns to a familiar left/right battle. The familiarity is because such a contest dominated the 20th century. The risk is because in the 21st century such a contest debilitates rather than advances the nation.
This is at present crystallising around debates over austerity, welfare, immigration and Europe. Suddenly, parts of the political landscape that had been cast in shadow for some years, at least under New Labour and the first years of coalition government, are illuminated in sharp relief. The Conservative Party is back clothing itself in the mantle of fiscal responsibility, buttressed by moves against “benefit scroungers”, immigrants squeezing out British workers and – of course – Labour profligacy.
The Labour Party is back as the party opposing “Tory cuts”, highlighting the cruel consequences of the Conservative policies on welfare and representing the disadvantaged and vulnerable (the Lib Dems are in a bit of a fix, frankly).
For the Conservatives, this scenario is less menacing than it seems. They are now going to inspire loathing on the left. But they’re used to that. They’re back on the old territory of harsh reality, tough decisions, piercing the supposed veil of idealistic fantasy that prevents the left from governing sensibly. Compassionate Conservatism mattered when compassion was in vogue. But it isn’t now. Getting the house in order is.
For Labour, the opposite is true. This scenario is more menacing than it seems. The ease with which it can settle back into its old territory of defending the status quo, allying itself, even anchoring itself, to the interests that will passionately and often justly oppose what the government is doing, is so apparently rewarding, that the exercise of political will lies not in going there, but in resisting the temptation to go there.
So where should progressive politics position itself, not just in Britain but in Europe as a whole? How do we oppose smartly and govern sensibly?
The guiding principle should be that we are the seekers after answers, not the repository for people’s anger. In the first case, we have to be dispassionate even when the issues arouse great passion. In the second case, we are simple fellow-travellers in sympathy; we are not leaders. And in these times, above all, people want leadership.
So, for Britain, start with an analysis of where we stand as a country. The financial crisis has not created the need for change; it has merely exposed it. Demographics – the age profile of our population – technology and globalisation all mean that the systems we created post-1945 have to change radically. This is so, irrespective of the financial catastrophe of 2008 and its aftermath.
Labour should be very robust in knocking down the notion that it “created” the crisis. In 2007/2008 the cyclically adjusted current Budget balance was under 1 per cent of GDP. Public debt was significantly below 1997. Over the whole 13 years, the debt-to-GDP ratio was better than the Conservative record from 1979-97. Of course there is a case for saying a tightening around 2005 would have been more prudent. But the effect of this pales into insignificance compared to the financial tsunami that occurred globally, starting with the sub-prime mortgage debacle in the US.
However, the crisis has occurred and no one can get permission to govern unless they deal with its reality. The more profound point is: even if it hadn’t happened, the case for fundamental reform of the postwar state is clear. For example:
What is driving the rise in housing benefit spending, and if it is the absence of housing, how do we build more?
How do we improve the skillset of those who are unemployed when the shortage of skills is the clearest barrier to employment?
How do we take the health and education reforms of the last Labour government to a new level, given the huge improvement in results they brought about?
What is the right balance between universal and means-tested help for pensioners?
How do we use technology to cut costs and drive change in our education, health, crime and immigration systems?
How do we focus on the really hard core of socially excluded families, separating them from those who are just temporarily down on their luck?
What could the developments around DNA do to cut crime?
There are another 20 such questions, but they all involve this approach: a root-and-branch inquiry, from first principles, into where we spend money, and why.
On the economy, we should have one simple test: what produces growth and jobs? There is roughly $1trn (£650bn) of UK corporate reserves. What would give companies the confidence to invest it? What does a modern industrial strategy look like? How do we rebuild the financial sector? There is no need to provide every bit of detail. People don’t expect it. But they want to know where we’re coming from because that is a clue as to where we would go, if elected.
Sketch out the answers to these questions and you have a vision of the future. For progressives, that is of the absolute essence. The issue isn’t, and hasn’t been for at least 50 years, whether we believe in social justice. The issue is how progressive politics fulfils that mission as times, conditions and objective realities change around us. Having such a modern vision elevates the debate. It helps avoid the danger of tactical victories that lead to strategic defeats.
It means, for example, that we don’t tack right on immigration and Europe, and tack left on tax and spending. It keeps us out of our comfort zone but on a centre ground that is ultimately both more satisfying and more productive for party and country.
You are invited to read this free preview of the upcoming centenary issue of the New Statesman, out on 11 April.
There is an alternative’ – Ed Balls’ speech at Bloomberg 2010
The case against the ‘growth deniers’ – how Labour can win the argument that there is an alternative
Download a PDF of the speech here
I am very grateful to Bloomberg for giving me the opportunity to come here this morning to respond to the bullish speech given from this same platform by George Osborne 10 days ago.
That speech is the clearest articulation of the Cameron-Clegg Coalition strategy for this parliament.
In it, their Chancellor repeated his claim that fiscal retrenchment through immediate and deep public spending cuts to reduce the fiscal deficit would build financial market confidence in the UK economy, keep interest rates low and secure economic recovery by boosting private investment.
And the Chancellor once again declared that his was the only possible credible course ahead – dismissing anyone who doubts that fiscal deflation on this scale and at this delicate stage in the economic cycle is necessary or wise.
I was in America when I read about the speech, travelling across New England.
And after seeing first hand the worried and increasingly pessimistic mood in the US – in the media and in conversation with friends – it jarred to read the British Chancellor saying he was “cautiously optimistic about the economic situation”.
The prevailing attitude I saw in America was not optimism but fear.
Every newspaper I read highlighted people’s worries about their business, their jobs or their home and the growing concerns of US policymakers and business leaders and financial analysts at the emerging signs of a double-dip recession – and not just any recession.
They fear what Americans – especially on the Eastern seaboard – like to call a ‘Perfect Storm’.
A perfect storm where continued de-leveraging by banks and the private sector meets premature fiscal retrenchment from governments and a drastic tightening of consumer spending… as tax rises, benefit cuts and rising unemployment hit home.
And it is these fears – not just in the US but round the world – which in recent days have caused equity markets to fall sharply, bond markets to surge, well summed up by Wednesday’s Financial Times front page headline ‘Market jitters over growth’.
This is a risky and dangerous time for the world economy. History teaches us that economic recovery following a large-scale financial crisis can be slow and stuttering.
In the US, the debate is not about fiscal tightening but whether further stimulus is needed to prevent a double-dip. And the world will be watching closely when Federal Reserve Chairman Ben Bernanke speaks this afternoon in Jackson Hole to see what message he sends about the future course of US monetary policy and whether he can revive flagging confidence in the US recovery.
Here in Britain we have seen, in recent days, MPC member Martin Weale warn of the risk of a double-dip recession as a result of the current fiscal tightening.
But whether our economy continues to recover or slips back into sustained slow growth – even recession again – is not just a concern for Treasury ministers and financial analysts.
Whether our leaders make the right calls now on growth and jobs, the deficit, public spending and welfare reform will determine the future of our country for the next decade or more and shape the kind of society we want to be.
I do believe we face a choice as a country – on the economy and the future of our public services and the welfare state.
And today I want to respond to what I believe was a fundamentally flawed speech ten days ago:
– wrong in its analysis of the past;
– reckless in its diagnosis of the current situation; and
– dangerous in its prescription for the future.
This week’s IFS analysis of the June Budget has confirmed what we already knew – that the Coalition’s economic and fiscal strategy is deeply unfair.
In this speech I will argue that it is also unnecessary, unsafe for our economy and unsafe for our public services too.
Of course we need to deal with the deficit and there is no doubt that we must cut waste where it is found. There is no dispute about that.
We do need a credible and medium-term plan to reduce the deficit and to reduce our level of national debt – a pre-announced plan for reducing the deficit based on a careful balance between employment, spending and taxation – but only once growth is fully secured and over a markedly longer period than the government is currently planning.
I believe that – by ripping away the foundations of growth and jobs in Britain – David Cameron, Nick Clegg and George Osborne are not only leaving us badly-exposed to the new economic storm that is coming, but are undermining the very goals of market stability and deficit reduction which their policies are designed to achieve.
Far from learning from our history it is my fear that the new Coalition government is set to repeat the mistakes of history – and that George Osborne’s declaration of ‘cautious optimism’ on this platform a fortnight ago may go down in history alongside Norman Lamont singing in his bath.
But it is not too late to change course.
So today I will set out the building blocks of an alternative economic strategy that is rooted in economic history and analysis as well as our country’s shared values.
POLITICS, ECONOMICS AND HISTORY
First, let me say why I think it is so important for me – and indeed every other candidate who seeks to lead the Opposition – to stand up now and challenge the current consensus that – however painful – there is no alternative to the Coalition’s austerity and cuts.
Because as someone who was at the heart of the decision on whether Britain should join the Euro, it seems incredible to me that such fundamental and far-reaching economic decisions are being taken by the coalition government with so little debate and – let us be clear – with no mandate from the British people for their rise in VAT or immediate and deep spending cuts.
Yes, there is plenty of discussion up and down the country about where the axe should fall on public services – as my opposite number Michael Gove has discovered.
There are intense disputes, not least within the Conservative Party, about whether welfare reform can deliver the impact and savings claimed by Iain Duncan Smith.
And there are very important arguments taking place about the universality of benefits, and the age at which pension-related entitlements should kick in.
These are all important debates.
But the fundamental questions we face now – Is it right to be cutting billions of pounds from public services and taking billions of pounds out of family budgets this financial year and next? what will that do to jobs and growth? and ultimately, what will that mean for the deficit? – are almost ignored.
Yes, there are some important warning voices – Anatole Kaletsky, Paul Krugman, Lord Skidelsky, David Blanchflower to name a few – who have written powerful critiques on the comment pages of the broadsheets.
