Ramsay MacDonald, the first Labour Prime Minister, with his family. Photograph: Corbis
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Half-echoes of the past

Blue Labour is conservative, but about a society that no longer exists – or never existed. Ed Miliband should be wary of this faction and instead forge an alliance that will win back aspirational voters in the south.

The Labour Party, founded in 1900, has been in existence for 112 years. But there have been Labour governments for just 32 of those years; for another eight years, Labour participated in wartime national unity governments. During the remaining 72 years, it was in opposition. Why has so much of Labour’s existence been spent in opposition? There are three reasons.

The first is factionalism. After the election defeats of 1951 and 1979, Labour was rent by fratricidal disputes between left and right – between the Bevanites and the leadership after 1951 and between the Bennites and the leadership after 1979. The party seemed more anxious to have a dialogue with itself than a dialogue with the British people, who decided, both in the 1950s and in the 1980s, to confirm Labour’s status as a party of opposition.

After the defeat of 1970, too, Labour threatened to descend into factionalism, but Harold Wilson skilfully contained it. Even so, the party returned to power in March 1974 through the vagaries of the electoral system, as opposed to any merits of its own. Between 1970 and the general election of February 1974, Labour lost 6 per cent of the vote – one-seventh of its support – the largest fall in votes of any opposition party in Britain until, in 1983, Michael Foot succeeded in doing even worse.

Labour’s defeat in 2010 was worse than those of 1951, 1970 or 1979. Indeed, in terms of percentage of the vote, Labour did worse in 2010 than at any time since it became a mass party except for 1983. Yet there have been no renewed outbreaks of factionalism, no divisions between left and right. The party has shown a remarkable degree of unity. There have been no latter-day equivalents of the Bevanites or the Bennites. That, no doubt, owes much to Ed Miliband’s empathetic and consensual style. It is an unnoticed achievement.

The second reason for Labour’s long years in opposition is that it has, since 1918, seen itself as the sole party of the left, and has been intolerant of competition from other claim ants. In the 1920s, it was more eager to eliminate the Liberals than to seek a progressive alliance with them, an alliance that might well have undermined Conservative dominance. Some Labour leaders actually preferred the Conservatives to the Liberals. Ramsay MacDonald, Labour’s first prime minister, declared in 1924 that he “could get on with the Tories. They differed at times openly then forgot all about it and shook hands. They were gentlemen but the Liberals were cads.”

In the 1930s, the Labour leadership stood firmly against a Popular Front, an alliance with Liberals and anti-appeasement Conservatives which might have brought about a change of government policy. Indeed, Labour succeeded in its aim of driving out the Liberals as a third party, but the price was a long period of Conservative hegemony, and the 20th century became the Conservative century even though there may well have been a progressive majority among the voters for much of the period.

Liberal friends

In the 1980s the third force revived – first the Liberal-SDP Alliance, then the Liberal Democrats. Labour’s instincts remained the same: to regard the third force as a competitor rather than a potential ally. Tony Blair was a great exception. The Ashdown diaries show that he would have preferred a coalition with the Liberal Democrats to a single-party Labour majority. Had the majority in 1997 been smaller, Blair would almost certainly have sought coalition.

Gordon Brown also sought an alliance with the Liberal Democrats in 2007 after becoming prime minister, and suggested coalition to Menzies Campbell, the then Liberal Democrat leader. In 2010, after the election, he again offered coalition to the Liberal Democrats, saying that the moment had come to create the progressive alliance. But it was too late. Labour was too weak. In 1997, it had been too strong. It was never the right moment.

Here, too, Miliband can claim to have escaped the entrenched positions of the past. There are no precise details of what has transpired between him and the Business Secretary, Vince Cable, but it is clear that a dialogue has begun and that Miliband does not regard all Liberal Democrats as the enemy. There is, after all, a powerful social-democrat tradition among the Liberal Democrats, one wing of which, including Cable, was in the SDP, a breakaway from Labour in 1981. Cable, indeed, began his political career as a Labour activist, and would probably have continued in the Labour Party had it not swung so far to the left after the election defeat of 1979.

Clearly, many Liberal Democrats were prepared to swallow their doubts about Conservative methods of curing the deficit and proposals for student fees in order to secure cherished measures of constitutional reform – reform of the voting system and a directly elected House of Lords. Now that it has become clear that these reforms are unattainable, they may well revert to their natural home on the left.

