Jacqui Smith: The Interview

She may be using a softer language on the big crime and security issues of the day but Britain's fir

The Home Office has turned out to be a graveyard for new Labour politicians. David Blunkett and Charles Clarke were forced out after they failed to get to grips with a dysfunctional department. Although John Reid jumped before he was pushed, he too struggled to cope with rising prison numbers and a series of crises involving escaped prisoners. His solution was to split the department in two just before announcing his resignation. Only Jack Straw, the great survivor, left with his reputation intact.

Jacqui Smith, whose appointment by Gordon Brown took everyone by surprise, has no illusions about her chances of longevity. The gallery of portraits of her predecessors outside her office has already given her pause for thought. "I have taken the trek along the corridor and looked at the whole row of home secretaries. I think it's in order to inspire you, but also to demonstrate that you are moving through," she says.

It is not Straw or Clarke that she chooses as her role model, but Blunkett, with whom she worked at the Department for Education for two years. "My first ever boss as minister was David Blunkett, and David has always brought something very special to ministerial life," she says. "I think in terms of his ability to communicate the challenges we face in government and [I] never forget that success as government is the impact we have on communities and those that serve us." She also pays tribute to Roy Jenkins, Labour home secretary during the 1960s, as a reformer. But she baulks when we ask if she would like to be seen as a "liberal" in the Jenkins tradition. "No," she says without a moment's hesitation. "I'd like to be seen as a home secretary that made a difference to people feeling secure and enabling them to get on with what they want to do in their lives."

Her politics were forged by experience in her constituency, Redditch, a Worcestershire marginal that has stayed in Labour hands through three elections thanks largely to the local MP's appeal to the values of Middle England. She has long argued that Labour must hold to the centre ground if it is to win the trust of voters in seats like her own. "I come at this very much from the point of view of someone with a marginal constituency," she says. "I have to build the broadest possible coalition within my constituency, which seems to be a microcosm of what we've managed to do as a government and will carry on doing."

This does not mean being illiberal, she says, "but being pretty tough about representing the concerns of those who elected us and making sure we deliver on them". In practical terms, this involves giving extra powers to local communities to hold local police to account. That is why she has ordered the monthly publication of local reports on how crime and antisocial behaviour are being tackled.

"You cannot continue to make the progress we've seen in reducing crime if you don't engage with people at a local level in determining what the issues are they want to see addressed and being part of the solution as well. If people feel more engaged at a local level you have a result on everything from terrorism to antisocial behaviour. People also feel more confident about the society they live in." She remains unconvinced, however, of the need for locally elected police chiefs. "Having an elected police chief is shorthand for 'we want more accountability'. Of itself, I don't think it would deliver that."

It may be tempting to see Smith as gentler than her predecessors, partly because she is a woman and partly because of the calm way she approached the failed terrorist attacks in Glasgow and London on her first weekend in the new job. But, on all the most pressing issues, she is a hardliner in the tradition of Blunkett and Reid rather than an instinctive liberal like Clarke. On extension of the 28-day period of detention without charge, on identity cards, on penal policy and on immigration, she is, if anything, more convinced about the authoritarian approach than the tough guys who came before.

Dark omens

The 28-day issue has become the first battleground for civil liberties under the Brown government. The omens are not promising. Smith says although she cannot cite an example of an existing case that would have benefited from an extension, she is certain it will be needed in the future. She believes it is responsible to have the argument now about the balance between protecting human rights and catching terrorists, rather than wait for an emergency. "I don't see it as talismanic," she says. "Am I looking for a fight on the 28 days? No. But am I looking to make sure that I can be confident that the police and those who need to investigate terrorist plots have got . . . everything they need in order to be able to do that? Yes." We ask her to clarify: is the status quo among the various options being discussed? She admits it is not. "I have been persuaded that at some time in the future . . . we will need to be in a position where, in very rare situations, we may need to go beyond 28 days."

On ID cards, she is even more dogmatic. Although the Brown government has initiated reviews of policy on casinos, cannabis and 24-hour drinking, there is no turning back on this. Some had wondered - it now turns out to be wishful thinking - if Brown, during his hesitant first Prime Minister's Questions, had been bounced into restating the government's commitment to ID cards. The hope was that he didn't mean it, that ministers might eventually shelve the scheme in the face of protests or rising costs.

