Kalpesh Lathigra for New Statesman
Show Hide image

Tony Blair’s unfinished business

The former prime minister on Trump, Brexit, Corbyn and his return to public life in an attempt to revive “the progressive centre”. Will anyone listen?

Tony Blair enters the room at his London offices wearing a navy blue crew-neck sweater, an open-neck pale blue shirt, informal dark trousers and dark shoes. This relaxed, casual style is strikingly reminiscent of how he was dressed when he appeared alongside George W Bush during their first meeting at Camp David in February 2001, the beginning of a relationship that set Britain on the road to war in Iraq, the reverberations of which continue to destabilise the world and distort the legacy of Labour’s most electorally successful leader.

Protected by his personal security team, Blair travels incessantly, a habitué of the first-class lounge and the luxury international hotel, and on this damp, early Monday morning, he looks puffy-eyed and tired. He sits to my left, in a stiff-backed chair, leans forward, his legs slightly splayed, and asks for some coffee. There is a monitor mounted on the wall and several small bottles of water in a bucket of ice on a sideboard. The blinds are partially closed, lending our meeting a curious conspiratorial atmosphere.

Neither of us can recall the last time he was interviewed by the New Statesman. In his memoir, A Journey (2010), he wrote of this publication in a sly aside: “It used to be a serious magazine.” (The New Statesman has been resolute in its opposition to the Iraq War and took the side of the Brownites in Labour’s internal conflict.) “Did I say that?” he says, smiling. “It’s much more serious now, really very interesting.”

Blair, who in conversation is personable and animated, is not quite a fugitive in his own land but, because of the Iraq War and his extensive business operations since leaving office, as well as some of the dubious company he has kept among the global plutocracy, he is widely reviled, a fate that frustrates him but to which he is resigned. “I gave up a long time ago, worrying as to whether life’s treated you unfairly,” he says, when I mention his public image in Britain.

But these are turbulent new times and Blair is planning a fresh start and a renewed engagement with British politics. In September, he announced that he would “close down Tony Blair Associates and wind up the Firerush and Windrush structures”, two companies in the group through which the revenues flow. While he will keep some personal consultancies, Blair said that he will concentrate on his charitable and not-for-profit work. “The substantial reserves” – estimated to be around £8m – “that TBA has accumulated will be gifted to the not-for-profit work,” the Office of Tony Blair said in a press statement, which noted that his group of organisations employed 200 people in 20 countries. It was as if Blair was clearing the ground for a comeback. At the age of 63, his journey was far
from complete.

The day before our meeting, the Sunday Times reported that Blair was “positioning himself to play a pivotal role in shaping Britain’s Brexit deal”. He was also alleged by unnamed sources to have called Jeremy Corbyn a “nutter” and Theresa May a “lightweight”. The report irritated his aides and Blair alluded to it several times during our conversation, as if eager to correct any misunderstanding.

There has been speculation to the effect that he wants to set up a new political party. He says that he does not. Nor does he want a role in Brexit negotiations, or to lead the resistance to it. But he wants to participate in public life, engaging with new ideas and policy initiatives. He wants to be heard and to influence the wider debate – because, as he told me, the state of Western politics simultaneously dismays and motivates him. His dismay is motivating his re-engagement.

Blair hasn’t met Theresa May since she became Prime Minister but expects to before long. “I didn’t call her that [a lightweight],” he says. “This is completely not my view, by the way. I would not be rude and disrespectful in that way. I’ve not said that about her, I don’t think that about her. No, I think she’s a very solid, sensible person but she’s delivering Brexit. And she has to deliver it. Otherwise she will lose the support of that very strong right-wing media. And they’ll open up a rift in the Tory party again. It will be very difficult for her, and that’s why I don’t disrespect her at all. She’s got a very difficult political hand to play.”

As for Corbyn, he says: “I did not call Jeremy Corbyn ‘a nutter’. I don’t think he’s a nutter. I just think he is someone on the far left of politics and he’s been consistent for the last 35 years that I’ve known him, which is fine. I don’t think that’s an unprincipled position. I just don’t think it’s a position that is either correct or one from which he can win an election. But I may be wrong, so let’s wait and see.”

