Tuesday, 1 May 2018

What will the local elections tell us?


This Thursday, Britain's political parties face their first major electoral challenge since last June, when Labour's unexpectedly strong showing raised spirits across the Left. It's going to be a big night, at least in England (Northern Irish, Scottish and Welsh voters might be tempted to skip the rest of the post, though Thursday night's results might give us quite a lot of clues about the future government of the UK as a whole). All of the councillors for London’s boroughs are up for election, along with one third of councillors in Metropolitan Boroughs – and all of the seats in the following big cities: Birmingham (above), Leeds, Manchester and Newcastle. The same one-third count in 17 unitary authorities are also up for grabs on councils such as Portsmouth, Reading and Slough, as well as 68 second-tier districts such as Ipswich and Lincoln.

The opinion polls right now seem stuck, and as such might not be much of a guide to detailed local and regional performance. Both Labour and the Conservatives seem to be hovering a little above the 40 per cent mark that they both cleared back at the June 2017 General Election. The Conservatives, probably and slightly, have their noses just in front: but really, given the only middling record of British opinion polls, it is hard to be sure. Taken as a whole, the polls at the moment just about point to a continuing Conservative minority government, able to govern (as now) only with the help of Northern Ireland's Democratic Unionist Party. But the polls are so close, and so many seats out there to be won are on such a knife-edge, that your guess is as good as ours, really. It's just as likely that Labour would be able to seize power, albeit very tenuously, and only in their turn with the assistance of the Scottish National Party, the Welsh Nationalists Plaid Cymru and the single Green MP, Caroline Lucas. And the acquiescence of the Liberal Democrats, which may or may not be forthcoming.

This is, however, where we can start to draw out the significance of what we do and don't see when checking the results on Friday morning. On the surface, this might be a bit of a standstill contest. The Conservatives have painfully built up a one or two per cent lead on average in the polls, varying between a lead of five per cent (with Matt Singh's Number Cruncher Politics) and an exact draw (recorded by ComRes): but the last time most of these wards were fought, in May 2014, it was Labour that had the edge. Labour’s lead was just under three per cent that month, with a rather bigger range between a lead of seven per cent and a deficit of one per cent.

On a uniform swing, given that Labour is not performing quite as well as against the Conservatives as it was early in 2014, we might expect Labour to gain no more than a few scores of new councillors. That swing between the relevant, equivalent contests is in truth quite small (of just under three per cent): but it is there. So although Labour should be looking forward to quite a good night at this stage in a Parliament, overall it might be quite disappointed if the polls are any guide. Except they might not be, partly because the relationship between Westminster polling on alternative governments and local election scores isn't particularly good. Remember the 2016 locals, held at a time when the Tories had their noses in front a bit in the polls? Labour came out on top when the National Equivalent Share of the vote was calculated. But instead of just putting up a big shrug emoji, let's take a look at the known unknowns involved.

There are two big unknowns on Thursday night, and they make the result in terms of both vote share and council seats very uncertain indeed. First, and most importantly: where will the United Kingdom Independence Party's voters go? They won seventeen per cent of the vote, and 166 councillors, the last time these wards were up. But UKIP right now seems to be in advanced state of decomposition, with national leadership woes, defecting councillors and huge falls in its vote at council by-elections all contributing to the suspicion that they will lose almost all, and perhaps every single one, of the council seats they contest this year. In last year's General Election, most of these voters went to the Conservatives. If that's true again this week, then lots of seats will fall into the Conservatives' hands. Not just UKIP ones: potentially Labour ones, too, often in quite working-class bastions of previous Labour strength. But if Labour can detach more of these voters than they have hitherto managed, they will hold off any potential Conservative surge in (say) Walsall, Basildon, Peterborough or Rugby.

But some of those voters will simply not now turn up at the polls, and some smaller but significant chunks of ex-UKIP support – for instance in smaller English cities or struggling coastal communities – might heed Labour's renewed populist appeal to discontented 'left behind' voters. This might just make up for any anti-European (and anti-immigration) sentiment that continues to thrive in ex-UKIP heartlands, helping Labour overcome the barriers between them and these potential sources of support. Councils such as Hartlepool, North-East Lincolnshire and Great Yarmouth are worth watching in this respect. What will be the mix of Brexity Ukippers moving over to the Tories, those going back to Labour if that's where they came from in the first place, and those abstaining - especially in these traditionally quite low turnout contests? We simply don't know. The Conservatives will probably lose seats this year, but the exact scale of their retreat will outside London depend on this mix of choices, not by straight switching between the main red and blue teams.

The second element complicating the picture is the performance of the Liberal Democrats. They normally do quite well in local elections, even at time when they are struggling on the national stage. They managed to gain 18 per cent of the vote in the 2017 local elections, just a month or so before they went on to gain under half that total at the General Election only a month later. They managed to score 13 per cent in 2014, when they were recording between five and ten per cent in the Westminster polling. Can they attract pro-Remain voters in urban areas, perhaps detaching them from Labour? If they can, they will blunt the Labour attack just as surely as UKIP defectors to the Tories and ex-Labour Ukippers staying at home will. The Liberal Democrats themselves will probably have to comfort themselves with some progress in, and perhaps capture of, Kingston and Richmond councils in South-West London, their leader Vince Cable's own heartland... and, not very coincidentally, the sites of some of the heaviest Remain votes in the whole country. But their effect elsewhere could be to slow Labour's moves forwards. 

We suspect that these local elections will in fact show that a great, quiet sorting among the British electorate is still underway. Put very crudely, blue collar Britons outside cities are gradually trending towards the Conservatives, while higher-income and more liberal areas are gradually being shaded in pink and red. It is hard to avoid the impression that Brexit – and, more importantly, the cleavages of age, geography, social status and cultural outlook that it highlighted and revealed – has gathered voters in England and Wales into two tribes. The first, very crudely made up of relatively socially conservative over-50s who live in medium-sized towns and across a relatively settled Deep England of suburbs and villages, has seen at least the single largest group among 2015 UKIP supporters move over to the Conservatives. But there is a second Britain, mainly living in cities and radical university towns, and full of the under-50s trying to raise families or make their way in a punishing job and housing market – and in which Labour has hoovered up most left-leaning Liberal Democrats, ex-Greens and voters who previously backed smaller Left parties.

So look for grounds of relatively high-income public sector workers, professionals, liberals, well-travelled Remainers, black and minority ethnic Britons, as well as relatively well-educated young people. Wherever you find them, Labour will do well, and the Conservatives will be giving up territory that, however well-established, is increasingly hostile to their Hard Brexit fervour for a Britain that never really has been, and certainly doesn't exist now. This situation seems unlikely to change until the reality of Brexit dawns, and a new Prime Minister takes over from Theresa May. Only then will some of the likely lines of the next election become clearer. But these local elections – taking place this time only in England – will give us some precious pointers as to whether the country really is resolving into two hostile camps, eyeing each other warily in a kind of cultural Cold War. If the Labour challenge is deflected just where Leave did really well in 2016 (so for instance in Amber Valley, or Thurrock), while they triumph in more Remain-friendly areas such as Trafford, then the long-term trends we sense are there get another tick in the box marked 'actual evidence'.

A number of interesting contests should be to the fore here. This complex balance of Leave versus Remain, the extent of UKIP decline or collapse, Liberal Democrat success or failure, and most profoundly (albeit slowly) of urban liberalism versus ex-urban cultural conservatism, should sharpen up our questions. Will Labour continue to make progress in towns that look more and more like distant London suburbs – in Reading, for example? Will they continue to attract ex-UKIP voters in poorer southern towns and cities, such as Plymouth? In the same vein, will they push their vote even higher in Hastings, where they did quite well in 2014 and which is part of now-ex Home Secretary Amber Rudd’s very vulnerable Westminster seat of Hastings and Rye? Can Labour up their appeal in relatively blue-collar Harlow – a seat they held until 2010, but in which the Conservative Robert Halfon presently enjoys a 7,000-plus majority? What about Dudley, where the Conservatives did very well – in both Labour Dudley North, and Tory Dudley South – in 2017, and which witnessed yet another great big victory for Leave in 2016? There will be myriad clues in the details.

London, of course, now looks like a completely discrete political city-state: it behaves in quite different ways to the rest of the country. But it is still set to be the most important battleground this year, and all indications are that Labour will do extremely well here. It's increasingly a red city. Its entire cultural outlook - the whole feel of the place - sometimes gives you the sense that city is Labour, rather than simply voting Labour. Labour did very well in the capital at the 2017 General Election, achieving a swing of over six per cent and taking three Conservative seats. London is in general full of those Remain voters, social liberals and renters who are increasingly slipping out of the Conservatives’ orbit: European Union citizens are also eligible to vote in these elections, they are disproportionately concentrated in London, and they are unlikely to look kindly on Mrs May’s party. In addition, Labour's membership boom is concentrated in London and the Home Counties, and the street-level campaigning that allows the party to mobilise seems particularly appropriate in densely-populated city streets.

