Transcript: David Davis interview

New Statesman political correspondent James Macintyre talked to David Davis about quitting, David Cameron and Davis's leadership ambitions. Here is a full transcript

New Statesman political correspondent James Macintyre talked to David Davis about quitting, David Cameron and Davis's leadership ambitions. Here is a full transcript

NS: How are you? It's been quite a year for you.

DD: Yeah it's been a moderately busy year. As I say I'm feeling very relaxed. The irony of all of this is that on the one hand the interest in me has not gone down, but the workload has become manageable. So for example last Thursday I went to a Remembrance service, and there was a lunch after it, and normally I would have to not go to the lunch because I would have three or four bids from television; this time I turned them down to go to the lunch. So I actually control my life more whereas I would have felt as a matter of duty I would have had to do them. So in that sense life's much more relaxed, but still useful in that – we'll come back to 42 days – had some stuff on Afghanistan, all of which has kept me pretty plenty to do.

NS: Victory over the Government over 42 days?

Rather interesting – in truth, they collapsed rather quicker than I thought. I had planned my life for the prospect of a six month guerrilla war around a Parliament Act, and I think what happened – and who knows, who can see inside the mind of Gordon Brown, and now [Peter] Mandelson and Jacqui Smith and so on – but I think what happened is this, that before they thought it was a no lose proposition to go into battle with the Government over 42-days because they believed that seventy per cent of the public agreed...Now when you ask the question properly: do you agree with locking up terror suspects for 42 days who might either turn out to be innocent or guilty – if you put that bit in – it's down thirty per cent less. And I think that what that says to them is where before, win or lose in the Parliamentary battle they get public credit for doing this, now they don't get public credit because people think it's wrong, and they think it's politically motivated; they've worked that out and [the Government] felt the best thing to do is get out of there as fast as possible. So yeah, I'm pretty pleased, and there is a sort of secondary aspect to it because although tactically that was a smart thing to do; on the day when the credit crunch and the American elections were dominating the headlines, so it was a page 14 Government climbdown, that was very smart from their point of view in tactical terms; but in strategic terms it's quite interesting because I sense a difference in mind-set over all the liberty and privacy issues from virtually every journalist I talk to, certainly most of the MPs I talk to: they now see this as a Government weakness, and they see the Government as being somewhat uncommitted which are looking more and more under threat. On things like the new communications bill, that is going to be a battle royal, and DNA database and so on – all those things now look much more shaky with the Government. So there's a second element which I hadn't entirely expected: which is that because of the Government's tactically clever stand down, they've opened up the battle on four of five fronts.

NS: On you this going to be your main campaign?

I was given advice by Bob Geldoff not to become a single-issue campaigner. Interestingly the same advice was given to me by Martin Bell. Now those are the people who should know. And I don't have any intention of being single issue. I reckon the liberty / privacy issues will take up about a quarter of my time. What my intention has been since the [by] election is to pick big issues – the issue of the day, or one of the issues of the day – ones where I think the issue matters and where I can make a change. There's no point just being a sort of spectator shouting from the sidelines and not altering things. The point of being in this place is that you change history, that's what it's about. If you don't want to do that you shouldn't be here. So for example, Afghanistan -

NS: Which I want to come back to -

And the logic that led to that was that in July, we were hearing very optimistic noises from the Government, on the one hand, but we were hearing back from the front and from informed journalists, rather less optimistic voices. So this is an area where clearly there's going to have to be a change of strategy and policy, and I could usefully add to that.

NS: We'll come back to that. On your resignation from the front-bench, clearly you wanted to take the fight to the Government, but are you willing to touch at all on the truth behind some of the tensions on the front bench, the ideological tensions -

DD: Well, there weren't any, on these issues. I mean to a very large extent I had a pretty free hand. I mean David Cameron accepted I knew my brief, and I'd been doing it for four and a half years, and I had a reasonable good track record: we got through four Home Secretaries and God knows how many secretaries of state...on terrorism, although we had taken a very principled pro-liberty stance we had a lead on that...And David actually publicly complimented me at the [19]22 Committee, after the second big debate on 42-days [the second reading]. What was interesting was not just that we won hands down – frankly I expected that – but it was that the next day, I mean you know what it's like, you've worked here, making a speech in the House of Commons is a very good way to keep a secret, and yet on both of those occasions we got fantastic coverage – news coverage and editorial coverage – in pretty much everything accept the Murdoch press. Not the Sun, and the Times was ambivalent, so everybody was happy with that. No if there's a difference, it's not over where on the ideological spectrum you find's just how much you care about it, and on that question anybody with ears or eyes in his head, is in any doubt that for me this is one of the big issues of the age. Now it would be a very funny old organisation if everybody thought the same thing on this. And against that David has a different task; his task is to win the next election.