What is unambiguous is that Blair is determined once again to become an agent of influence in British politics, on issues from Brexit to reviving what he describes as the “progressive centre or centre left”.

His allies call for a new “muscular centre”. They are discussing how best to counter the populist surge on both the radical left and radical right. There are plans for a new think tank or organisation to generate policy initiatives, and for Blair to make more direct interventions. Jim Murphy, a former leader of Scottish Labour, is working as an associate on various projects.

“You’ve got to unpack, first of all, what bits of the so-called liberal agenda have failed and what bits haven’t,” Blair told me. “And you’ve got to learn the right lessons of Brexit, Trump and these popular movements across the Western world. Otherwise you’re going to end up in a situation where you seriously think that the populism of the left is going to defeat the populism of the right. It absolutely won’t.”

Our new emerging political order, he believes, is defined less by a conflict between left and right than by one between “open and closed”, and this is a theme he has been exploring since 2007.

“Open v closed is a really important debate today, because in a curious way the populism of the left and the populism of the right – at a certain point they meet each other. They tend to be isolationist. OK, the left is more anti-business, the right is more anti-immigrant, but they tend to be protectionist and they have an attitude to the process of globalisation that says this is a policy that is given by government and we can stop it and should stop it. Whereas my view about globalisation is that it’s a force essentially driven by people, by technological change, by the way the world has opened up. You’re not going to reverse that. The question is: how do we make that just and fair? That is the big question of our times. The centre left does not provide an answer to that, and we can and should.”

He does not want Labour to split, though he feels that the party is in a much weaker position than it was even in the 1980s. “It’s a tough business . . . The leadership has been captured by the far left for the first time in the party’s history, so we have to see. I hope that the Labour Party realises that it has a historic duty to try to represent people in this country who need our representation desperately. I hope it rediscovers the fact that the government that I led and that Gordon Brown led actually did a huge amount for the people who were left behind by the policies of the previous Conservative government.”

Blair knows that he is unpopular, especially with the left, and why. But does he feel misunderstood?

“Well, I think there was huge misunderstanding of what we were about and why we were about it. That’s partly one of the reasons I’m changing everything.”

Changing everything: the phrase is resonant and refers not only to Blair’s decision to close down most of his commercial and business interests, but also to his renewed sense of political engagement. “What I’m doing is to spend more time not in the front line of politics, because I have no intention of going back to the front line of politics, to correct another misunderstanding . . . but in trying to create the space for a political debate about where modern Western democracies go and where the progressive forces particularly find their place . . . I’m dismayed by the state of Western politics, but also incredibly motivated by it. I think in Britain today, you’ve got millions of effectively politically homeless people.”

He tilts forward. His voice quickens even as his body language betrays frustration. “I can’t come into front-line politics. There’s just too much hostility, and also there are elements of the media who would literally move to destroy mode if I tried to do that . . .”

So what can he do? Is there someone in whom he can invest his hopes? He says that his first priority is to “build a platform” that will allow people to debate ideas and formulate solutions, without the abuse or vilification that has become so prevalent in modern politics. “The best thing I can do is use [my] long experience, not just as prime minister – I’ve learned a huge amount being out in the world these past nine or ten years . . .”

The platform will be driven by technology. “One advantage of today’s social media is that you can build networks. Movements can begin at scale and build speed quickly. You’re not going to relate the answers to the challenges that we face by a Twitter exchange, so what I’m interested in doing is asking: what are the types of ideas that we should be taking forward? How do we provide a service to people who are in the front line of politics, so that we can provide some thinking and some ideas? The thing that’s really tragic about politics today is that the best ideas about politics aren’t in politics. I find the ideas are much more interesting in the technology sector, much more interesting ideas about how you change the world.”

***

Tony Blair believes that Brexit can be halted. “It can be stopped if the British people decide that, having seen what it means, the pain-gain cost-benefit analysis doesn’t stack up. And that can happen in one of two ways. I’m not saying it will [be stopped], by the way, but it could. I’m just saying: until you see what it means, how do you know?”