Such is the increasing grip of the metropolitan media, that it is probably in London that the headlines will be made. Although the latest YouGov London polling in late April showed very little change in voting intention since the general election, there seems to have been a huge seven per cent swing from the Conservatives to Labour since the last time these boroughs were contested in 2014. Labour can certainly hope to take control of Barnet, and may even find themselves running Wandsworth: they might just be able to manage to seize control of the Conservatives’ symbolic borough of Westminster too. If they do manage all that – and the last result would be a huge stretch – then Mrs May’s leadership of her party could immediately come under even greater scrutiny. Be warned, though: Labour is already so dominant in the capital that it's hard for them to move forward very much in terms of councillors, and the Conservatives are so entrenched in Wandsworth and Westminster that it requires a big swing (7.5 and 8.8 per cent, respectively) to get them out. In Barnet, once thought a certain Labour gain, the party might well suffer among Jewish voters for its anti-semitism scandal. We suspect that Labour is going to come very close or actually win in Wandsworth, but it's hard to tell. 

Altogether, Labour is likely to come away with a medium-sized haul of new councillors. The Conservatives are likely to get a real hammering in London, while holding the majority of their ground across most of the rest of the country. But that London result should not breed the type of complacency on the Left that the 2017 General Election – Labour’s third defeat in a row – inexplicably seems to have evoked in many progressive partisans. Oppositions are supposed to gain councillors. Labour added 88 councillors in 1984, and 76 in 1988 – the first contests after their disastrous election losses in 1983 and 1987. After those admittedly very small gains when expressed as a proportion of council seats up for election, they still went on to lose the next election.

The real test is to be had at a more granular, and perhaps more challenging, level. Labour must break out of London, do well across areas where UKIP has previously succeeded, and show that they can move forward in seats that are marginal at Westminster while fighting back in Brexit Britain. If they can do all that, then they might be heading for government after all.

This is an updated and expanded version of the author's article on the same subject in the spring issue of The Fabian Review, entitled 'Poll Position', which is available here

Next time: the text of my inaugural lecture, followed in June by a review of Labour's policy prospectus as it stands now. There's always more where this has all come from... 

Monday, 2 April 2018

The Conservatives' Prospectus is Plain Wrong


The UK’s Conservatives are probably feeling pretty chipper at the moment. They’ve managed to just about hold together during the process of leaving the European Union, a drawn-out crisis that has the potential to blow their party apart. The economy is still growing (and producing many, many more jobs than most thought possible). The main Opposition Labour Party is engaging in one of its tragi-comic periods of internal confusion and red-on-red civil war – while wearing a nasty-as racist face that many of its activists simply refuse to see. For the first time since the disastrous snap election of 2017, they are ahead in most of the polls. Theresa May’s rating as Prime Minister (above) just reached a new post-election high against the numbers plumping for Labour leader Jeremy Corbyn. Perhaps, Conservative activists might hope, things are finally on the up.

They are wrong if they think that they are emerging from their lack-of-comfort zone. Their lack of ideas is going to continue to hurt them all the way to next polling day. The economy looks unlikely to come to their aid. If nothing is done, public services are also going to seem threadbare indeed – a prelude to the party’s disastrous defeat in 1997. And most of all, their basic presumptions, and their backstop case to the electorate, is total nonsense. Let’s look in turn at some of their psychological furniture, and elements of their rhetoric, each bit of it as unimpressive in analytical power and descriptive force as the last.

The Brexit dividend. Let’s not rant on about Vote Leave’s notorious red bus any more, please. You know all about how misleading that was. But Ministers, including both the Prime Minister via omission and evasion – and the Foreign Secretary, in person – continue to encourage the damaging illusion of increasing public spending via the return of Britain’s EU membership fees. To which the only response possible is: are you joking? Where have you been for the last twenty-one months? Let us spell it out for you yet again: There. Will. Be. No. Brexit. Dividend. Slower growth will eat almost all of that money up, and then some. The whole idea of a Brexit dividend is a myth - just like many of the other old saws that the Leave team has always treated us to. 

We could even throw some numbers around, if you like. Foreign Secretary Boris Johnson has talked, in his usual pie-in-the-sky manner, about using Britain's now-unspent EU membership fees on increasing National Health Service funding by £5bn a year. The Office for Budget Responsibility has, again and again, pointed out how nonsensical that is, with up to £15bn per year going missing from the Treasury's coffers. If the UK were to leave the Customs Union and the Single Market - and it looks like it will leave many of the latter's functions - the cost could be very significant indeed. Even on the most recent and quite optimistic estimates of a good and solid free trade agreement with the EU, Whitehall might be £3bn-£4bn short of where it would have otherwise been every single year. So, yes, you can cut a quarter of the Transport budget, or get rid of unemployment benefit altogether, but get real. The real Brexit 'dividend' will be even more cuts than we're already likely to endure.

The repatriation of powers. The Leave campaign held out the promise of Britain controlling its borders; making its own laws; deciding its own destiny. Fair enough, in some ways. There is no doubt that membership of the EU means sharing sovereignty – inevitably giving up or merging some of it, in the hope of wider gains as everyone’s power is multiplied. But Brexit’s transition phase is going to take a great deal of the shine off this promise. Britain is pretty much going to remain in the EU until the end of 2020, with not much to show – on migration, spending, even fishing – for leaving. Except being excluded from the European Council and Parliament, where all the decisions are made. Even more seriously, life after the transition period won’t look like a clean break either. The Prime Minister is clear that Britain wants to participate in all sorts of institutions – from the EU’s aviation rules, via the Erasmus student exchange scheme, to the European Space Agency – that the country used to be a member of as of right. That’s going to cost the UK quite a bit of cold, hard cash.

Not only that: through the mechanism of a ‘deep and special’ trade partnership, Mrs May wants to recreate key elements of the Customs Union without actually calling them that and scaring the frightened Eurosceptical horses within her own party. That’s fine (and entirely rational): she’s proceeding, albeit very slowly and crabwise, to isolate the ultras within her own Cabinet, and on the backbenches, so she can seal a historic compromise. But the trade deals that Britain can then reach will be much paler things than they might once have been – kind of obviating the whole point of leaving at all. Once, the British strained to secure opt-outs: from the Social Chapter of the Maastricht Treaty, or the creation of the Euro. Now, they want a load of opt-ins, to rebuild a relationship they just throw on the floor, like a 1,000-piece jigsaw they’re now going to have to put back together in a wonky pastiche of the relationship they spoiled just a few months ago.

Falling immigration. There is no single term that explains Brexit more than the single word ‘immigration’. The relatively sudden entry of millions of Eastern Europeans into parts of the UK that had often not experienced much immigration just stretched the elastic of consent to the limit. So the Conservatives think that lower immigration will help them with those relatively low-income voters that often flocked to their banner in 2017, winning them some seats that had been Labour for generations. It’s likely that’ll succeed, to some extent. But it may do the Conservatives more harm than good overall. For there’s also little doubt that immigration helps the British economy, overall, to reach towards those growth rates that pay for public services. That if Britain isn’t careful, labour shortages will replace a relative glut of workers. And that growth will be held back as a result. It would of course be open to London, then, to issue more work permits and visas. Sovereign states all round the world take a view every year, or every few years, of what they want, and act accordingly. Will immigration go on falling, as it has over the past year or so? We wouldn’t bet on it.

Yet again voters will say: ‘Is that it? Is that what we voted Brexit for?’ In those circumstances, it should be little surprise that the British seem to have been warming a little towards immigration, as recent figures from Ipsos-Mori reveal (opens as PDF). This has the potential to get poisonous for the Conservatives’ new coalition of hard-up workers and richer, older people. They will get caught in a vice, between that bedrock of hardcore anti-immigration feeling they’ll have disappointed, and more mainstream voters if they start to get a case of the Bregrets.  If they see EU citizens making for the boats, voters will get very, very worried about the staffing of schools and hospitals, at the same time as they face up to higher prices for all sorts of goods and services (including food) that they have become accustomed to grabbing on the cheap. Keep in mind that a General Election electorate looks quite Remainer-y compared to that of the 2016 referendum: and that older Leave voters will have an inevitable tendency to exit that electorate as time goes by.

A growing economy. It looks like the economy is going to keep growing over the next few years. Not as quickly as it probably would have done without Brexit, it has to be said, and at a rate that would make a snail blush. There’s lots of reasons for that. British productivity increases, for one thing, are so embarrassingly bad that the word ‘embarrassing’ doesn’t do them justice. Brexit has caused something of a confidence blow to the system. British consumers are becoming very indebted again, and the UK’s service- and retail-based economy is probably straining against the best it can do. On the other hand, even Britain’s anaemic rate of growth should be enough to clear the deficit. At last. About six or seven years after the Conservatives first said that they could manage that feat. That will allow the Tories to get a bit more spending going in the public sector (we now already see the first signs that pay restraint is fading), and to promise more in the next Parliament.