NS: Accepting what you say about David Cameron, you mention the Murdoch press of which of course Michael Gove is a product -

DD: I don't know if he's a product – he works for them -

NS: Although there is an ideological point here isn't there; Michael Gove is a neo-con as it were, very into Islamic terrorism, and there is a different position to you on these liberty issues – and Osborne -

DD: There is a whole list of names trotted out – about four of them – but the truth is that this debate never took place. There was only a single debate over the tactics – not over the aims - and that debate took place between David and George Osborne and me early on. And we went through in some detail – we took 45 minutes, half an hour – which is a long, long time -

NS: In a private meeting?

DD: Yeah a private meeting, just to go over the details, because George was quite properly concerned about whether we could be outflanked to the right, all this sort of stuff, and we went through it all, and he was happy, and that was that.

NS: Any tension?

DD: No. It was an entirely proper debate on where the tactical position should be. Now to be honest I have no idea what most of the shadow cabinet members – supporters or opponents, whatever they may be – what their views on this is.

NS: Shouldn't they have rallied to your support more clearly in that case?

DD: They didn't need to, I mean why do they need to rally to my support. I don't go off and offer views on how Andrew Lansley is running the health thing or whatever. The people who were in the team were very clear, David was very clear, nobody else actually would normally speak about it.

NS: Are you happy with the way Dominic Grieve has carried on with the post?

DD: Yes, absolutely, and the thing to understand – I said, and people were taken back by my response, they said, well you know you could have been home secretary, and I said you've got in Dominic Grieve someone who would be a better home secretary. Watch and see.

NS: I have to just touch on George Osborne. What's your view of his position after the Corfu affair?

DD: In three months it will be forgotten. What's much more important is the issue of the economy, and we've got some difficult times, and there's no doubt about it, in the words of Keynes: when the facts change, I change my mind. Everybody has to face that we've had a change in the facts in the last six months.

NS: We'll come back to that in a moment, but do you accept that to have a conversation about what would have been an illegal offshore donation is worse than, say, what Peter Mandelson did on this yacht?

DD: The simple thing James is that I don't know the details of what happened. I have read the headlines like everybody else. I do not make myself deep into the detail, familiar with what happened. My understanding of it is that George did nothing that was wrong in any measure, and had he done so then either the Electoral Commission, or the Committee on Standards, or the House of Commons Privileges Committee, or one of those bodies would be investigating, and coming to a conclusion...So I don't have strong views about it. George himself has said he made a mistake over it; I'm not sure what that's about -

NS: You don't agree with that?

DD: I have not spent my time immersing myself with that.

NS: Last question on this, on a broader level, you said during the last leadership contest: “We shouldn't be in politics to defend privilege. At its greatest, the Conservative Party has spoken for one nation, for the many not the few. I want us to be the champion for the victims of state failure, those without hope and opportunity under the current system. We shouldn't be in politics to accept the status quo.” - You must accept on a broad level, the sort of mixing with these very rich characters, the Bullingdon stuff, that it damages the party?

DD: No I don't.

NS: Really? It's very different from your style.

DD: Well of course, but I have no time for snobbery and I have no time for inverted snobbery either. And the best demonstration of the British public's reaction to that was the response to Brown's attempt to do the toff thing, in Crewe. The reaction of that was distaste. And I think the public take the view, it's not James Macintyre's fault what school he went to; it's his mother and father's fault what school he went to – what he does with it is his responsibility. And I think the British public is pretty mature about that in terms of how they cope with that.

NS: Just on Cameron's leadership – what is your assessment of Cameron's leadership at this stage?

DD: Pretty good actually – one thing that is noteworthy is that he's grown into the job. He was pretty good when he started but I think he's got bigger in the job, and I think that's important.