But for the most part, the political and media consensus has dictated that the deficit is the only issue that matters in economic policy, that the measures set out in the Budget to reduce it are unavoidable, and that there is no alternative to the timetable the Budget set out.
Interviewers look aghast when I tell them that cutting public spending this financial year and pre-announcing a rise in VAT is economically foolish, when growth and consumer confidence is so fragile. ‘But what would you cut instead?’ they demand.
So strong and broad is this consensus that a special name has been given to those who take a different view – ‘deficit-deniers’ – and some in the Labour Party believe our very credibility as a party depends on hitching ourselves to the consensus view.
I am not one of them.
The history of British policymaking in the last hundred years has taught us that on all the other occasions when major economic misjudgements were made, broad-based political, media, financial and popular opinion was in favour of the decision at the time, and the dissenting voices of economists were silenced or ignored.
In 1925, Chancellor Winston Churchill decided to return sterling to the ‘gold standard’ on the grounds that there was no credible alternative which the financial markets would support and that a return to gold would boost confidence and private investment.
He was supported by the broad mass of economic opinion – including the Governor of the Bank of England, Montagu Norman and the leadership of the Labour Party. Only John Maynard Keynes stood out against the consensus at the fateful 11 Downing Street dinner where Churchill made the decision.
But Keynes famously lost the argument and, as he correctly predicted in The Economic Consequences of Mr Churchill, the result was deflation, rising unemployment, the general strike and then Conservative election defeat.
In 1931, two years after the biggest financial crisis of the last century, Labour Prime Minister Ramsay MacDonald said spending cuts were unavoidable to slash the deficit, ease pressure on sterling and satisfy the markets, in the hope of triggering a private sector led recovery.
He wrote: “We are compelled to devise special measures to meet the temporary difficulties. The critics will have to face facts and deal honestly with the interests of the country.”
Labour MPs rebelled, and MacDonald formed a national coalition government with the Conservatives to drive the plan through with broad media support.
Again, Keynes stood outside this consensus, writing that: “Every person … who hates social progress and loves deflation … feels that his hour has come and triumphantly announces how, by refraining from every form of economic activity, we can all become prosperous again.”
And the result of MacDonald’s plan?
The promised private sector recovery failed to materialise. Unemployment soared. Debt rose. Britain faced years of low growth. The parallels with today’s situation are striking.
Again in 1949 and 1967, the decisions of the then Labour governments to resist and delay inevitable devaluation was widely supported by both the press and the Conservative opposition.
In 1981, Geoffrey Howe and Margaret Thatcher told the country: “There is no alternative” as they proposed dramatic hikes in interest rates and taxes to tackle inflation and strengthen the public finances, even as 364 economists famously wrote to The Times newspaper to criticise the plan.
And the consequences? The deepest recession since the Second World War, massive social unrest, five years of rising youth unemployment, 3 million jobs lost in Britain’s manufacturing industries and whole communities scarred for a generation.
And finally in 1990, Margaret Thatcher and John Major decided to join the European Exchange Rate Mechanism in the face of heavy financial market pressure, a decision supported by the CBI, the TUC, the Governor of the Bank of England, the leadership of the Labour Party – and widely acclaimed by the press.
Again, there were one or two voices – Alan Walters on the right, Bryan Gould on the left – who stood against the tide, but they were largely ignored.
And the result? Interest rates stuck in double figures as the UK suffered the longest recession since the war.
So the first lesson I draw from history is to be wary of any British economic policy-maker or media commentator who tells you that there is no alternative or that something has to be done because the markets demand it.
Adopting the consensus view may be the easy and safe thing to do, but it does not make you right and, in the long-term, it does not make you credible.
We must never be afraid to stand outside the consensus – and challenge the view of the Chancellor, the Treasury, even the Bank of England Governor – if we believe them to be wrong.
But there is a second lesson too – which is also very pertinent at the present time for the Labour opposition and those of us who aspire to be the next Labour leader: it’s not enough to be right if you don’t win the argument.
For – as Keynes found in 1925 and 1931 and Alan Walters found in 1990 – being right in the long run and well-judged by history is no great comfort.
Up to now, this is Labour’s current predicament. Only last week the Guardian ICM poll reported public support for Coalition action to cut the deficit.
Of course, the impact of immediate cuts to public spending on jobs and the recession has not yet fed through. And while it is one thing for the public to support deficit reduction when they are told that it will come from cutting “waste” in public spending, it is quite another when the cuts mean local school building projects stopped, or a new local play facility cancelled.
As the impact of deflation on jobs and the economy feeds through over the coming months, and the reality of the Government’s cuts programme, tax rises and benefit cuts begins to bite, I have no doubt that public opinion will become increasingly concerned.
But, in my view, to sit back and wait for the pain to be felt is a huge trap for Labour.
Because in the meantime, the clear strategy of the Coalition Government is to persuade the public both that there is no alternative, and that – however much George Osborne boasted of his own fiscal austerity before this audience – all their decisions are the fault of the previous government.
In my view Labour cannot sit back and allow this to happen.
Leadership is about changing and leading public opinion rather than being driven by it.
That is why I say it is time for Labour to take on and win the argument with David Cameron, Nick Clegg, George Osborne and others who share their views.
Not through warm words and wishful thinking.
And not only by highlighting that the VAT rises and benefit and spending cuts are unfair – because if the Tories can persuade people they are both unavoidable and Labour’s fault, we won’t win that argument either.
The last Labour government succeeded when we combined our values with economic rigour, when we were both radical and credible in our approach.
When I made the case for Bank of England independence, sticking to Tory spending plans in 1997, not joining the Euro, or raising tax to pay for the NHS I did so based on sound analysis – and we won the argument over time.
That is why we need now to win the argument for an alternative economic plan that is rooted in economic history and analysis, as well as our values and principles.
And I am clear that we cannot start waging the argument for a credible alternative path for growth, jobs, continued recovery and the eventual reduction of the deficit without first setting out why we believe the new government has got it so fundamentally wrong.
That is why it is vital that we first show that the Tory cuts are not just unfair, but both unnecessary and economically-unsafe.
THE OSBORNE BLOOMBERG SPEECH
So let me turn to George Osborne’s speech and his triumphant espousal of the current consensus.
In his speech he makes four main claims:
– that the current economic situation – and the decisions he says he must now take – are all Labour’s fault;
– that the demand from the international money markets for fiscal consolidation is so strong that Britain and other countries must cut the deficit to avoid a ‘Greek-style’ financial crisis;
– that – as a direct result of his deficit reduction plan – Britain is re-entering a period of sustainable growth, with the private sector, in his words, “confounding predictions that [it] cannot generate jobs”;
– and that anyone who argues for a slower, less steep plan for reducing the deficit is a ‘deficit-denier’ who would ‘wreck’ recovery.
1. ‘All Labour’s fault’
So first, is the current economic situation all Labour’s fault, the consequence irresponsible levels of public spending and borrowing in the early part of the last decade?
And Labour’s fault too for increasing the fiscal deficit during the financial crisis by nationalising the banks, cutting VAT and boosting public spending.
First, no matter how George Osborne seeks to re-write history for his political ends, it is a question of fact that we entered this financial crisis with low inflation, low interest rates, low unemployment and the lowest net debt of any large G7 country – and the second highest levels of foreign investment too.
Yes, we borrowed in the last decade to invest in the transformation of our public service infrastructure – and rightly so – but where we needed to raise money to pay for increased current spending on nurses, doctors and the New Deal, we raised the taxes to pay for them – the NI rise for the NHS, the windfall tax on the privatised utilities. And when handed the windfall from the sale of the 3G mobile spectrum, we used it to pay down the national debt.
Of course we did not get everything right. We should have ignored Tory and City claims that we were being too tough on financial regulation and been much tougher still. And there is no doubt that house price inflation was rising too fast in 2007 – despite the actions we took to implement the Barker report.
But in the main I believe that our decisions were far-sighted and responsible, which was why we were the government that made the Bank of England independent and the only government in British history to maintain and meet our fiscal rules for more than a decade. The increase in the trend growth rate was confirmed by the National Audit Office. And there was no significant structural deficit in the public finances until the collapse of tax revenues from the City of London in 2008.
Moreover, even despite that loss of revenues, our low debt position, our low inflation and low interest rates meant that we were the only government in post-war British history which – faced with recession and deflation – had both the will and the means to fight it through a classic Keynesian response.
Everything we did was intended to pump money into the economy, protect jobs and support household finances: stopping the banks collapsing; subsidising mortgages; cutting VAT; funding new apprenticeships and job opportunities; giving people cash incentives to buy new cars; supporting viable businesses; postponing tax payments; bringing forward public spending; quantitative easing by the Bank of England.
And as a result, we came through that storm without seeing the spiralling rates of inflation, interest rates, unemployment and repossession which have accompanied previous British recessions.
Not only that, but our actions led the world to follow suit, stopped the collapse of the global banking system, and took us back from the brink of depression.
And the effects of our actions are clear to see from the data on jobs, growth and the public finances from the first half of this year, before George Osborne’s ‘Emergency Budget’:
– faster than expected economic growth in the second quarter of the year;
– unemployment falling not rising;
– and public borrowing now markedly lower than Alistair Darling forecast back in March.
But rather than continue with a strategy that was working, George Osborne is doing the exact opposite.
As the second storm looms on the horizon, everything he is doing is designed to suck money out of the economy and cut public investment, while his tax rises and benefit cuts will directly hit household finances at the worst possible time. It is the exact reverse of the policy which allowed Britain and the rest of the world to weather the first storm.
