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

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There's nothing Luddite about banning zero-hours contracts

The TUC general secretary responds to the Taylor Review. 

Unions have been criticised over the past week for our lukewarm response to the Taylor Review. According to the report’s author we were wrong to expect “quick fixes”, when “gradual change” is the order of the day. “Why aren’t you celebrating the new ‘flexibility’ the gig economy has unleashed?” others have complained.

Our response to these arguments is clear. Unions are not Luddites, and we recognise that the world of work is changing. But to understand these changes, we need to recognise that we’ve seen shifts in the balance of power in the workplace that go well beyond the replacement of a paper schedule with an app.

Years of attacks on trade unions have reduced workers’ bargaining power. This is key to understanding today’s world of work. Economic theory says that the near full employment rates should enable workers to ask for higher pay – but we’re still in the middle of the longest pay squeeze for 150 years.

And while fears of mass unemployment didn’t materialise after the economic crisis, we saw working people increasingly forced to accept jobs with less security, be it zero-hours contracts, agency work, or low-paid self-employment.

The key test for us is not whether new laws respond to new technology. It’s whether they harness it to make the world of work better, and give working people the confidence they need to negotiate better rights.

Don’t get me wrong. Matthew Taylor’s review is not without merit. We support his call for the abolishment of the Swedish Derogation – a loophole that has allowed employers to get away with paying agency workers less, even when they are doing the same job as their permanent colleagues.

Guaranteeing all workers the right to sick pay would make a real difference, as would asking employers to pay a higher rate for non-contracted hours. Payment for when shifts are cancelled at the last minute, as is now increasingly the case in the United States, was a key ask in our submission to the review.

But where the report falls short is not taking power seriously. 

The proposed new "dependent contractor status" carries real risks of downgrading people’s ability to receive a fair day’s pay for a fair day’s work. Here new technology isn’t creating new risks – it’s exacerbating old ones that we have fought to eradicate.

It’s no surprise that we are nervous about the return of "piece rates" or payment for tasks completed, rather than hours worked. Our experience of these has been in sectors like contract cleaning and hotels, where they’re used to set unreasonable targets, and drive down pay. Forgive us for being sceptical about Uber’s record of following the letter of the law.

Taylor’s proposals on zero-hours contracts also miss the point. Those on zero hours contracts – working in low paid sectors like hospitality, caring, and retail - are dependent on their boss for the hours they need to pay their bills. A "right to request" guaranteed hours from an exploitative boss is no right at all for many workers. Those in insecure jobs are in constant fear of having their hours cut if they speak up at work. Will the "right to request" really change this?

Tilting the balance of power back towards workers is what the trade union movement exists for. But it’s also vital to delivering the better productivity and growth Britain so sorely needs.

There is plenty of evidence from across the UK and the wider world that workplaces with good terms and conditions, pay and worker voice are more productive. That’s why the OECD (hardly a left-wing mouth piece) has called for a new debate about how collective bargaining can deliver more equality, more inclusion and better jobs all round.

We know as a union movement that we have to up our game. And part of that thinking must include how trade unions can take advantage of new technologies to organise workers.

We are ready for this challenge. Our role isn’t to stop changes in technology. It’s to make sure technology is used to make working people’s lives better, and to make sure any gains are fairly shared.

Frances O'Grady is the General Secretary of the TUC.