My Life, Our Times
Page 53
Of course, the public square today is mediated not just by print and TV journalism, but also by Twitter, Facebook, Instagram and the explosion of social media. In both traditional and digital media, we have seen in my view a coarsening of public debate. All too often, the public square resounds with voices that are harsh and discordant, frivolous, or at times even menacing.
But while all my experience tells me that we have to be careful when we carry religious or even moral arguments into public decision-making, I believe, as I look back at the debates we had when I was an MP, chancellor and prime minister, that I should have been more open about my beliefs, more upfront in dealing with the difficulties of doing so, and more willing to take potential criticisms head-on. In the end, the choices in our public square should not be reduced to a theocratic and unacceptable dogmatism on the one hand and a joyless and barren secularism on the other. A more ethical politics can introduce an essential moral dimension into the biggest of issues, make for a far healthier and more robust national conversation, and help build what I think millions today yearn for – a better, fairer and more compassionate Britain truer to its best hopes and ideals.
CHAPTER 21
MY LIFE WITH LABOUR
This book has been the story of my life with Labour. It has also been a morality tale showing how the fortunes of a progressive party can rise and fall.
For more than a century the Labour Party has been the indispensable agent of economic progress and social justice in Britain. If a Labour Party did not exist, I believe it would have to be created if the needs and aspirations of the people are to be properly represented. Perhaps this is why for most of its members and its leaders, from Keir Hardie to Jeremy Corbyn and all those in between, Labour is not simply a party nor even a movement for change, but a cause.
Indeed, throughout my life with Labour I have borne witness to the dedicated work of committed men and women who get up in the morning thinking how to achieve a better, fairer world. They work through the day, whether as councillors or MPs or citizens in their own communities, testing themselves, their actions and their decisions against their progressive ideals. For it is the mark of being Labour to believe that people are not just competitive and appetitive by nature but cooperative and altruistic. It comes down to what you believe and what makes you tick.
Before 1997, Labour had been in power for less than a year in 1924, for two years between 1929 and 1931, and for no longer than six consecutive years in the governments of 1945-51, 1964–70 and 1974–9. And on those occasions when Labour’s time in power went beyond the length of a single parliament, in the early 1950s and late 1960s, the party was already looking exhausted and beset by seemingly insoluble problems by the time it left office. So winning and holding power for thirteen years was a unique and momentous passage in Labour history.
In telling the story of these years I have tried to focus not just on the comings and goings of politicians and personalities – important and, at times, dramatic as they are – but on the movements and ideas that have shaped our times. And in this final chapter, as I have tried to do throughout the book, I write not just to review the past but to contribute to the debates ahead. In politics, nostalgia is a self-indulgent exercise. Looking back is only worthwhile if lessons from the past can influence the future.
For forty years I have fought against the assertion that prosperity will simply trickle down to those in need and that the best government can do is get out of the way. There are, of course, many obstacles to a better life that we can surmount either on our own or within our families, but government exists because there are some challenges that we cannot meet and master unless we do so together. When failures arise in the operation of markets and powerful private interests – whether banks and utilities or, as now, IT and big data companies accumulate too much power, exploit that advantage and hold people back – it is, as I have suggested earlier, Labour’s historic role to call them to account and rein them in. It has been done before. It can and must be done again.
Of course, the Labour Party of the 1980s had to break with the idea of command-and-control statist socialism, the illusion that everything could be taken to and run from the centre. I remember being horrified and amused in equal measure when in the 1980s one of President Gorbachev’s right-hand men visited London from the Soviet Union and, seeing that food was in plentiful supply in the shops but being unable to conceive that this might be due to the successful operation of a market in which supply matched demand, he asked to meet the controller of London’s food distribution. For me it conjured up the pioneering sociologist Beatrice Webb’s observation that in 1930s Russia there was no problem that an extra 300,000 junior-grade civil servants could not solve. The alternative that I favour – decentralised decision-making wherever possible – is what Labour’s post-war health minister Aneurin Bevan eloquently called ‘taking power to give it away’.
The aim of progressives today is the same as it has been for one hundred years: running a full-employment economy and treating people fairly. To pursue this aim since the latter half of the twentieth century, we have had to battle with an ideology at the other end of the spectrum: neoliberalism. At a private meeting in the House of Lords the last time I saw him, J. K. Galbraith recounted to me a speech he had given in Vienna City Hall to celebrate the fortieth anniversary of the Austrian Republic. In the front row were Friedrich Hayek and other Austrian neoliberal economists who had emigrated to America and won fame and status by rejecting the very notion that governments should pursue policies that advanced economic efficiency and social justice together. Galbraith started by thanking them for their contribution to Austria’s development for, as he put it, if they hadn’t left Austria, the country could never have enjoyed the social progress it had achieved in the forty years since 1945. With typical wit, Galbraith was exposing as an illusion the idea that social justice and economic prosperity were incompatible.
But at every point in our history, the question that arises is the same one we faced when I was starting out as a young party member: is the Labour Party in its current form the right vehicle to deliver the change our country needs?