George Osborne was fond of saying – wrongly – that the Labour government had failed to fix the roof while the sun was shining. What he is now doing is the equivalent of ripping out the foundations of the house just as the hurricane is about to hit.
2. ‘Satisfying the markets’
So what of George Osborne’s second contention – strongly supported by Nick Clegg – that the demand from the international money markets for fiscal consolidation is so strong that Britain and other countries must cut the deficit to avoid a ‘Greek-style’ financial crisis?
On this platform, the Chancellor went so far as to say that “the biggest downside risk to the recovery” was a loss of market confidence and a sharp rise in market interest rates. And he claimed that this risk had now been averted as a result of his Budget package for deficit reduction.
I do not have to tell this audience that what matters for credibility is not how tough politicians talk, but if their plans work and can be delivered.
Above all, stability requires a credible medium term path for fiscal sustainability and stable growth. What undermines confidence is uncertainty over whether a sudden fiscal adjustment is deliverable and over the impact it will have on consumer and investor confidence.
Time and time again in recent years, we have seen the markets lose confidence – usually in emerging market economies – because they see fiscal adjustment plans which look tough but lack credibility and end up being self-defeating. A vicious circle begins of slower growth, investor flight, further reduced projections for growth, a worsening fiscal position, and further loss of market confidence.
Hence Spain’s decision, announced earlier this month by Prime Minister Zapatero, to reverse cuts in infrastructure spending and put back in place some projects that were suspended – a decision designed to support growth, jobs and confidence.
In Greece the markets have looked at the draconian spending cuts that the rest of Europe has demanded from the Greek government, seen the resulting general strikes and riots in the streets, decided that those spending cuts are undeliverable, that the Greek economy will struggle to grow within the Euro area, and have lost confidence accordingly.
The Greek crisis may have started with concerns over the government’s ability to service its debt, but it is now a more fundamental question about whether its economy can grow and its society can remain stable.
By contrast – outside the Eurozone and with long-term real interest rates at record lows for both 10 year and 30 year bonds – Britain faces no difficulty servicing its debts as recent debt auctions have demonstrated – and the term structure of our debt is long thanks to the brilliant work of the Debt Management Agency.
As US economist Brad DeLong said last month:
“History teaches us that when none of the three clear and present dangers that justify retrenchment and austerity – interest-rate crowding-out, rising inflationary pressures on consumer prices, national overleverage via borrowing in foreign currencies – are present, you should not retrench.”
And yet in recent months, as Britain has followed the rest of Europe down a reckless commitment to immediate deficit reduction, we are now seeing very real worry in financial markets as fears of stagnation or even a double-dip recession grow.
Before the general election we were told regularly by the Conservatives – and also by some newspapers – that the UK economy was at grave risk of being ‘downgraded’ by the international credit rating agencies because the deficit was not paid down fast enough.
Last week Moody’s raised the prospect of downgrades for economies across Europe – including the UK – for precisely the opposite reason: because of the threat of lower growth and higher unemployment on deficits.
The fact is that savage cuts that hit the economy or are politically undeliverable won’t achieve sustainable deficit reduction or build market confidence. A slower, steadier plan, which does not put jobs, growth or services at risk, is more likely to succeed and have market credibility.
3. ‘The prospects for growth’
Which brings us to the issue of George Osborne’s cautious optimism.
In the Bloomberg speech, his third, and definitely his boldest contention, was that – as a direct result of his deficit reduction plan, and indeed impossible without it – Britain was re-entering a period of sustainable growth.
“The much-needed rebalancing of our indebted economy – away from government and towards the private sector, away from consumption and towards business demand, away from imports and towards exports – is beginning.”
I would like him to point to the precedent from British economic history which says that, with slowing growth in our main trading partners and companies de-leveraging, it is possible for public sector retrenchment to stimulate private sector growth and job creation.
The 1930s and 1980s proved the opposite. And indeed, the new government economic forecaster, the OBR, has admitted the cuts will depress jobs in both public and private sectors – starting with the loss of jobs building new schools.
The data for the second quarter for GDP may have been strong, but the signs are not encouraging for the second half of this year.
Even in the days since the Bloomberg speech, we have seen increasing signs of economic slowdown in Britain, and UK consumer confidence, business optimism and mortgage starts are all down.
For all George Osborne’s talk of ‘deficit-deniers’ – where is the real denial in British politics at the moment?
We have a Chancellor who believes that he can slash public spending, raise VAT and cut benefits – he can take billions out of the economy and billions more out of people’s pockets, he can directly cut thousands of public sector jobs and private sector contracts, and none of this will have any impact on unemployment or growth.
Against all the evidence, both contemporary and historical, he argues the private sector will somehow rush to fill the void left by government and consumer spending, and become the driver of jobs and growth.
This is ‘growth-denial’ on a grand scale.
It has about as much economic credibility as a Pyramid Scheme.
For George Osborne read Bernie Madoff: he’ll take your money and take your job, but don’t worry – if you wait long enough, he promises you’ll get it all back from someone else.
4. ‘There is no alternative’
Then – having blamed the Labour government for his cuts plan, and insisted the markets are guiding his hand – George Osborne went on to make a further bold claim.
I have argued that the Coalition’s plans for rapid deficit reduction now are not just unfair but also unnecessary and economically very risky indeed.
The Chancellor says that there is no alternative to his timetable for deficit reduction, and that anyone who argued for a slower, less steep plan for reducing the deficit was a deficit-denier, someone who wanted to “wreck the economy” and condemn it to “ruin [and] disaster”.
George Osborne includes in his charge Alistair Darling and David Miliband, who have suggested the lesser plan of halving the deficit over four years.
I told Gordon Brown and Alistair Darling in 2009 that – whatever the media clamour at the time – even trying to halve the deficit in four years was a mistake.
The pace was too severe to be credible or sustainable.
As both history and market realities teach us, the danger of too rapid deficit reduction is that it proves counter-productive:
– tipping us back into recession, unemployment rising and the deficit and debt getting worse into the medium-term.
– and requiring cuts to public spending which would hamper our long-term economic future by cutting university places or scientific research and development; or be deeply unfair, dismantling the very basis of the NHS and universal welfare state that the Attlee government established.
Yet George Osborne is planning to go £40 billion further and faster this year than even Alistair Darling’s plans.
If I have explained this morning why I disagree with the Cameron-Clegg strategy and why I believe their economic plan is a prescription for disaster, it does beg the question: what is the alternative?
It was never enough for Keynes just to rail against the government of the day and their ill thought out plans. He wanted to argue the better course of action.
So it is Labour’s responsibility to set out a clear plan for growth, a more sensible timetable for deficit reduction, and a robust explanation of why that will better support our economy and public finances.
Even halving the deficit over four years represents comfortably the biggest and fastest cut in the deficit since the period after the Second World War, but without the peace dividend to fund it.
In a recent article in the Financial Times, the historian Niall Ferguson wrote:
“People are nervous of world war-sized deficits when there isn’t a war to justify them.”
But this is precisely the case I made to Gordon Brown and Alistair Darling last year – we have just experienced the biggest global financial crisis in a century, an event as momentous in historical and financial terms as war, famine or a natural disaster.
Our economies were saved from catastrophe only by government intervention to nationalise banks and to absorb huge financial liabilities from the private financial sector. To attempt to repair the damage of such an event and return the national debt to its previous level in just a few years is not only dangerously incredible in the eyes of financial markets but places an intolerable burden on current users of public services.
Just think if Clement Attlee’s government at the end of the Second World War had decided that the first priority was to reduce the debts built up during the war – there would have been no money to fund the creation of the NHS, no money to rebuild the railways and housing destroyed in the Blitz, no money to fund the expansion of the welfare state.
All the things the Labour movement is proudest of about that post-war government would have been jettisoned.
And why weren’t they?
Because they recognised that when a country has been through an once-in-a-generation event – like the Second World War – where the costs involved are a second thought next to equipping the armed forces and saving people’s lives, homes and freedom – then the government needs a once-in-a-generation approach to the resulting debt: a slower, steadier pace of reduction which meant they could also fund the improvements in health, education and welfare that the post-war generation demanded and deserved.
So when George Osborne says that there is no alternative to their timetable and that anyone who disagrees is a deficit-denier, I say this:
If it was possible for our post-war government to have the wisdom and foresight to recognise the benefits of a slower, steadier approach to reducing an even bigger debt, then it does not behove you to close off all debate.
As for the argument that by taking a longer period to repay the debt, we unfairly burden future generations, Nobel prize-winning economist Paul Krugman puts it well:
“People who think that fiscal expansion today is bad for future generations have got it exactly wrong. The best course of action, both for today’s workers and for their children, is to do whatever it takes to get this economy on the road to recovery.”
That is why – on the grounds of prosperity and fairness – I believe Labour does need a credible and medium-term plan to reduce the deficit and to reduce our level of national debt, but only once growth is fully secured and over a markedly longer period than George Osborne is currently planning.
For the medium-term, a credible and pre-announced plan for reducing the deficit needs a careful balance between employment, spending and taxation.
We need to do more to raise taxes fairly – such as starting the top rate of tax at £100,000 and reversing the cancelled part of the NI rise. I support an international transaction tax and think David Miliband is right to propose a new wealth tax on the largest estates.
And we will need to set out tough spending cuts in some areas, as I did in the schools budget where I identified in detail the savings which could be made in school and non-school budgets alike while protecting frontline service delivery.
But by far the biggest influence on deficit reduction and the balance between taxation and spending is economic growth and the number of taxpayers in jobs paying their fair share.
That is why the priority this year and next must be growth and jobs.
The Coalition should act quickly and aggressively to reverse George Osborne’s cuts in support for the economy, and his increases in household bills.
