In Scotland, Labour faces replacement by nationalists. Photo: Getty
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Social democrats face irrelevance at best, extinction at worse

Labour could find itself in office come May, but without the power to act. Social democrats everywhere need to understand the crisis they are in and how much they need to change.

Is social democracy already dead and like the proverbial headless chicken are we simply running round the yard on instinct before we topple over for good? If social democracy is still alive, it’s hard to know how or why. Let’s look at the evidence.

No social democratic party anywhere in the world is on the front foot. Sure, parties may find themselves in government – as they do in Denmark, Germany and France, in their own right or as part of a coalition – but this happens by accident and tends to be down to the failures of the right. And in office, social democrats tend to follow austerity or austerity-lite measures.  No social democratic party has a strident and confident set of intellectual and organisational ideas that propel a meaningful alternative political project. The future looks incredibly bleak. Why?

The reasons are not hard to find.  Social democracy is a 19th-century construct that achieved some successes in the 20th-century but is hopelessly prepared for the 21st century. This is because all the forces that once made social democrats strong have disappeared. The collective experience of the war, the existence of a unified, organised and seemingly growing working class and the brooding presence of the Soviet Union – a threatening alternative to free markets that forced big concessions from employers who feared revolution happening in the West – all combined to ensure that capitalism momentarily made historic compromises with social democratic parties. 

With hindsight, this "golden era" should be viewed as a historic blip but social democrats have continued to mistake it as the norm. They then compound this error to devastating effect. Having lost their external sources of power, they focus almost entirely on electing ‘the right leaders’ who, they believe, will re-enact the ‘golden era’ from above. This is a technocratic politics devoid of movements, any understanding of historic context or the geo-politics that shapes the everyday actions of politicians and people alike. Social democrats are surfers without waves.

But time has not stood still. The 20th-century underpinnings of social democracy have not just evaporated, but have been replaced by other hostile forces. Globalisation and individualisation act as pincers to further restrict the possibilities of any social democratic renewal. Globalisation – the flight of capital and the downward pressure on taxes and regulation it engenders – signals the death knell of socialism in one county. Meanwhile, individualism and the culture of turbo-consumption make social solidarity difficult to say the least.  In such a world, not only have we thankfully lost the sense of deference that made much of the paternalistic social democracy of the last century possible, but the good life has become something to be purchased by the lone consumer and not collectively created by the citizen. The endless formation and reformation of our identities through competitive consumption destroys the very social fabric that social democracy needs to take root. Today, it would seem, there is no alternative.

The brief upturn in the electoral fortunes of social democrats in the mid 1990s around the third way, the new middle and Clintonism was won at the expense of the further erosion of an increasingly ignored electoral base. In the mistaken belief it had nowhere else to go, core support was traded for core values and reliance pinned on a dysfunctional financialised capitalism that backfired spectacularly in 2008 with social democrats caught with their fingers in the neo-liberal till.

This existential crisis of social democracy finds its ultimate expression in the continuing crisis of capitalism. If the historic goal of social democracy is to humanise capitalism, then the way in which public finances have been used to bail out the banks at the expense of the people who are capitalism’s victims, proves the paucity of the social democrat position.

Where the crisis hit hardest, the social democrats fell furthest and fastest. Today PASOK in Greece barely exists. The PSOE in Spain are fairing badly and have ben overtaken in the polls by Podemos – a party less than a year old! In Scotland, Labour faces replacement by nationalists. Everywhere else, social democrats struggle as populism and an anti-politics mood sweeps Europe.

All of this is obvious. But social democrats seem unable to do anything more than shrug and go back to the same orthodoxies. They push at the edges of fiscal and regulatory boundaries but never really break with the constraints of neo-liberalism. They act as if the same class divisions existed, still take their core voters for granted and behave as if the planet wasn’t finite. They vie for office, to pull leavers that have long since rusted and ceased up. The baggage of the past just seems too heavy to let go.  Adopting Einstein’s definition of insanity – they do the same thing again and again and expect a different outcome.

So what is to be done? Social democrats are going to have to be brave – really brave – or face irrelevance at best, extinction at worse. There are three key challenges.

The first challenge is to redefine the meaning of the good society. Social democracy has focussed for too long on the material. Yes we want greater equality, but does that mean just more and more consumption in a race that can never be won? If the workers plasma TV can never be big enough then capitalism always win. The the treadmill of competitive consumption simply undermines any hope for social solidarity as much as it wrecks the environment. Instead of more things we didn’t know we wanted, paid for with money we don’t have, to impress people we don’t know, social democrats are going have to talk about more of other things – more time, public space, clean air, community and autonomy.  This suggests a politics of working time limits, workplace democracy and ownership, a citizen’s income and stringent carbon controls.

The second challenge is a radical shift in terms of internationalism. If capitalism has gone beyond the nation, then social democracy has no option but to follow. It needs to regulate and control markets wherever they do damage to people or the planet. Yes this is difficult, and yes it means surrendering sovereignty. But power is empty if wielded at the national level when economic decisions are being made in other countries and on other continents. The politics of this would start at a European level around issues like a continent wide minimum wages and corporation tax rates. 

The third challenge is cultural. Social democrats are going to have to let go. There is no place for elected vanguards, who do things to people and for them. Social democrats are going to have to know their new place as just one source of empowerment for citizens. Instead of pulling policy levers, the job is to create the platforms so that people can collectively change things for themselves. This is a more humble role, but essential and entirely possible in a networked society in which the internet has become the main nexus for human culture. Parties need to open up and out. They need to see themselves as simply part of much wider alliances for change, and not the sole repository of all wisdom and action. Parties are going to have to become really democratic, localising power and building platforms for collaboration around things like energy, loans and new media.