Miliband needs perhaps to make a sharper distinction between the Liberal Democrat leadership, or the Clegg-Laws faction of the leadership, whose ideological sympathies lie with the right, and the vast majority of Liberal Democrat members and voters, whose heart remains on the left. Franklin Roosevelt, after all, never attacked the Republicans, only the Republican leadership.

Yet Miliband’s flexibility towards the Liberal Democrats is a second achievement of Labour in opposition. He needs to become the leader of all progressive forces in Britain, not just the Labour Party.

There is a third reason why Labour has spent so much of its life in opposition. It is that its inclination in defeat is to retreat to its comfort zone, its core basis of support, such as that represented by the Blue Labour tendency, set up in 2009 by the academic Maurice Glasman, who was subsequently made a peer. The instincts of the Blue Labour faction are the same as those that led Labour to elect Foot as leader in 1980, and that lay behind its failure to pressure Attlee to retire after the 1951 defeat.

During the 1950s, Labour’s vote fell steadily from the 48.8 per cent peak of 1951 – achieved, paradoxically, in an election in which the party was defeated by the Conservatives. Not until after the third election defeat in 1959, however, did Hugh Gaitskell feel able to attempt to modernise the party by proposing the deletion of Clause Four from Labour’s 1918 constitution, which committed it to the nationalisation of the means of production, distribution and exchange. Even then, the party refused to support him, and it was left to Gaitskell’s successor, Harold Wilson, to modernise Labour by more surreptitious means, Wilson’s 1964-70 government being revisionist in practice if not in theory.

After the 1983 defeat, Neil Kinnock took over where Gaitskell had left off, but he was constrained by activists and his progress in modernising the party was painfully slow. It was not until 1992, after the fourth successive defeat, that Blair was able to take Labour by the scruff of the neck. Succeeding to the party leadership in 1994, he got rid of Clause Four and founded New Labour. There was just one Labour tradition that he hated, Blair told the 2006 party conference in his farewell speech – losing elections. Some in the party have never forgiven him for breaking that tradition.

Today also, there are siren voices saying that Labour should return to its comfort zone. For the essence of the Blue Labour faction is that the party should become more conservative, more respectful towards the supposed values of working-class communities and of working-class attitudes (some would say prejudices) on immigration and crime. The politics of nostalgia would be disastrous for the left, however, ideologically and electorally.

Blue Labour emphasises co-operatives, mutuals, friendly societies and more localised provision of public services. Never mind that it was because this very approach was insufficient that past Labour governments strengthened central government. It is fashionable to decry the state, but it is to the state, not the Salvation Army or the Co-op, that we turn when we find ourselves sick or out of work.

The truth is, as the recent TUC conference has shown, that there are no hermetically sealed working-class values. The values of the organised working class reflect wider social ethics. The calls at the conference for a general strike were an attempt to use the market power of organised labour to alter the policy of the democratically elected government. Miliband was right to distance Labour from it. But was the call for a strike any worse than the threat made by bankers and their like that any attack on their bonuses would lead to them taking their business abroad? If the rich and powerful can use their market power to threaten the government, why should organised labour not follow their lead?

Labour was founded more than a century ago to represent the organised working class, and perhaps its electoral rise up to 1951 and its decline thereafter can be correlated with the rise and fall of that class. Even so, the party’s central aim was to secure certain values, to transcend a society based on economic self-interest. Lab - our, Keir Hardie insisted, attacked a system not a class. If the values of community and fellowship had already been present in working-class communities, as some of the advocates of Blue Labour seem to imply, there would have been no need for a Labour Party. It was precisely because these values were not present that the party was founded.

The better life

There is a great danger in romantic mythologizing of working-class communities, a tendency sometimes practised by those who have never lived in them. Margaret Thatcher, who in the 1980s seemed to understand working-class aspirations better than Labour, declared that she had rarely met anyone from such communities who did not wish to escape from them.

Most working-class people want their children to have a better life than they had – a better education, better housing and a more fulfilling job – not to replicate their position in the “community”. Those aspirations received little expression at the TUC conference. They need to be expressed by the Labour Party. Indeed, it is only when Labour has been able to express such aspirations, as in 1945, 1966 or 1997, that it has been successful electorally.

