Interview: Jon Cruddas

Tony Blair's former aide is standing as the people's choice and has little time for his cabinet riva

Jon Cruddas is not a household name, but he may yet become one. The MP for Dagenham has a strategy for reviving the Labour Party and, heaven knows, it needs one. At the same time, he is making himself noticed. The man who worked for years behind the scenes in Tony Blair's office is poised to become an important figure in the new world of Gordon Brown.

The outsider in the deputy leader contest does Jeremiah politics to good effect. A month or so ago, just as his campaign was getting going, he warned that if the party continued to haemorrhage members at the current rate, it would have none left by the year 2013. He believes Labour must turn once more to grass-roots campaigning on issues that can fire the passions of a new generation: the rise of the British National Party, traditional causes such as inequality and poverty and, more boldly, the rights of migrants. All of these are acute problems in his area.

As we sit down with him at Westminster, he seeks to enlist our support for a nationwide campaign, Stopthebnp.org.uk, which seeks to take on the BNP ahead of the local elections in May. It will not focus necessarily on key marginals or councils where Labour is fighting for control - places where the party machine would usually direct its resources. But Cruddas does not see the rise of the BNP as a fringe issue. For him, this is a front-line struggle to win back alienated Labour voters who risk being lost to the far right.

Cruddas is an engaging but curious mix. He talks half in the language of Warwick University philosophy postgraduate: "post-party", "virtual politics", "parallel universe", "rational choice economics" and, yes, "endogenous". The other half of his conversation is political agitprop, with an accent some in his party suspect might have been estuarised in recent years. He talks credibly of the need for Labour to focus again on local parties and trade-union branches, where he believes it belongs. He argues that the government's obsession with building a meritocracy, creating opportunities for the talented or fortunate, has made society less equal. In place of this, he proposes a model of "social solidarity" where interest groups ally to improve conditions for everyone. "We don't live in a classless meritocratic new Labour nirvana, right?"

Even though he believes the entire economic underpinning of Blairite thinking is flawed, Cruddas talks warmly of his four years as trade-union linkman at No 10. "It was a fantastic privilege. There was an energy there." Whatever the ideological differences, he refuses to doubt the integrity of anybody he worked with. When we ask him about the police investigation into loans for honours, he says: "I wouldn't question the ethics of anyone involved. Everyone I met, irrespective of whether I agreed with them politically, was in it for the right reasons." Like many, he has little experience of the world outside politics: he joined Labour as a political officer in his twenties and worked for successive party general secretaries. His decision to become an MP was almost inevitable and he was duly elected as the member for Dagenham at the 2001 election.

Cruddas says he was prompted to join the race by a conversation with a cabinet minister who told him that grass-roots politics was dead. Perhaps his close relationship with the party explains his distress at how the Labour movement has lost its way. He describes the decision to introduce tuition fees as "the most regressive piece of economic and social policy any Labour government has ever introduced".

Cruddas is the son of a sailor, and made his way to university along with his working-class siblings from a Catholic comprehensive near Portsmouth. He was a tuition-fee rebel, despite years of loyalism, because he believed the government was selling a false promise of future affluence to children from working-class families. He believed the prospect of years of debt would dissuade people like his parents from allowing their children to apply to university.

Cruddas talks passionately about the need for Labour to reform its structures and become, once more, a genuinely federal party that can re-enfranchise its members. It is more difficult to pin him down on specific policies. After some prompting, he outlines six ideas. He would reverse immigration legislation that clamps down on employers using illegal migrants and instead regularise their status in the UK, to help prevent them being exploited on starvation wages. In health, he would publicise per-capita health inequality in every primary care trust and make it the duty of each trust to close the gap. In what amounts to a direct challenge to Gordon Brown he says: "You cannot construct a choice-based agenda in health where you have no base camp of equality of provision in terms of primary care." On education, he would not turn back the clock on city academies and independent trust schools, but he would end the present system whereby local authorities are penalised for not embracing these institutions by having funding for building new schools removed.

He goes on. He would institute what he calls "a real-time demographic picture of the country". Cruddas claims that the current census does not account for between 10 and 15 per cent of the population in urban areas, which makes it difficult for local authorities to plan services. His most challenging proposal is perhaps his most simple. "Build council houses," he says. "This is so obvious." Cruddas argues that in and around London especially, the large influx of people, coupled with vast tracts of brownfield land should free councils to build new social housing.

As the lone backbencher in a field of five, Cruddas enjoys a freedom to speak out that is harder for the rest (not that our previous two interviewees seemed bothered). Until now, the campaign has been a civilised affair, but Cruddas decides to take the gloves off. He suggests his rivals are looking for any excuse - wait till Blair has left, or till the local elections are over, or don't rock the boat - to avoid a public debate with him.

Indeed, it was this very accusation, made in the NS in December by a Cruddas ally, which drew such an angry response from the other candidates that they all volunteered to be interviewed by us. But Cruddas is not satisfied: "We're going to lose this opportunity to renew the party. The remedy is to use the deputy leadership to get them all to resign." He says: "They should all walk out and we should all have a genuine debate, rather than all this briefing, leaking and playing both sides: in the cabinet and simultaneously out of the cabinet."

He is scathing about the others' apparent conversion. "They're playing smoke and mirrors to find themselves. After ten years of doing the nodding-dog routine, they try to reinvent themselves as more radical."

Like his opponents, Cruddas is reinventing himself as a radical, but perhaps he has less of a journey to travel. Even though he is given little chance of winning the contest, he has already changed the terms of debate. And he is not prepared to let matters rest there. The transformation of Labour into a more open, democratic and progressive party, he believes, begins, not ends, with Brown's accession. He claims he has yet to decide whether even to vote for him. "I want to hear what John McDonnell has to say, or anyone else who comes in, like Michael Meacher."

He says that unlike his cabinet rivals, he has no desire to ingratiate himself with the new master. "It's slightly unedifying that all the other candidates seem to be in a bidding war to proclaim who's said the nicest things to Gordon Brown. I think he's an outstanding politician, but I want to contest some of the terms of the debate."

Jon Cruddas: the CV
Born 7 April 1962, Helston, Cornwall
1989 Begins work for Labour as policy officer
1990 Gains philosophy PhD from Warwick University
1992 Marries a Labour official, Anna Healy
1994 Chief assistant to Labour general secretary Larry Whitty, then Tom Sawyer
1997 Becomes deputy political secretary to the Prime Minister, acting as link with the trade unions
June 2001 Elected MP for Dagenham. Quickly gains reputation for fight against BNP in his constituency
January 2004 Rebels against tuition fees
September 2006 Announces candidacy for Labour's deputy leadership
November 2006 Appointed chair of the London group of Labour MPs
Research by Lucy Knight

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.