Not a bit of it, says Smith. "You do need a system which has at its heart the ability, at a national level, to tie people's identity to a record of who they are." It has been suggested that it would be possible to have an identity database, but no physical card. On this point, Smith, again, is crystal clear. "There will be an ID card," she says. "From 2009 we will be introducing ID cards for UK citizens. From 2008 we will introduce what will effectively be an ID card for those who have been in the UK for more than six months."

Nor will liberals find comfort in Smith's approach to criminal justice policy. Despite record prison numbers and increasing disquiet over indeterminate sentences, "Putting more people in prison is not an end in itself, but it might be part of the solution to reducing overall levels of crime." We put to her Clarke's concerns about prison numbers. "He was right to be bothered, because the number of people you put in prison is a representation of the amount of crime you've got . . . but you can be bothered without then arguing that you should fundamentally change the nature of your sentencing, or that you should reject as wrong a decision you took previously on indeterminate sentencing."

Much has been made of Smith's calm approach to the failed terrorist attacks at Glasgow Airport and outside a London nightclub. We wonder whether she had deliberately avoided the emotive language of the "war on terror", concentrating on the criminal nature of terrorism. "It is a conscious approach," she says, "and it's a conscious approach that stems from the need to enlist the broadest possible coalition in order to tackle terrorism . . . So, yes, it's tone, but the tone is fundamentally linked to the approach you need to take to counter terror."

Asked what she thinks of the specific phrase "war on terror", she is again frank: "It is not one that I used. It seems to me that what we should be doing is emphasising the values that we share which are under attack from terrorism, rather than trying to create a battle or war between those who oppose the terror and those who want to carry it out."

Smith is a fierce advocate of Brown's "hearts and minds" approach to tackling the radicalisation of young Muslims. She also believes that Muslim communities have not been best served by their leaders. She backs moves, put in place by Ruth Kelly when she was communities secretary, to broaden the kinds of groups with which the government engages and cut out, for example, the Muslim Council of Britain. "We've got to make serious attempts to go beyond those who have previously been seen as leaders of the community. She was absolutely right to do that. We have seen, in the immediate aftermath of the Glasgow and London bombings, that the response from leaders of the community was better because of the action previously taken."

Jacqui Smith: the CV

l3 November 1962 Born in Malvern, Worcestershire, daughter of two teachers

1979 Joins Labour after local Tory MP, Sir Michael Spicer, speaks at her school

1981-84 Studies PPE at Hertford College, Oxford. Runs unsuccessfully for president of student union before being elected chair of National Association of Labour Students

1986 Starts career as an economics teacher

1997 Elected Labour MP for Redditch as "Blair babe"

2003 After stint as one of youngest ministers in DoH, is appointed deputy minister for women and equality, driving civil partnerships legislation

2005 As minister of state for schools, funds Lesbian and Gay History Month

May 2006 Joins cabinet as chief whip in Blair's fraught last reshuffle

January 2007 Brands Celebrity Big Brother producers "shameful" in racism row

28 June 2007 Selected by Gordon Brown as first female home secretary and second youngest since Winston Churchill

29 June 2007 Survives baptism of fire with failed car bombings in London and Glasgow

July 2007 Dubbed "Jacqui Spliff" after admitting to experimenting with cannabis at university

Research by Matthew Holehouse

Jeremy Corbyn. Photo: Getty
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Lexit: the EU is a neoliberal project, so let's do something different when we leave it

Brexit affords the British left a historic opportunity for a decisive break with EU market liberalism.

The Brexit vote to leave the European Union has many parents, but "Lexit" – the argument for exiting the EU from the left – remains an orphan. A third of Labour voters backed Leave, but they did so without any significant leadership from the Labour Party. Left-of-centre votes proved decisive in determining the outcome of a referendum that was otherwise framed, shaped, and presented almost exclusively by the right. A proper left discussion of the issues has been, if not entirely absent, then decidedly marginal – part of a more general malaise when it comes to developing left alternatives that has begun to be corrected only recently, under Jeremy Corbyn and John McDonnell.