But no-one’s going to feel this for a long, long time. The best projections we have for real wages is that they’re going to creep up,very slowly, only crawling past their 2007/2008 peak over the next year or two. Things are going to feel gritty, in the longest, slowest, most underpowered recovery we’ve experienced for perhaps two centuries. That’s going to hurt the Government. And at a time when record low interest rates and lots of savings in emerging economies might accelerate and attract more investment (in a country with an almost laughably child-like public transport system, for instance), the Government just is not doing nearly enough to head off such damage. It could force up what it calls the National Living Wage even more than it already has. It could allow cities and regions to borrow more. It could unleash the power of the housing market to buoy up its political fortunes, as Conservatives did in the 1930s, the 1950s and the 1980s. The present signs? They’ll do none of these things, but rather leave Britain on its current slow road to prosperity.

More opportunity all round. One key point Mrs May lasered in on during her early days in No. 10 was the plight of the so-called JAMs – those Just About Managing citizens who were working hard, perhaps at more than one job, but didn’t seem to be getting anywhere. They have enough to get by, but there’s absolutely no leeway at the end of the month. Just a little thing – a car bill, in policy terms a small interest rate rise – could tip these families into insolvency. There’s millions of these people, often disappointed that capitalism hasn’t granted them much actual capital, and there’s lots of them in swing marginals across the English North and Midlands. If the Tories could just reach them, went Nick Timothy’s reasoning while he remained as Mrs May’s key adviser, they’d sweep the board.

Well, yes – except that inequality is likely to get a lotworse over the next few years, after many years of stagnating, or even gently falling. That won’t do much for the JAMs’ sense that the world is fixed against them. Tax credit cuts, the egregious cruelties of Universal Credit and the like, and stagnating real wages, are unlikely to open up any opportunities for anybody - at a time when there is real suffering in parts of the country. What was the Conservatives’ answer? Grammar schools. A system that was ripped up in the 1960s because the ‘science’ behind selection at the age of eleven collapsed, and also because precisely these sorts of economically in-betweeny people revolted against them, when their children failed to gain entry. And not even a lot of grammar schools – just their extension where they already exist, and where the Conservatives, perhaps, are powerful enough to push them through. Given the party’s lack of a majority, even that’s now been kicked into the long grass. Some meritocracy.

No doubt the Conservatives are enjoying their little bump in the polls. Foreign policy, and in particular Russia’s reckless attack in Salisbury, has come to their aid – for now. The Leader of the Opposition is busy reminding voters about all those doubts they first had about him. When it comes to their own dirty laundry, Labour is bumbling around like a blindfold man in a sealed room. Inside a shipping container. On a boat that’s sunk. To the bottom of the Mariana Trench.

But zoom back from the day-to-day, and the Conservatives’ basic presumptions, and their direction, are wrong. Their crippling caution speaks to a dim low-on-thought twilight zone that desperately needs pepping up. But that’s hard to do while you’re governing: it's certainly very, very difficult indeed without a majority, and in the midst of Brexit. They have options. They could adopt a startlingly liberal appeal to a kind of new, surprising Toryism – modern, dynamic, fissiparous and liberating. Right now, Scottish Tory leader Ruth Davidson could probably win many, many more urban and suburban Labour seats than any other potential Conservative leader. Or they could grab hold of a working-class agenda that focused on fairness and opportunity, spreading wealth and power in all directions – as their MP for blue-collar Harlow, Robert Halfon, constantly urges them to do. Instead they’ll probably drift, hoping that Labour’s hand-to-hand fighting gifts them the next election. As we’ve seen, that’s a very dangerous presumption indeed.

You can break all that down into its constituent parts. The Conservatives apparently believe that Brexit will bring some money back into the Treasury’s coffers, and untie their hands to reform the economy. That is vanishingly unlikely. They think that falling immigration is going to continue to burnish their nativist credentials with ex-UKIP and ex-Labour voters. That may be true, but squeezing the numbers much more will be hard – at a time when the public seems to be thawing to the idea of people coming in anyway.

Tories seem to believe that the ‘free market’ is a thing of beauty, as well as a fact of nature. In a world economy increasingly likely to look nationalistic, protectionist and competitive, we sincerely doubt that shrinking the state even further – even the continuation of Britain’s slightly comic-opera status quo – will help anyone. At a time when the economy will be growing, but people may still be feeling both objectively poorer and as if they’re falling behind Britain’s elites – enormously fertile ground for Labour’s new and relatively populist cries. Last but not least, Mrs May’s rhetoric about an economy and a society that works for all looks very unlikely indeed to purchase on actually-existing reality. Britain’s Tories are lucky in the Opposition they face – for now. But their whole outlook is just fundamentally wrong. In no world does that not hurt them, and hurt them grievously.

Next time, we'll look in late April at what the local elections across England tell us about the state of the parties. Then, in May, 'Public Policy and the Past' will even-handedly take Labour's programme apart, since it's just as laughably threadbare as the nonsense the Tories have rolled out. See you there!

Wednesday, 7 February 2018

Does neoliberalism exist?


Neoliberalism. It's the buzz word of the day. Well, okay, it's not bandied around all that much in everyday life, but engage with anyone on the Left these days, and it's pretty much a done deal that the word will crop up in some context. Here's a sketch of the case you might get if you talk to a common-or-garden social democrat or Soft Leftist in the West. Neoliberalism saw all sorts of markets liberated and governance itself spun out to the private sector from around the mid-1970s, but that system of marketisation and free trade has been in crisis since the 2007-2008 financial crash, an age of falling wages, rampant inequality and government failures - typified by the UK's 'left behind' voters plumping for Brexit and the awful tragedy of Grenfell Tower, consumed by fire after the local council outsourced its everyday care to an arms-length management company.

But if this word is to do all the work it's asked to - represent a critique of an entire economic and social system, ripe now to be abolished and replaced by something rather more collectivist - then we've got to be sure that it's meaningful, useful and above all accurate in what it's trying to describe. Here there are many doubts, as we'll be outlining in this blog, though they are concerns that are perhaps in the end outweighed by the analysis that can actually be forwarded by using the idea of 'Neoliberalism' as a tool.... provided that it is mobilised in a considered, precise, thoughtful, conciliatory and above all historical way.

First, some definitions. We don't usually spend too much time on these, assuming that you know what we're talking about anyway, but here - when we're talking about a Big Word - we're going to need to get some real clarity in place before we can proceed to test its efficacy. One place to start could be the dinky-but-handy Very Short Introduction to Neoliberalism (2010). As tiny as its name suggests, this slim volume nevertheless contains some really sharp comments as to what we mean by all this talk of 'NL'. As an ideology, it is apparently always portraying 'globalizing markets in a positive light as an indispensable tool for the realization of a better world'. As a governing ethos, neoliberalism is supposedly 'rooted in entrepreneurial values such as competitiveness, self-interest and decentralization'. Then, finally, the concept contains and necessitates an actual policy agenda: 'deregulation of the economy; ...liberalisation (of trade and industry); and... privatization (of state-owned enterprises'.

We could give any number of similar examples, sometimes overlapping, sometimes differing in detail. Here's the estimable David Harvey, in his older but very readable A Brief History of Neoliberalism (2007 edition), with his definition:
Neoliberalism is in the first instance a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade. The role of the state is to create and preserve an institutional framework appropriate to such practices. The state has to guarantee, for example, the quality and integrity of money. It must also set up those military, defence, police and legal structures and functions required to secure private property rights and to guarantee, by force if need be, the proper functioning of markets. Furthermore, if markets do not exist (in areas such as land, water, education, health care, social security, or environmental pollution) then they must be created, by state action if necessary. State interventions in markets (once created) must be kept to a bare minimum because, according to the theory, the state cannot possibly process enough information to second-guess market signals (prices) and because powerful interest groups will inevitably distort and bias state interventions (particularly in democracies) for their own benefit.
The first thing the reader will note is that all this isn't very snappy. The very posited ambition of neoliberalism itself, and the multi-pronged, broad-fronted attack that recent critics have mounted on it, has made the whole field look like a zig-zag of intellectual barbed wire and back-and-forth advances and retreats. The idea is, in short, shrouded in the fog of war. It is in the end, and given such fire, fury and confusion, no wonder that many authors have come to question whether neoliberalism really exists at all. It is an every-shifting, shifty, conceptually hard-to-capture concept in the first place; there is significant temporal slippage everywhere you look about its edges, with very few hard-nosed historians willing to deny that it's an idea in search of an epoch; and even as an analytical tool, there's a thick mist where it meets almost all of those underlying realities that spring to mind when we think of the late twentieth and early twenty-first century. Let's take a quick look at these objections, in no particular order.

