Sunday, 13 June 2010

Why New Labour failed in forging the case for social democracy

Labour needs to return to a mature, respectful, modern social democratic agenda. New Labour tried to do this - it tried to marry the ‘traditional values’ and place it in the ‘modern setting’ that John Prescott alluded to. But New Labour did not succeed in marrying the timeless traditions of the party and placing it in a pragmatic setting. Of course the increased investment in public services, 600,000 children out of poverty, giving dignity to old-aged pensioners once more, the minimum wage, the Human Rights Act, civil partnerships and the equalization of the age of consent, aid to Africa and much more were wonderful successes of the last government. We should not forget these brilliant things.

Yet New Labour did not do enough to challenge the conservative orthodoxy with relation to the relationship between the individual and the state. It did not give clear credence to reminding people - especially high earners - of their responsibilities to society. Bankers earned huge bonuses whilst playing casino capitalism through the lax regulation of financial markets that hit ordinary people with repossessions and job losses when the chickens came home to roost during the recession. Tax rates were left unchanged at the top for the majority of the time Labour was in government. Any increases in indirect taxation, National Insurance, and other ‘stealth taxes’ only undermined the progressive taxation cause with which Labour should have shouted from the rooftops until it was red in the face. It also undermined the trust that citizens had with government, and as a result, trust in the State.

When citizens feel that the State is not listening, they do not feel empowered, and when they do not feel empowered then they feel that the government is on their back and turn to attack its very being. The whole purpose of social democracy is to empower those people who feel shut out of society. Solidarity with others. A collectivi st society. Promoting fairness and equality. That New Labour was aware of the feeling people still felt the State was not listening to them it is probably safe to say, but during the years of plenty - in respect of high tax revenue, economic growth and electoral success - it chose not to break a good thing and challenge and confront directly what Tony Blair promised to: the “forces of Conservatism”.

That New Labour did not attempt to radically re-alter the relationship between the citizen and State only undermined its cause. Using the State to make people feel fearful, concerned and worried when instead it should have been reassuring, respectful and tolerant by the promotion of ID Cards, the DNA database as well as numerous anti-terror laws and control orders only weakened the ability in peoples eyes of the state to be a force for good. It played into the hands of right-wing and conservative critiques of the ‘overbearing state’ and ‘big government’.

New Labour should have been more confident of its own mission and more confident of the ability of social democratic ideology to challenge conservative dogma about the State. If it did, it could have made the case confidently for being more progressive in dealing with the recession by rebalancing tax rates further so that indeed ‘those with the broadest shoulders’ did bear the biggest burden by making the new 50% rate permanent. It could have introduced the Future Jobs’ Fund earlier, therefore embedding the importance of using the State for positive ends and using government to help people when the private sector couldn’t. Financial regulation should have been tightened earlier. VAT could have fallen earlier together with increasing tax allowances for those on the smallest sums, thus making the tax system fairer on the worst off and balancing it with higher taxes in other areas (such as corporation and capital gains tax, which fell under Labour). It could have made the case more strongly for using the minimum wage to secure the basis for a living wage and eliminating low pay altogether.

While repeating the mistakes and disasters of the early 1980s must be avoided, Labour should use the current situation at Westminster to reinforce the ideological differences between the ‘ConDems’ and us. This means being more upfront and honest about that fact that Labour is the only party of progress that exists in the mainstream of British politics now. We should seize the moment. The Conservatives and LIberal Democrats are going to use the current situation with regards to the deficit as a way of solidifying the concept of the role of government as “bad” and will use public sector cuts, in the name of economic prudence, as a way of rolling back the State and reducing the importance of the public sector to a level that could bypass the damage done of the Thatcher years.

Whoever is the new leader of the party should remember the triumphs but also the mistakes of the New Labour years and attempt not just to rebuild the internal structure and morale of the party, but also look at the wider picture and be more brash and confident at forging a social democratic agenda for change together with making the case for the State as a force for good.

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