Blue Labour, by contrast, is conservative, but conservative about a society that no longer exists, or perhaps never existed. It resembles Tory paternalism of the Baldwin-Macmillan variety; or perhaps the feudal socialism that Marx ridiculed in his Communist Manifesto as “half lamentation, half lampoon; half an echo of the past, half menace of the future”.

Speak for the middle

In any case, the old-style working class is not Labour’s problem. Even in 2010, the Conservatives were unable to win a single seat in any of the large cities of the Midlands or the north – Birmingham, Bradford, Edinburgh, Glasgow, Leeds, Leicester, Liverpool, Manchester, Newcastle, Nottingham and Sheffield, while the Liberal Democrats won just six. In fact, one reason why the remnants of the working class have so little political leverage is that they are largely concentrated in safe Labour seats. The best way to strengthen the electoral influence of the working class would be to reform the electoral system so as to eliminate the safe seat.

But Labour’s electoral problem lies elsewhere. It lies, as in the 1980s, in its failure to retain the allegiance of aspirational voters in the south of England. South of the Severn-Wash line outside London, the party holds just ten out of 197 seats. It has no MPs at all in Cornwall, Somerset, Wiltshire, Dorset, Sussex, Kent, Essex, Norfolk, Cambridgeshire, Northamptonshire, Rutland, Warwickshire, Buckinghamshire, Hertfordshire, Gloucestershire, Worcestershire or Here fordshire. The BBC’s electoral analyst David Cowling was right, therefore, to describe the outcome in 2010 as “the dismem - bering of New Labour’s 1997 electoral triumph”. Labour must seek to reassemble that triumphant coalition, not retreat to the safety of its heartland.

Labour’s problem is not the working class but the southern working class, the most aspirational segment of the working class. Indeed, psephological studies have shown that a northern middle-class voter is more likely to vote Labour than a southern working-class voter. Blue Labour would do little to win back these lost voters.

Ed Miliband has kept Labour away from its comfort zone and his call to defend the “squeezed middle” resonates with many voters. However, he has not yet allied the party firmly enough with the aspirations of voters in the south of England; and he has still to spell out his programme for responsible capitalism, taming the markets, rebalancing the economy and achieving greater fairness at a time when public spending will be constrained. Perhaps his greatest difficulty is that most voters find it difficult to identify with him, to “place” him; and, in so far as they do place him, it is as a north London intellectual, remote from their concerns. His background is not his fault any more than David Cameron’s is, but he needs to transcend it.

Wilson faced a similar problem. Before becoming Labour leader, he had been associated in the public mind with the bureaucratic restrictions necessary after the war and a dry, impersonal, economic approach to politics. To overcome his image problem, he enlisted advisers such as the journalist Joe Haines and Albert Murray, the MP for Gravesend, who could supply what he lacked. Wilson rapidly reinvented himself as a man of the people.

Miliband needs to do the same. He could begin by avoiding terms such as “predator capitalism” and “predistribution”, which may resonate with readers of the New Statesman, but lend themselves to ridicule elsewhere. He needs to become the natural spokesman of Middle England, the “squeezed middle” whose aspirations he has sought to champion.

Democracy, it is often said, is government by explanation, and the crucial electoral battleground is that of public opinion. Governments can transform opinion by acting. Oppositions can transform opinion only by speeches, by teaching. For many years, the left in Britain has lacked a teacher. The task for Ed Miliband is to show that he can be as formidable a teacher for the left as Thatcher was for the right.

Vernon Bogdanor is a research professor at the Institute for Contemporary British History, King’s College London. His books include “The Coalition and the Constitution” (Hart, £20), published last year.

This article first appeared in the 01 October 2012 issue of the New Statesman, Labour conference special

JON BERKELEY
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The empire strikes back

How the Brexit vote has reopened deep wounds of empire and belonging, and challenged the future of the United Kingdom.

Joseph Chamberlain, it has been widely remarked, serves as an inspiration for Theresa May’s premiership. The great municipal reformer and champion of imperial protectionism bestrode the politics of late-Victorian and Edwardian Britain. He was a social reformer, a keen ­unionist and an advocate for the industrial as well as the national interest – all values espoused by the Prime Minister.