Conceptual confusion. One grave difficulty with neoliberalism is the very range of the term as it's used. That makes it slippery. Are we talking about an intellectual agenda, an ethos, a philosophy, a general outlook, a governance agenda, a set of more discrete economic and social policies? No-one has done a truly great job of sharpening up the concept so that it truly cuts through everywhere. It does relatively well in describing the ethos of central government organisations, advised as they have been since the 1960s by management consultants, and increasingly subject to the idea that potential providers - inside and outside government - should compete for business. Even here, there's a problem, in that some of the assumed hallmarks of neoliberal governance - the Private Finance Initiative, for instance - have never added up to anything like a majority of government contracting. But set that to one side. The idea, at least, of 'competition' as a good has taken hold - even if it has ended up building something akin to a Perestroika Britain, a half-public, half-private jumble of built and imagined environments that has copied across some of the worst elements of each. Elsewhere, however, neoliberalism's reach is even less impressive.

Consider public spending. If we look at any good time series of how much the Government actually lays out (above), it doesn't vary all that much. Now neoliberal theorists have two good answers to this: firstly, that they never said that governments would vastly shrink, but rather change their nature; and, secondly, that neoliberal states demand strong governments to enforce the changes that they seek (think of the use of well-organised and more centrally-directed police forces during Britain's 1984-85 miners' strike). Well, yes. But the problem with both of these arguments is that they don't take account of the way in which the state hasn't changed. Until the last few years - when neoliberalism was apparently in relative retreat - British health and education spending had been going up for decades, and actually surged spectacularly under New Labour. More than that: as the economic historian Jim Tomlinson argues in his (very good) new book, Managing the Economy, Managing the People (2017), the liberal Keynesian managed economy never went away. When did public spending surge? When governments had to let the 'automatic stabilisers' - welfare payments, for instance - blow out and support the economy during the recessions of the early 1980s, the early 1990s, and 2008-2010. Whitehall and Westminster adjusted its micro-economic outlook, but its macro-economics? Well, they proved harder to change. Which brings us to the influence of long-term changes, and the burdens of history - as opposed to the influence of philosophers.

Historical reality. Then there's the problem of how policy change actually happens. And? It's slow, mixed, piecemeal, confused. It doesn't bear all the hallmarks of a single idea. Take the creation of East London's Enterprise Zone and the construction of Canary Wharf - usually an image of 'neoliberal' freedoms. Well, actually, that was built on a decade of public transport and infrastructure planning for a more mixed-use development, and to ensure its success civil servants took powers much like New Town Corporations (£) - supposedly the built examples, par excellence, of the social democratic age that followed the Second World War. Historians have here adopted the idea of 'assemblage' - policy as mosaic, jigsaw, blurry sketch - rather than directed ideological drive. That seems to fit the In the Thick of It nature of actual administration much better than a single word. Take another example. Is the egregious cruelty of the present Conservative Government's welfare policies 'neoliberal'? Well, yes, in that it to some extent depends on the idea that everyone should work in the paid market, if they possibly can - and in that it evokes the first-stage liberalism of the New Poor Law of the 1830s. But no, in that it has carried from its origins the hallmarks of recent conservative - very much not 'liberal' - thought on the compassionate rehabilitation and assistance of people on the margins of paid work. Its foundations are built on many things. A very tight labour market. The passage of economic power away from medium-sized Western countries like the UK, putting pressure on all sorts of public spending. Administrative confidence and ambition, rather like that displayed by Gordon Brown over the power of tax credits, not doubt that any neoliberal state - according to Harvey's definition - 'cannot possibly process enough information to second-guess market signals'.

Eras are just signposts. They merge into one another. Post-war governments built welfare states, yes, but also pursued free trade via the General Agreement on Tariffs and Trade, while most governments have remained more than wedded to under-the-radar protectionism during the era of so-called 'neoliberalism'. Social democrats maintained some controls over capital and income, it's true - but they also bulldozed controls and cut taxes. The Conservative government of the 1950s built lots of council houses: but they built more dwellings for private ownership. And any periodisation contains a multiplicity of running clocks, timeframes, caesuras... even ironies. On an international level, shock capitalism was all the rage in the 1980s and early 1990s - the period of the so-called 'Washington Consensus'. That didn't last. These days, the World Bank is more likely to turn up and agree with The Guardian than The Road to Serfdom. So where does the 'neoliberal' age begin and end? In Britain, it's for instance very hard to argue that public - as opposed to elite - attitudes have changed very much. As Andrew Hindmoor argues in his new book, What's Left Now? (2018), the electorate overall moved to the Left in the 1990s - as Thatcherism was seen to reach its limits - and then back again to the Right during the later Blair and Brown years. But those changes happened within very tight boundaries: one academic index of these things, measuring 'policy mood' on a Left-Right scale of 100-0, shows that in the modern age it has always remained within a range of 45 and 55. Yes, young people today are quite conservative: but the public mood, on inequality, on public spending, on many social judgements about what government should and shouldn't do, hasn't changed for decades. 'Neoliberal state', maybe: 'neoliberal people', no.

'Real' forces. The changes unleashed in recent years aren't all down to government decisions, and that matters. There's a problem here with our basic governance model. In our minds - partly because we still learn far too much History and Politics via the records of Cabinets and Parliaments - is the following structured story. Ideas emerge. Governments latch onto some of them. They put them into effect. Then they either succeed or fail. Governments monitor this, using statistics and qualitative reports, and then adjust the policies they've announced - or bin them and start again. So it's easy to talk about the influence of Hayek, or Milton Friedman, or the Mont Pelerin Society - all thinkers key to neoliberal concepts - and then lay out how actually-practising politicians put their views into effect. The problem is that governance doesn't actually work like that. You should often actually start with policies as they were last year, which will always form more than ninety per cent of this year's strategies - the so-called 'iceberg effect'. Then and from there the numbers come in, and influence policies that are therefore shaped not so much by universities and thinktanks as by the shape of just those statistics that are available. Hence the 'assemblage' with which we are already familiar.

The question of where to place technology in the causal change is important. The way the 'neoliberal' word is used is very often idealist in concept: that is, it starts at the realm of ideas, and then demonstrates their effects. How else to explain the constant emphasis, on the Left, placed on 'fighting neoliberalism', 'rethinking neoliberalism', 'challenging neoliberalism' - as if a new form of verbal cues and connections could cure the body politic? Well, it's just as important to say that a mix of transport revolutions (shipping containerisation in particular, in train since at least the 1960s), information technology, China's entry into the world economy, India's surge away from poverty, a set of regional trade deals (NAFTA, the EU) far more powerful than 'globalisation' or 'free trade' taken in the round, ageing Western populations, the vast power of computerisation, and so on, are far more powerful than ideas. They're affected by concepts of governance, of course - how else to explain Chinese Communists' decision to join the World Trade Organisation? - but it's just as possible that those ideas are borne aloft on structural convulsion, like barnacles on a whale.

And yet, and yet. Neoliberalism's still there - yet to be knocked off either its academic perch or off its (increasingly) popular patch. And such success has to mean something. The idea lurks in the corner of the eye all the time. Yes, it's hard to pin down, but that doesn't mean that it's not there. It's like the blast zone of an explosion. Maybe there's nothing there any more right at the point of impact, but the blackened lines around the crater tell you that even an absence can add up to a presence. To be more specific, people use this word, and they find it meaningful; and you know what they mean, even when you can raise a great big list of clever objections to almost its every use. That means that it does exist in at least some form or another.

Consider some of the key UK sectors, pretty much at random - air travel and airports; her railways; the car building industry; universities. Are we really going to say that there's nothing we can do, analytically, to distinguish between the way they were run in the mid-1970s and the early twenty-first century? The old British Airways and the British Airports Authority were sold off in the 1980s, and now the airports that constituted even the newly-privatised BAA PLC compete one against the other. State-owned British Leyland has now been replaced by a welter of foreign-owned builders who have vastly raised productivity, reliability and output, but aren't subject to anything like the same amount of national direction or Whitehall oversight. Universities used to get student quotas and block grants from the old University Grants Committee: now they dive in for just as many students as they can get, given that those students bring with them up-front loans for which, ultimately, they as well as the Government are responsible. And so on. It's hard to argue that these changes don't, in any way, meet the definitions with which we started: either 'deregulation of the economy; ...liberalisation (of trade and industry); and... privatization (of state-owned enterprises', or an insistence that 'if markets do not exist (in areas such as land, water, education, health care, social security, or environmental pollution) then they must be created, by state action if necessary'.

