Man of straw

So it was Jack Straw who counselled against an early election? Martin Bright reports on a politician

It turns out that Jack Straw was one of the "greybeards" who always advised, sagely, against an autumn election. Gordon Brown must now be kicking himself that he didn't listen earlier to his Justice Secretary's wise words of caution. It could all have been so different.

Hang on a minute. Isn't this the same Jack Straw who indulged in the most shameless piece of electioneering of the whole Labour conference by spinning that the government would legislate to protect "have-a-go heroes"? His interview on Today the day after Brown's "vote red, get blue" speech was part of a calculated shift to draw in Tory floating voters ahead of a snap poll. Apart from the toe-curling examples of Straw's bravery in the face of street violence, it was an egregious act of authoritarian populism from a man who failed to propose any such legislation as home secretary between 1997 and 2001. One thing is certain: if Brown had decided to call a November election that, too, would have turned out to be Straw's idea.

Before the fiasco of the election-that-never-was, Brown was credited with being the most cunning political animal in the Labour pack. But at times like this he looks like a pussycat compared to Straw, the supreme survivor of the new Labour project, who has spent his entire career reinventing himself. I have often wondered why no one has written a biography of Straw, considering how close he has been to the centre of the action for so long. Part of the problem for anyone considering the project is that his politics are so ill-defined.

His record: a young man hired as adviser by Barbara Castle for his "guile and low cunning", he became a fashionably Eurosceptic leftist in the 1980s, but turned into an ardent new Labour cheerleader when the mood shifted. He was respon sible for making the case for an EU constitution, but then bounced Tony Blair into a referendum in April 2004 while his boss was on holiday. When first the French and then the Dutch voted against the proposed treaty, his glee in a call to Blair in June 2005 was such that the then prime minister is said to have put the phone down in disgust with the words, "What a tart."

Straw is the man who invited the Islamist Muslim Council of Britain (MCB) into the heart of government and hung Denis MacShane out to dry when he dared suggest that British Muslims had a responsibility to root out terrorists. He later decided to assert his Enlightenment credentials by objecting to Muslim women covering their faces in his MP's surgeries. He was a fierce opponent of electoral reform, dismissing Lord Jenkins's proposals in 1998 as "ingenious" and "complex". Now that several members of Brown's inner circle are con sidering a move to the Alternative Vote system, Straw says he supported this option all along.

As foreign secretary, Straw was, of necessity, signed up to war in Iraq, but he fashioned for himself an ingenious get-out in case things went wrong. On the eve of war, when there was no realistic chance of turning back, he sent Blair a confidential memo suggesting that, after all, maybe Britain shouldn't join the Americans in invading. This has allowed him to distance himself from a conflict in which he played an intimate role.

This most Janus-like of politicians has an almost uncanny ability to play the liberal and the authoritarian at the same time. He should be given serious credit for introducing the Freedom of Information Act and the Human Rights Act. But he has spent much of his time in government undermining the principles of both. As the NS has reported, he has blocked the release of the missing first draft of the allegedly "sexed-up" dossier on weapons of mass destruction. Despite a ruling by the Information Commissioner to release the document, it remains to this day locked in the Foreign Office while mandarins prepare to appeal the decision.

Straw was also foreign secretary when his department developed cosy relations with the MCB at home, and abroad undertook discreet dialogue with the Muslim Brotherhood, the banned Islamist group. Following publication in the NS and elsewhere of these disclosures, a Foreign Office official, Derek Pasquill, was charged under the Official Secrets Act.

Hot-headed youth

The split between the cabinet's "Young Turks" and "greybeards" has been hugely overstated in recent days. The younger generation in cabinet has been bruised by accusations of poor judgement. "We were just providing information to the man who had to make the decision," one told me. The real scandal is not that the likes of Ed Balls and Douglas Alexander became excited at the idea of crushing the Tories when they looked weak, it is that older members, who should have known better, did not have the gumption to make their voices heard long before the Labour conference. Where Margaret Thatcher famously had William Whitelaw (her "Willie") and Blair had a whole range of older, wiser heads, including Brown himself, our new Prime Minister has no one but Alistair Darling, Geoff Hoon and Straw - none of whom has the authority to tell him what he doesn't want to hear. As a former minister said: "If he was so sure he was right, why didn't Jack do anything, or say anything, more publicly?"

Straw effortlessly made the leap from Blair to Brown just when it looked like his career might be on the slide. It is easy to forget that the man who acted as campaign manager for Brown's leadership bid was a campaign manager for Blair 13 years earlier. There is no other senior figure in the Labour Party who would have been able to do both jobs.

There is already talk that Brown's line-up is a mere "interim government" and that a reshuffle is in the offing. One sign of Brown breaking with the past would be to pension off Straw, but I suspect he will be around for some time to come. There is great uncertainty around the Labour Party, but there is one constant: Jack, as the saying goes, will always be alright.

Jeremy Corbyn. Photo: Getty
Show Hide image

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.