We need to reinstate vital investments now which support jobs and recovery:
– the Future Jobs Fund
– the September school leavers guarantee
– the youth jobs guarantee
– the Building School for the Future capital programme
And we need urgently to revive the G20 process to support global growth and accelerate progress on international coordination of financial regulation.
THE BIG SOCIETY
But whatever our competing visions for the economy, growth and deficit reduction, there is also a wider and more fundamental issue at stake which could be easily forgotten or postponed as we focus on how best to protect the current status quo in terms of growth, jobs and living standards.
It is the fairness of our society.
How we confront the current financial storm and whether we can reduce the deficit and preserve a universal welfare state and strong public services will, in my view, have a profound impact on how we can tackle the greatest long-term economic challenge we face: the rising inequality in every developed nation in the face of technological change and international competition.
And this is why the debate we must have about when and how to reduce the deficit is not just about economics and jobs but about the future of our country and the competing visions of our political parties.
David Cameron and George Osborne – and Nick Clegg too – are using their crusade to cut the deficit to make a wider ideological argument that the post-war welfare settlement – of universal public services and universal benefits – has somehow failed: a symbol of the over-spending Labour government which must be scaled back, dismantled and replaced with more private provision and co-payments for services.
With Conservative colleagues from the Thatcherite right – and Orange Book liberals too – they have an excuse in the deficit for the programme they have always wanted to pursue for ideological reasons: to shrink the state and leave the vulnerable relying on charity.
So instead of the private and voluntary sectors working alongside an empowering and enabling public sector, the involvement of charities and businesses is being boosted not to enhance public provision but to undermine it. Each new policy, fresh initiative or hasty Bill pushed through Parliament sees the state being withdrawn from support for the economy, the family and public services.
It will not surprise you that I have a very different vision and take a very different view of the importance of sustaining public services and protecting those on lowest incomes as we ensure borrowing comes back down.
David Cameron has a narrow view of the role of the state – that it stifles society and economic progress. I have a wider view of the role of state – a coming together of communities through democracy to support people, to intervene where markets fail, to promote economic prosperity and opportunity.
He has a narrow view of justice – you keep what you own and whatever you earn in a free market free for all. My vision of a just society is a wider view of social justice that goes beyond equal opportunities, makes the positive case for fair chances, recognises that widely unequal societies are unfair and divisive and relies on active government and a modern welfare state to deliver fair chances for all.
Far from thinking that electoral success is based on the shedding or hiding of values, I believe we now need to champion those values and the importance of a fairer Britain – to show we are on peoples’ side after all.
Labour’s next leader needs a much stronger, clearer vision of the fairer Britain we will fight for – very different from the unfairness and unemployment the Coalition’s savage and immediate cuts will cause.
So over the coming months, it is not just an economic argument we need to win: over the pace and scale of deficit reduction; over how to protect jobs and growth in our economy; and over Labour’s responsibility for the situation we find ourselves in.
It is also an argument over fairness and the role of the state to deliver economic strength and social justice in the 21st century.
It is my contention that our opposition and our vision for government must be credible as well as radical and based on our values.
We must make clear that vision of a better Britain is rooted in a robust and credible economic analysis and an alternative economic plan.
We must persuade people in their heads as well as their hearts to come back to Labour again.
And by comparison, we must expose the Coalition’s plans as heartless and wrong-headed.
That is the challenge for Labour’s next leader.
The Spirit of ’45 – first look review | Film | guardian.co.uk
Ken Loach’s account of the Labour postwar programme of nationalisation favours reminiscence at the expense of detail, but it certainly packs an emotional punch
guardian.co.uk, Monday 11 February 2013 11.25 GMT
Labour of love … a still from Ken Loach’s The Spirit of ’45
No one can accuse Ken Loach of sitting on the fence. This account of Labour’s postwar general election victory and the subsequent programme of nationalisation is about as partial as they come. In Loach’s eyes this was a glorious time, when the experiences of the second world war were put to era-changing use on a home front still crippled as much by the depression of the 1930s as by military expenditure. The rush of socialist enthusiasm ended dangerously exploitative conditions in heavy industry, rebuilt lousy housing and established a free-to-all medical service.
The Spirit of ’45
Production year: 2013
Directors: Ken Loach
Well, Loach’s film certainly packs an emotional punch. He calls on a string of retirees – former mineworkers, nurses and the like – to tell their stories. It’s clear that a big part of Loach’s purpose is to confront the decades of media propaganda that have characterised unionised workers as overpaid shirkers, brakes on growth and “the enemy within”, as Loach’s principal bete noire, Margaret Thatcher, would have it. Indeed, as Loach presents it, this was a time when the union man (and woman) was a heroic figure, straddling the age and hewing the future with bare hands. It’s stirring stuff.
But I do have to confess to feeling a tiny bit disappointed. Although Loach’s film is certainly engaging – largely down to his spirited interviewees – there’s something a little sketchy about it. We know that this was an epoch-making period, that the 1945 election was great national drama, that Attlee was a great leader – but the film rushes through it all with little attempt at in-depth contextualisation. Loach’s aim is to favour memories and reminiscences (as the title indicates); I’d have liked the exhortatory tone leavened with more detail. Rather bafflingly, for example, he completely blanks that other great project of the 1945 Labour government, the disengagement from empire – the global impact of which has arguably been greater.
But it would be churlish to pick too many holes. This is clearly a subject Loach has great feeling for, even if he keeps himself scrupulously off camera. There’s a very contemporary purpose at work here too: to remind people, if nothing else, why the NHS is worth fighting for at the very moment it’s being dismantled. Films are rarely this committed or, indeed, persuasive.
via The Spirit of ’45 – first look review | Film | guardian.co.uk.
Len, Conflict and One Nation
Posted on Wednesday, January 16th, 2013 at 3:41 pm.
Len McCluskey, General Secretary, Unite.
Last night, there were two major discussions of Labour’s future policy and strategy. The first, held in Westminster, featured Labour policy chief Jon Cruddas, Ed Miliband’s “Blue Labour” guru Maurice Glasman and had David Miliband sitting in the audience. The debate ranged widely over the question of how to build ‘One Nation’.
The second event was an LSE lecture by Len McCluskey, General Secretary of Unite, Britain’s largest trade union, on the political strategy for trade unionism. Despite Unite’s size and influence, there were few big names from the Labour party in attendance and the speech has achieved little media coverage, not even making any of the endless lists of top British political stories.
Indeed, the only references to the speech I found on Google news we articles for Iran’s Press TV and the Belfast Telegraph. Perhaps this demonstrates Len McCluskey’s point about the exclusion of the representatives of the working class from British political life. The Trade Unions are still being treated like the “Mad Aunt in the Attic”.
Yet if I had to choose which discussion was likely to have a lasting practical impact on the direction of the Labour party over the next two years I’d make the Union leader’s speech the favourite. Why?
First is the obvious structural influence of Len McCluskey personally1 and the leading Trade Unions generally on Labour policy and strategy. Half of votes at conference and a sizeable proportion of the National Policy Forum and the NEC are dedicated to Trade Union representatives, and while those representatives are very far from a monolithic bloc, when a common agenda is shared, they represent a powerful voice inside the party.
However, this organisational presence doesn’t guarantee political dominance, whatever the Conservative party would have us believe. The NPF, NEC and Conference have been around for a long time but the Union complaint about New Labour was not even that all their demands were ignored, but that they often did not even feel part of the conversation.
((I’d argue this is a misreading of how New Labour and the Unions operated: So a diversion:
New Labour ministers tended to approach policy-making with Trade Unions as something that could be positively managed within specific bounds. These boundaries were roughly: No Return to pre-80s union legislation, no significant re-nationalisation, pressure on public service reform, and preservation of a basic pro-business and free movement of goods policies, but along with that, more union rights, though limited, a fairly radical range of workplace legislation on specific issues. This meant that while New Labour was rarely regarded with affection by Trade Union leaders, they could at the same time score significant policy victories.
As late as 2005 TUC Conference speeches, while sharply critical of Labour’s lack of ambition, were also larded with specific Trade Union policy achievements. After eighteen years of unrelenting defeat, this was perhaps more significant than it seems in retrospect and formed a large part of the reason why New Labour and the Trade Unions developed a modus vivendi. The fact that Labour’s policy jargon included regular references to ‘The Warwick Agreement” and “Warwick Two” were symbolic of this transactional, constantly re-negotiated relationship. Union leaders needed to swat New Labour, but they also felt that they needed New Labour to make swatting the government worthwhile.
That tolerance began to die towards the end of Tony Blair’s administration, and declined sharply under Gordon Brown, perhaps because for many years Trade Union leaders had regarded Brown as “The acceptable face of New Labour” and had higher expectations of a Brown-Led Labour government than of Blair, When these expectations went largely unfulfilled, discontent was muted by a combination of a lack of a credible left alternative, the economic crisis, which relegated political concerns to a lower priority, and finally the fear of a Conservative government))
This is why McCluskey’s speech deserves proper attention. New Labour existed and survived for thirteen years, and did so at least in part because Unionism offered no coherent alternative analysis or political strategy. There were a few on the extreme left who sought a return to Bennite struggle, but it felt faintly ludicrous, I suspect even to those involved.
Now this has changed. New Labour is dead, and in the subsequent debate about what replaces it Len McCluskey wishes to put the political power of Trade Unionism into the service of a specific political idea, and makes a clear, cogent and direct case for doing so.
I dissent from this analysis, and disagree about the conclusions, but it is time, well past time, to take this analysis seriously and consider where it might take Labour. This is not least because on an intellectual and stylistic level, McCluskey’s speech is clearer, more provocative and richer in content than the vast majority of speeches, especially the airy asserting of pious good intentions that are so fashionable now, and deserves attention and great thanks for that alone.