NS: And what's the nature of your relationship. Would you accept as Mandelson did with his relationship with brown, that you've had your ups and downs?

DD: No, I wouldn't, I mean, we had a difference of view over the by-election.

NS: Why?

DD: I'll tell you in a second but let me answer the first question first. No I mean it's quite interesting – I've known David for a very long time; Ive known him since John Major was prime minister; we worked together, and people interestingly say well I sort of grew to like him during the leadership contest, and that is not exactly true: I liked him before the leadership contest, I got to like him more. I know it's a fine distinction. But people think there is tension and sort of daggers drawn, and that's not true, and you know -

NS: The by-election.

DD: The by-election. I put him in a difficult position. There is no doubt about that – I put him in a difficult position. Here he is, leader of the party, big lead in the polls, and suddenly I come along and I sort of rock the boat. And a number of my colleagues in the House – not just David – felt, 'well crikey, this may jeopardise our lead. Now, actually what happened is there was a poll the next day and our lead increased, but at the point he was told, [Cameron] didn't know that was going to happen.

NS: What was his reaction?

DD: Well, he was a bit surprised, to say the least. He said, 'Why?'. His first question was why. And I went through it and he said 'Well, I don't - it's very risky'. And I said, 'Yeah but the risk is all mine, David.' And he said there is a risk to our lead, and I said no I don't think there is. [I said] I think actually you'll find that the public will respond well to this, and he wasn't at all sure about that, so there was a difference of view.”

NS: And he tried to persuade you not to do it?

DD: Yes of course he did, of course he did.

NS: How rigorously, for how long?

DD: Well, several times during the course of the evening. Leaders don't have great tranches of time.

NS: What calling you on the mobile?

DD: Yeah. And he wasn't the only one.

NS: Who else? Osborne?

DD: I'm not going to get into that [laughs].

NS: On Cameron, what do you say to those who say he's just a PR man, he's had no outside experience and that he is in Brown's word a novice?

DD: Well I don't think so, I mean bear in mind that Brown's predecessor, Mr Tony Blair, came to office never having done anything as far as I can tell, and is viewed in the Labour party at least as having been a very great prime minister.

NS: Is that your view?

DD: No it's not my view [laughs]. I view Blair as a great political general, and I think he made a mistake that David is not making, which was – and it's understandable, after 18 years in opposition – to focus so much on the campaign to get in, that he didn't pay enough attention what they would do with it, once they had won. I remember one of the interesting things for me about Blair was on the flight back he still wasn't sure he was going to win, and was stung by the size of the victory, and that was just an insecurity on his part, but the effect of that insecurity was that he didn't plan for victory. I think you'll find – I can't elaborate because it would be a breach of my shadow cabinet conversations – but I think you'll find there's a fair amount of planning as to what is to be done. Now, some of that planning will have to be redone because of the economic circumstances -

NS: Planning as to what is to be done in the event of victory?

DD: Yeah. Bear in mind that what you can do, is determined by how much money you've got, you know, and if you haven't got much money then it alters how much you can achieve.

NS: Forgive me but isn't that a sign of David Cameron's complacency?

DD: No of course not – he's got two things to do; he's got to win the election, which is a mark of the leader, and then he's got to use it properly which is the mark of a good prime minister. And the distinction I made with Blair was that he was a brilliant – as in the best in a century – political general, you know, but he was not – even the best in a decade, prime minister, competing only with himself [laughs], you know and the public expect us to plan for what will happen I guess in 2010, and when you've got a systematic lead over a long period of time, you would be daft not to make those plans. I suppose it's forgivable if you're behind in the polls all the time – but even if you're behind in the polls you have to do something. I can remember vividly when Iain Duncan Smith was leader, quite a lot of the policy was planned then and we were never ahead in the polls, so no, I don't think it's complacency; I think it's professionalism.

NS: Very briefly, what's the nature of these plans?

DD: Well I can't go into detail. I'll tell you – some of them are in the public domain, I mean the stuff I did at the home office for example – what we would do about police reform, prison reform, right down to things like canceling the ID cards. Whole range of actions to be taken.

NS: Spoken to the civil service?