Less noticed, however, is that May’s excavation of Chamberlain’s legacy is a symptom of two larger historical dynamics that have been exposed by the vote for Brexit. The first is the reopening on the British body politic of deep wounds of race, citizenship and belonging, issues that home rule for Ireland, and then the end of empire, followed by immigration from the former colonies, made central to British politics during the 20th century. Over the course of the century, the imperial subjects of the queen-empress became British and Irish nationals, citizens of the Commonwealth and finally citizens of a multicultural country in the European Union. The long arc of this history has left scars that do not appear to have healed fully.

The second dynamic is the renewal of patterns of disagreement over free trade and social reform that shaped profound divisions roughly a century ago. Specifically, the rivalry was between a vision of Britain as the free-trade “world island”, supported by the City of London and most of the country’s governing elite, and the protectionist project, or “imperial preference”, articulated by Chamberlain, which sought to bind together the British empire in a new imperial tariff union, laying the foundations for industrial renewal, social progress and national security. The roots of these commitments lay in his career as a self-made businessman and reforming mayor of Birmingham. A leading Liberal politician, Chamberlain broke with his own party over home rule for Ireland and, with a small group of Liberal Unionists, joined Lord Salisbury’s Conservative government of 1895, becoming colonial secretary. He subsequently resigned in 1903 to campaign on the question of imperial preference.

The fault lines in contemporary political economy that Brexit has starkly exposed mimic those first staked out in the early part of the 20th century, which lie at the heart of Chamberlain’s career: industry v finance, London v the nations and regions, intervention v free trade. This time, however, these divides are refracted through the politics of Britain’s relationship with Europe, producing new economic interests and political ­alliances. What’s more, the City now serves the European economy, not just Britain and her former colonies.

Chamberlain is the junction between these two critical dynamics, where race and political economy interweave, because of his advocacy of “Greater Britain” – the late-Victorian idea that the white settler colonies of Canada, Australia, New Zealand and South Africa should be joined with the mother country, in ties of “kith-and-kin” solidarity, or more ambitiously in a new imperial federation. Greater Britain owed much to the Anglo-Saxonism of Victorian historians and politicians, and was as much a Liberal as a Conservative idea. Greater Britain was a new way of imagining the English race – a ten-million-strong, worldwide realm dispersed across the “white” colonies. It was a global commonwealth, but emphatically not one composed of rootless cosmopolitans. Deep ties, fostered by trade and migration, held what the historian James Belich calls “the Anglo-world” together. It helped equip the English with an account of their place in the world that would survive at least until the 1956 Suez crisis, and it was plundered again by latter-day Eurosceptics as they developed a vision of the UK as an integral part, not of the EU, but of an “Anglosphere”, the liberal, free-market, parliamentary democracies of the English-speaking world.

Greater Britain carried deep contradictions within itself, however. Because it was associated with notions of racial membership and, more specifically, with Protestantism, it could not readily accommodate divisions within the UK itself. The political realignment triggered by Chamberlain’s split with Gladstone over Irish home rule, which set one of the most enduring and intractable political divides of the era, was symptomatic of this. For Chamberlain, Irish home rule would have entailed Protestant Ireland being dominated by people of “another race and religion”. Unless there could be “home rule all round” and a new imperial parliament, he preferred an alliance with “English gentlemen” in the Tory party to deals with Charles Stewart Parnell, the leader of Ireland’s constitutional nationalists.

The failure of Chamberlain’s kith-and-kin federalism, and the long struggle of nationalist Ireland to leave the UK, left a bitter legacy in the form of partition and a border that threatens once again, after Brexit, to disrupt British politics. But it also left less visible marks. On Ireland becoming a republic, its citizens retained rights to travel, settle and vote in the UK. The Ireland Act 1949 that followed hard on the Irish Free State’s exit from the Commonwealth defined Irish citizens as “non-foreign”.

A common travel area between the two countries was maintained, and when immigration legislation restricted rights to enter and reside in the UK in the 1960s and 1970s, Irish citizens were almost wholly exempted. By the early 1970s, nearly a million Irish people had taken up their rights to work and settle in the UK – more than all of those who had come to Britain from the Caribbean and south Asia combined. Even after the Republic of Ireland followed the UK into the European common market, its citizens retained rights that were stronger than those given to other European nationals.