All concepts, eras and causal chains come with fuzzy edges. We historians sometimes call the late nineteenth century 'an age of Empire'. Actually, it was just another age of Empire, following on from the very different Murghal, French and British Empires which a new world of steel and coal replaced. It often wasn't very 'imperial', with free trade ruling the world from the 1840s until at least the 1880s, and ideas about human liberation and equality beginning to bubble up everywhere. And the forces governing all that weren't often the imperialists. New technology - the telegraph, the machine gun, the steam propeller - were probably more important than Benjamin Disraeli and Otto von Bismarck. But we still say 'age of Empire'. We have to say something.

It's the same with 'neoliberalism'. It's a helpful myth - a story we tell ourselves about ourselves, because it allows us to understand some fundamental elements of our times. As long as we don't think that it's an unchallengeable way of knowing, an impermeable answer, or more than a helpful word, we'll be all right. One way to think about this is to say that 'neoliberalism' is an adverb or a verb, a way of understanding the moving parts in our economic and social system, rather than a noun. 'Neoliberalism' both does and does not exist. It explains some of the blur we grasp and fail to grasp about our own evolving world - and whatever new and ill-understood systems are emerging now. But it is not a thing, an obelisk-like McGuffin that explains everything else.

So if someone comes to you and says 'this policy reflects neoliberal ways of thinking in some ways', or 'these policies bear the hallmark of neoliberal ideas about efficacy', or 'that person is talking about the state and its capabilities in a neoliberal framework', you can nod and say 'that's interesting'. If instead your interlocutor says 'you're a neoliberal', or 'that's neoliberal', 'that's a neoliberal party', or just shouts 'neoliberal' at you, then you can safely dismiss the rest of what they say. Block and mute. Block and mute. It's the safest way. In the meantime, the rest of us can get on with the actual work of trying to understand public policy, rather than spinning a load of old rope and calling it a story.

Next month, we'll go back to poking people in the eye, when we begin a series about the presumptions that lie behind the main UK parties' policies. Needless to say, almost everything the two Westminster Front Benches hold dear as background assumptions is just plain wrong. In the meantime, we apologise for the balance, nuance and reasonableness displayed above, and in future will try to start some more fights in empty rooms. Never fear: normal service will soon be resumed.

Wednesday, 10 January 2018

Waiting for the conservative reaction


It's hard to look at the horizon. All sorts of things get in the way, especially in the hurly-burly of politics and public policy. There's always something to attend to, isn't there? A reshuffle. A Prime Minister's Questions. An opinion poll. A scandal. But what we should be doing instead is looking at the strategic setup: the forces and structures likely to shape the policy battlefield for the decade or so to come. We should be looking to the medium-term future, and if possible beyond it - all the while quantifying, specifying, showing our workings, thinking, and even imagining. Otherwise, it's all just running around and shouting. Fun, maybe, but rather more energising than helpful.

So this week we're going to try to look a bit beyond even the likely Corbyn government that 'Public Policy and the Past' believes is the better-than-evans chance at the next election. Because there are significant dangers to the Left that are much more long-lasting than just a single election or term in power. Yes, there's a popular cod sociology around that looks at young Labourites and older Conservatives, as well as the Tories' shrunken membership, and says 'British Conservatism is (literally) dying out'. But that's a bit like the commentary that said Labour could never win again in the early sixties, because the electorate was becoming ever more bourgeois. Or that Labour could never win again in the mid-1980s, because of widespread affluence among working voters. Or that the Conservatives were doomed by their antediluvian social attitudes in the mid-2000s. What happened next? That party started on a determined walk back into the public's good graces.

Beware the bear market in partisanship. When the last buyer of shares in Labour or the Conservatives becomes a seller, that's when you should pile in. So it is now, when the Tories look to have run out of ideas and renewable philosophy - an impression we have ourselves long chronicled. Because it is possible to divine just the first faint contours of what might be a fierce and determined conservative reaction to the Corbyn ascendancy. Stick with us for a bit: you'll see what we mean.

The first thing to note is that the young have not suddenly become a load of left-wing firebrands. In fact, their views are more right-wing, in many ways, than that of their elders. Take a look at YouGov polling on rail nationalisation. Young people and older Britons take a very similar attitude to that (they are for it), but 18-24 year olds are less likely, not more likely, to be in favour of nationalising the energy sector. Peer into the new Britain Thinks focus group work on young people, and who do they often blame for their travails? That's right - 'scroungers', not the rich elites much-beloved of Labour's new populist foghorn. Think that Jeremy Corbyn is particularly popular among young people? Well, he moved the dial in the election towards Labour among under-35s, but more among thirtysomethings than millennials. And when we turn to Labour's new (and huge) membership, it's oldsters, not youngsters, who first spring to meet the eye.

Young people are hacked off - very, very hacked off, in our experience - not by capitalism, but by capitalism's failure to deliver. Who can blame them, as the prospect of ever buying a house recedes from view across great swathes of southern England and in most of Britain's successful cities, and as real wages stagnate? They are libertarians. They are social liberals. Prime Minister Theresa May's Brexity rhetoric and fearful Daily Mail-style talk, as if everyone without a semi-detached bungalow and a car was a 'saboteur', has turned them off faster than a freezing cold shower. But they're not socialists. They believe in privacy, and personal freedom, and - well - Remain. They are advocates for the environment. They want to be optimists at a time of pessimism. Their whole outlook bears very little relation to Mr Corbyn's Bennism with bells on.

And if and when that project runs into trouble - as every government does - the swing against Corbyn-Labour, which isn't particularly interested in Europe, or really in the environment, or issues of personal liberty, will be much the fiercer for the young's initial swing towards him. Just as his project looks increasingly Blairite, all spin and triangulation over issues as apparently far apart as Universal Credit and the Single Market - and with attendant layers of spin doctors and intellectual praetorian guards - so, one day, Mr Corbyn won't be able to go to Glastonbury, because just to appear will be met with derision. Because: do we really think that Labour's housing targets can be met, especially if immigration dips and wages stabilise? Not really. Do we really think that Britain's long-standing and deep-seated problems with the housing market, particularly its financialisation, the rigidities of the planning system, and the sheer weight of intergenerational capital inequality, can be solved in one or two terms? Er, no. Supply bottlenecks and high prices have defeated many a government since the last really fierce housing drive in the middle 1960s. Without a bit more honesty about the tradeoffs involved, they'll defeat Mrs May's attack on the problem now (such as it is), and the next one too.

So it may be inevitable, from this point, that young people turn rightwards under Labour. Labour's challenge, in this respect, is to use Corbynism as a gateway drug for socialism - just as supporting Mrs Thatcher led to lifelong Conservatism for many in the 1980s. There's little evidence for that yet. But Labour in government will be in a race, to entrench their statist modes of thinking and doing among the under-30s before all the issues that plague the government now begin to close in again. It'll be a hard task. It'll be fertile ground for the Conservatives to offer yet more housing subsidies that throw more petrol on the fire, or tax cuts for younger workers, or more apprenticeships, or all of the above. All we can say is that this will be one crucial part of the battlefield, and that Labour is not so advantageously placed as it looks right now.

The Conservatives will also probably seek to change their image. Mrs May is the epitome of Oxfordshire Middle England, where she grew up: her age and manner and voice all mark her out as trustworthy to older voters who like the impression of hard work and duty. To more liberal ex-Conservative voters, to those great big chunks of Remain Britain that peeled themselves away from her project last year, in the cities, among Britain's ethnic minority communities, and above all among the young, she sounds like a black-and-white BBC announcer from the 1950s. These impressions matter, since they go straight into voters' brainstems in a way that (most) policies never do. But shift the dial a bit, and put someone else in who speaks much more directly to those urban and upscale areas where the Conservatives went backwards last June, and things change quite a bit.

Imagine an election in which the Conservatives were led by someone who looks and sounds very different to Mrs May - who challenges people's presumptions about the Conservative Party far more than David Cameron, that son of gilded privilege, ever could. Ruth Davidson, say (above). A gay liberal kickboxer who wasn't even interested in politics until very recently. Or a Conservative leader who emerged amidst the now-impressive ranks of Conservative MPs from ethnic minority communities - Nusrat Ghani, perhaps, the Conservatives' first Muslim member of the House of Commons, or Kemi Badenoch, who was brought up in Nigeria. That could change things quite a bit. The very different mood this would create might necessitate just such a new Conservative leader, with a wholly novel image designed to appeal to voters lost in 2017, to shove the gears rightwards to keep their party happy. Unlikely? It's no more of a paradox than the apparent leftiness that is at the moment allowing Labour to engage in nearly as much Brexiteering as their Conservative opponents.

Consider also the real roots of the culture of rage that our politics has been incubating for some while. Is it caused by inequality? Well, that great defect of modern societies hasn’t really been going up very much for more than two decades (it has actually trended down from its peak in 1990), though admittedly the headline Gini figure probably under-estimate the influence of the really, really wealthy and over-emphasises changes in the middle of the income spectrum. We're probably just at the start of a period of increased inequality, and wealth inequality definitely has started to rise. So: a bit. Is it caused by the 'left behind'? Well, again, there's some truth to that, but it's limited. The great cry of rage that 2016's Leave vote represented was raised in wealthy old Spelthorne, as well as in Hull and Stoke. It was a cultural phenomenon of perceived helplessness as much as it emanated from poverty. So some of the targets Labour will tilt at in office, trying however imperfectly to rebalance incomes and the economy's spatial inequities, might not aim quite at the heart of the problem.