DD: Not yet, no we're not at that point yet. That starts in a few months. One of the interesting things about where governments go right to the end of their term there's a duty on civil servants to ---- I mean I remember Robin Cook coming to be briefed at the Foreign Office and he didn't make use of it in the way he should have done – I don't think any of the shadow cabinet did, because you can go to them and say, here is a plan to do, let's say a red tape reduction programme with the police, and can you draft it and even cost it.

[Interview interrupted by DD taking call from National Audit Office – contents confidential]

NS: That's an impressive bike.

DD: Ah, my six-thirty start. My current routine is I'm here by seven, I go to the gym, I do a two mile run, 2 km row -

NS: So, just briefly then, on politics generally, Hazel Blears mentioned you in this context – we were talking about whether Cameron is just a PR man – Hazel Blears says there should be more politicians like you, with outside experience.

DD: A compliment from Hazel Blears!

NS: Again I bring it back to your comment about privilege – do you not accept that at least there is a perception issue.

DD: Well...I don't think so. I mean the perception issue is an historic perception issue in the Tory party – that people think that people in the Tory party are wealthier than in other parties, this is not necessarily true, and certainly not necessarily the case that it promotes...I mean after all one could argue that the owner of your magazine is pretty wealthy; it doesn't mean he promotes privilege I don't think, knowing Geoffrey of old.

NS: What about say the inheritance tax policy?

DD: Well I'll tell you what was interesting about that policy – I think I was on Andrew Marr the next day, and I went into a Starbucks and because I'm well known people talk to me about politics, and the girl behind the counter said that was a great policy...No who knows what her parent's situation was...Under a million it gives you clearance. I mean if you've got a seven hundred thousand pound house – and that seems to me like a huge amount of money, but in the home counties, it isn't a huge amount...

NS: They're moving up the threshold to £2m aren't they?

DD: Well I don't know about that – you'll have to ask them about that – but the next day, the lady doing the make up said the same thing, you know, and it struck me this is really quite interesting, what resonance this has, with people who are not themselves wealthy but may have maybe expecting inheritance at some point and you know because of house-prices...this is in quite big numbers.

NS: And this doesn't grate with you at all as a meritocrat?

DD: No it doesn't grate with me, not at all, we're not calling for abolition. Also I'm a father, and I'd quite like my kids to inherit what I've earned. You know, I didn't steal the money from anybody, I didn't do anything other than earn it, so I don't see why it should be taken away rather than given to my kids.

NS: Just onto other policy areas briefly. Cameron is described in the media as a centrist and a moderniser. Can you tell me briefly what areas he has actually changed?

DD: Well, the biggest single one is the green agenda, where he has gone into territory which people don't think historically as being naturally ours. Interestingly, the first environmental act was actually Margaret Thatcher, but people have forgotten that.

NS: But it's all about perception, he's now rowed back.

DD: I don't think so, I mean the emphasis will change, inevitably, because of the economy; the priorities will change. You know the reason politics changes like this is not because politicians change their minds, the hierarchy of needs and aims of the electorate will alter. Two years ago people weren't thinking, after this election I may not have a job, a house, a pension, etc. etc., but they may be thinking that now, so inevitably that goes to the top of the agenda -

NS: So, just on the economy, do you accept that the Tory leadership has been exposed by economic situation, on a practical level but also on a philosophical level, the way in which capitalism has -

DD: No. The idea that we have a completely unregulated bank sector is not to understand what banking is about. What we've had is a badly regulated banking sector, and there's a distinction there. Nobody I know is in favour of bad regulation, and that's what we've had here...You know it was Clinton who kept investment banking separate from retail banking – a very very smart piece of legislation, and it was Clinton who carried it through...And what you will see of course is a great deal of leftists in a mildly triumphalist way saying there we are, which is understandable. They may not be too happy with the consequences, because one of the first thing when the growth runs out is investment has to come down in public services. Now as you know, I am very pro public services, and so you know the first victim of restrain on growth, is the public accounts. So no I don't think it has explained an ideological flaw...

NS: What about the policy on sharing the proceeds of growth – is that going to have to be revised?

DD: Well unless you think growth has gone forever, no. And I don't believe that, I think we are in recession at the moment, I hope the world community will stop it from being a depression. I mean they have all read their books – some of them not very well – about the '30s. And they've got lots of advice out there...

NS: And are you satisfied with Osborne's performance as shadow chancellor at this time?