Th argument begins with a quote from Miliband, (Ralph, not Ed):
““All concepts of politics, of whatever kind, are about conflict──how to contain it, or abolish it.”
This provides the core of McCluskey’s argument. First that conflict is inherent to the relationship between the workers and the powerful, second that the unions must be the marshals, quartermasters and strategists for one side of this conflict, and that third, it is vital to the working class that this work bot be hobbled and prevented.
From this flows the view that the defeats of the Trade Union movement experienced since the 1970s were primarily“a consequence of the deliberate drive to destroy the trade union movement and working-class politics which the elite has embarked on over the last generation or so”
In other words, the Neo-Liberals waged war upon the workers, won the field, and so unionism declined, and with it, the status of workers.
In order to reverse this process, the essential first step is to extend the organisational power of the union to win the worker’s battles.
“if we are on a march towards “one nation” and ultimately “one world”, it is a road that leads through struggle and conflict.
We cannot create common interests across a society that is now more unequal than for generations simply by wishing for it.”
This is, I think, an acute insight. The great strength and danger for the “One Nation” project is that it ends up merely being a mechanism used to avoid conflict, first in the Labour party (by seeking to be so inclusive that both Len and I feel obliged to make favourable references to the slogan, to avoid seeming disloyalty) and then nationally, as it demands responsibilities from all, offering rights in return. This could make it either a hegemonic political projects, or a vast balloon of inflated rhetoric.
As McCluskey notes, “One Nation’s” political history, whether Disraelian, interwar, postwar, or New Labour could be used to ameliorate or manage the process of conflict.2 Depending on your perspective, this is either a sell-out of the interests of the Working Class, or a cover under which the working class can be distracted from claiming their full rights. Either way, to be given a more definite content, One Nation requires some conflict.
Where does this analysis of the past take us for the future of unionism?
“We have to say that we speak for the working class, that the working class speaks for a better world for all, and we have to organise and fight on that basis – not as a special interest or as a lobbying group, but as the motivators of the only real alternative to the crisis of capitalism and the multiple failures of the present ruling elite.”
First, it leads to the conclusion that conflict is essential for future social progress.
Whether through “Occupy” style direct action, strikes, mass demonstration, the presence of conflict is a sign that the right battles are being fought. Logically, for the Trade Union movement, this should require much greater organisation and strike action freedom.
Second, note that this analysis is primarily political, not industrial.
It sees the events of the last thirty years as the profound result of a Neo-Liberal assault on the institutions of the working class. The response must therefore be primarily a political response.
There is little analysis in the speech of other possible factors for the decline of British Trade Unionism over the last three decades, whether it is the shifting of heavy industry overseas, the role of new technologies in de-industrialisation, or unionism’s failure to offer much to the emergent routine white-collar classes of the private sector.3
This feels like a story of unionism that misses out the workplace.
If what is happening is a “Neo-Liberal” assault on the working classes, what explains the strange absence of conflict in the private sector? Today, Private sector strike rates are very, very, low, This is true even when comparing within the ‘neo-liberal’ era. 4.
The strange absence of Industrial Conflict in the Private Sector
In 2012, it looks as if we will have one of the smallest numbers of days lost to strikes in the Private Sector since ONS started counting.
In the remaining unionised private sector workplaces, the story of British Unionism has been more about constructive engagement with employers than conflict.
Now, the obvious response to this is that the hollowing out of the Union movement has led to an unexpressed conflict, one that is being repressed by a lack of industrial representation.
Yet, there seems little sign yet of an upsurge in demands for union organisation which might signal such a path. Union Density in the Private sector is falling, and the rate of growth of private sector union membership is lagging the overall growth in private sector employees.
On a critical reading of the Union left, if conflict is not happening in workplaces – if private sector workers are not voting for conflict in union ballots, in demands for membership, or spontaneous organisation, it becomes vital to locate it elsewhere, whether the public sector, non-industrial protest or politics.
Is this perhaps part of why protest and conflict in the political sphere matters to the new Union left?
I feel this drives McCluskey’s picture of non-labour movement radicalism.
Stuggles like Occupy or Tax protests against capitalism offer a sign of the radicalism that is not demonstrated in the union members own actions, at least in the Private sector. It’s like my reaction whenever I read of calls to “Unite the Resistance” – what resistance is there to unite that isn’t already united?
This underlies the way in which Len McCluskey talks about expanding Union membership. It becomes about gathering together those left abandoned and workless by neo-liberalism, not an offer of something to those who may be surviving within it.
Socialist Worker Headline: Congratulations. You’ve already succeeded!
So the speech’s list of those who need Unionism includes “unemployed, the disabled, carers, the elderly, the voluntary and charity sector”. Those who work in the private sector but are not unionised are a tougher target, thanks to “exploitative and anti-union companies”. ((To be fair though, this is a speech about protest, not industrial organising, and I’m sure that Unite regularly talks about the importance of growing membership through organisation))
This strikes me as a lop-sided picture of Britain today.
First, I suspect that the reserve army of Labour Unite wishes to enlist will prove rather different to the one he sketches. Second, I think the growing private sector non-unionised work force is less about exploitative companies and more about the changing nature of employment5.
Just as the Tories are wrong to characterise Britain today as a land with hundreds of thousands of scroungers, it’s not the case that the unemployed are a stable, disenfranchised mass. Instead, especially for women, there is a steady cycling in and out of a complex web of work, part-time work and family obligations.
Trade Unionism’s current membership model is reliant on a stable labour force in a single location or community, with equally stable, and thus manageable, interests and demands. Unite’s response to the decline of this model, The community membership scheme, itself seems an attempt to graft this model on a very different Labour market.
For example, What happens to the Community member when she finds work for 20 hours a week? What support will her union offer for her? Well, according to the Membership guide “they will either be transferred onto full Unite Membership or be advised to join the appropriate union if the work is not in an area covered by Unite”6 I’m not sure how attractive this will prove.
Here’s my view – Len McCluskey’s critique of Neo-Liberalism as the driving force of Union and Working class decline leaves out a great deal of what is actually happening in workplaces, and how “Neo-Liberals” like Bill Clinton, Tony Blair and, yes, Gordon Brown, sought to ameliorate, anticipate and make the most of those changes.
Further, it leads to constantly locating flaws elsewhere, which requires surprisingly little analysis of Unionism’s own weaknesses.7
But my dissent from Len McCluskey’s analysis is far less important than the fact the left analysis exists.
Followed through to his logical conclusion, then the argument that the delivery of “One Nation” means conflict ahead. For example, it means that McCluskey should be pushing the Labour party for a radical expansion of Trade union organisational rights.
Further, rather than a “One Nation” position balancing of “Rights and responsibilities” across all of society, McCluskey’s position entails an expansion of the rights of the working and non-working classes at the clear and direct expense of the privileged few.
((At its smallest level, this requires the presence of more “working Class” voices in Labour politics. Yet again, “working class” is likely to be a political, not a demographic, or employment statement. I grew up in a housing association home with a single mother who moved between benefits and part-time work. I also went to Oxford and write words for a living. Am I more or less working class than Len himself, or say, Owen Jones? What about Hazel Blears, or Phil Wilson? ))
Politically, McCluskey would argue that this would motivate and energise those who grew dissatisfied with Labour. I’ve set out why I think this analysis is wrong electorally elsewhere, so won’t repeat it.
What matters next is how willing Len McCluskey and those around him are to generate the conflict of which he speaks, and when he chooses to pursue it.
If they wish, Unite could seek to put the Labour leadership to the test before the General Election, with a clear set of policy demands that would almost certainly be strongly resisted. If they succeeded with a large part of this agenda, this would give Labour a clear, and more controverisial political identity.
On the other hand, Unite might choose to wait, judging that the election of a Labour government is a needed first step to making real change and that conflict now would merely mean an inability to pursue more important conflicts later.
The Labour leadership will seek to persuade Unite, the GMB and others to broadly accept the latter position, hoping to return to a more generous version of the Warwick I and II transactional agreements.
However, reading Len’s speech I wonder if he would regard such an approach as a “return to Blairism”, and thus entirely unsatisfactory and vague.
If he did, the theoreticians and philosophers at that other intellectual seminar, the one in a Westminster committee room graced by so many ‘big thinkers’, might find they are in for something of a surprise.
I had trouble deciding how to address Len McCluskey. we’ve never met, but have exchanged tweets and he’s said he looks forward to reading my response to his speech. So calling him Mr McCluskey seems snitty, but Len seems over-familiar. So I’ve sort of switched between Len McCluskey when referring to him personally, and Mcluskey’s when referring to the speech. Anyway Len, if you’re reading, this is an attempt to explain how I’ve used your name! [↩]
Though Disraeli did not talk of “One Nation” – the first use of the phrase was, I think, Baldwin‘s [↩]
The only reference I saw to these cast this too as a part of a deliberate assault on the Working classes, a “neo-liberal experiment that sent ‘old’ industries elsewhere in the world”. [↩]
Nor can this be explained as purely a result of legislative weakness limiting Trade Union action. Public Sector strikes have increased [↩]
To put it another way, I don’t quite see why capitalists are today more rapacious and anti-Union than they used to be back when very fat men watered the workers beer [↩]
For a part-time worker, this will be around £70 a year, or c£140 if working over 21 hours a week. [↩]
To be needlessly provocative, since conflict is good, It is like a general having suffered a series of reverses and seeing a large part of his troops have deserted, blaming only the evil intent of the enemy, and never wondering if he chose to fight on the right ground, or even whether fighting was the right decision to begin with [↩]
Labours line in the sand on benefits | Ruth Lister | Comment is free | The Guardian
Ralph Miliband and sons
For Ralph Miliband governments could never tame capitalism. New Labour thought otherwise – and then came the financial crisis. But what will David or Ed do if they gain the leadership?