Ceding Brexit to the right was very nearly the most serious strategic mistake by the British left since the ‘70s. Under successive leaders Labour became so incorporated into the ideology of Europeanism as to preclude any clear-eyed critical analysis of the actually existing EU as a regulatory and trade regime pursuing deep economic integration. The same political journey that carried Labour into its technocratic embrace of the EU also resulted in the abandonment of any form of distinctive economics separate from the orthodoxies of market liberalism.

It’s been astounding to witness so many left-wingers, in meltdown over Brexit, resort to parroting liberal economics. Thus we hear that factor mobility isn’t about labour arbitrage, that public services aren’t under pressure, that we must prioritise foreign direct investment and trade. It’s little wonder Labour became so detached from its base. Such claims do not match the lived experience of ordinary people in regions of the country devastated by deindustrialisation and disinvestment.

Nor should concerns about wage stagnation and bargaining power be met with finger-wagging accusations of racism, as if the manner in which capitalism pits workers against each other hasn’t long been understood. Instead, we should be offering real solutions – including a willingness to rethink capital mobility and trade. This places us in direct conflict with the constitutionalised neoliberalism of the EU.

Only the political savvy of the leadership has enabled Labour to recover from its disastrous positioning post-referendum. Incredibly, what seemed an unbeatable electoral bloc around Theresa May has been deftly prized apart in the course of an extraordinary General Election campaign. To consolidate the political project they have initiated, Corbyn and McDonnell must now follow through with a truly radical economic programme. The place to look for inspiration is precisely the range of instruments and policy options discouraged or outright forbidden by the EU.

A neoliberal project

The fact that right-wing arguments for Leave predominated during the referendum says far more about today’s left than it does about the European Union. There has been a great deal of myth-making concerning the latter –much of it funded, directly or indirectly, by the EU itself.

From its inception, the EU has been a top-down project driven by political and administrative elites, "a protected sphere", in the judgment of the late Peter Mair, "in which policy-making can evade the constraints imposed by representative democracy". To complain about the EU’s "democratic deficit" is to have misunderstood its purpose. The main thrust of European economic policy has been to extend and deepen the market through liberalisation, privatisation, and flexiblisation, subordinating employment and social protection to goals of low inflation, debt reduction, and increased competitiveness.

Prospects for Keynesian reflationary policies, or even for pan-European economic planning – never great – soon gave way to more Hayekian conceptions. Hayek’s original insight, in The Economic Conditions of Interstate Federalism, was that free movement of capital, goods, and labour – a "single market" – among a federation of nations would severely and necessarily restrict the economic policy space available to individual members. Pro-European socialists, whose aim had been to acquire new supranational options for the regulation of capital, found themselves surrendering the tools they already possessed at home. The national road to socialism, or even to social democracy, was closed.

The direction of travel has been singular and unrelenting. To take one example, workers’ rights – a supposed EU strength – are steadily being eroded, as can be seen in landmark judgments by the European Court of Justice (ECJ) in the Viking and Laval cases, among others. In both instances, workers attempting to strike in protest at plans to replace workers from one EU country with lower-wage workers from another, were told their right to strike could not infringe upon the "four freedoms" – free movement of capital, labour, goods, and services – established by the treaties.

More broadly, on trade, financial regulation, state aid, government purchasing, public service delivery, and more, any attempt to create a different kind of economy from inside the EU has largely been forestalled by competition policy or single market regulation.

A new political economy

Given that the UK will soon be escaping the EU, what opportunities might this afford? Three policy directions immediately stand out: public ownership, industrial strategy, and procurement. In each case, EU regulation previously stood in the way of promising left strategies. In each case, the political and economic returns from bold departures from neoliberal orthodoxy after Brexit could be substantial.

While not banned outright by EU law, public ownership is severely discouraged and disadvantaged by it. ECJ interpretation of Article 106 of the Treaty on the Functioning of the European Union (TFEU) has steadily eroded public ownership options. "The ECJ", argues law professor Danny Nicol, "appears to have constructed a one-way street in favour of private-sector provision: nationalised services are prima facie suspect and must be analysed for their necessity". Sure enough, the EU has been a significant driver of privatisation, functioning like a ratchet. It’s much easier for a member state to pursue the liberalisation of sectors than to secure their (re)nationalisation. Article 59 (TFEU) specifically allows the European Council and Parliament to liberalise services. Since the ‘80s, there have been single market programmes in energy, transport, postal services, telecommunications, education, and health.