Attempting to secure access to the single market will be the defining negotiation. “Either you get maximum access to the single market – in which case you’ll end up accepting a significant number of the rules on immigration, on payment into the budget, on the European Court’s jurisdiction. People may then say, ‘Well, hang on, why are we leaving then?’ Or alternatively, you’ll be out of the single market and the economic pain may be very great, because beyond doubt if you do that you’ll have years, maybe a decade, of economic restructuring.”

But, I suggest, the Remain side made numberless dire economic forecasts during the long, dispiriting referendum campaign and they were ignored. The public understands well enough the risks of Brexit.

“But this is what I keep saying to people. This is like agreeing to a house swap without having seen the other house . . . You’ve got to understand, this has been driven essentially ideologically. You’ve got a very powerful cartel of the media on the right who provided the platform for the Brexiteers who allied themselves with the people in the Tory party who saw a chance to run with this. And, OK, they ended up in circumstances where there was a very brutal but not particularly enlightening campaign. They won that campaign.”

He pauses to reach for his coffee cup.

“But in the end, for a large number of the people, even those who voted Leave, they will look at this in a practical way, not an ideological way. And all I’m saying is: what shows you how ideological this is is that when I say, ‘Well, let’s just keep our options open,’ it’s condemned as treason. Why wouldn’t you keep your options open? Why wouldn’t you say, ‘We took this decision, we took it before we saw what its consequences are; now we see its consequences, we’re not so sure’?

“I think, in the end, it’s going to be about parliament and the country scrutinising the deal. So, for example, the deal that was done with Nissan” – to persuade the Japanese carmaker to expand its production in Sunderland after Brexit – “I don’t know what the terms of that deal are, but we should know. Because that will tell us a lot about what they’re prepared to concede in order to keep access to the single market.”

***

Blair says that he has never met Donald Trump, although last week he met his son-in-law, Jared Kushner, the real estate multimillionaire who is part of the Trump transition team and is married to Ivanka Trump. Blair’s aides said that the encounter with Kushner was at Cipriani, an Italian restaurant in Manhattan. Donald Trump was not present. “[Tony] knew a couple of people at the table and was invited to join them. However, the assertion that he was ‘angling for a role’ is complete nonsense.”

Trump’s venality, belligerence, isolationist rhetoric and narrow definition of the national interest has alarmed the Anglo-American foreign policy establishment, which considers the president-elect to be a clear and present danger to the rules-based liberal world order. The urgent challenge facing the West in an age of intensifying nationalism, great power rivalry and demagogic plutocracy will be to hold together the alliance structure that has defined the world for the past 70 years.

Under Trump’s presidency, the political scientist Robert Kagan has written, the US is likely to retreat into “national solipsism”. It could be much worse than that, but Blair’s response to Trump’s victory is to invoke realpolitik. He does not denounce the president-elect, but nor does he welcome his improbable triumph. Neither for nor against Trump – in public, at least – he wants to
understand and explain.

“Look, he’s been elected president of America and [I agree with] the comments that Barack Obama has made about working with him, trying to make sure that those things that people are worried about don’t materialise. That’s our obligation now. He’s the American president, duly elected through their electoral college system, and that’s it. He won because people want to change. Because there are various issues upon which the Republican platform was stronger than the Democrats’. And this is part of a general global movement, which is partly a reaction to globalisation and partly economic. But it is also a lot to do with culture and identity, and people’s feelings that the world is changing rapidly around them and that the left doesn’t get this.”

He believes that Trump’s preoccupation with questions of identity and belonging, as well as his appeal to people’s anxieties about immigration and Islamist terror, was fundamental to his appeal. “If you leave aside all the comments that Donald Trump made and you just look at the two platforms, on the issues that related to culture and identity, I could see why there would be Americans, even in the centre ground, who might be attracted by that [Trump’s] platform – even if, by the way, they weren’t attracted by the personality of the person who is the standard bearer. There’s got to be a lot of analysis as to why this happened.”

