Common ground emerges between Labour’s warring tribes

Tribalism starts to recede into the past as Labour consolidates its stance on the state.

The left has always enjoyed a good argument, but Labour's recent history has been characterised by bitter division between its warring tribes. Whether it be New Labour v Old Labour, Blairites v Brownites or Progress v Compass, the left's tribalism has been a defining feature of the past few decades. However, recently common ground has begun to emerge.

Opposition has focused the mind and humbled the chiefs of these tribes. Most of all, the competitive nature of the five-horse race that the Labour leadership contest has become has given pluralism on the left a new lease of life. A new collection of essays produced by Soundings and the Open Left project at Demos scoops out common ground between the candidates. The left is becoming defined by a debate between pluralists and centralisers rather than divisions between left and right. 

Labour's defeat has allowed those associated with New Labour reformers of public services and defenders of globalisation, such as James Purnell, to accept bravely that "because we were too hands-off with the market, we became too hands-on with the state". He argues that New Labour's attitude to globalisation "too often sounded to voters like they were on their own". The lesson of the last election, he writes, is that Labour had stopped sounding like reformers and that globalisation became "the way New Labour told the Labour Party it couldn't have what it wanted".

Unison's Heather Wakefield argues that the knowledge, commitment and experience of public-service workers was "at very best submerged in 'social partnership', generally overlooked and at worse derided". This frustration with the way social partnership was conducted is a crucial challenge for Labour's next leader, because of the divisions that the coalition's cuts agenda is certain to create within public-sector unions.

Andy Burnham's introduction of "preferred provider status" for the NHS and the social partnership with education unions was an important move away from the public-service reform agenda in Labour's second term that Ed Balls has recently criticised. But Wakefield highlights an obvious failing when she points out that Labour left the gender pay gap "to be dealt with through costly litigation rather than cheaper government intervention". Here was an obvious case of being too hands-off with the market, even when it was affecting public-sector workers.

The key common ground emerges in Jonathan Rutherford's argument that a "covenant politics" should be based on the "ethic of reciprocity". So Labour's public-service reform agenda might, in future, be grounded in the principle of mutualism, and on giving users and workers a democratic stake in the functioning of hospitals and schools. At the same time, a reform agenda in global markets would regulate the banking sector to encourage long-term sustainable investment and reform corporate governance to bring firms under greater stakeholder control -- agendas recently embraced by Ed Miliband and David Miliband, respectively.

Anthony Painter imagines that in 2015 in austerity Britain, the state will not only be smaller, but will be one in which benefit and tax credit cuts have undermined the public's faith in collective and redistributive welfare. He argues that there will be a deeper scepticism about the state among the public, which may be more difficult to reverse than simply waiting for a backlash against cuts. Again, the ethic of reciprocity is called forward as an answer, where the state creates mutualist or voluntary organisations to achieve social-democratic outcomes previously pursued by the state.

While the Labour leadership candidates seek distinction for advantage at the hustings, a new post-Labour consensus is emerging and common ground is starting to take shape. This latest essay collection is the best guide yet to the likely direction of Labour's renewal, whoever ends up as leader.

Richard Darlington is head of the Open Left project at Demos.

Richard Darlington is Head of News at IPPR. Follow him on Twitter @RDarlo.

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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.