The only way a progressive party can succeed is by being both radical and credible. It can be radical without being credible, but it will never be a successful party of power. It can also be credible without being radical, but it will no longer be progressive. In neither condition will it achieve anything truly worthwhile.
We need to be credible radicals not only in the policies we adopt but in the way we behave as a party. Political parties are communities in which, in Michael Ignatieff’s words, strangers come together to defend what they hold in common. And here is the tension: between the activist impulse to pursue ideals on the one hand, and the representational responsibility to articulate and aggregate the views of the general public – and thus speak up for the needs and aspirations of the population as a whole – on the other.
In forty years of attending Labour conferences I have seen this tension at first hand. Nuclear disarmament, renationalisation, unrealisable spending pledges that defy fiscal gravity – examples abound of motions that would often be passed in the most general of forms in order to express a broad statement of objectives but which, by their very nature, glossed over the difficulties of implementation, prioritisation and funding. These motions would be passed to cheering crowds and, when the leadership failed to deliver, were inevitably followed by cries of betrayal.
I remember the bitter battles Neil Kinnock fought in order to make us credible radicals – against those who wanted telecom renationalisation, unilateral nuclear disarmament, no council-house sales and nothing to do with the private sector. Eventually most members came to accept that we could, at one and the same time, respect public opinion and honour our values. We need not be swayed by purely sectional interests. We could be the party that stood for fiscal realism and not just for more and more spending irrespective of whether it delivered better outcomes.
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ut it took time to persuade even the best-informed commentators of our prudence. Indeed there was a long period right up to 1997 – and even after – when each time I went on the BBC’s Today programme the only question that the interviewer thought worth asking was ‘How much will your programme cost and how much will you have to raise taxes in order to pay for it?’ The Labour Party had to counter this caricature, and so we did: through the sterling efforts of Neil Kinnock, then John Smith, and then Tony Blair.
But by the mid-1990s we had to offer something more. The left’s traditional answers – to pull the levers of state power through nationalisation, currency and capital controls, and restrictions on imports – had failed to recognise the new reality: that national economies were interconnected in a global economy and that money and goods now moved freely across borders irrespective of national decisions. The prevailing neoliberal orthodoxy offered a simple but dishonest framework within which to understand globalisation. In response to a fast-changing world that had moved on from the 1980s, what approach would we propose instead? Voters knew what we were against; now they had to know what we were for.
Tony and I both wanted to build the widest possible base of support for our new approach, and I supported the lengths he travelled, geographically and rhetorically, to deal with the Sun, The Times and other newspapers which had so unfairly undermined Neil Kinnock. But the question was: would New Labour take on not just the obsolete shibboleths of the left but also the prevailing dogma of the right? Would we cave in to the new neoliberal orthodoxy, fall in line with the privatisers, deregulators and liberalisers, and ignore what was becoming a defining issue – inequality – or would we take that orthodoxy on?
I was in no doubt where New Labour had to stand. We supported markets but resisted the automatic equation of markets with the public interest, so there were limits to the sale of nationally owned services that were often referred to as ‘the family silver’. We supported fiscal realism but rejected the myth that national finances were the same as household budgets albeit on a larger scale, and with it the inflexible neoliberal insistence on a ‘balanced budget’, and so our fiscal rules would allow us to borrow in order to invest. We wanted to reward hard work, merit and the contribution citizens made to the strength of our communities, but we were not prepared to overlook the gross and glaring inequalities of income and wealth in our country. At the same time, while we stipulated that certain services – defence, law and order, health and education – could not be run on purely market principles, we needed to ensure that, within the public sector, all services were run efficiently and accountably.
As trade and industry spokesman before 1992 and shadow chancellor thereafter, I left my colleagues in no doubt that we had to embrace markets, competition and the essential role of the private sector in achieving economic growth. But we would not accept a private sector free-for-all. Competition was usually in the public interest – hence our support for new businesses joining the marketplace – but competition also required there to be laws that would challenge the power of monopolies and cartels as well, now, as the excesses of the privatised utilities. Liberalisation had a public purpose, but in areas like health and safety, environmental protection and conditions in the workplace, it was often regulation, not deregulation, that would best serve the public interest. New Labour did not mean ditching our principles but, as John Prescott was right to keep reminding us, implementing our enduring values in a modern setting.
The successful changes we delivered in our first term in government arose from that approach – the New Deal for employment paid for by a windfall tax on privatised utilities; Bank of England independence and tougher financial regulation; the minimum wage and tax credits for working families; a focus on reforms and resourcing that would put ‘schools and hospitals first’. We were updating the Attlee government’s post-war social contract, providing twenty-first-century answers to twenty-first-century problems. And under Labour, the public sector was in turn supporting science, innovation and a major drive to improve public and private sector productivity, and thus higher levels of economic growth.
