Leader: Liberalism now feels inadequate in this new age of insecurity

The stakes could not be higher.

A mother and daughter protesting about immigration controls. Photograph: Getty Images

Ever since the Thatcher era, British politics has been defined by forms of economic and social liberalism. The right won the argument for the former and the left the argument for the latter, or so it is said. Yet in the post-crash era, this ideological settlement is beginning to fracture. The right is re-examining its crude economic liberalism and the left its social liberalism. This shift is characterised neither by a revival of socialist economics, nor by one of reactionary conservatism. Rather, it is defined by a mutual recognition that liberalism, at least in some of its guises, does not provide all the answers to Britain’s most entrenched problems: its imbalanced economy, its atomised society, its lack of common identity.

Two thinkers, Phillip Blond and Maurice Glasman, and their respective factions – the Red Tories and Blue Labour – were quicker to recognise this than most. Mr Blond may no longer have the ear of the Prime Minister, if he ever did, but since the appointment of Jon Cruddas as the head of Labour’s policy review, the Blue Labour faction has emerged as the dominant intellectual influence on the Labour Party.

With his support for a technical baccalaureate, employee representation on remuneration committees and a new network of regional banks, the Labour leader, Ed Miliband, has embraced elements of the German social-market model long championed by Lord Glasman. At the same time, Blue Labour has encouraged the party to begin to articulate concerns on social issues that have long been neglected by the left and to speak about culture as well as economics. In a recent speech to the Fabian Women’s Network, Diane Abbott, the shadow public health minister and once on the hard left of the party, spoke out against the “sexualisation” of childhood. “For so long,” she said, “it’s been argued that overt, public displays of sexuality are an enlightened liberation. But I believe that for many, the pressure of conforming to hyper-sexualisation and its pitfalls is a prison.” Ms Abbott concluded: “We’ve got to build a society based on open-minded family values and not ‘anything-goes’ market values.”

More contentiously, in the case of immigration, Blue Labour has provided Mr Miliband with a language in which to engage with what went wrong under New Labour. According to Tony Blair’s globalist narrative, an open immigration policy was an unalloyed good. The interests of workers who saw their wages undercut and who felt confused and left behind by the pace of change were subordinate to those of the corporations that benefited from a larger and more flexible labour pool. Mr Miliband appears to have accepted the argument of Lord Glasman, Mr Cruddas and others that the Labour Party was too slow to respond to such anxieties among its natural supporters in working-class communities. He has argued that Labour was wrong not to impose transitional controls on migration from accession states such as Poland, as other members of the EU had done. He has pledged to ban recruitment agencies that operate exclusively by bringing in foreign workers to Britain without trying to fill vacancies locally. If it is true that immigration has had a generally beneficial effect on aggregate output, it is also true, as Mr Miliband has observed, that: “People don’t live their lives in the aggregate.”

This insight is also shaping the Labour leader’s approach to welfare and his call for a reassertion of the “contributory” principle. By remodelling the benefits system so that there is a clearer link between what people put in and what they receive, Labour seeks to restore public confidence. The view of the welfare state as a pot from which all draw as much as they can is being rejected in favour of one that emphasises reciprocity. This is necessary if the welfare state is to survive and to continue to enjoy majority support.

On the right of British politics, there is a similar willingness to question the free-market dogmas that, as David Selbourne argues in his essay beginning on page 28, the modern Conservative Party under David Cameron has embraced. “The inability of today’s Conservative Party to fashion an identity for itself is a matter for incredulity,” he writes. “If you think like the classical Conservative used to think, you would be seething at the ‘moral condition’ of the country . . . Old-style Tory utilitarians would have been rolling up their political sleeves to tackle today’s indecent levels of social and economic inequity, housing shortage, declining standards of health provision, rural impoverishment and soaring public transport costs.” Instead, the party is suspended uneasily between tradition and “modernisation”.

Yet there is good thinking occurring on the right. The Tory MP Jesse Norman and the conservative commentator Ferdinand Mount recognise that Britain’s lightly regulated model of financial capitalism has undermined the conservative goal of a stable and orderly society. Mr Norman, who will shortly publish a book about Edmund Burke, has written of how markets should not be idolised, but “treated as cultural artefacts mediated by trust and tradition”.

Nearly three years after the general election, British politics remains hung. There is increasing disdain for the coalition but as yet little genuine enthusiasm for the Labour alternative. The events in Cyprus remind us that, five years after the greatest financial crash in history, Europe remains in crisis and the banking system is largely unreformed. In Britain, where the banks were bailed out at a great cost to the nation, wages are flat or falling, unemployment remains very high, and the old welfare model is unravelling. Institutional trust is at an all-time low. So peculiar is our situation that an unelected monarch, the embodiment of the old class-based hierarchical system, is perhaps the nation’s most trusted and respected individual.

With its emphasis on abstract individualism, liberalism, the great driver of social emancipation and economic prosperity, now feels inadequate to this new age of insecurity. In his recent “Earning and Belonging” speech, Mr Cruddas said: “Simply opposing the cuts without an alternative is no good. It fails to offer reasonable hope. The stakes are high because when hope is not reasonable despair becomes real.” He is right: the stakes could not be higher but who is best positioned to lead Britain out of despair and create a new sense of purpose and belonging?