As we've tried to sketch out before, the roots of the age of hate were planted with other seeds too. Divisive social media, driving a wedge between people where once they could talk. The now-inevitable drain of wealth and power away from the Atlantic world, and towards South Asia and the Pacific. Complex, time-pressured lives among the 'squeezed middle', constantly rushing around each city in their cars trying to get three children to three different schools they've 'chosen' to be at. The hedonic treadmill of consumerism, forever offering you enough to keep offering you more. Tiny inequalities of access and difference that throw up anger via the narcissism of small differences, as you watch people with very similar incomes to you make just slightly different (and rather more successful) choices. And so on. Are these fury escalators going to stop? Well, no. They are encoded into late modernity. All governments will struggle even to address one or two of these trends. Labour will touch any of this hidden wiring's latticework at its peril, though it is probably confident enough now to have a go. But governing at all these days is like standing out in a lightning storm with an umbrella. Sooner or later, the forks will hit you and blast you to bits. Ask Mrs May.

This is an especial danger if you've spent your time in Opposition undermining some of the pillars of civic society. It will not have escaped your notice that one skill Labour's new iteration has mastered is the emission of hatred and threats on social media, coupled with a faustian bargain with 'new' outlets such as the Skwawkbox - purveyors of fantasy news prejudice to the Left that sit nicely alongside Britain's tabloid press in their two-bit makebelieve and poisonousness. That's all very well for now. Such sites regularly gain hundreds of thousands of likes on Facebook, all of which rebound to Labour's gain. But when Labour sinks low in government, and it needs to explain its policies, it will find itself faced with the obverse: a whole new raft of right-wing ranters who are watching the Skwawkbox experiment, and sharpening their tongues for when they can give the opposite type of government a really, really good lashing. Put it like this: Labour's most 'radical' MPs spend their time undermining the so-called 'mainstream media', or MSM. When they're hit by a US-style flood of right-wing shock jockery, they'll come to regret that choice of paranoid style over calm engagement. 

Labour are doing really well at the moment. They're surfing a wave of discontent with malfunctioning economics and an economy that just isn't helping under-35s move up the ladder in the way that they are used to - and which they expect to. But there are big risks involved in that strategy. One day the Conservatives are going to wake up and see the opportunities they've been granted by the way the current Opposition plays fast and lose with promises, and indeed with Britain's civic culture itself. Her Majesty's Opposition is slowly bulldozing its way to power, but it's sweeping away all the defences that protect us from the radical Right, as well as from governments formed purely and unequivocally on the Left. Labour are seeking to ride the tiger. But one day they're going to end up inside the tiger - and the rest of us could well end up sitting in there with them.

Thursday, 14 December 2017

What would a Corbyn government actually be like?


All through this tumultuous political year, there’s been something strangely absent from the narrative: a clear picture of what a change of government might actually mean. What would a Labour government really do in practice and feel like? What challenges would it face? How likely is what we know of its programme to succeed? There are lots of reasons for this oversight. For one thing, a government led by Labour leader Jeremy Corbyn (above) looked very, very unlikely until the sudden Labour surge between mid-May and early June. For another, the whole Brexit imbroglio has distracted attention from the normal story of blue-versus-red political competition. Last and perhaps most importantly, the whole ‘Corbyn phenomenon’ looks much more like a populist single issue campaign of remarkable passion and energy than a traditional government-in-waiting.

So in this blog, we’re going to have a look at what a Corbyn government would actually be like. There’ll be no attempt to construct a point-by-point account of some future history. What’s to come is far too uncertain (and contains way too many moving parts) for that. What we’ll be doing instead is building up a picture of the main elements that will decide the course of a new Labour administration. What we don’t know has rather the upper hand over what we do know. But we can speculate, an important enough process regarding any Opposition’s intent and prospects, but critically now when Labour is on the edge of power – just a handful of seats away from being able to govern as a minority.

So what are the main elements of chance and choice involved? Let’s take a look, in no particular order, at the likely results of a future General Election; then, the potential reactions among the Corbyn movement as Labour turns its agenda into concrete actions; thirdly, at the economy and the leeway it will give any left-wing government; and then fourth and last, the intentions of the small clique at the heart of Mr Corbyn’s Labour Party. We won’t be able to settle on exact conclusions, but perhaps the veil of ignorance will be parted a little: unknown unknowns will be turned into known unknowns, and light thrown on the main constraints and room for manoeuvre.

Labour’s Parliament. One major element will be whether Labour can forge a governing majority. Despite their better-than-expected result back in June, Labour are still a very long way from governing outright. With 262 Members of Parliament, they are still 64 seats (and a 3.6 per cent swing from all other parties) away from governing with an absolute majority: they probably still require another sixty MPs (and a 3.4 per cent swing) to govern with a working majority, enjoying a lead of one over all other parties given that the Sinn Fein Members from Northern Ireland do not take their seats. Just a couple of polls taken since June have suggested that Labour are strong enough to get to that finishing line.

Now we mustn’t suggest that their relatively watery lead on average means that they cannot make it to 326 MPs. Labour managed to leap from about 26 per cent at the start of the last election campaign to 41 percent by the time all the votes were counted. But it’s still a tall order. They’ve squeezed out a lot of the votes that were the easiest to seize upon: Greens and left-leaning Liberal Democrats have already flocked to them, along with younger moderate Remainers in South and South-West England. Remember that polls now assume that 2017’s relatively unusual turnout will hold next time, too, especially among young people: longer-term experience suggests that it might not.

So it might be that Labour has to rely on the Scottish National Party to govern. Given the latest polling in Scotland, it seems unlikely that they will be able to win enough seats from the SNP to end their reliance on them if they can’t push over a lot of seats in England. In that circumstance, Mr Corbyn will be faced with lots of problems. He will probably have to do some sort of deal with the SNP, especially if he is a long way from a majority – at about the 280 or 290 seats that current polling averages put him at. The SNP might well want more money for Scotland, a demand that might do a lot of damage to Labour’s reputation in England – especially if the bill comes to a much higher figure than the £1bn that Prime Minister Theresa May was forced to disburse to Northern Ireland by the Democratic Unionists back in the summer.

There might also have to be a second Scottish independence referendum, in which Mr Corbyn’s obvious ambivalence on that issue might do nearly as much harm to his political standing and reputation as his disastrous campaign in the 2016 European Union referendum. Even given SNP support, Labour might find it hard to govern on the home front, given English Votes for English Laws – the process by which House of Commons committee votes on English issues are limited to England’s MPs. Labour probably tell themselves that they can just put down law after law and dare the SNP to vote them down. In reality, since the SNP rely for a key part of their electoral coalition on the idea that there may never be another successful Labour government at Westminster – and that the SNP therefore have to ‘stand up for Scotland’ alone – that party’s MPs will be looking from day one for an excuse to bring Labour down. These are clearly grave dangers here for any future Labour government.

Activist opinions. One startlingly underwritten element of Labour’s recent story is its waning enthusiasm for redistribution. There are no two ways about it: on lots of measures, inequality is likely to be higher after one term of Labour than before. Very few of the party’s proposed measures will do anything to reduce income inequality. Abolishing tuition fees will increase it. Cancelling or restructuring student debt, which Labour has dropped broad hints about, will have the same effect. So will accepting the Conservatives’ welfare cap and Universal Credit changes – 'reforms' to which Labour is committed.

So will rail nationalisation, in all likelihood, since increasing investment (and perhaps reducing fares) on the railways will inevitably favour those commuters in the South East of England who mainly use trains – as well as creating a standing political economy incentive to ratchet up government spending on a mode of transport disproportionately utilised by rich people. Hard or fixed rent controls? Likely to increase inequality as landlords flee the sector. Opposing any sort of equity release from states to fund social care? The same, at least when compared to the Conservatives’ hastily-abandoned plans for a so-called ‘dementia tax’. And so on. If you throw in Brexit – likely to increase disparities between Britain’s richer and poorer regions – what limited egalitarian measures Labour is promising (for instance a minimum wage higher than that planned by the Conservatives) will be like throwing pebbles at a bulldozer.

Regional Investment Banks? Well, that’s not necessarily a bad concept – though they are massively overhyped. But investing more in each region might actually widen the gap between rich and poor. We don’t know much about the criteria for Labour’s new policy infrastructure on this front, but suffice to say that if you invest more in Leeds, Birmingham and Manchester, you might find that the surrounding towns and villages – where most of the deeper poverty is actually happening – will get worse. Meanwhile, some of Labour’s actually good ideas take effect for many years. More spending on early years education is to be welcomed with as much praise as we can muster. But, of course, the effects will take more than a decade to become apparent.