The Guardian, Saturday 4 September 2010
Viewed from one angle Ralph Miliband was a theorist of revolution who failed to notice the radical transformations going on around him. A lifelong Marxist, he never doubted that the future would be shaped by the struggle against capitalism. In fact it was capitalism that proved to be the revolutionary force in the late 20th century, consigning socialism to the memory hole. By the time Miliband died in May 1994, the Soviet system had been replaced by a type of resource-based authoritarian capitalism, while China’s Communist party was overseeing the development of an unbridled market of a kind that Milton Friedman could only dream about.
In Britain in the 1980s Miliband managed to convince himself that Labour, which he had always bitterly attacked, might, under the influence of Tony Benn, turn into a genuinely socialist party. In fact Labour split, which more than any other single factor enabled the continuing dominance of Thatcher. Probably only the battles fought by Neil Kinnock prevented Labour disintegrating altogether. When John Smith became leader, the party began the “prawn cocktail offensive”, a rapprochement with the financial sector pursued through private lunches with leading City figures, which formed the prelude to New Labour. Only weeks after Smith died (in the same month as Miliband) the party would start burying any trace of its socialist past.
When he gave the Bennite wing his intellectual support, Miliband was colluding in the politics of make-believe. Yet in one vital respect this intractably oppositional Jewish refugee from nazism had a firmer grip on reality than the social democrats who eventually prevailed in Labour’s internecine conflicts, and when he ridiculed Anthony Crosland’s vision of a domesticated and pacified capitalism, he left the party with a dilemma it has not been able to resolve. Like Marx, Miliband understood that states and governments are never autonomous actors; their options are shaped, and often foreclosed, by the distribution of power and resources. This was the central theme of Miliband’s The State in Capitalist Society (1969), a penetrating assault on social-democratic thinking in which he developed and extended the argument against revisionism of his earlier Parliamentary Socialism: A Study of the Politics of Labour (1961).
In The Future of Socialism (1956), Crosland had argued that Labour must distinguish between means and ends (a theme pursued later by Blair). Capitalism had changed fundamentally, and rather than opposing it Labour should use the market to advance socialist values. Properly managed to ensure steady economic growth, free markets could be used to promote an egalitarian society in which everyone could live the good life. Against this rosy vision, Miliband urged – rightly, I’ve always thought – that the world had not changed as much as Crosland and his fellow-revisionists imagined. Capitalism remained an unruly beast, and the idea that governments had learnt how to tame it was just an illusion.
The oil shocks of the 70s were an early warning of the fragility of the postwar order. The shocks were not fatal, and capitalism survived the crisis (as it will survive the present crisis, in one form or another). But it was already becoming apparent that while governments could withstand upheavals in the global economy, the state was not the directing agency social democrats imagined it to be. As Miliband saw it, the state was a servant of these forces rather than their potential master. Of course he exaggerated. The interests of capitalists are often at odds, and in any case politics is driven by far more than class conflict. Even so, Miliband’s view that the state is constrained, reactive and hemmed in by market forces has become increasingly plausible with the passage of time. But if this is so, what role can there be for a party that aims to make capitalism a force for the collective good? Can a future Labour government succeed where past governments have failed and harness capitalism to a vision of social improvement? Or should Labour accept that it is capitalism itself that must be changed?
These are precisely the questions that face Miliband’s sons as they contend for the Labour leadership. The clash between the two has an undeniable drama, and it is not just a matter of sibling rivalry. It occurs at a time when the world economy is in a crisis the founders of New Labour believed to be impossible. Lacking the Marxian insight that capitalism is inherently volatile and constantly mutating, they never doubted that the deregulated finance-capitalism that developed in the US towards the end of the past century would last. The left had to overcome its suspicion of the free market, and accept that only by exploiting its productivity could government improve society: social democracy and neo-liberal economics were actually complementary.
Just like Crosland, though without his Keynesian grasp of the dangers of recurring boom and bust, New Labour believed capitalism had been tamed. But as Ralph Miliband suspected and events have confirmed, the anarchic energy of the free market is not so easily controlled. The fall of communism was celebrated as a triumph of capitalism, which now became practically world-wide; but the effect was to make capitalism more unstable, as disturbances in one part of the system were rapidly transmitted to all the rest. The fragmented world of the cold war was more resilient to shocks, and also more hospitable to social democracy, than the world that ensued. Governments found that few of the levers they used to control the economy worked as they had before. New Labour did not want to control the market. A feature of the understanding it reached with the City was that financial markets would continue to be deregulated. In part this was accepted as the price for power, but it also reflected New Labour’s Fukuyama-like faith that market capitalism was the final stage of economic development; the future lay with the self-regulating market.
As could be foreseen, things turned out rather differently. With regulatory controls relaxed or scrapped the financial institutions whose support Labour had wooed became predatory, raking in vast profits from strategies whose risks they did not understand. Inevitably this hubris led to their downfall, and the financial system imploded. The market millennium lasted hardly more than a decade, leaving a legacy of unsustainable debt.
The happy conjunction of neo-liberal economics with social democracy on which New Labour was founded is now history. This is the truth evaded in Tony Blair’s autohagiography. If New Labour is obsolete it is not because of the personal defects of Gordon Brown, Blair’s delusional moral certainty and incessant war-mongering or even the dysfunctional relationship between the two leaders. It is because American finance-capitalism, the model for virtually everything that New Labour ever did, has blown itself up.
The problem with the debate between the Milibands is not that it risks turning into a public family feud. It is that neither of the two contenders has come to terms with the bankruptcy of the New Labour project in which each of them was involved. Neither has acknowledged, or perhaps fully understood, the implications of the financial crisis for a future Labour government. It can only mean an erosion of the very foundations of Britain’s social democratic inheritance. Yet in different ways, each of the Miliband brothers still sees government as capable of controlling market forces – the illusion their father presciently exposed.
In his Keir Hardie lecture in July, David Miliband spoke eloquently of moving away from state paternalism and reviving Labour traditions of mutualism. The state can no longer be the centre of knowledge and initiative – its function is rather that of empowering society. Top-down Fabian control must be replaced by open democratic relationships. No doubt these are desirable goals, if very much in the spirit of the prevailing conventional wisdom and perhaps not so different from Cameron’s fluffy “big society”. The larger difficulty is that Miliband is harking back to Crosland (whom he recently cited as his political hero) at a time when Crosland’s thinking is no longer applicable.
Crosland’s vision was based above all on economic growth – steady, continuing and robust. Following Keynes, he believed that wise economic management could create a society of abundance. But the effect of the financial crisis has been to curtail growth, at least in developed economies. Even if the economy recovers, governments will not have the largesse he assumed would be available. Bailing out the banks has passed the burden of debt on to the state, and no British government can expect to avoid large-scale cut-backs in borrowing and spending. Instead of the market generating wealth that could be used by governments for collective purposes, the resources of government have been pre-empted for the repayment of debts incurred by the market’s excesses. Against this background, the post-paternalist state is likely to mean higher unemployment and cash-starved public services.
Unlike his brother, Ed Miliband has chosen to define his candidacy explicitly in terms of New Labour’s failings and argues forcefully for the need to remodel capitalism. “Britain’s big question of the next decade,” he has written, “is whether we head towards an increasingly US-style capitalism – more unequal, more brutish, more unjust – or whether we can build a different model, a capitalism that works for people and not the other way around”. Once again these are noble aspirations but far removed from reality. Globalisation is an idea that has been greatly over-hyped, yet governments’ freedom of action has without question been reduced as capital has become more mobile. Even the US may soon find it difficult to fund its ballooning federal debt. But if American capitalism is entering a crisis zone, Britain will not have the luxury of forging a new economic model; it will have trouble just staying afloat. Ralph Miliband’s pessimistic assessment of the future of social democracy could well be vindicated.
If one of the Miliband brothers wins the Labour leadership and becomes prime minister he will confront in an acute form the constraints on the power of the state his father astutely identified. Rather than controlling or reshaping capitalism, a Miliband government would find itself struggling to preserve Britain’s social democratic inheritance in the face of capitalism’s renewed disorder. Ralph Miliband seems never to have lost the Marxist faith that history would eventually open the way to a truly socialist society. He would surely have appreciated the curious dialectic through which it has fallen to his sons to defend the social democracy he so fiercely attacked.
Time for Labour to denounce that they were wrong with ATOS
Ramblings of a Fibro Fogged Mind
This letter is now closed to comments, if you haven’t had you comment approved yet don’t worry as I’m copying everything to give to sonia its taking a little time to copy and approve everyone but it will be done before the letter goes to mr Milliband… Thank you everyone for your support… Dxxx
Dear Mr. Miliband,
I am a UK-based journalist and broadcaster. Here is a link to my website. www.soniapoulton.co.uk.
On my site you will find all the media outlets that I contribute to across print, TV, radio and internet, nationally and internationally.
I am prompted to write to you having just watched these two programmes on the subject of ‘fit to work’ testing for sick and disabled people: Channel 4’s Dispatches (‘Britain On The Sick’) and BBC2’s Panorama (‘Disabled or Faking it’).
This year, as a writer, I have been made painfully aware of how…
View original post 692 more words
Nye Bevan lecture, given by Ed Balls
It is a great honour to give the 10th Bevan lecture:
To pay tribute to one of the towering heroes of the Labour movement;
To speak tonight alongside Geoffrey Goodman, Nye’s close friend and an authority on the man himself;
To join a long and distinguished line of past lecturers including Neil Kinnock, Gordon Brown, Robin Cook and my predecessor as Shadow Chancellor, Alan Johnson who have given this lecture.