DD: Yes I am. I don't subscribe to all this. I mean what you have is a sort of gossip fest, and that's been translated in some way into criticism. If the day before all of that nonsense, you added up a sort of batting order of how each member of the shadow Cabinet played off against his opposite number, you would have put Osborne way above Alistair Darling.

NS: Just moving on to some other policy areas. Are you concerned the party is not taking civil liberties as seriously as you – do they need to be harder on that?

DD: No they don't need to be is the truth. This is the sort of Geldof advice – don't be a single-issue man. Secondly there is a tide. As those issues come up – whether it's loss of data or whatever, Dominic comments on it, as is appropriate. There are all sorts of issues under way. There is an interesting problem on this, and it is not so much the politicians so much as the media appetite. One journalist said to me, 'Isn't the set of economic problems, going to render the rights debate redundant. When you're worrying about your house, your pension, your job, you're not going to worry about liberties?'.

NS: The two are not mutually exclusive.

DD: Well, it's worse than that, because I said, 'When was the last time human rights in Europe were last abused? When did that start?' And he said, 'the 1930s'. I mean history doesn't repeat itself so you have to be wary of overstating this. But you have some quite interesting international problems with Russia, which are not the same as but quite similar, to Germany: a country that has been humiliated, arguments over Georgia and the Ukraine and so on, and as I say it's not identical, but there are similar tensions there. You've got the domestic subordination of freedom – I prefer freedom agenda to rights – because of the supposed threats – the real threats – well the supposed appropriate responses to the real threats. That's why things like the by-election were important. You know true history, individuals or small groups of people – you've probably heard me say this before – have nudged a little bit one way, a little bit the other...And that's part of my job. I mean 'nudge politics' is now a fashionable term, but if you nudge something early enough, it changes the direction.

NS: Just moving onto foreign policy, and we'll touch on Afghanistan, but just on Europe briefly – as a prominent Eurosceptic, you must be satisfied with the party's position because Cameron is basically presiding over the most anti-European party -

DD: I don't think it's anti-European, I mean you don't have many calls for withdrawal.

NS: Well there are some MPs -

DD: Well there are one or two, there always have been one or two. But what your seeing as well which is interesting, is the Irish response to the referendum. Bob Geldof was saying how proud he was.

NS: You're pals?

DD: Yeah we're pals – he came and spoke for me in the election. We were talking about this on the train back – I don't want to make this all about Bob Geldof – he was just saying how proud he was and one of his fellow countrymen as it were was saying, 'I didn't vote for it because I didn't understand it.' The issue with Europe is democracy and the proper role of the nation state; it's not about xenephobia. I'm comfortable.

NS: On Afghanistan, this is an issue that is close to your heart now, and you came back with a serious message.

DD: Yeah what happened, just so you know, is I started out after the by-election, thinking OK where are the big issues, and this was one, and the death rate was going up, so I spent about several weeks over the summer reading a very large number of books – I normally say 27 – but actually it was 25 and two novels, one of which was Flashman – in fact that Flashman one was informative in a peculiar way. But the point being, you read all of those, books about what has happened in the last few years. I ended up with a whole load of theses. I read loads of reports, UN reports, general accounting reports from the US congress, reports from people working for the foreign office here, on drugs and so on, probably a hundred – plural hundreds – the idea is so you know it backwards. You know in a war-zone, with a history of several civil wars – four or five civil wars – you are going to get people who are going to make a case to you with their own axe to grind, so you've got to have some knowledge. Let me give you an example: I was talking to a Talib lawyer – a Taliban lawyer – and he was going on about how we have a constitution which respects the Koran. And I said, 'Well in the '50s you had a constitution which said exactly that, and no laws should be passed which is repugnant of the Koran. So you go out there with a base and you contextualise. The conclusion we came to is very simple – a set of conclusions – one is that in Helmand, in the British part, we are not making any military progress. We are sort of stagnant, with us holding about five bases, we are not holding any roads, not holding the countryside...and growing casualty rate, so that's one component. The second component who are the face of government in Helmand – the Afghan national police – well, the word corrupt is not stong enough, I'm not kidding – they are almost a criminal organisation, you know. They stop you on the road and you have to pay bribes to get through. So if you're taking goods to market and you want to make a profit you won't make any money at all. They rob people. They are into drugs, 16 per cent of them are junkies. There's cases of abduction of women, and so on. So you've got that problem, and you've got the circumstance that if a ordinary Afghan wants a legal judgment, let us say on his land entitlement, if you've had five governments through civil wars, each of them try to give the land through somebody else – a bribe to get the case lifted...So someone will walk out the capital five or ten miles, find the Taliban, who will then send a summons to the other person and call them over within a day, have a hearing, spend a couple of days checking the facts, and hand over a ruling within a week. And that ruling stands. You kinow, when a government cannot even deliver justice – the most fundamental thing, the Romans said peace, security and justice – you cannot even get that, Roman levels of governance – so you've got that, you've got security problem, you've got a justice problem – I prefer to call it justice – and you've also got an aid problem, because it's so unsafe you can't really do anything proper. And we have put it right – well, actually the Americans have to put it right. But in essence there is a soluble outcome I think that requires big big American resource increase, that will require Karzai being told that he's got to have proper justice. I note today, that he's actually for the first time sacked a Cabinet minister for corruption. So it's beginning to get across. When I went I thought I'm going to come back and face a flood of abuse – you know you come back and say we're not winning the war and they say 'Oh, you're undermining the troops', and I was willing to deal with that. I was wrong – it wasn't just me. The conventional wisdom just flipped 180 degrees in about three weeks – a combination of other voices...