What will happen when Labour activists look at an economy and society that is quite a lot more unequal after five years of Mr Corbyn? What will they do? Well, probably nothing – firstly because he has entirely naturally and understandably reshaped the party in his own image, and secondly because a one-term government can be cut quite a lot of slack on the way to bigger objectives. Remember that the Thatcher Government had not achieved very much at all by the time of its re-election in 1983. Most of its really long-lasting reforms were still to come. Recall that the Blair government hadn’t changed much in the public sector by the time of the 2001 General Election, having focused instead on constitutional reform and the pursuit of peace in Northern Ireland. Having trended very slightly downwards for many years (though a lot depends on how you count these things), the admittedly crude and problematical Gini coefficient measuring income inequality will go up under Labour. Its members will give their leaders more time. Voters as a whole might not – which brings us to the national economy.

Economic uncertainty. One big and important story will be provided by the economic backdrop. If Britain’s poor productivity and therefore growth picks up a little, or even if growth continues to chug along at a low-but-sustainable level, there might not be too much to say on this front. Socialism in one country will be easier to deliver. Mr Corbyn will turn up and beam beneficently at lots of new schools, hospitals and rail stations, and what popularity he attracts will hold up or even increase as older and more Jeremy-sceptical Britons say to themselves ‘well, this isn’t so bad’. But if the economy goes south, things will be much grittier – especially in relation to the public spending pledges that now seem to be Labour’s raison d’etre.

Despite many partisan assertions to the contrary, Labour’s manifesto was almost entirely uncosted. Oh, of course, they said it was ‘costed’, but their maths basically amounted to rocking up at Tesco’s and trying to buy a month’s shopping with just a single twenty pound note. Their numbers were and are totally unrealistic. The money they promise to raise only from big companies and richer Britons just is not there. If growth continues, well, that might not prove too much of a problem. They can raise Corporation Tax even higher than they said they would. They can rein back on some of their spending pledges, while making sure that they do give effect to some of their highly-legible signature plans such as the abolition of university tuition fees. They can (whisper it) run the score up using some of those stealth taxes familiar from Tony Blair and Gordon Brown’s time in office, for instance freezing allowances and allowing silent income tax rises to take some of the strain.

But if the British economy is only crawling forward, if Brexit really slows growth (and it’s at least quite likely that it will), or if Labour come to power in the wake of a disorderly Brexit, then things will be much harder. If they’re also hit by a 'normal' recession, for which we are more than overdue, things will be more difficult still. Note here that there is also the danger of a withdrawal of foreign investment and spending as companies take fright at the election of an apparently radical leftist administration. That’s not vastly likely, as we’ve already had quite a big sterling devaluation and withdrawal of funds after Brexit – for obvious reasons. But it is certainly possible, as Labour’s own wargaming for just this eventuality reveals. Then, things could get very tough indeed. Slamming on capital controls to stem the outflow, at the same time as trying to withstand a damaging Brexit slowdown or navigating a garden-variety recession could mean that austerity budgeting will have to be intensified, not reversed. There’s precedent for that, as when the left-wing Labour Chancellor Stafford Cripps made every pip squeak in the late 1940s. But what on earth will happen if then-Chancellor John McDonnell – John McDonnell, of all people – starts slashing public sector pay? Your guess is as good as ours.

What do Labour want? Fourth and last, we come to the vexed question of what it is that Mr Corbyn and Mr McDonnell actually want. Labour’s militantly reasonable manifesto from 2017 is one thing. The history and values of their advisers – Seumas Milne, Andrew Murray, Andrew Fisher – is quite another. Those advisers have spent their lives arguing and writing in direct opposition to the entire thrust of Labour’s post-war history. Mr Murray, for instance, was a member of the Communist Party (and North Korea enthusiast) until very recently. They possess as their highest lodestar an opposition to the United States of America and all its works, including the rules-based economic trade and payments system the US and its allies have built since the early 1990s. Their sympathy for America’s opponents, wherever they may be and whatever they think, somehow manages to be both Putinist and Trumpian in equal measure – if that truly is the contradiction that it at first appears.

So Labour went into the last General Election arguing that the UK government should replace the Trident nuclear weapons system; retain its key role within the North Atlantic Treaty Organisation; refuse to raise income tax except for the very wealthiest citizens; and only to nationalise utilities that used to be publicly owned. So far, so good. But what we don’t know is if Mr Corbyn and Mr McDonnell do wish only to reverse some of the Thatcherism’s wilder instincts in this manner, or whether these proposals are a mere transitionary programme towards a much more radical agenda.

What if Prime Minister Corbyn simply took Trident off station, or ordered the removal of the nuclear submarine’s missiles? He must be desperate to get that chance: and it seems deeply unlikely that his Cabinet could stop him. The concerning precedent set by the fact he ignored the resignation of nearly his entire team in 2016 shows that he would not care in the slightest were there to be a rash of Ministerial resignations. What if this NATO-sceptical Prime Minister refused to go to the military aid of a NATO state under attack that was pleading for assistance? What if Brexit meant much higher middle class tax rates to pay for the end of public sector pay restraint? What if second-term proposals encompassed a much deeper drive towards co-operatisation of the economy, or ‘differential compensation’ (as already rumoured) for another big bite at nationalisation – code for paying shareholders out on the basis of Ministers’ moral judgement of their past behaviour? What if pushing forward government control of the economy ended up meaning reducing (or ending) the Bank of England’s role in monetary and regulatory policy? What if the British economy can only be restructured behind a wall of capital controls? The answer is that we simply don’t know. Britain might become a very different place indeed, though if more than one of these policy changes really were to transpire, a Labour split would become much more likely. Perhaps by that point it wouldn’t really matter.

There we must leave it, with the observation that there is much more about a Corbyn Labour government that we don’t know than that which we do. We just don’t know whether Labour can fight its way to a durable overall majority, massively boosting Mr Corbyn’s power and removing any Labour reliance on the SNP. We’re not sure how Labour members will react as the gap between rich and poor rises, following a decade or two of overall stability (or slight falls) in income inequality. It’s unclear how Labour would react to economic problems, whether those turn out to be just squalls or develop into real storms. And perhaps most profoundly at all, it’s opaque as to how far the Labour leadership team want to push things. Do they just want Britain to look rather more like Denmark and Sweden, or do they want to break with every actually-existing international model and sprint towards that left-socialism that Syriza imagined but could not deliver in Greece?

We end the year knowing a lot less than we thought we did when we entered it. Perhaps that realisation is a good thing. But the potential shape of the Labour government that does now look more likely than not – its challenges, its choices – is hopefully a little bit clearer after the last few paragraphs. Its politics are still there to be shaped: by General Election voters, by party members inside the policymaking machinery, in little and large economic decisions alike, by the public’s reaction when Labour’s true values are revealed. As ever, most of what happens next is up to you.

Thursday, 16 November 2017

Jeremy Corbyn's Labour is now likely to win the next election


It will not have escaped your notice that this blog spent some time during the 2015-17 Parliament predicting electoral disaster for the British Labour Party. That didn’t happen, for reasons we’ve attempted to lay out here (and trailed here), but that’s not going to stop us peering forward into the near future. That’s, for one thing, a natural and necessary part of all collective life, so as to winnow out the consequences of choices and trends evident now. But even more than that, it's important to say that prediction doesn’t necessarily seek to get everything right: it searches for truth through falsification, validation and those precious errors that actually tell us something.

So where are we going at this moment? Well, unless something really big changes soon, Labour leader Jeremy Corbyn (above) is now rather more likely than not to become Prime Minister within the next few years. What follows will be a sketch of six key reasons why we are now moving our outlook towards what American election forecasters would sum up as a move to labelling the race ‘lean Labour’, though they are by no means exhaustive.

One. Polling. Though there are plenty of people willing to tell you about how rubbish polls were at June’s General Election, they did better than punditry and rumour, which is all we’d have if we didn’t have any polls at all. They also got a bit closer to the aggregate result than in 2015, really missing the target ‘only’ in terms of the Labour score. Even then, commentary failed much more than polls: just as with Brexit and the election of Donald Trump, most poll interpreters couldn’t even process the evidence of their own eyes. By the time election day had rolled around, even a crude polling average told you that Labour were within an average error, and not far outside even the statistical margin of error, of forcing the Hung Parliament that they managed. Don’t get us started on this one. Anyway, just using a crude average now, Labour lead by one or two percentage points. That’s more than enough, if that was indeed the result, to take power – even if that’s as a minority government in quite a weak position. The first reason to say that Labour might well win is exactly the reason we came to that conclusion by the end of this year’s campaign: the numbers say that it is so. Past prejudice shouldn’t get in the way of that.