And to understand why, 51 years after his death, we are still today celebrating the life and contribution of Aneurin Bevan to Labour and the trade union movement, you just have to look back at those past lectures and the tributes they paid.
But I am not going to start this lecture by quoting from the current generation of Labour greats who have paid tribute to Nye Bevan – but by quoting from one of the next younger generation of Bevanites.
Because I have been helped in researching this lecture by a young Bristol graduate, Ellie Gellard, the young woman who Labour chose to introduce Labour’s last manifesto in a new hospital in Birmingham.
And the name on Twitter she goes by?
And when I asked her to put into words why Bevan was her hero, she told me:
“Bevanism is the perfect political combination of principle and power.
“Nye was the most vocal proponent of a democratic socialism which actually delivered for the people it sought to help.
“A figure who, still today, shows us that to change society for the better, we need to be true to our roots and our founding principles, but to do anything for the people we represent, we first and foremost need a Labour Government.”
So let me start this lecture tonight with that good news: the legacy of Bevan is alive and well and being taken forward by the next generation of Labour activists.
And tonight, as Shadow Chancellor, I want to explain why Bevan is a hero of mine too.
BEVAN THE HERO
Everyone has a special reason why Bevan is a hero.
For some, there is the fact that he overcame great hardship. Born in Tredegar – the son of a miner – forced to leave school at 13, self-taught, then winning a scholarship to the Central Labour College in London, sponsored by the Miners’ Federation… these were his first step towards Westminster – to become an MP in 1929, make it to the Cabinet and then be Deputy Leader.
For others, there is the fact that – even before he was first elected to Parliament in 1929 – he had established a reputation as a brilliant speaker with that rare gift to inspire and lift an audience.
A great speaker – and such a colourful and controversial and sometimes frustratingly volatile figure – storming out of the Cabinet in 1951, expelled from the Labour party once, and almost a second time; passionately in love with his wife, Jennie Lee, a Labour heroine in her own right; a vocal critic of Winston Churchill, Ernie Bevin, the Daily Mirror, Tory “vermin” – and pretty much everyone else at some point in his career.
Of course, for all of us, it was his passion and compassion alongside his hard work, persistence and patience, delivered the greatest achievement of Labour in power of the last century – the National Health Service – his lasting legacy, renewed and reaffirmed in the twenty-first century by the last Labour government, and now threatened as never before by the current Tory-Liberal Democrat coalition.
And then there is the fact that Bevan never made it to be Labour leader, in part, and aside from that famous volatility, because he put his beliefs before political expediency at key moments in his career – which is, for some romantics, enough of a reason to bestow hero status. But again, he is far from being alone in the history of our Party.
For me, though, there is an extra special reason.
Because Bevan rose to be a senior figure in the Labour Party – and an impassioned platform speaker – despite struggling for all his life with a stammer.
And for Bevan, this struggle was the making of the man.
As John Campbell writes in his biography, this stammer:
“…did not make him hate himself, or in the least degree diminish his self-confidence. Instead it drove him… to public speaking, first at Sunday school, later at lodge meetings, as a technique of mastering the demon by meeting it head-on… he used to practice declaiming large chunks of poetry on walks with his sister, he became adept at using the stammerers’ device of using an alternative word when he might stick on the obvious one…”
Techniques which stammerers everywhere will most certainly recognise.
As Campbell concludes:
“Whatever caused Bevan’s stammer, and whatever scars his stammer left, the determination and ultimate success with which he faced, harnessed and practically eradicated it was the first revelation, and the first exertion of an exceptional will.”
Which is why, for stammerers like me, Bevan will always be a special kind of hero.
BEVAN: A VISONARY AND A PRAGMATIST
But my admiration for Bevan goes beyond the personal.
Because, as I argued at a special Guardian fringe meeting at our Party Conference in 2008 – organised to debate who is Labour’s greatest hero – Nye Bevan combined two important qualities both essential for success.
First, he was a visionary.
As Geoffrey Goodman has said:
“I can think of no one in Labour’s pantheon who evoked and inspired the vision of a socialist society more eloquently and vibrantly than Aneurin Bevan.
And in the words of Jennie Lee following Nye’s death in 1960:
“He was not a cold blooded rationalist…..He was no calculating machine. He was a great humanist whose religion lay in loving his fellow men and trying to serve them.”
Growing up in a mining community in South Wales he saw hardship first hand. For Nye, Westminster was therefore a place to build a better future for the people he represented.
And no task was too big or too daunting. While Beveridge set out the five giants threatening our post-war society, Bevan sought to slay as many of them as possible.
And while slaying demons, Bevan also famously took no prisoners among his opponents – in others parties and also, at times, in his own – coruscating about the economic mistakes of MacDonald and Snowden in 1931, woundingly mocking of Winston Churchill in 1945, and – typical of the rebellious streak that held him back politically – storming out of the Cabinet over the costs of rearmament in 1951.
But second, and despite these outbursts, Bevan was also a pragmatist – who always knew that principles and values required political power to make a difference.
As a Cabinet minister, he compromised when necessary. As a political leader, he was a realist who was prepared to take the tough decisions when that was not the politically expedient thing to do.
As Labour historian Kenneth Morgan has written:
“Bevan had a sense of the compromises and complications that the exercise of power might involve. The language of priorities, the relativism of his political philosophy, were essential ingredients of his outlook no less than the socialist bedrock.”
Or in the words of Bevan himself, at the beginning of the 1945 general election campaign:
“We have been the dreamers, we have been the sufferers, now we are the builders.”
Take the NHS.
His vision of healthcare – free at the point of use, based on need and not ability to pay, one National Health Service – was born of his own practical experience of hardship in the valleys of south Wales. And it was radical, challenging and difficult to come to terms with – for foes but also for friends too anxious at seeing local municipal hospitals nationalised.
But Bevan the NHS architect was also a self-confessed pragmatist.
After a long, complicated process of negotiation with the vested interests of the health-care system, during which the very future of the NHS itself was cast into doubt, Bevan put aside purity, giving the BMA important concessions on earnings and pay beds… but without ever compromising the founding principles of the NHS.
As he famously said, to get the doctors on board, he “stuffed their mouths with gold”.
And on defence and international affairs, too, we see this same combination of vision and pragmatism.
Staunchly internationalist, appalled by the post-war direction of Soviet policy, an early advocate of NATO, famously critical of the Korean War and its implications for Britain…
… his disavowal of unilateralism at the 1957 Labour Conference again showed his pragmatism in action – famously suggesting the consequence of such a policy would be like sending the Foreign Secretary “naked into the conference chamber”… all in the face of howls of protests from his Bevanite followers.
Indeed, it was disagreement over Bevan’s stance on disarmament which provoked the famously Bevanite Tribune newspaper to part company with Nye, who had been a board member at its launch in 1937.
And as monthly columnist of Tribune myself now for over eight years, I know that Nye Bevan would want me and all of us today to celebrate the news that, despite its financial troubles, an agreement has been reached with the proprietor and staff to allow the paper to continue as a co-operative – I hope securing the future of this august and historic part of the Labour movement.
BEVAN AND THE ECONOMY
Bevan – a visionary and a pragmatist – on the NHS and defence… and on the economy too.
Over the past year, I have regularly said that Britain and the world must learn the lessons of the early 1930s – the mistaken austerity, the misplaced policies of the coalition National Government, the failure of international cooperation – if we are not to repeat the mistakes of those years.
And coming into Parliament in 1929, the year of the Wall Street Crash, the second biggest financial crisis of the last hundred years, the trigger for a decade of stagnation and rising unemployment, Bevan’s speeches are highly instructive for today’s economic debate.
From the outset, Bevan argued, at a time of financial meltdown, that to do nothing, to fail to take a lead, to blindly accept the consensus…was a complete abdication of the responsibility of political leadership.
In his biography of Bevan, Michael Foot describes a conversation between MacDonald and Bevan:
“the premier explained how his economic advisers had told him the crisis had passed its peak, how the unemployment figures would soon be turning the other way, how ‘recovery was just round the corner’, how if the Party avoided internal embarrassments it might soon be able to face the country with renewed prospects of victory. Bevan left the interview in despair.”
And Bevan was deeply disparaging of the new National Government’s attempts to blame everything on the previous Labour government, speaking in the House of Commons in December 1931:
“it would be foolish for hon. members to say, as some have said, that this crisis is due to (2 1/2 years of) Socialist Government. That is too frivolous…it ignores the fact that in countries which have not enjoyed the advantages of a Socialist Government the crisis is even worse… if that were so, the defeat of that Government and the mere coming into existence of a National Government would have resuscitated British industry, and it would be showing signs of immediate revival, whereas it is lying prostate as ever.”
Sounds familiar too?
But while angry in his opposition to the economic failings of the coalition, and desperate for an alternative vision, Bevan’s pragmatism and realism again shines through in that debate:
“If you have a certain purpose in view, you seek for the right instruments to carry out that purpose, and the National Government, if it is to justify itself, must declare its purpose and plan… is it not obvious that the PM is merely fobbing off the House of Commons with one tit-bit after another in the hope that time will come to his rescue? I would prefer to see in power a strong party Government with a party programme, clearly thought-out and boldly executed, than this stalemate, the miserable conspiracy which today is called a national government… Let us face our problems in the spirit of realism.”
And what happened next?
The national Government did not listen to criticism – whether Labour Bevan or the Liberal John Maynard Keynes. And what followed? The Great Depression of the 1930s, mass unemployment and – yes – the deficit got worse.