Blair’s response to the fragmentation of globalisation is not to reject but to reaffirm his commitment to it and to free market economics and the open society. In other words, he favours not less but more liberalism. “Against the received wisdom, I think the absolute essence is to revive the centre. Progressive forces, if they’re not coming at this from a strong centrist position, are likely to find themselves just enough off-centre on the debates around culture and identity, never mind the economy, where they’re going to be defeated by a populism of the right. And if you put a populism of the left against that, which is where some people want to go – it’s where the British Labour Party’s gone [and] many Democrats argue that, really, if we’d had Bernie Sanders, we’d have done better – if we go down that path, we’ll just get beaten bigger.”

***

So is this the beginning of Tony Blair’s second act in British public life? Will enough people be prepared to listen to him, or is the stain of the Iraq misadventure and subsequent pursuit of personal wealth too deep? The property portfolio that he and Cherie Blair own, which includes a main residence in Connaught Square in London and a country home in Buckinghamshire, is worth at least £27m, according to the Guardian. Blair’s total wealth may be at least twice that, according to media reports, though he said in 2014 that it was less than £20m.

 “We are suffering a crisis of global leadership,” says one former ally and associate of Blair’s. “There’s an absence of a strong centrist foreign policy voice. We need someone to make the case for Nato and for the alliance system. Blair could do that. But it will be difficult for him, because he’s never found a way of acknowledging the mistakes he made. If he wants to talk about Brexit and Trump, he needs to do so with humility and not be so Manichaean about it. He has long spoken of the clash between Islamism and Western civilisation – now we have a problem with Western civilisation, don’t we?”

In his long Atlantic interview with Jeffrey Goldberg in April 2016, Barack Obama discussed the moral limits of American power and articulated what he called his doctrine of “tragic realism”. Like the philosopher-theologian Reinhold Niebuhr, whom he has read carefully, Obama acknowledges the existence of evil (as the more religious Blair does) in the world, but also the difficulties and dangers inherent in confronting it. Obama, who opposed the Iraq War, understood the risks of attempting to impose through violence Western values of freedom, democracy and the rule of law. His foreign policy, unlike Blair’s, was defined by a sense of cautious “realism”. Great power carries the burden of responsibility and demands the necessity of restraint – perhaps far too much restraint, in the case of Obama and the Syrian tragedy.

“We cannot do good without also doing evil,” Niebuhr wrote in The Irony of American History. “We cannot defend what is dearest to us without running the risk of destroying what is even more precious than our life . . .”

In his response to the Chilcot inquiry, Blair accepted responsibility for the failures of post-invasion planning, but defended the original decision to invade and occupy Iraq. With his voice croaky and weakening, he was described as resembling a “broken man” by some commentators during the press conference at which he replied to Chilcot. Yet, in person, he seems anything but broken: he is alert, vigorous, optimistic about the prospects for globalisation, and determined to fight back against the waves of populism sweeping the West. He believes that the arc of history still bends towards progress and enlightenment.

Talking to him, I was reminded of the speech he gave at the 2001 Labour party conference, shortly after the 9/11 attacks. “The kaleidoscope has been shaken,” he suggested, and it was time to reorder the world. For Blair, 9/11 was a profound shock but also an opportunity. The catastrophe enabled him to find a public voice commensurate with the moment, a voice that George W Bush could not find, and he saw an opportunity to influence Bush and internationalise US foreign policy, drawing the world’s one essential nation away from hermit security and back into the world.

Trump’s “America First” isolationism is today an exaggerated caricature of Bush’s pre-9/11 positions on foreign policy. In the 2000 presidential debates with Al Gore, Bush said, “I’m not so sure the role of the United States is to go around the world and say this is the way it’s got to be.” How incredible that now seems.

“Every American president I’ve ever dealt with, and I’ve dealt with three now, has always come to power with an essentially domestic programme,” Blair says now. “And all of them have ended up, because this is America’s inevitable role in the world, being highly engaged in global affairs. And even in relation to a President Trump and President Putin, let’s see what happens. Let’s see what happens when they actually have to negotiate.”

Asked about the threat posed by Russia to the West, Blair says: “It’s important in my view that we in the West stand up for our essential values. The language that President Putin understands is strength. He will take advantage of any weakness. We have got to be very clear . . . This concept of a sort of new authoritarianism, I think, is a real risk in the world as a whole, but again the best way of dealing with that is to respond to those people who want some authority and order. I mean the electorate, even in the West. There was a poll I saw in Le Monde, the other week, with an astonishing amount of people worried that democracy didn’t actually work. The answer to that is to have a centre ground that is strong and radical. And the centre ground has become flabby and managers of the status quo.”