In 1998, the Good Friday Agreement went a step further. It recognised the birthright of all the people of Northern Ireland to hold both British and Irish citizenship. Common EU citizenship north and south of the border made this relatively straightforward. But under a “hard Brexit”, Britain may be asked to treat Irish citizens just like other EU citizens. And so, unless it can secure a bilateral deal with the Republic of Ireland, the UK will be forced to reinvent or annul the common travel area, reintroducing border and customs controls and unstitching this important aspect of its post-imperial, 20th-century settlement. Will Ireland and its people remain “non-foreign”, or is the past now another country?

 

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Today’s equivalent of 19th-century Irish nationalism is Scottish national sentiment. Like Gladstone and his successors, Theresa May is faced with the question of how to accommodate the distinct, and politically powerful, aspirations of a constituent nation of the United Kingdom within the unsteady framework associated with the coexistence of parliamentary sovereignty and ongoing devolution. Scotland’s independence referendum bestowed a sovereign power on its people that cannot be set aside in the Brexit negotiations. The demand for a “flexible Brexit” that would allow Scotland to stay in the European single market is also, in practice, a demand for a federal settlement in the UK: a constitutional recognition that Scotland wants a different relationship to the EU from that of England and Wales.

If this is not couched in explicitly federal terms, it takes the unitary nature of the UK to its outer limits. Hard Brexit is, by contrast, a settlement defined in the old Conservative-Unionist terms.

Unionism and federalism both failed as projects in Ireland. Chamberlain and the Conservative Unionists preferred suppression to accommodation, a stance that ended in a war that their heirs ultimately lost.

Similarly, the federal solution of Irish home rule never made it off the parchment of the parliamentary legislation on which it was drafted. The federalist tradition is weak in British politics for various reasons, one of which is the disproportionate size of England within the kingdom. Yet devising a more federal arrangement may now be the only means of holding the UK together. May’s unionism – symbolised by her visit to Edinburgh to meet Scotland’s First Minister, Nicola Sturgeon, in the first days of her premiership – will be enormously tested by a hard Brexit that cannot accommodate Scottish claims for retention of single-market status or something close to it. Separation, difficult as this may be for the Scottish National Party to secure, may follow.

The idea of Greater Britain also left behind it a complex and contentious politics of citizenship. As colonial secretary at the end for 19th century, Chamberlain faced demands for political equality of the subjects of the crown in the empire; Indians, in particular, were discriminated against in the white settler colonies. He strongly resisted colour codes or bars against any of the queen’s subjects but allowed the settler colonies to adopt educational qualifications for their immigration laws that laid the foundation for the racial discrimination of “White Australia”, as well as Canadian immigration and settlement policies, and later, of course, the apartheid regime in South Africa.

Nonetheless, these inequalities were not formally written into imperial citizenship. The British subject was a national of the empire, which was held together by a common code of citizenship. That unity started to unravel as the colonies became independent. Specifically, a trigger point was reached when, in 1946, the Canadian government legislated to create a new national status, separate and distinct from the common code of imperial citizenship hitherto embodied in the status of the British subject.

The Attlee government responded with the watershed British Nationality Act 1948. This created a new form of citizenship for the UK and the colonies under its direct rule, while conferring the status of British subject or Commonwealth citizen on the peoples of the former countries of empire that had become independent. It was this that has made the act so controversial: as the historian Andrew Roberts has argued, it “gave over 800 million Commonwealth citizens the perfectly legal right to reside in the United Kingdom”.

This criticism of the act echoed through the postwar decades as immigration into the UK from its former empire increased. Yet it is historically misplaced. The right to move to the UK without immigration control had always existed for British subjects; the new law merely codified it. (Indeed, the Empire Windrush, which brought British subjects from the Caribbean to London in June 1948, docked at Tilbury even before the act had received royal assent.)

At the time, ironically, it was for precisely opposite reasons that Conservative critics attacked the legislation. They argued that it splintered the subjects of empire and denied them their rights: “. . . we deprecate any tendency to differentiate between different types of British subjects in the United Kingdom . . . We must maintain our great metropolitan tradition of hospitality to everyone from every part of our empire,” argued Sir David Maxwell Fyfe, the Tory shadow minister of labour and future home secretary.