NS: Do you think the Tories will win the next election?

DD: Yeah I do, I do.

NS: You don't think there's been a change in recent weeks?

DD: Well there's been a change in the polling numbers but it's quite interesting – they're quite widely spread, what have you got a five or six point lead; earlier in the week a thirteen point lead, I mean what you're always seeing is a Tory lead, and it's quite interesting today's poll – I mean the problem is you want to be quite careful of micro-analysis of polls, and I put that big caveat on what I'm about to say, right, but today's poll shows that people want to see Brown manage this crisis, and they want to see Cameron after the election. That's essentially what they say. And that's sort of what I'm picking up anecdotally. I mean the thing about – my stats professor at business school once said to me, if it's surprising it's probably wrong, about statistics. And what I'm seeing on the street, I'm seeing the popularity of David -

NS: Really?

DD: Yeah, absolutely, I'm talking about east Yorkshire now, my constituency – I'm seeing David being popular; both with Tories and with others – they aren't necessarily all going to vote for him, but they blame Brown for where they are – there's little doubt about that – the majority blame Brown for where we are; they think Brown has done a slightly better job in the last month.

NS: Do you share that view?

DD: Well, he's improved on a bloody awful job, and there are some aspects of his policies which I agree with, but by no means all of them, and he is going to be handicapped by his own historic profligacy – his room for manoeuvre is tiny. So anyway, no I think we'll win, and I think we'll win with an absolute majority, which means we've got to have an eight point lead.

NS: You ran with the slogan 'Modern Conservatives'. How would you have done things differently?

DD: There was a wonderful irony – one of my financial backers who I probably shouldn't name, said – and he meant this [laughs] as a criticism of David Cameron actually – said after the first conference after he won, said oh well David Davis would have done all these things. The irony is that the programme has very little difference. I mean there are things where we differ -

NS: You're not quite as socially liberal as him are you?

DD: No, no I'm not, no I'm not, that's right, and, um, in a way in those terms he's probably more in tune with the times, or at least in the south of England he is anyway.

NS: He's adopted that sort of Portillo agenda hasn't he?

DD: Well I think he believes it, I mean you know he is, it is of his era and generation and so on, so no I think there are some mild differences there, but I don't think they are materially tangible in terms of impact and electability. What's interesting too is that you know he has grown in the job, more notably than anybody, I mean, most leaders grow a bit, some don't grow at all but most grow a bit, he has grown more than most I think.

NS: Is that because he was inexperienced -

DD: No, I don't think so, I mean he was good – good enough to beat me that's for sure. He was a good candidate to start off with but I think he has grown. He has a strong character. One of the things that perhaps you don't see, with the sort of privileged background, is you don't see he's got a strong character.

NS: He's got a bit of a temper on him hasn't he?

DD: Well I've never seen that. But you know there have been times when we've had discussions about you know quite high risk problems, and er, it wouldn't be proper to tell you what they were -

NS: Strategic?