With his flag planted firmly in the “progressive centre ground” and with opposition to the Tories so divided, Blair is preparing for his re-entry into public life, though his plans remain inchoate. It’s almost as if he believes he’s on an ethical mission, that he has unfinished business. But the ground beneath his feet is shifting violently.

What if America under Trump ceases to be the last best hope for the world and becomes something darker and more malevolent? This isn’t something that Blair wishes to contemplate. He and millions like him may feel “politically homeless”, but he remains, at heart, a liberal optimist. But is his optimism no more than misguided faith? What if history is not linear, as he believes, but cyclical, contingent and discontinuous?

“In a world of uncertainty, people want strength in their leaders,” Blair says. “It’s our job to make sure that that does not bleed across into authoritarianism. And that’s why, when we were in government, we introduced real reforms, not least around the Supreme Court, the European Convention on Human Rights being incorporated into British law . . . We had more devolution, more giving away of government power at the centre. But it was still a strong government, with a very clear sense of where it was going, and it had control of the political agenda. And this is not a lesson of politics that’s [only] relevant to this time but to any time. And if you look back at when progressive forces do well, they always do well when they are at the cutting edge of the future, and when they have sufficient strength that people feel there is real leadership taking the country forward. Now, I don’t doubt that the post-financial crisis world has made a significant difference, but . . . when you really look at, for example, the people supporting Brexit, the people supporting Trump, they’re not particularly anti-wealth. What they are is anti a system they think they’re paying into that other people aren’t.”

Trump, Brexit, Corbyn – Tony Blair keeps ending up on the losing side, though the years when he was winning sustain him in his convictions and extraordinary self-belief. He cautions against fatalism and he remains defiant. And he never doubts he’s on the right side of history.

“Of course, history has a direction,” he says, dismissing my scepticism. “There is progress, we are making progress, even in our own countries. If you think of the world your son is growing up in and the world my grandfather grew up in, if you think what he’s going to have and what my father had, I mean, come on! There’s a lot to celebrate. There is absolutely no reason to be pessimistic about the human condition. But there are people who will exploit the fears of people if we don’t root the hopes of people in realistic, sensible policies.”

 


Tony Blair on Trump, the EU referendum and Strictly

Jason Cowley Are we entering a post-liberal era? If so, why are many people rejecting liberalism?

Tony Blair You’ve got to be really careful of what’s been rejected and what hasn’t been. And one of the things I find quite bizarre about the present debate is the number of voices on the progressive left who want to blame those of us who won elections for the defeats we’ve subsequently suffered. What would be more sensible would be also to analyse why we won and what’s changed and what hasn’t changed. And when people say that liberalism has been defeated, it depends what you mean by liberalism.

JC Trump won on a hostility to globalisation, open markets and freedom of movement of peoples, all of which are associated with what one might call the market globalisation of the past 25 years.

TB It’s true that there is a reaction against globalisation. The degree to which that means people have all gone against free trade, I think you’ve really got to watch that. These issues of culture and identity are far more important than this. And those feelings of culture and identity are bound to happen at a period of rapid change. The sensible thing is to deal with those issues and anxieties. And to deal with them by having strong, clear policy positions on them – that then allows you to make the sensible case for immigration, but for controls.

JC As well as ultra-economic liberalism, we also have identity liberalism, too – a rainbow coalition of identity interests, many of which Hillary Clinton attempted to appeal to. And Trump disregarded much of that rhetoric and agenda.

TB What is very instructive is to go look at the Democratic platform for that election and look at the Republican one – leave aside Hillary Clinton and Donald Trump. Just look at those two platforms and you’ll see what the problem is. For example, when it comes to a discussion of radical Islam and the Islamist threat, the Democrats felt that, for reasons I completely understand, that if you talked about it in that language, the general prevailing sense is that you were then stigmatising all Muslims. I don’t personally agree with that. I think that you’re perfectly able to distinguish between Islamists and Muslims. But there is a threat that is based on the perversion of religion, and you should acknowledge it as such in my view. Whereas the Republicans had a whole section that was all about that. Again, if you’re looking at America and how they feel about things, what they feel is that the liberal left is unwilling to have a discussion about these things.