As the empire withered away in the postwar period, some Conservatives started to change their minds. Enoch Powell, once a staunch imperialist, came to believe that the idea of the Commonwealth as a political community jeopardised the unity of allegiance to the crown, and so was a sham. The citizens of the Commonwealth truly were “citizens of nowhere”, as Theresa May recently put it. As Powell said of the 1948 act: “It recognised a citizenship to which no nation of even the most shadowy and vestigial character corresponded; and conversely, it still continued not to recognise the nationhood of the United Kingdom.”

Once the British empire was finished, its core Anglo-Saxon populace needed to come back, he believed, to find their national mission again, to what he viewed as their English home – in reality, the unitary state of the UK – rather than pretend that something of imperialism still survived. On England’s soil, they would remake a genuine political community, under the sovereignty of the Crown-in-Parliament. If Greater Britain could not exist as an imperial political community, and the Commonwealth was a fiction, then the kith and kin had to live among themselves, in the nation’s homeland.

Contemporary politicians no longer fuse “race” and citizenship in this way, even if in recent years racist discourses have found their way back into mainstream politics in advanced democracies, Britain included. However, the legacies of exclusivist accounts of nationality persist, and not merely on the populist right. British politics today is dominated by claims about an irreconcilable division between the attitudes and national sentiments of the white working classes, on the one hand, and the cosmopolitanism of metropolitan liberals, on the other.

But thinking and speaking across this artificial divide is imperative in both political and civic terms. Many Remainers have the same uncertainties over identity and political community as commentators have identified with those who supported Brexit; and the forms of patriotism exhibited across the UK are not necessarily incompatible with wider commitments and plural identities. Above all, it is vital to challenge the assumption that a regressive “whiteness” defines the content of political Englishness.

 

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Brexit thus forces us once again to confront questions about our citizenship, and the question of who is included in the nation. In an ironic twist of fate, however, it will deprive the least cosmopolitan of us, who do not live in Northern Ireland, or claim Irish descent, or hold existing citizenship of another EU country, of the European citizenship we have hitherto enjoyed. Conversely it also leaves a question mark over the status of EU nationals who live and work in the UK but do not hold British nationality. The government’s failure to give guarantees to these EU nationals that they will be allowed to remain in the UK has become a matter of deep controversy, on both sides of the Brexit divide.

As only England and Wales voted for it, Brexit has also exposed the emergence once again of distinct identities in the constituent nations of the UK. Although Scottish nationalism has been the most politically powerful expression of this trend, Englishness has been growing in salience as a cultural and, increasingly, as a political identity, and an insistent English dimension has become a feature of British politics. Although talk of a mass English nationalism is misplaced – it can scarcely be claimed that nationalism alone explains the complex mix of anxiety and anger, hostility to large-scale immigration and desire for greater self-government that motivated English voters who favoured Brexit – it is clear that identity and belonging now shape and configure political arguments and culture in England.

Yet, with a handful of notable exceptions, the rise in political Englishness is being given expression only on the right, by Eurosceptics and nationalists. The left is significantly inhibited by the dearth of serious attempts to reimagine England and ­different English futures, whether culturally or democratically.

It is not just the deep politics of the Union and its different peoples that Brexit has revived. The divisions over Britain’s economy that were opened up and positioned during the Edwardian era have also returned to the centre of political debate. Though as yet this is more apparent in her rhetoric than in her practice, Theresa May seems drawn to the project of reviving the Chamberlainite economic and social agendas: using Brexit to underpin arguments for an industrial strategy, a soft economic nationalism and social reform for the “just about managing” classes. She has created a new department responsible for industrial strategy and advocated places for workers on company boards (before watering down this commitment) as well as increased scrutiny of foreign takeovers of British firms. Housing policy is to be refocused away from subsidising home ownership and directed towards building homes and supporting private renters. Fiscal policy has been relaxed, with increased infrastructure investment promised. The coalition that delivered Brexit – made up of struggling working-class voters and middle-class older voters (or the “excluded and the insulated”, as the Tory peer David Willetts puts it) – is seen as the ballast for a new Conservative hegemony.

