The gospel according to Dave

The party knows what it wants – grammar schools, immigration controls, spending cuts. But does the l

I don't want this to sound too much like an undergraduate PPE essay, but the question of whether David Cameron is a Conservative requires one to define what one means by that term. The Tory party is a broad church, and the conservative movement in Britain is far wider than the party. Each of us in that movement (and, for the avoidance of doubt, I must stress I am not a member of the party) has his or her own definition of what conservatism is. By mine, Cameron is something else altogether.

In my own traffic with Conservatives, I detect common themes that they would wish to see elaborated in policy under Cameron, but which for the moment are not. They want the state to be cut back, and all that that entails. They are profoundly unimpressed by the European project and wish us to have less of a part in it or, in some cases, no part at all. They are strong supporters of grammar schools and strong opponents of the diluted university education they believe is being purveyed in institutions of higher learning today. They endorse private education, and would like to see a voucher system that made it more affordable to more people. They support strict controls on immigration. One of the few public spending programmes they would like to see expanded is that of prison-building. They believe the notion of man-made global warming is an anti-capitalist conspiracy. They support fox-hunting and feel that urban Britain has been greatly favoured over the rural since 1997. They support the National Health Service, but would like to see it fundamentally reformed. In their attitudes to welfare, they draw a distinction between the deserving and the undeserving poor. They prefer married families to unmarried ones.

As far as mainstream Conservatives are concerned, none of those views is really exceptional, and certainly not extreme. Yet, as I look down that list, I am hard put to find any item on it with which I am convinced Cameron would unequivocally agree.

The party's economic policy, insofar as one can be properly defined, is a mess. Cameron now intervenes more and more to enunciate it, as he did recently when ruling out "swingeing cuts" in the first year of a Tory administration. What this says about his faith in George Osborne can only be a matter for conjecture. Big business, which is supposed to be the Tories' natural constituency, is telling him it will relocate abroad if the 50p tax rate is not reversed. Yet the Tories are afraid to do this in case it is represented by Labour (as it surely would be) as favouring the "rich". Never mind that the "rich" tend to spend their disposable income on products and services supplied by the "poor", many of whom will suffer a severe, and not just marginal, blow to their lifestyle when the higher rate comes into effect in April.

Cameron is also taking a Heathite attitude towards cuts. The NHS will not be cut, he says. His lieutenants say that the only health policy the Tories can afford, politically, is one that is identical to Labour's. This ignores the widespread belief among Conservatives that a public service costing more than £100bn a year must have scope for reform; and reform that provides a health service free at the point of use to all who need it, but more cheaply and efficiently. There is also bemusement among Tories that the only other budget that Cameron has guaranteed to protect is the one for international development. It is presumed that this is because he wishes to grandstand at some point about his party being compassionate to people in the third world, and therefore not "nasty".

Public relations

Many natural Tories have still not forgiven Cameron for his obtuse handling of the Lisbon Treaty question. His promise - or threat - to do something about the treaty even if it were ratified has turned out to be empty. He cannot unratify the treaty without our leaving the EU altogether. There is talk of his calling for an intergovernmental conference, and even of having a referendum to give him a mandate to call for one, but that is absurd. Cameron may have to tolerate erosions of sovereignty that are no fault of his, but rather of Gordon Brown's, yet the blame he will attract from Tories for allowing them to happen will be the fault of his having raised expectations unreasonably. Cameron seems out of step with his party on Europe, and not really to understand the issues - as his handling of Lisbon and of his party's realignment with various oddballs in the European Parliament would seem to confirm.

Yet nothing upsets mainstream Tories more than their leader's stand on grammar schools. This is a policy driven by focus groups taken among non-Tory voters, who say that grammar schools are not popular with them. They wouldn't be, would they? However, they are intensely popular with almost every Tory activist I have ever met, and with many other natural Tory voters. They are seen as offering a route out of poverty to young people with brains.

This is where Cameron's own background comes to grate with his party. If one has a father rich enough to send one to Eton, then grammar schools are neither here nor there. If they are the only way for some young people to get a truly superb education, it matters very much when a Conservative leader (who is also an OE) says he can't be arsed about them.

Cameron knows that he must throw the odd bone to his core vote. He has encouraged the retributive ethos against burglars that one finds in one's own home - though this was made easier for him by the fact that the case that prompted the debate involved the shocking treatment of an Asian householder: grandstanding about anything that might be seen to support ethnic minorities has become second nature. He seemed to be prepared to defend married families through the tax system, but that became subject to the usual economic confusion that so often besets the party. Cameron shifts easily on such issues because he has very few principles, other than his belief in himself as prime minister. If it is feasible one day to reward marriage through the tax system, he will do so. If it is not, he won't really care less. Such is the mindset of the former public relations man, whose elastic intellect can be placed on whatever side of whatever argument.

It is that intellectual (or is it moral?) weakness that is likely to be exposed in the dirty fighting of an election campaign. Natural Conservative voters want blood - Labour blood - and Mr Cameron must try to give it to them. Having little in his political wardrobe that passes for a principle, that may be simple to do at a superficial level. However, it makes him vulnerable to scrutiny and to being tested in a way that would provide few difficulties for a genuine conviction politician, but which could severely undermine an imitation. Not least for that reason, real Conservatives await the campaign with great interest.

Simon Heffer is associate editor of the Daily Telegraph

Simon Heffer is a journalist, author and political commentator, who has worked for long stretches at the Daily Telegraph and the Daily Mail. He has written biographies of Thomas Carlyle, Ralph Vaughan Williams and Enoch Powell, and reviews and writes on politics for the New Statesman

This article first appeared in the 01 March 2010 issue of the New Statesman, The Dave Ultimatum

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.

 

 

This article first appeared in the 01 March 2010 issue of the New Statesman, The Dave Ultimatum