Two. Tory infighting. It won’t have escaped your notice that the Conservative Party seems to be having some sort of complex psychic meltdown. Clear, dynamic government seems to have simply stopped, and when that happens, all the ordnance that might miss you just lands right amidships. At the moment, the fires are threatening the weapons store, and the whole ship might just blow up in front of us. It’s not the number of scandals and disasters that is so notable. It’s the role that factionalism play in them. The now-ex Defence Secretary, Michael Fallon, seems to have been done in by his Cabinet ‘colleague’, Andrea Leadsom. Michael Gove seems to be making the Government’s travails over the Iranian imprisonment of Nazanin Zaghari-Ratcliffe even worse than it might be by defending his fellow Brexiteer, that scheming-but-useless charlatan otherwise known as ‘Foreign Secretary’ Boris Johnson. The downfall of now ex-International Development Secretary Priti Patel was in part due to her bizarre pursuit of an independent foreign policy, conducted perhaps in the hope that she would one day be Prime Minister. Well, let us hope that she won’t be. There are two major themes in all of this. First, it illustrates the weakness of the Prime Minister, confirming all our worst fears since a Hung Parliament began to hove into view during early June. And secondly, it shows the divisive power of Brexit, the single most complex set of policy dilemmas faced by any government since 1945. Which brings us to…

Three. Brexit. Brexit is now the gravity well sucking in everything in the British public policy sphere. It. Is. Everything. Nothing much will happen outside of the Brexit sphere for at least the next four years, and perhaps for at least the next six or seven. This will have several consequences. For one thing, the Conservatives will have no time or energy to renew themselves in office. That’s always hard, and Ministers in the end just end up tired out, as Labour were in 1950-51 or the Conservatives became in 1996-97. Although any organic image here is more analogy than analysis, there is a sense in which governments just reach their natural end. By 2022, the Conservatives will have been in office for twelve years. Only once since the Second World War has such a task been carried off (in 1992). Given that they’ve got to manage Brexit, that seems even less likely than those numbers suggest. Also important here is the very real split that the Prime Minister has always papered over – until now – between really hard-core Brexiteers and more pragmatic Tories. If the UK at least stayed in the Customs Union, the problem of any ‘hard’ border on the island of Ireland would go away, as would the nightmare of re-setting all of Britain’s trade arrangements with the world beyond the EU. If she stayed in the Single Market, or at least mimicked it very closely, any danger of increased regulatory and other non-tariff barriers to trade would be avoided as well. But enough of Theresa May’s backbenchers are theologically attached to Brexit-at-any-costs that they might well split the party over any deal that she brings back. Labour MPs will make up the gap, no doubt, as Whigs and Liberals did when they came to the aid of Conservative Prime Minister Sir Robert Peel in 1846. But that will leave the Conservatives more divided than ever, and right-wing Tories hopping mad with rage. They managed to blow up John Major’s premiership in the mid-1990s. They might well be about to do it again.

Four. The economy. Another under-written element of the Conservatives’ 2017 debacle was the fact that real wages were falling by the time voters got to the polls. In 2015, incomes were rising strongly, helping to explain David Cameron’s surprise majority. The economy isn’t everything on polling day, but it is something, and something important. The next few years look likely to be pretty gritty. Real wages will probably stop falling so sharply over the next couple of years, as the wave of inflation kicked off by sterling’s Brexit devaluation passes out of the system. But interest rates are now likely headed on a very slow, but steady, route upwards. Britain’s productivity performance is so bad that there is a fixed upper band on wage rises, which cannot really be anything – overall – but mediocre-to-weak. In real terms, they might just stagnate. And a load of welfare cuts are about to hit the low paid, slashing benefits under an arbitrary cut and squeezing working tax credits. That will lower wages at the lower end of the scale, where the Conservatives actually did okay at the General Election. All the while, post-Brexit growth is likely to be slow and stuttering, even if we are not hit by another recession – for which, by all post-war standards, we are more than overdue after more than a decade of slow but persistent growth. The economy isn’t going to save the Government, as it did Mrs Thatcher’s administration in 1983 and 1987. Quite the opposite, in fact.

Five. Labour campaigning. All the – shall we say – Momentum is with Labour right now. They have the fired-up activists. They have the glint of righteousness in their eyes. They have the socially just cause, from the tragedy at Grenfell Tower to Boris Johnson’s appalling blunder over Iran. But it’s more than that. They are just better at campaigning. It’s not the mass membership, though that can’t hurt – financially, if nothing else. It’s the sheer sophistication, scale and persistence of their methods, especially on Twitter and Facebook. Some extraordinary stats came out of the 2017 campaign, but perhaps most shocking of all was that more than half of the Facebook users in some key seats had been reached by the Labour social media team. If we take a look at (say) the Tory Instagram game versus Labour’s Snapchat, the latter is miles, miles and miles again ahead of the former. That helps to explain the age gap yawning in our policies, of course. But it also suggests that campaign-phase Labour might be able to get even more traction than it is at the moment. The Conservatives entered the 2015 campaign more than twenty points ahead. If they go into the next neck-and-neck, the new networked methods championed by Labour's younger and enthusiastic activists might carry all before them.

Six. The Trump-gasm. The President of the United States is – how shall we put this? – not the most popular person in the world. His US ratings are terrible for a President at this stage in the cycle, and in Europe his numbers basically approximate those enjoyed by smallpox. Theresa May has felt the need to hug him close in the past, because she needs some sort of US trade deal (and American help elsewhere) if Britain’s diplomatic position isn’t to cave in entirely. But if he manages to clinch a state visit to the UK, or if his awful numbers decline still further, he’ll stink up the British government by association. If there is one fixed point in Mr Corbyn’s intellectual firmament, it is dislike of America and all its works. It is his luck – alongside all the other stars lining up for him – that he is Leader of the Opposition at a moment when most British people agree with him. When ‘America’ meant Barack Obama, many Britons regarded it with at least curious affection: now its public face is orange with rage, they regard its politics at least with horror. Any new crisis in which the UK seeks to line up with Trump’s America – in East Asia, perhaps, or the Middle East – will erode further the Government’s room for manoeuvre. It doesn’t matter who you are: you can’t poke the President of the United States in the eye too much if you want to get things done. For now at least, Mr Corbyn can. That will help him.

Let’s be clear here: this isn’t much of a cause for celebration, at least on this blog. Corbynism has a positive face, which is its opposition to the cruel and deeply unnecessary public sector austerity of our times - likely to get worse, by the way, before it gets better. But it has another, much darker mode, since it also embraces a toxic 'new politics' of paranoia, denialism, conspiracy theorising, ‘context’-mongering, Trumpian gaslighting, overly-partisan shouting-from-the-rooftops, borderline and not-so-borderline racism, social media hatefests, fantasy economics and private school play acting. Its progress in this age without truth is instructive in that, like the rest of our politics, it’s not clear whether this paroxysm is a symptom of extreme immaturity in what is new, or the advanced dotage of the old order. Perhaps it's a bit of both.

Still, the victory of what for want of a better word we might here call a ‘phenomenon’ now seems fairly likely. Not very likely, mind you. Not overwhelmingly likely. Quite likely. A sort of ‘more than evens' likely. That long list above looks over-specified and over-determined now that we stand back and look at it, and each point could well fall apart quite quickly if things change. The Conservatives will probably get a new leader before they face the voters again. A new President may well replace Trump in 2020. The economy might speed up as it rides in the slipstream of world recovery. It’s not as if we haven’t seen everything change like lightning in the recent past, is it?

Not only do we have to get used to marginal thinking, rather than just calling things as the black and white that only newspaper critics seem to see: we must also realise that almost nothing now turns out like we think it will. America’s leader in the political stats field, Nate Silver, has a new rule in this respect: the commentariat's conventional wisdom will always be wrong. It’s suspicious that now everyone reckons Corbyn will win. It smells of over-correction, and the buyers’ remorse of loads of people who like to think of themselves as pretty clever, but feel Mrs May has just made them look very stupid. The herd now says Corbyn. The herd could be wrong. Keep that in mind.

All of this goes against all our own initial instincts, too – representing nearly as concerning a development as Brexit itself, or that extreme phase of Blue-Red Mayism that sought to ‘Crush the Saboteurs’. These twin populist appeals are actually just two faces of the same incoherence: that especially nasty affectation that treats rageful emotion as an end points that everyone knows is no answer at all. But as to one side’s victory over the other: well, when the facts change, we change our minds. What do you do?

Next time, in our December blog, we’ll examine what might become of the Corbyn government projected here. What will it seek to do? What will be the effects? What are the risks and opportunities? That might be getting ahead of ourselves, it’s true, but as an exercise in future history it should be useful. Laying out such a government’s choices, and their likely effects, should show the possibilities and limits before Westminster and Whitehall as we move forward into the uncertain world of post-Brexit governance. Hope to see you there!