The New Labour That Wasn’t: lessons for Miliband

If there is a lesson to be learned from the road not taken by New Labour, it is that economic reform and political reform are necessarily connected.

Labour currently faces a period of challenging redefinition. New Labour is emphatically over and done. But as New Labour recedes into the past, it is possible to speak of a road not taken – the ‘New Labour That Wasn’t? And what relevance does it have for Labour today?

The New Labour That Wasn’t found expression in a number of important works from the mid-1980s to the mid-1990s. Perhaps the key early contribution was David Marquand’s The Unprincipled Society, followed by Paul Hirst’s After Thatcher and Associative Democracy. Will Hutton’s The State We’re In (1995) arguably pulled the ideas together in the way that had the biggest impact. Another important feature of the context was the rise, from 1988, of Charter 88 as a pressure group and wider political movement arguing the case for comprehensive constitutional reform.

The New Labour That Wasn’t argued that the UK’s economic problems had deep institutional roots. In The State We’re In, Hutton argued that the UK’s competitiveness in manufacturing had been undermined historically by the short-termism of the City, making for an excessively high cost of capital and consequent underinvestment. German capitalism, he argued, offered an alternative model based on long-term, ‘patient’ industrial banking. It also illustrated the benefits of structures of governance of the firm that incorporate not only long-term investors but also labour as long-term partners – ‘stakeholders’ – in enterprise management.

For Paul Hirst, the UK’s economic revival depended on manufacturing renewal in particular. At its heart would be small and medium-sized firms adapted to the production of high-quality goods, targeted to the needs of varied customers, on the basis of highly and broadly skilled workforce. Institutionally, Hirst argued, this kind of production is supported by ‘corporatist’ arrangements that facilitate collaboration between labour and capital, as well as a strong regional dimension to economic growth strategy.

The second key plank of the New Labour That Wasn’t was the advocacy of a pluralist polity: Charter 88’s platform of devolution, a UK Bill of Rights for the UK, electoral and House of Lords reform and freedom of information. Pluralism here also entails an idea of cohesion and the common good. The individual citizen should be able to argue their case in dialogue with other citizens both in the workplace and in the wider public sphere.

The third key element of The New Labour That Wasn't lies in the claim that economic and political reform are necessarily connected. Power is shared across parties: industry and finance, labour and capital. But it is difficult to create the framework for this kind of pluralism to flourish when the state itself is so centralised and majoritarian.

Actual New Labour was partly inspired by this current of thought. But it was also defined, in some important ways, by a strong rejection of it. On the economy, New Labour briefly, and somewhat superficially, adopted the language of stakeholding. However, Hutton's relational idea of stakeholding gave way to a much more individualistic understanding of the term, a matter of individuals holding assets which increase their options in the marketplace. This reflected a key strategic decision on Labour's part to accept the existing financial system and (to a large extent) the rules of corporate governance.

While New Labour took a much weaker line on reforming the economy, on the side of political reform, New Labour of course adopted and delivered on a number of the pluralists' commitments. There were, however, also some major elements of the pluralists' agenda that Labour did not deliver on: while most hereditary peers were removed from the House of Lords, Labour did not go further in reform of the second chamber. The Jenkins Commission on the voting system reported in 1998 only to be politely but emphatically shelved. This was not accidental. Labour’s attitude to Charter 88 was marked at the outset by wariness and a degree of hostility. The pluralist republicans saw political process not simply as a means to an end but as valuable in itself. By contrast, New Labour adopted a decidedly more instrumentalist view, and took a significantly more managerialist approach.

This offers an interesting way of looking at the emerging perspective of ‘one nation’ Labour. On the one hand, there are some clear similarities between one nation Labour and the New Labour That Wasn’t. This is particularly true around the economy. First, there is the judgment that economic revival must involve industrial renewal. Second, there is an interest in exploring what lessons the German and Nordic economies might have for achieving industrial renewal. But the similarities are much less marked with the political pluralist dimension of the New Labour That Wasn’t. There are, however, important ways in which Labour’s politics could be usefully informed by this spirit. For example, if Labour is serious about radical economic change then it needs to consider how it can build an alliance of social and political forces to support it. Of course it will call on people to join and vote Labour. But it must recognise that many people whose support and energy it needs will belong to other parties or to none.

Positive economic change requires a broad movement and Labour cannot credibly claim simply to be this movement. Nor can it just demand that others follow. It must try to earn leadership through argument in open debate with others – including trade unions, religious groups, community organising initiatives and anti-cuts campaigners.It is encouraging to see that Labour is starting to grapple with the need for serious economic reform. But if there is a lesson to be learned from turning back to the insights of New Labour’s road not taken, it is in seeing that economic reform and political reform are closely intertwined.

This piece originally appeared in Fabian Review

Stuart White teaches political theory at the University of Oxford; Martin O'Neill teaches political theory at the University of York

Tony Blair talks with Ed Miliband during a Loyal Address service to mark the Queen's Diamond Jubilee at Westminster Hall. Photograph: Getty Images.

Stuart White teaches political theory at the University of Oxford; Martin O'Neill teaches political theory at the University of York

Photo: Getty
Show Hide image

Who will win the Copeland by-election?

Labour face a tricky task in holding onto the seat. 

What’s the Copeland by-election about? That’s the question that will decide who wins it.

The Conservatives want it to be about the nuclear industry, which is the seat’s biggest employer, and Jeremy Corbyn’s long history of opposition to nuclear power.

Labour want it to be about the difficulties of the NHS in Cumbria in general and the future of West Cumberland Hospital in particular.

Who’s winning? Neither party is confident of victory but both sides think it will be close. That Theresa May has visited is a sign of the confidence in Conservative headquarters that, win or lose, Labour will not increase its majority from the six-point lead it held over the Conservatives in May 2015. (It’s always more instructive to talk about vote share rather than raw numbers, in by-elections in particular.)

But her visit may have been counterproductive. Yes, she is the most popular politician in Britain according to all the polls, but in visiting she has added fuel to the fire of Labour’s message that the Conservatives are keeping an anxious eye on the outcome.

Labour strategists feared that “the oxygen” would come out of the campaign if May used her visit to offer a guarantee about West Cumberland Hospital. Instead, she refused to answer, merely hyping up the issue further.

The party is nervous that opposition to Corbyn is going to supress turnout among their voters, but on the Conservative side, there is considerable irritation that May’s visit has made their task harder, too.

Voters know the difference between a by-election and a general election and my hunch is that people will get they can have a free hit on the health question without risking the future of the nuclear factory. That Corbyn has U-Turned on nuclear power only helps.

I said last week that if I knew what the local paper would look like between now and then I would be able to call the outcome. Today the West Cumbria News & Star leads with Downing Street’s refusal to answer questions about West Cumberland Hospital. All the signs favour Labour. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.