The challenge facing Labour

Don’t let the Tories win the argument on the management of public services.

I'm afraid in my previous post I gestured rather airily in the direction of some "fundamental questions of political economy" that the candidates for the Labour leadership need to answer, without specifying what those questions might be. I don't think I'd be able to better for clarity or precision Chris Dillow's account of the challenge facing Labour as it tries to determine what a post-New Labour version of social democracy might look like.

Dillow offers five reasons why New Labour's conception of social democracy is dead. I'd like to draw your attention here to two of those reasons. First, he points out that Labour's "promise of macroeconomic stability" was false (John Gray said something similar in the piece about Ralph Miliband that I discussed yesterday):

Macroeconomic stability was mere good luck which has passed, not something which it is in the power of governments to create.

The challenge for an intelligent left is to ask: how can we protect the worst-off from macroeconomic fluctuations, given that macro management is insufficient? This requires either more use of insurance markets, or a welfare state that puts a higher weight upon reducing risk than upon incentives.

Gray, of course, was fairly pessimistic about the ability of a future Labour government to "protect the worst-off from macroeconomic fluctuations". But he and Dillow agree that figuring whether and how it is possible to do this in the "globalised world" to which Tony Blair's memoir is, in part, a deluded incantation is a task the centre left needs to take very seriously.

Second, Dillow makes a point about managerialism and the public sector (something David Miliband and Jon Cruddas allude to in their Guardian piece that I also blogged about yesterday):

The inefficiencies in the public sector generated by top-down management might have been tolerable when no one worried about government borrowing. However, even though concern about the deficit is grotesquely overblown, this is not the world we'll live in in the foreseeable future. Governments will have to pay more attention to value for money. This requires that public-sector workers be empowered, as they know best where inefficiencies really lie. But New Labour's managerialism prevented it from seeing this.

The critique of managerialism is something that the left has allowed the Tories (for whom it goes proxy for an assault on the public sector tout court) to take ownership of and it's time it wrested it back.

Jonathan Derbyshire is Managing Editor of Prospect. He was formerly Culture Editor of the New Statesman.

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How Theresa May laid a trap for herself on the immigration target

When Home Secretary, she insisted on keeping foreign students in the figures – causing a headache for herself today.

When Home Secretary, Theresa May insisted that foreign students should continue to be counted in the overall immigration figures. Some cabinet colleagues, including then Business Secretary Vince Cable and Chancellor George Osborne wanted to reverse this. It was economically illiterate. Current ministers, like the Foreign Secretary Boris Johnson, Chancellor Philip Hammond and Home Secretary Amber Rudd, also want foreign students exempted from the total.

David Cameron’s government aimed to cut immigration figures – including overseas students in that aim meant trying to limit one of the UK’s crucial financial resources. They are worth £25bn to the UK economy, and their fees make up 14 per cent of total university income. And the impact is not just financial – welcoming foreign students is diplomatically and culturally key to Britain’s reputation and its relationship with the rest of the world too. Even more important now Brexit is on its way.

But they stayed in the figures – a situation that, along with counterproductive visa restrictions also introduced by May’s old department, put a lot of foreign students off studying here. For example, there has been a 44 per cent decrease in the number of Indian students coming to Britain to study in the last five years.

Now May’s stubbornness on the migration figures appears to have caught up with her. The Times has revealed that the Prime Minister is ready to “soften her longstanding opposition to taking foreign students out of immigration totals”. It reports that she will offer to change the way the numbers are calculated.

Why the u-turn? No 10 says the concession is to ensure the Higher and Research Bill, key university legislation, can pass due to a Lords amendment urging the government not to count students as “long-term migrants” for “public policy purposes”.

But it will also be a factor in May’s manifesto pledge (and continuation of Cameron’s promise) to cut immigration to the “tens of thousands”. Until today, ministers had been unclear about whether this would be in the manifesto.

Now her u-turn on student figures is being seized upon by opposition parties as “massaging” the migration figures to meet her target. An accusation for which May only has herself, and her steadfast politicising of immigration, to blame.

Anoosh Chakelian is senior writer at the New Statesman.

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