Presentationally, May’s vision of Brexit Britain’s political economy is more Chamberlainite than Thatcherite, a shift that has been obscured in Brexit-related debates about migration and tariff-free access to the European single market. Her economic utterances are edged with a national, if not nationalist, framing and an economic interventionism more commonly associated with the Heseltinian, pro-European wing of her party. In a calculated move replete with symbolism, she launched her economic prospectus for the Tory leadership in Birmingham, advertising her commitment to the regions and their industries, rather than the City of London and the financial interest.

It is therefore possible that May’s project might turn into an attempt to decouple Conservative Euroscepticism from Thatcherism, creating a new fusion with Tory “One Nation” economic and social traditions. It is this realignment that has left the Chancellor, Philip Hammond, often exposed in recent months, since the Treasury is institutionally hostile both to economic interventionism and to withdrawal from the single market. Hence his recent threat to the European Union that if Britain cannot secure a decent Brexit deal, it will need to become a deregulated, low-tax, Dubai-style “world island” to remain competitive. He cannot envisage another route to economic prosperity outside the European Union.

It also leaves those on the Thatcherite right somewhat uncertain about May. For while she has sanctioned a hard Brexit, in crucial respects she appears to demur from their political economy, hence the discontent over the government’s deal to secure Nissan’s investment in Sunderland. As her Lancaster House speech made clear, she envisages Brexit in terms of economically illiberal goals, such as the restriction of immigration, which she believes can be combined with the achievement of the new free trade deals that are totemic for her party’s Eurosceptics.

In practice, the Prime Minister’s willingness to endorse Hammond’s negotiating bluster about corporate tax cuts and deregulation shows that she is anything but secure in her Chamberlainite orientation towards industrial strategy and social reform. Her policy positions are shot through with the strategic tension between an offshore, “global Britain” tax haven and her rhetoric of a “shared society”, which will be difficult to resolve. May has embraced hard (she prefers “clean”) Brexit, but a transformation of the axes of conservative politics will only take place if she combines Euroscepticism with a return to pre-Thatcherite economic and social traditions. This would make her party into an even more potent political force. The recent shift of the Ukip vote into the Tory bloc and the notable weakening of Labour’s working-class support suggest what might now be possible. This is the domestic politics of Chamberlain’s social imperialism shorn of empire and tariff – only this time with better electoral prospects.

 

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There are some big pieces of 20th-century political history missing from this jigsaw, however. In the 1930s, Chamberlain’s son Neville succeeded where his father had failed in introducing a modest version of tariff reform, and trade within the empire rebounded. Britain abandoned the gold standard in 1931 and cheap money revived the national economy. The collectivism of the wartime command economy and the postwar Keynesian settlement followed. New forms of economic strategy, industrial policy and social reform were pioneered, and the Treasury beliefs in limited state intervention, “sound money” and free trade that had defined the first decades of the 20th century were defeated.

This era was brought to an end by the election of Margaret Thatcher in 1979. Her government smashed the industrial pillars and the class compromises that had underpinned the postwar world. The ensuing “New Labour” governments inherited a transformed political economy and, in turn, sought to fuse liberal with collectivist strands in a new settlement for the post-industrial economy. What many now view as the end of the neoliberal consensus is, therefore, better seen as the revival of patterns of thinking that pre-date Thatcherism. This tells us much about the persistent and deep problems of Britain’s open economic model and the continuing, unresolved conflict between finance and parts of industry, as well as London and the regions.

Brexit brings these tensions back to the surface of British politics, because it requires the construction of a completely new national economic and political settlement – one that will be thrashed out between the social classes, the leading sectors of the economy, and the nations and regions of the United Kingdom.

Few peacetime prime ministers have confronted the scale and kinds of challenge that Brexit will throw up: holding together the UK, revitalising our industrial base, delivering shared prosperity to working people and renegotiating Britain’s place in Europe and the wider world. This is the most formidable list of challenges. Lesser ones, we should recall, defeated Joe Chamberlain.

Michael Kenny is the inaugural director of the Mile End Institute policy centre, based at Queen Mary University of London

Nick Pearce is professor of public policy at the University of Bath

This article first appeared in the 19 January 2017 issue of the New Statesman, The Trump era