One Nation Labour looks more like West Germany than East

If Cameron wants an accurate comparison for Labour's policies, he should look to modern Germany.

David Cameron told the Sun yesterday that Ed Miliband’s "one nation" philosophy "sounded more like East Germany than Great Britain". The irony here is that what few policies Labour has revealed look startlingly like the political economy of the Federal Republic of Germany more than anything else. 

Workers on company boards

Labour has pledged to put an employee on the remuneration committee of large companies. What has gone unnoticed about this policy is that remuneration committees are a subcommittee of companies’ board of directors: putting an elected employee on the committee would mean having at least one on the company’s board. Miliband hinted as much in his first conference Q&A.

In Germany, large firms’ supervisory boards are 50% elected by workers, and 50% by shareholders – a process called co-determination, or Mitbestimmungsgesetz. The supervisory board in turn elects the firm’s management board and approves all major decisions. This system where workers and capital owners play fairly equal parts is in contrast to the Anglosphere view of company boards as being the exclusive petty fiefdom of shareholders.

It’s not surprising that Ed Miliband has sold this co-determination policy indirectly, in terms of tackling executive pay – reform of corporate governance is hardly sexy stuff for the electorate. While one worker is hardly going to be able to outvote shareholders, Miliband’s former senior policy advisor Sonia Sodha tells me the policy is "an important first step to something more significant".

Vocational qualifications and apprenticeships

Technical and vocational schools are a fundamental part of Germany’s economy, where vocational education actually outstrips academic study and about half of 16-18 year old school leavers take apprenticeships – compared to 9% in the UK.

Two Labour policies lean in this direction: Ed Miliband’s big conference announcement that he would introduce a new "Technical Bacc" route for the "forgotten 50%" not going into higher education was welcomed by further education leaders as a strong way of promoting technical education. Ed’s pledge that all public contractors would have to offer apprenticeship schemes to be considered for tender it also designed change the situation where under a third of large UK firms offer apprenticeships – and bring it closer to the German state of affairs, where nearly all do.

State investment bank

Founded in 1948 as part of the Marshall Plan, Germany’s state investment bank, the KfW, or Kreditanstalt für Wiederaufbau - meaning Reconstruction Credit Institute, is a cornerstone of the country’s active industrial policy. The country’s technology minister sits on the bank’s 37-member board. 

The bank provides cheap finance for housing projects, environmental projects and small and medium sized businesses, particularly those looking to export. Widely regarded as the "safest bank in the world", in the words of the bank’s Chair Ulrich Schroeder, the KfW is active "only in areas where the market does not provide a satisfactory solution".

Shadow business secretary Chuka Umunna visited Germany in February to take a look at the country’s banking system, including the not-for profit Sparkassen and local-authority controlled Landsbanks: it’s not hard to see the connection between Mr Schroeder’s views, Labour’s state investment bank policy, and Miliband’s explicit aim to address market failure in SME finance.

Cooperative trade unions

In Miliband’s second Q&A to the Labour conference, he spoke of a role for business and trade unions as partners in enterprise rather than adversaries. Ed cited the car industry and the Olympics as an example of the sort of cooperation he’d like to see between unions and employers.

This kind of cooperation is straight out of German political economy. On top of participating in institutionalised co-determination, German unions are otherwise central to the country’s economic strategy. In the British car industry Miliband speaks of unions actually hold down wages: this is the strategy of German manufacturing exporters, who held down their unit labour cost, internally devaluing the cost of their exports to other countries and causing an export boom that left them with a €140.3bn trade surplus in 2010 – the highest in the EU. (Conversely, UK has the biggest deficit.) This is, incidentally, the internal devaluation which the PIIGS countries are now struggling to replicate through austerity in order to be able to compete in export markets.

Labour’s support for a public sector pay freeze was justified in terms of prioritising "jobs over wages". If this attitude continues then expect to see it implicitly articulated for the private sector as well.

Under Miliband's leadership, Labour has looked to Germany's social market economy for inspiration. Photograph: Getty Images.

Jon Stone is a political journalist. He tweets as @joncstone.

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Hannan Fodder: This week, Daniel Hannan gets his excuses in early

I didn't do it. 

Since Daniel Hannan, a formerly obscure MEP, has emerged as the anointed intellectual of the Brexit elite, The Staggers is charting his ascendancy...

When I started this column, there were some nay-sayers talking Britain down by doubting that I was seriously going to write about Daniel Hannan every week. Surely no one could be that obsessed with the activities of one obscure MEP? And surely no politician could say enough ludicrous things to be worthy of such an obsession?