JC What is the best-case scenario for a Trump presidency?

TB That the Trump who is a deal-maker and a non-ideologue comes through. But the only thing you can do is to wait and see.

JC Michael Portillo described David Cameron’s decision to hold the EU referendum as the greatest blunder ever made by a British prime minister. Do you agree?

TB I understand the reasons for it. As you may recall, I argued very strongly against it before the general election . . . but . . . I could’ve held one in 2005 and lost one. When we thought we were going to have to hold a referendum on the Lisbon Treaty, I thought that was a very, very open question as to whether we were going to win or not. What it shows you [is] that if you put this decision to people like this in a referendum, I think at any point in time in the last 30 years you could have got that result.

JC If the prime minister believed leaving the EU would be potentially so disastrous, why take the risk?

TB Jason, I  wouldn’t have done it myself, I’d be strongly against it. But I know what it’s like, so I’m more forgiving of people who hold the position of prime minister.

JC You’re interested in networks and their possibilities. Are you impressed by what Arron Banks pulled off by creating Leave.EU? And what do you think of Nigel Farage?

TB I think what the Leave campaign created was a really interesting machine. You should learn from that. One of the things you have got to be able to do in modern politics is to build that platform of connections and networks. On the other hand, never ever forget that it starts with the right policies.

JC In your view, Farage obviously doesn’t have the right policies, but he has the ability to communicate . . . Trump has even said he should be British ambassador to the United States.

TB I know we talk about this as a new thing, but many of us grew up with Enoch Powell. I mean, you remember the “rivers of blood” [speech], and black people were welcomed into the country and weren’t expelled, and that Britain was going to fall apart as a nation. I mean, these people are always on the wrong side of history, they always are, because that’s not the way the world is today. The world’s going to integrate more. It may integrate fast or slow, but it will integrate. Because technology, travel, migration, trade are bringing the world closer together. If you take a step back and you look at the broad sweep of history, this is actually a great time for humanity in many ways. You’ve had more people out of poverty than ever before in human history.

JC What do you think of Ed Balls on Strictly Come Dancing?

TB I have huge admiration for him, I have to say. I mean, that requires courage beyond . . .

JC Would you do it?

TB No, I absolutely would not dare to do that. I absolutely take my hat off to him and I think he’s been brilliant.

JC Have you watched it?

TB My family’s completely devoted to Strictly, so even if I didn’t want to watch it I’d be watching it.

Jason Cowley is editor of the New Statesman. He has been the editor of Granta, a senior editor at the Observer and a staff writer at the Times.

This article first appeared in the 24 November 2016 issue of the New Statesman, Blair: out of exile

Jeremy Corbyn. Photo: Getty
Show Hide image

Lexit: the EU is a neoliberal project, so let's do something different when we leave it

Brexit affords the British left a historic opportunity for a decisive break with EU market liberalism.

The Brexit vote to leave the European Union has many parents, but "Lexit" – the argument for exiting the EU from the left – remains an orphan. A third of Labour voters backed Leave, but they did so without any significant leadership from the Labour Party. Left-of-centre votes proved decisive in determining the outcome of a referendum that was otherwise framed, shaped, and presented almost exclusively by the right. A proper left discussion of the issues has been, if not entirely absent, then decidedly marginal – part of a more general malaise when it comes to developing left alternatives that has begun to be corrected only recently, under Jeremy Corbyn and John McDonnell.

Ceding Brexit to the right was very nearly the most serious strategic mistake by the British left since the ‘70s. Under successive leaders Labour became so incorporated into the ideology of Europeanism as to preclude any clear-eyed critical analysis of the actually existing EU as a regulatory and trade regime pursuing deep economic integration. The same political journey that carried Labour into its technocratic embrace of the EU also resulted in the abandonment of any form of distinctive economics separate from the orthodoxies of market liberalism.