These challenges are huge and the scale of transformation enormous. Think of the sudden the fall of Kodak and the rise on Instagram. Can the challenges be met? We simply don’t know. While we mustn’t underestimate the scale of the transformation necessary to make social democracy relevant to the 21st century, neither should we underestimate our capacity for change. Decline is not inevitable. Energy is out there but social democrats are going to have to find out new ways to tap into it. Everything is down to the political decisions we make. A new political alliance can be built out of the resource poor and their time poor alter egos.  But the clock is ticking and we have been warned.

Neal Lawson is chair of the good society pressure group Compass. His most recent publication, with Indra Adnan, is "New Times: how a politics of networks and relationship can deliver a good society" 

Neal Lawson is chair of the pressure group Compass and author of the book All Consuming.

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Debunking Boris Johnson's claim that energy bills will be lower if we leave the EU

Why the Brexiteers' energy policy is less power to the people and more electric shock.

Boris Johnson and Michael Gove have promised that they will end VAT on domestic energy bills if the country votes to leave in the EU referendum. This would save Britain £2bn, or "over £60" per household, they claimed in The Sun this morning.

They are right that this is not something that could be done without leaving the Union. But is such a promise responsible? Might Brexit in fact cost us much more in increased energy bills than an end to VAT could ever hope to save? Quite probably.

Let’s do the maths...

In 2014, the latest year for which figures are available, the UK imported 46 per cent of our total energy supply. Over 20 other countries helped us keep our lights on, from Russian coal to Norwegian gas. And according to Energy Secretary Amber Rudd, this trend is only set to continue (regardless of the potential for domestic fracking), thanks to our declining reserves of North Sea gas and oil.


Click to enlarge.

The reliance on imports makes the UK highly vulnerable to fluctuations in the value of the pound: the lower its value, the more we have to pay for anything we import. This is a situation that could spell disaster in the case of a Brexit, with the Treasury estimating that a vote to leave could cause the pound to fall by 12 per cent.

So what does this mean for our energy bills? According to December’s figures from the Office of National Statistics, the average UK household spends £25.80 a week on gas, electricity and other fuels, which adds up to £35.7bn a year across the UK. And if roughly 45 per cent (£16.4bn) of that amount is based on imports, then a devaluation of the pound could cause their cost to rise 12 per cent – to £18.4bn.

This would represent a 5.6 per cent increase in our total spending on domestic energy, bringing the annual cost up to £37.7bn, and resulting in a £75 a year rise per average household. That’s £11 more than the Brexiteers have promised removing VAT would reduce bills by. 

This is a rough estimate – and adjustments would have to be made to account for the varying exchange rates of the countries we trade with, as well as the proportion of the energy imports that are allocated to domestic use – but it makes a start at holding Johnson and Gove’s latest figures to account.

Here are five other ways in which leaving the EU could risk soaring energy prices:

We would have less control over EU energy policy

A new report from Chatham House argues that the deeply integrated nature of the UK’s energy system means that we couldn’t simply switch-off the  relationship with the EU. “It would be neither possible nor desirable to ‘unplug’ the UK from Europe’s energy networks,” they argue. “A degree of continued adherence to EU market, environmental and governance rules would be inevitable.”

Exclusion from Europe’s Internal Energy Market could have a long-term negative impact

Secretary of State for Energy and Climate Change Amber Rudd said that a Brexit was likely to produce an “electric shock” for UK energy customers – with costs spiralling upwards “by at least half a billion pounds a year”. This claim was based on Vivid Economic’s report for the National Grid, which warned that if Britain was excluded from the IEM, the potential impact “could be up to £500m per year by the early 2020s”.

Brexit could make our energy supply less secure

Rudd has also stressed  the risks to energy security that a vote to Leave could entail. In a speech made last Thursday, she pointed her finger particularly in the direction of Vladamir Putin and his ability to bloc gas supplies to the UK: “As a bloc of 500 million people we have the power to force Putin’s hand. We can coordinate our response to a crisis.”

It could also choke investment into British energy infrastructure

£45bn was invested in Britain’s energy system from elsewhere in the EU in 2014. But the German industrial conglomerate Siemens, who makes hundreds of the turbines used the UK’s offshore windfarms, has warned that Brexit “could make the UK a less attractive place to do business”.

Petrol costs would also rise

The AA has warned that leaving the EU could cause petrol prices to rise by as much 19p a litre. That’s an extra £10 every time you fill up the family car. More cautious estimates, such as that from the RAC, still see pump prices rising by £2 per tank.

The EU is an invaluable ally in the fight against Climate Change

At a speech at a solar farm in Lincolnshire last Friday, Jeremy Corbyn argued that the need for co-orinated energy policy is now greater than ever “Climate change is one of the greatest fights of our generation and, at a time when the Government has scrapped funding for green projects, it is vital that we remain in the EU so we can keep accessing valuable funding streams to protect our environment.”

Corbyn’s statement builds upon those made by Green Party MEP, Keith Taylor, whose consultations with research groups have stressed the importance of maintaining the EU’s energy efficiency directive: “Outside the EU, the government’s zeal for deregulation will put a kibosh on the progress made on energy efficiency in Britain.”

India Bourke is the New Statesman's editorial assistant.