DD: Strategic issues. And you know he's been willing to go down routes that are more risky than others, and even frankly the one I mentioned earlier on green issues, he's gone down a route that frankly, a significant number in the party don't want to go down -

NS: But he hasn't done a Kinnock on Militant or a Blair on Clause IV has he, to show the electorate he is taking on his party. Indeed they say you don't need a Clause IV.

DD: You don't need to, you see one of the things that I think is a weakness in the stereotypical analysis of Westminster is that you know we need to sort of replicate what New Labour did – you know the raw truth is that new Labour had a firm ideology on their hands -

NS: Don't you?

DD: No I don't think we do at all?

NS: You don't think the IDS period was like Militant – languishing with the core vote strategy?

DD: No – Militant was a sort of Trotskyite wing, and an entryist wing, and with a sort of command economy, socialist model, which had failed everywhere -

NS: So, sorry, had you been leader you wouldn't have taken on the party, you didn't have an issue in mind to show the electorate you've changed?

DD: What issue?

NS: Tax?

DD: Hm?

NS: You don't rule yourself out of the leadership do you?

DD: Yeah pretty much. I mean the first thing to say is, a) I don't think it's going to happen?

NS: And if he doesn't win?

DD: I still think -

NS: It would be an absolute disaster if he doesn't win.

DD: I don't think that's going to happen in truth.

NS: And you're not going to get into the hypothetical on if he doesn't win.

DD: No but you know I don't see that, I have...the other thing for me is that I have still got – it may not last forever – it won't last forever – it may not last for long – the ability to influence events, and that is not related – ironically usually when people stand down from a job, they find in very short order, the reason people talk to them was their job. And there was a risk to that.

NS: And you're not finding that.

DD: I'm not finding that, and the issues I'm interested in, I'm associated with are issues which are live issues, so -

NS: I'm not trying to encourage you to undermine David Cameron by asking you...whether you completely and utterly rule yourself out of the leadership.

DD: But I very much have.

NS: But you're an obvious candidate.

DD: Candidate for a job that doesn't exist.

NS: But why rule yourself out? Why not hold the door open slightly?

DD: No no because these things create their own impetus, that's the trouble, and as you hold the door open as you put it, it looks as though, ooh maybe under these circumstances then it creates instability. You know we've been out of power now for twelve, thirteen years by the time of the election, and the thing I want is to see a Tory government back in place, bar absolutely nothing.

NS: Do you rule out a Cabinet position?

DD: Well that's not my call. The way I think about this is quite straightforward. I've made a decision with its associated risks. And when you buy a house, it is daft to spend all your time afterwards fretting about the price you pay – you agreed to pay the price, you know, and I agreed to pay the price. Now, that doesn't mean that, um, well I mean so that's point one. Point two is then it comes down to what David and a new Tory government needs, and it's up to them. If the government asked me to do something worthwhile then of course I'll do it. But the thing to understand is that ministerial office for me doesn;t hold great attractions, and people forget that.

NS: But very finally on the leadership, it would be wrong to conclude that by doing your move on civil liberties, you are ruling yourself out of the leadership completely.

DD: But I'd already done that in my mind. I'd already done that three years ago. That's it, you know, all of that's behind me, that's just the reality. The problem about this is that your profession I'm afraid underestimate what somebody who knows what they are doing can do as a backbencher.

NS: Well, you've done it before.

DD: I've done it more than once before. In fact the most important things I've done in my political career I've done as a backbencher not as a frontbencher.

NS: And you went on to be nearly leader of the party.

DD: But the simple truth is that if I am a backbencher with a Tory government in power, you can be bloody sure that the agenda I'm talking about will be part of that agenda. Politics is about influence as well as power.

NS: Will you ever criticise positions taken by the leadership?

DD: If they arise, but I have not seen them doing anything I think they're wrong to, but our duty in this place is first to the country, second to the constituency and third to the party. I mean if the by-election meant anything -

NS: Was that on your mind when you resigned and went to the country?

DD: Was what on my mind?

NS: That one, two, three, country, constituency, party?

DD: Yeah but that's in your DNA. That's in your sort of political DNA.

James Macintyre is political correspondent for the New Statesman.
Jeremy Corbyn. Photo: Getty
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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.