As I said to the Labour Conference this year and last: you either learn the lesson of history or you repeat the mistakes of history.
That is why I have argued that, facing a similarly dangerous economic crisis today, we need our political leaders to put ideology aside, demonstrate the same pragmatism and look at the facts.
And in setting out Labour’s alternative five point plan for growth and jobs at this year’s Labour Party Conference, I drew again on the parallel with the 1930s, arguing that our country – the whole of the world – is facing a threat that most of us have only ever read about in the history books – a lost decade of economic stagnation:
– The aftermath of a worldwide financial and banking crash;
– Families and businesses fearful about the future, cutting back on spending and investment;
– Governments all around the world trying to cut spending at the same time;
– Demand sucked out of the economy;
– Stock markets tumbling, banks in trouble, economies stalling, unemployment rising – a vicious circle as slow growth makes it harder to get deficits down;
– Not a crisis of any one country or continent – but a spiralling global crisis – from which no economy can be safe…
– … Threatening the jobs, pensions and living standards of families here in Britain and across the world.
Not – as the Conservatives claim – simply a crisis of public debt which can be solved – country by country – by austerity, cuts and retrenchment – but truly a global growth crisis which is deepening and becoming more dangerous by the day.
The world must remember the lesson of the 1930s: that there is no credibility in piling austerity on austerity, tax rise on tax rise, cut upon cut in the eventual hope that it will work when all the evidence is pointing the other way.
A conclusion that, for all his – in my view – misplaced antipathy to John Maynard Keynes, I am sure that Bevan and Keynes would today agree with.
And this Bevanite combination of vision and pragmatism must continue to guide us now – in opposition, and as we develop a credible and radical programme for government. And I choose the words ‘credible’ and ‘radical’ with care.
I believe it would be a profound mistake to now shy away from setting out our values and a radical vision for the future. In the face of a right wing and ideological government, core Labour values of fairness and social justice are more important than ever.
But we must show that we do not hold values for their own sake or for show. Our beliefs and principles are our reference point but we must also show what they mean in practice, how they are relevant to people’s lives in the 21st century and how they will guide our work in building a better Britain in the current economic and fiscal conditions.
And that means our opposition and our vision for government must be credible as well as radical and based on our values. Because we must make clear that part of that vision is rooted in a robust and credible economic analysis – to persuade people in their heads as well as their hearts to come back to Labour again.
The fact is that we do have a radically different set of values and approaches to this Conservative-led government.
Where Margaret Thatcher promised to “roll back the frontiers of the state” and Michael Howard smeared a publicly funded NHS as “Stalinist”, in government we recast Labour’s mission to proclaim: “by the strength of our common endeavour we achieve more than we achieve alone”.
As a matter of ideology, based on their values – whatever the Conservatives say about the responsibility we all have to act together – they will not do what is necessary to deliver social justice and opportunity for all. It is the same old Conservative ideology of small state and deep spending cuts, leaving the vulnerable relying on charity.
So instead of the private and voluntary sectors working alongside an empowering and enabling public sector, the involvement of charities and businesses is being boosted not to enhance public provision but to undermine it. Each new policy, fresh initiative or hasty Bill pushed through Parliament sees the state being withdrawn from support for the economy, the family and public services.
I take a different view of the importance of supporting the economy and sustaining public services and protecting those on lowest incomes as we ensure the deficit comes down in a steady and balanced way – a different view that is as important to our economic success as it is fundamental to our Labour and cooperative roots.
They have a narrow view of the role of the state – that it stifles society and economic progress. We have a wider view of the role of state – a coming together of communities through democracy to support people, to intervene where markets fail, to promote economic prosperity and opportunities.
They have a narrow view of justice – you keep what you own and whatever you earn in a free market free for all. Ours is a wider view of social justice that includes equal opportunities, and recognises that widely unequal societies are unfair and divisive.
Far from thinking that electoral success is based on the shedding or hiding of values, I believe we now need to champion those values and the importance of a fairer Britain – to show we are on people’s side after all. We need a much stronger, clearer vision of the fairer Britain we will fight for – very different from the unfairness and unemployment the right wing coalition’s deep and dogma-driven cuts will cause.
The dividing line at the next election will remain between progressives who believe in rights and responsibilities – strong communities, supported by enabling government with a strengthened voluntary sector guaranteeing fairness and justice for all, and Conservatives who do not accept that there is a collective responsibility and are determined to pursue deep cuts in spending, leaving the vulnerable with less support and charities stepping in.
But it will not be enough simply to set out warm words and wishful thinking. It is not enough to wail that cuts are unfair, because if the Tories can persuade people they are unavoidable we won’t win the argument.
That is why the real lesson from New Labour’s political success was the importance of combining our values with economic rigour and tough fiscal disciplines. That is why it is vital that we show that deep Tory cuts are avoidable as well as unfair.
So my vision for Labour has at its heart an alternative economic plan to the devastating strategy of this Conservative-Liberal Democrat government; an alternative plan that is rooted in economic history and analysis as well as Labour values and principles.
Because just as Ramsay MacDonald and his chancellor Philip Snowdon did after the biggest financial crisis of the last century, David Cameron and George Osborne claim deep spending cuts are unavoidable to slash the deficit and satisfy the markets.
It is the same strategy then and now to ease pressure on sterling and hope that downward pressure on wages would boost competitiveness and trigger a private-sector led economic recovery.
But then as now the promised private sector recovery has failed to materialise as companies themselves retrench, unemployment is rising, and growth is stagnant.
The government says deep cuts are unavoidable – and when I say they are wrong – that the spending cuts and tax rises go too far and too fast and are a political choice, not economic necessity – Cameron echoes MacDonald and calls his critics “deficit deniers”.
They enthuse about a private-sector led economic recovery; they say the governor of the Bank of England; and that the financial markets demand rapid deficit reduction. But that argument was always nonsense – as the stagnation of our economy for the last twelve months has shown.
First, there is no precedent to believe that, with slowing growth in our main trading partners and companies deleveraging, public sector retrenchment will stimulate private sector growth. The 1930s and 1980s proved the opposite. And we have seen in recent months that private sector jobs have failed to fill the gap left by cuts to public sector jobs.
This argument is as specious as the government’s claim that the reason why we have a large deficit is because of Labour’s spending prolificacy. The truth is that Britain started the crisis with lower national debt than America, France, Germany and Japan. It was a global crisis triggered by the irresponsibility of bankers not public servants – it was not too many teachers, nurses and police officers in Britain which caused the Lehman Brothers investment bank to collapse in New York.
Second, while I respect Mervyn King, 1931’s bank governor Montagu Norman also strongly advocated the “Treasury view” that rapid cuts were necessary. Sometimes even bank governors get it wrong, especially when the political and media wind is blowing so strongly in one direction.
And third, the idea that the UK faces a financial crisis if we do not cut the deficit faster is a fiction. Outside the Eurozone and with low long-term interest rates, Britain faces no difficulty servicing its debts, and the main worry in financial markets is now about the absence of growth.
What matters to market credibility is not how tough politicians talk on deficit reduction, but whether their plans are deliverable. Savage cuts which hit the economy or are politically undeliverable won’t in the end achieve sustainable deficit reduction or build market confidence either. In fact, the government is already set to borrow £46 billion more than they planned.
That is why I believe we need a slower, steadier, fairer deficit reduction plan, which does not put jobs, growth or front line services at risk, is more likely to succeed and have market credibility too.
So yes, there is an alternative. And following in the tradition of Bevan and Keynes, it is Labour’s responsibility to set it out: a clear five point plan for growth and jobs, a more sensible timetable for deficit reduction, and a robust explanation of why that will better support our economy and public finances.
We do need to set out distinctive values, ideas and vision for the future. But the risk is that we talk only of our values and visions and fail to focus on the economic realities we face and persuading people.
That is why we must set out spending discipline and tough new fiscal rules alongside action now for growth and jobs to get the deficit down.
In the 1990s the challenge for Labour was to win people’s heads as well as their hearts. After 13 years in government we lost too many hearts. We have to win them back. But in the process we also have to win their heads too. We need a credible and radical programme for government.
That’s how – drawing upon a Bevanite combination of vision and pragmatism – I believe we combine our values and the pursuit of electoral success so we can put them into practice too.
So it is clear why Bevan is a hero of mine… stammering, the NHS, defence, the economy – a pragmatic Labour visionary.
But let me return to the argument I made at that Guardian fringe meeting of three years ago, at which the Guardian political columnist Martin Kettle asked me to make the case for Nye Bevan as the greatest Labour hero of the past one hundred years…
That he is a hero of our movement is beyond doubt, right up there with Keir Hardie, Clem Attlee, Barbara Castle, Tony Crosland, Neil Kinnock and (– yes – )Tony Blair and Gordon Brown too.
But the greatest hero?
What is extra special about Nye Bevan, I argued, is that his passion, his values and his example inspired a succeeding generation of followers, the Bevanites, who were loyal to their hero and determined to nurture his legacy in a way that no other Labour figure has achieved.
Keir Hardie and Clem Attlee were great leaders who paved the way, but who were the Hardie-ites, the Attlee-ites?
Barbara Castle? Well she was a Bevanite, as was Harold Wilson, Michael Foot and Neil Kinnock.
And, unlike ‘Gaitskellite’, ‘Bevanite’ remains a meaningful term – still today invoking a Labour vision of a better and more equal society.
That is why, I argued, Nye Bevan deserves the title of Labour’s greatest hero.
And what greater tribute to the great man than that he is still a hero today – his name evoked by a new generation to describe their approach to politics.
Ladies and gentlemen – just ask Bevanite Ellie…
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Posted November 1st, 2011 by Ed’s team
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