They were wrong, on both counts. Daniel and I are as one on this: Leave and Remain, working hand in glove to deliver on our shared national mission. There’s a lesson there for my fellow Remoaners, I’m sure.

Anyway. It’s week three, and just as I was worrying what I might write this week, Dan has ridden to the rescue by writing not one but two columns making the same argument – using, indeed, many of the exact same phrases (“not a club, but a protection racket”). Like all the most effective political campaigns, Dan has a message of the week.

First up, on Monday, there was this headline, in the conservative American journal, the Washington Examiner:

“Why Brexit should work out for everyone”

And yesterday, there was his column on Conservative Home:

“We will get a good deal – because rational self-interest will overcome the Eurocrats’ fury”

The message of the two columns is straightforward: cooler heads will prevail. Britain wants an amicable separation. The EU needs Britain’s military strength and budget contributions, and both sides want to keep the single market intact.

The Con Home piece makes the further argument that it’s only the Eurocrats who want to be hardline about this. National governments – who have to answer to actual electorates – will be more willing to negotiate.

And so, for all the bluster now, Theresa May and Donald Tusk will be skipping through a meadow, arm in arm, before the year is out.

Before we go any further, I have a confession: I found myself nodding along with some of this. Yes, of course it’s in nobody’s interests to create unnecessary enmity between Britain and the continent. Of course no one will want to crash the economy. Of course.

I’ve been told by friends on the centre-right that Hannan has a compelling, faintly hypnotic quality when he speaks and, in retrospect, this brief moment of finding myself half-agreeing with him scares the living shit out of me. So from this point on, I’d like everyone to keep an eye on me in case I start going weird, and to give me a sharp whack round the back of the head if you ever catch me starting a tweet with the word, “Friends-”.

Anyway. Shortly after reading things, reality began to dawn for me in a way it apparently hasn’t for Daniel Hannan, and I began cataloguing the ways in which his argument is stupid.

Problem number one: Remarkably for a man who’s been in the European Parliament for nearly two decades, he’s misunderstood the EU. He notes that “deeper integration can be more like a religious dogma than a political creed”, but entirely misses the reason for this. For many Europeans, especially those from countries which didn’t have as much fun in the Second World War as Britain did, the EU, for all its myriad flaws, is something to which they feel an emotional attachment: not their country, but not something entirely separate from it either.

Consequently, it’s neither a club, nor a “protection racket”: it’s more akin to a family. A rational and sensible Brexit will be difficult for the exact same reasons that so few divorcing couples rationally agree not to bother wasting money on lawyers: because the very act of leaving feels like a betrayal.

Or, to put it more concisely, courtesy of Buzzfeed’s Marie Le Conte:

Problem number two: even if everyone was to negotiate purely in terms of rational interest, our interests are not the same. The over-riding goal of German policy for decades has been to hold the EU together, even if that creates other problems. (Exhibit A: Greece.) So there’s at least a chance that the German leadership will genuinely see deterring more departures as more important than mutual prosperity or a good relationship with Britain.

And France, whose presidential candidates are lining up to give Britain a kicking, is mysteriously not mentioned anywhere in either of Daniel’s columns, presumably because doing so would undermine his argument.

So – the list of priorities Hannan describes may look rational from a British perspective. Unfortunately, though, the people on the other side of the negotiating table won’t have a British perspective.

Problem number three is this line from the Con Home piece:

“Might it truly be more interested in deterring states from leaving than in promoting the welfare of its peoples? If so, there surely can be no further doubt that we were right to opt out.”

If there any rhetorical technique more skin-crawlingly horrible, than, “Your response to my behaviour justifies my behaviour”?

I could go on, about how there’s no reason to think that Daniel’s relatively gentle vision of Brexit is shared by Nigel Farage, UKIP, or a significant number of those who voted Leave. Or about the polls which show that, far from the EU’s response to the referendum pushing more European nations towards the door, support for the union has actually spiked since the referendum – that Britain has become not a beacon of hope but a cautionary tale.

But I’m running out of words, and there’ll be other chances to explore such things. So instead I’m going to end on this:

Hannan’s argument – that only an irrational Europe would not deliver a good Brexit – is remarkably, parodically self-serving. It allows him to believe that, if Brexit goes horribly wrong, well, it must all be the fault of those inflexible Eurocrats, mustn’t it? It can’t possibly be because Brexit was a bad idea in the first place, or because liberal Leavers used nasty, populist ones to achieve their goals.

Read today, there are elements of Hannan’s columns that are compelling, even persuasive. From the perspective of 2020, I fear, they might simply read like one long explanation of why nothing that has happened since will have been his fault.

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.