I have described the internal battles that took place within Labour over foundation hospitals, tuition fees and deregulation, and the changed mood I sensed in No. 10 after the election victory of 2001. I recall how at one point we had to counter the suggestion from one health minister that there were no limits to the private sector’s role in our NHS and, at another, having to respond to Tony’s own proposals for unwarranted deregulation of the City of London and for splitting up the Treasury. I was, as always, up for modernisation, but I was never up for a narrow interpretation of it that made the only measure of being a moderniser the size of one’s appetite for privatisation and liberalisation and the degree to which I could remain agnostic on reducing inequality.
I did promote some difficult privatisations – air traffic control was especially controversial – and the Treasury moved ahead in the face of internal party opposition not just with more public-private partnerships but with a new Enterprise Act that encouraged competition, with cuts to corporation tax and capital gains tax targeted at small business, as well as with the major initiatives I have described aimed at making the public sector more efficient and instituting a better system of regulation. Before and after I became prime minister I encouraged Labour to endorse the use of private providers not as an alternative to the NHS but in addition to it in order to meet our targets. So where I thought competition, liberalisation, privatisation or tax incentives to be in the public interest, I would be not just supportive but leading the charge.
However, I drew a line between modernisation that was progressive – where it could advance economic prosperity and social justice together – and the kind of modernisation that all too readily assumed that private was invariably better than public, that business interests and the public interest were always as one, and that inequality was not a pressing concern – a view of modernisation that could so easily have been mistaken for neoliberalism in disguise.
When Peter Mandelson famously said that Labour had nothing against people being ‘filthy rich as long as they pay their taxes’, he thought he was striking a blow in favour of modernisation. Peter did not, I am sure, mean to suggest there should be no limits on inequality, but that was how his remarks were interpreted. Yet when I said that the levels of inequality in our country were a problem – and if asked, l always did – or that I wanted to tackle tax avoidance, that was often depicted as the Old Labour desire to tax for its own sake.
Much of this debate was driven by the media, whose test of how far we would modernise was simpler still: ‘How far would Labour move to the right?’ If I wanted to attack the far left or the unions for refusing to modernise, I could get good coverage, but when I raised concerns about inequality, market failures or greed, this was considered either boring – peremptorily written off as the traditional Labour obsession with fairness – or, more likely, dismissed as anti-modernisation. When I resisted tuition fees and then even more controversially expressed concern about the exclusion of working-class students from Oxbridge and Britain’s unacceptably low levels of social mobility, my proposals were branded as either the politics of envy or an attempt to dumb down at the expense of excellence. Even when I was able to prove that, without sensible controls over their borrowing, foundation hospitals would likely run up deficits which the taxpayer would have to guarantee and fund, this was branded as ‘Old Labour’. For a time, ‘Old Labour’ and ‘New Labour’, ‘consolidators’ and ‘modernisers’, were thrown around as shorthand in order to isolate and dismiss party opponents, which had the counterproductive effect of obstructing rational discussion of policy. This became an increasing source of contention – and, if I’m honest, irritation – within the government.
But politics is invariably about choosing your priorities, and in government that often means sidestepping the barriers in your way by concentrating your attention where you think you can make the most diffe
rence. At the Treasury after 1997, I focused on tackling Britain’s age-old problem of low productivity, on fighting poverty through welfare reform and tax credits, and on preparing the ground for refinancing the NHS. In the period after 2001, I kept reminding myself that the one way to hold the show together – and to avoid conflict – was to focus on areas of policy that did not cut across No. 10’s interests. For example, I fought hard in Cabinet – and even more so behind the scenes – for educational maintenance allowances to prevent early school-leaving, additional funding for disadvantaged schoolchildren in the poorest areas, and the suite of measures to help infants in poorer communities known as Sure Start – all initiatives to promote greater equality. Where I felt honour-bound to put my alternative view – as on tuition fees – I eventually yielded to Tony’s judgement. At that time, I also focused my attention on the Treasury’s international development priorities, where we were able to work closely with our international development ministers and delivered not just on our government’s shared objective – more aid and more effective aid targeted on the very poorest countries – but also broke new ground with our innovative plans for financing 100 per cent debt relief and global education and health.
Later on, the financial crisis frustrated the more progressive agenda that ministers had started to advance on affordable housing, access to education, the integration of social care with the NHS and the eradication of entrenched inequalities. I had, for example, been fascinated by John Prescott’s proposal for building new affordable homes to be sold for £60,000, and until the crisis stalled our progress we were planning a new set of mini-towns, the release of more land for building, and measures that would open up the house-building industry to a wider range of companies and investors. After 2007 we did legislate the Child Poverty Act, start to implement new employment rights for temporary, part-time and zero-hour contract workers, and, with Harriet Harman in the lead, pioneered a radical new Equalities Act. But in the worst days of the recession, we had no choice but to concentrate our energies on stopping redundancies, bankruptcies and home repossessions. Had we been returned to government in the election of 2010, there was a comprehensive agenda to integrate health and social care, to reform tuition fees, to tackle discrimination and inequality – and, of course, to restructure the post-crisis financial sector and industrial economy – that I wanted to pursue.