Britain has long been an extreme outlier on privatisation, responsible for 40 per cent of the total assets privatised across the OECD between 1980 and 1996. Today, however, increasing inequality, poverty, environmental degradation and the general sense of an impoverished public sphere are leading to growing calls for renewed public ownership (albeit in new, more democratic forms). Soon to be free of EU constraints, it’s time to explore an expanded and fundamentally reimagined UK public sector.

Next, Britain’s industrial production has been virtually flat since the late 1990s, with a yawning trade deficit in industrial goods. Any serious industrial strategy to address the structural weaknesses of UK manufacturing will rely on "state aid" – the nurturing of a next generation of companies through grants, interest and tax relief, guarantees, government holdings, and the provision of goods and services on a preferential basis.

Article 107 TFEU allows for state aid only if it is compatible with the internal market and does not distort competition, laying out the specific circumstances in which it could be lawful. Whether or not state aid meets these criteria is at the sole discretion of the Commission – and courts in member states are obligated to enforce the commission’s decisions. The Commission has adopted an approach that considers, among other things, the existence of market failure, the effectiveness of other options, and the impact on the market and competition, thereby allowing state aid only in exceptional circumstances.

For many parts of the UK, the challenges of industrial decline remain starkly present – entire communities are thrown on the scrap heap, with all the associated capital and carbon costs and wasted lives. It’s high time the left returned to the possibilities inherent in a proactive industrial strategy. A true community-sustaining industrial strategy would consist of the deliberate direction of capital to sectors, localities, and regions, so as to balance out market trends and prevent communities from falling into decay, while also ensuring the investment in research and development necessary to maintain a highly productive economy. Policy, in this vision, would function to re-deploy infrastructure, production facilities, and workers left unemployed because of a shutdown or increased automation.

In some cases, this might mean assistance to workers or localities to buy up facilities and keep them running under worker or community ownership. In other cases it might involve re-training workers for new skills and re-fitting facilities. A regional approach might help launch new enterprises that would eventually be spun off as worker or local community-owned firms, supporting the development of strong and vibrant network economies, perhaps on the basis of a Green New Deal. All of this will be possible post-Brexit, under a Corbyn government.

Lastly, there is procurement. Under EU law, explicitly linking public procurement to local entities or social needs is difficult. The ECJ has ruled that, even if there is no specific legislation, procurement activity must "comply with the fundamental rules of the Treaty, in particular the principle of non-discrimination on grounds of nationality". This means that all procurement contracts must be open to all bidders across the EU, and public authorities must advertise contracts widely in other EU countries. In 2004, the European Parliament and Council issued two directives establishing the criteria governing such contracts: "lowest price only" and "most economically advantageous tender".

Unleashed from EU constraints, there are major opportunities for targeting large-scale public procurement to rebuild and transform communities, cities, and regions. The vision behind the celebrated Preston Model of community wealth building – inspired by the work of our own organisation, The Democracy Collaborative, in Cleveland, Ohio – leverages public procurement and the stabilising power of place-based anchor institutions (governments, hospitals, universities) to support rooted, participatory, democratic local economies built around multipliers. In this way, public funds can be made to do "double duty"; anchoring jobs and building community wealth, reversing long-term economic decline. This suggests the viability of a very different economic approach and potential for a winning political coalition, building support for a new socialist economics from the ground up.

With the prospect of a Corbyn government now tantalisingly close, it’s imperative that Labour reconciles its policy objectives in the Brexit negotiations with its plans for a radical economic transformation and redistribution of power and wealth. Only by pursuing strategies capable of re-establishing broad control over the national economy can Labour hope to manage the coming period of pain and dislocation following Brexit. Based on new institutions and approaches and the centrality of ownership and control, democracy, and participation, we should be busy assembling the tools and strategies that will allow departure from the EU to open up new political-economic horizons in Britain and bring about the profound transformation the country so desperately wants and needs.

Joe Guinan is executive director of the Next System Project at The Democracy Collaborative. Thomas M. Hanna is research director at The Democracy Collaborative.

This is an extract from a longer essay which appears in the inaugural edition of the IPPR Progressive Review.