It’s been astounding to witness so many left-wingers, in meltdown over Brexit, resort to parroting liberal economics. Thus we hear that factor mobility isn’t about labour arbitrage, that public services aren’t under pressure, that we must prioritise foreign direct investment and trade. It’s little wonder Labour became so detached from its base. Such claims do not match the lived experience of ordinary people in regions of the country devastated by deindustrialisation and disinvestment.

Nor should concerns about wage stagnation and bargaining power be met with finger-wagging accusations of racism, as if the manner in which capitalism pits workers against each other hasn’t long been understood. Instead, we should be offering real solutions – including a willingness to rethink capital mobility and trade. This places us in direct conflict with the constitutionalised neoliberalism of the EU.

Only the political savvy of the leadership has enabled Labour to recover from its disastrous positioning post-referendum. Incredibly, what seemed an unbeatable electoral bloc around Theresa May has been deftly prized apart in the course of an extraordinary General Election campaign. To consolidate the political project they have initiated, Corbyn and McDonnell must now follow through with a truly radical economic programme. The place to look for inspiration is precisely the range of instruments and policy options discouraged or outright forbidden by the EU.

A neoliberal project

The fact that right-wing arguments for Leave predominated during the referendum says far more about today’s left than it does about the European Union. There has been a great deal of myth-making concerning the latter –much of it funded, directly or indirectly, by the EU itself.

From its inception, the EU has been a top-down project driven by political and administrative elites, "a protected sphere", in the judgment of the late Peter Mair, "in which policy-making can evade the constraints imposed by representative democracy". To complain about the EU’s "democratic deficit" is to have misunderstood its purpose. The main thrust of European economic policy has been to extend and deepen the market through liberalisation, privatisation, and flexiblisation, subordinating employment and social protection to goals of low inflation, debt reduction, and increased competitiveness.

Prospects for Keynesian reflationary policies, or even for pan-European economic planning – never great – soon gave way to more Hayekian conceptions. Hayek’s original insight, in The Economic Conditions of Interstate Federalism, was that free movement of capital, goods, and labour – a "single market" – among a federation of nations would severely and necessarily restrict the economic policy space available to individual members. Pro-European socialists, whose aim had been to acquire new supranational options for the regulation of capital, found themselves surrendering the tools they already possessed at home. The national road to socialism, or even to social democracy, was closed.

The direction of travel has been singular and unrelenting. To take one example, workers’ rights – a supposed EU strength – are steadily being eroded, as can be seen in landmark judgments by the European Court of Justice (ECJ) in the Viking and Laval cases, among others. In both instances, workers attempting to strike in protest at plans to replace workers from one EU country with lower-wage workers from another, were told their right to strike could not infringe upon the "four freedoms" – free movement of capital, labour, goods, and services – established by the treaties.

More broadly, on trade, financial regulation, state aid, government purchasing, public service delivery, and more, any attempt to create a different kind of economy from inside the EU has largely been forestalled by competition policy or single market regulation.

A new political economy

Given that the UK will soon be escaping the EU, what opportunities might this afford? Three policy directions immediately stand out: public ownership, industrial strategy, and procurement. In each case, EU regulation previously stood in the way of promising left strategies. In each case, the political and economic returns from bold departures from neoliberal orthodoxy after Brexit could be substantial.

While not banned outright by EU law, public ownership is severely discouraged and disadvantaged by it. ECJ interpretation of Article 106 of the Treaty on the Functioning of the European Union (TFEU) has steadily eroded public ownership options. "The ECJ", argues law professor Danny Nicol, "appears to have constructed a one-way street in favour of private-sector provision: nationalised services are prima facie suspect and must be analysed for their necessity". Sure enough, the EU has been a significant driver of privatisation, functioning like a ratchet. It’s much easier for a member state to pursue the liberalisation of sectors than to secure their (re)nationalisation. Article 59 (TFEU) specifically allows the European Council and Parliament to liberalise services. Since the ‘80s, there have been single market programmes in energy, transport, postal services, telecommunications, education, and health.

