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Brown-hating hacks refuse to listen to what Labour has to say

What is left of New Labour, beyond a buzz-phrase that recalls a more confident and careless era: Cool Britannia, Noel Gallagher at No 10 and Tony Blair emoting over the death of Diana Windsor?

Gordon Brown can partly blame the apparent lack of coherent direction in his government on his predecessor. Mr Blair was always very good at articulating what New Labour wasn’t. It was “neither old left, nor new right”. It was anti-nationalisation; anti-explicit redistribution; anti-socialist. In fact, Mr Blair defined his politics as being against traditional Labour Party and leftist positions.

Mr Brown, as one of three (along with Peter Mandelson) architects of New Labour, cannot escape blame for the shedding of all ideology for the sake of popular electability: New Labour was a coalition of pragmatism founded, above all else, on the desire to gain and then hold on to power, at all costs – indeed at any cost – even if it meant Labour allying itself with the extremist and repugnant Bush administration and launching an illegal and ruinous war in Iraq.

New Labour, with Mr Brown as Chancellor, was seldom more than good on rhetoric. Mr Brown did, however, seek to remain true to Labour’s social-democratic heritage by attempting to pursue redistribution during a time of plenty, albeit largely by stealth.

Now, the government drifts, at once unable to decide on how to combat David Cameron’s Conservatives and unsure of its own values: for so long a party of neoliberalism, Labour is, in extremis, seeking to reinvent itself as a party of greater equality and fairness. Certainly, in recent days, the government has made several promising moves which may appeal to the electorate more than to the Cameron-loving and Brown-hating media. (The Guardian can scarcely contain its admiration for Mr Cameron; its interview with the Tory intellectual Michael Gove on 25 April was a model of swooning sycophancy of the kind that the riven and troubled newspaper regularly serves up when reporting on the Conservatives.)

The trick in the run-up to the next general election will be to ensure that such initiatives form part of a larger narrative – and crucially one that is social-democratic in nature. As the events of the past week have shown, Labour has much to say about some of the most pressing issues affecting the UK. The move in the Budget to raise the top bracket of tax was symbolic: even with measures to crack down on tax evasion, the most it can aim to raise appears to be several billion pounds. Nonetheless, the idea that the wealthiest 1 per cent of society should not shoulder more of the burden during a recession is absurd. If Barack Obama can succeed George W Bush as US president on an open platform of “sharing the wealth”, Mr Brown, likewise, should be able to articulate convincingly the case for what in practice is a mild tax increase at the top.

Second, the Equality Bill, introduced on 24 April, is promising in its attempt to create a legal framework against discrimination on class and gender grounds. Both have been criticised as heralding a “return to Old Labour”, whatever that means. But action on social inequality is necessary, however belated, and even Mr Blair should be praised for his commitment to social liberalism, helped by Labour’s policy of all-women shortlists for incoming MPs.

The Conservatives and their avid supporters in the press resolutely refuse to contextualise the economic crisis. This is not a crisis of capitalism, they say. Instead, the recession and Labour’s wild spending merely vindicate a return to monetarism and the need to slash spending now.

The urgent issue of national debt, from which the opposition is seeking to make maximum capital, must be set in perspective. True, there is a hole in the public finances, not least because of a new lack of revenue from the City, rising benefit payments and the ailing housing market. But, as a proportion of GDP, the UK’s debt, at roughly 44 per cent, remains smaller than that of the United States (60 per cent), Japan (170 per cent) and France (64 per cent). On debt, indeed, Britain remains positioned mid-table around the world.

However, the economy shows no sign of a quick-fix recovery. Much will depend on whether the Chancellor’s revised forecast of an upturn in growth comes good by next spring. But this is surely wishful thinking from Mr Darling: this recession will be deep and long, and the nation and our politics will emerge from it profoundly changed.

This article first appeared in the 04 May 2009 issue of the New Statesman, Flu: Everything you need to know

Photo: Getty Images
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A simple U-Turn may not be enough to get the Conservatives out of their tax credit mess

The Tories are in a mess over cuts to tax credits. But a mere U-Turn may not be enough to fix the problem. 

A spectre is haunting the Conservative party - the spectre of tax credit cuts. £4.4bn worth of cuts to the in-work benefits - which act as a top-up for lower-paid workers - will come into force in April 2016, the start of the next tax year - meaning around three million families will be £1,000 worse off. For most dual-earner families affected, that will be the equivalent of a one partner going without pay for an entire month.

The politics are obviously fairly toxic: as one Conservative MP remarked to me before the election, "show me 1,000 people in my constituency who would happily take a £1,000 pay cut, then we'll cut welfare". Small wonder that Boris Johnson is already making loud noises about the coming cuts, making his opposition to them a central plank of his 

Tory nerves were already jittery enough when the cuts were passed through the Commons - George Osborne had to personally reassure Conservative MPs that the cuts wouldn't result in the nightmarish picture being painted by Labour and the trades unions. Now that Johnson - and the Sun - have joined in the chorus of complaints.

There are a variety of ways the government could reverse or soften the cuts. The first is a straightforward U-Turn: but that would be politically embarrassing for Osborne, so it's highly unlikely. They could push back the implementation date - as one Conservative remarked - "whole industries have arranged their operations around tax credits now - we should give the care and hospitality sectors more time to prepare". Or they could adjust the taper rates - the point in your income  at which you start losing tax credits, taking away less from families. But the real problem for the Conservatives is that a mere U-Turn won't be enough to get them out of the mire. 

Why? Well, to offset the loss, Osborne announced the creation of a "national living wage", to be introduced at the same time as the cuts - of £7.20 an hour, up 50p from the current minimum wage.  In doing so, he effectively disbanded the Low Pay Commission -  the independent body that has been responsible for setting the national minimum wage since it was introduced by Tony Blair's government in 1998.  The LPC's board is made up of academics, trade unionists and employers - and their remit is to set a minimum wage that provides both a reasonable floor for workers without costing too many jobs.

Osborne's "living wage" fails at both counts. It is some way short of a genuine living wage - it is 70p short of where the living wage is today, and will likely be further off the pace by April 2016. But, as both business-owners and trade unionists increasingly fear, it is too high to operate as a legal minimum. (Remember that the campaign for a real Living Wage itself doesn't believe that the living wage should be the legal wage.) Trade union organisers from Usdaw - the shopworkers' union - and the GMB - which has a sizable presence in the hospitality sector -  both fear that the consequence of the wage hike will be reductions in jobs and hours as employers struggle to meet the new cost. Large shops and hotel chains will simply take the hit to their profit margins or raise prices a little. But smaller hotels and shops will cut back on hours and jobs. That will hit particularly hard in places like Cornwall, Devon, and Britain's coastal areas - all of which are, at the moment, overwhelmingly represented by Conservative MPs. 

The problem for the Conservatives is this: it's easy to work out a way of reversing the cuts to tax credits. It's not easy to see how Osborne could find a non-embarrassing way out of his erzatz living wage, which fails both as a market-friendly minimum and as a genuine living wage. A mere U-Turn may not be enough.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.