Britain has long been an extreme outlier on privatisation, responsible for 40 per cent of the total assets privatised across the OECD between 1980 and 1996. Today, however, increasing inequality, poverty, environmental degradation and the general sense of an impoverished public sphere are leading to growing calls for renewed public ownership (albeit in new, more democratic forms). Soon to be free of EU constraints, it’s time to explore an expanded and fundamentally reimagined UK public sector.

Next, Britain’s industrial production has been virtually flat since the late 1990s, with a yawning trade deficit in industrial goods. Any serious industrial strategy to address the structural weaknesses of UK manufacturing will rely on "state aid" – the nurturing of a next generation of companies through grants, interest and tax relief, guarantees, government holdings, and the provision of goods and services on a preferential basis.

Article 107 TFEU allows for state aid only if it is compatible with the internal market and does not distort competition, laying out the specific circumstances in which it could be lawful. Whether or not state aid meets these criteria is at the sole discretion of the Commission – and courts in member states are obligated to enforce the commission’s decisions. The Commission has adopted an approach that considers, among other things, the existence of market failure, the effectiveness of other options, and the impact on the market and competition, thereby allowing state aid only in exceptional circumstances.

For many parts of the UK, the challenges of industrial decline remain starkly present – entire communities are thrown on the scrap heap, with all the associated capital and carbon costs and wasted lives. It’s high time the left returned to the possibilities inherent in a proactive industrial strategy. A true community-sustaining industrial strategy would consist of the deliberate direction of capital to sectors, localities, and regions, so as to balance out market trends and prevent communities from falling into decay, while also ensuring the investment in research and development necessary to maintain a highly productive economy. Policy, in this vision, would function to re-deploy infrastructure, production facilities, and workers left unemployed because of a shutdown or increased automation.

In some cases, this might mean assistance to workers or localities to buy up facilities and keep them running under worker or community ownership. In other cases it might involve re-training workers for new skills and re-fitting facilities. A regional approach might help launch new enterprises that would eventually be spun off as worker or local community-owned firms, supporting the development of strong and vibrant network economies, perhaps on the basis of a Green New Deal. All of this will be possible post-Brexit, under a Corbyn government.

Lastly, there is procurement. Under EU law, explicitly linking public procurement to local entities or social needs is difficult. The ECJ has ruled that, even if there is no specific legislation, procurement activity must "comply with the fundamental rules of the Treaty, in particular the principle of non-discrimination on grounds of nationality". This means that all procurement contracts must be open to all bidders across the EU, and public authorities must advertise contracts widely in other EU countries. In 2004, the European Parliament and Council issued two directives establishing the criteria governing such contracts: "lowest price only" and "most economically advantageous tender".

Unleashed from EU constraints, there are major opportunities for targeting large-scale public procurement to rebuild and transform communities, cities, and regions. The vision behind the celebrated Preston Model of community wealth building – inspired by the work of our own organisation, The Democracy Collaborative, in Cleveland, Ohio – leverages public procurement and the stabilising power of place-based anchor institutions (governments, hospitals, universities) to support rooted, participatory, democratic local economies built around multipliers. In this way, public funds can be made to do "double duty"; anchoring jobs and building community wealth, reversing long-term economic decline. This suggests the viability of a very different economic approach and potential for a winning political coalition, building support for a new socialist economics from the ground up.

With the prospect of a Corbyn government now tantalisingly close, it’s imperative that Labour reconciles its policy objectives in the Brexit negotiations with its plans for a radical economic transformation and redistribution of power and wealth. Only by pursuing strategies capable of re-establishing broad control over the national economy can Labour hope to manage the coming period of pain and dislocation following Brexit. Based on new institutions and approaches and the centrality of ownership and control, democracy, and participation, we should be busy assembling the tools and strategies that will allow departure from the EU to open up new political-economic horizons in Britain and bring about the profound transformation the country so desperately wants and needs.

Joe Guinan is executive director of the Next System Project at The Democracy Collaborative. Thomas M. Hanna is research director at The Democracy Collaborative.

This is an extract from a longer essay which appears in the inaugural edition of the IPPR Progressive Review.

 

 

This article first appeared in the 24 November 2016 issue of the New Statesman, Blair: out of exile