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Is New Labour still new? A debate

Paul Thompson, Philip Gould

First published in Renewal Vol. 11, No. 1 (2003)

 

The meaning of modernisation contested.

 

Renewal has always been a critical friend of New Labour but the journal has long argued that the dichotomy between ‘new’ and ‘old’ Labour has outlived any usefulness. To what extent has Labour renewed itself in government, how much change has there been and what is still required? In the following pages Philip Gould and Paul Thompson debate whether New Labour is indeed still new. Philip Gould has been New Labour’s most pre-eminent political strategist, pollster and focus group maestro. He contributed to the first ever issue of Renewal– on Labour’s lessons from the New Democrats’ success in November 1992 after advising the Clinton campaign. Paul Thompson has edited Renewal from that day to this. He was previously the Chair of the Labour Co-ordinating Committee and is currently Processor of Organisational Analysis at the University of Strathclyde. They swapped the following email letters during January.

 

2 January 2003

Dear Philip,

Re-reading your book The Unfinished Revolution, was a reminder of similar journeys undertaken. Like yourself, the founders of this journal began from the debris of 1983 and, first through the Labour Co-ordinating Committee and subsequently Renewal, have travelled the long and winding road to establishing a viable modernising politics.

Looking back from the start of 2003, we can be justly proud of progress made. We would also, I suspect, agree that the decisive advance came with the election of Tony Blair as leader of the party and the pursuit of the New Labour ‘project’. Now that is almost a decade old, we have the opportunity to reflect on its character and effectiveness. Let me put my cards on the table at the outset and say that my judgement is that New Labour has succeeded in burying the past but largely failed to fashion a future.

Though replete with the danger of consigning anything in the past as flawed or failed, New Labour was necessary. First and foremost an exercise in political branding, it allowed us to re-connect with a fearful and distrusting electorate. Most of the old policy shibboleths such as unilateralism had already been jettisoned by Neil Kinnock and John Smith. But under Blair’s leadership we were able to make decisive symbolic changes, notably the replacement of Clause Four, and project a dynamic, forward-looking politics that chimed with public aspirations.

At one level, the 1997 landslide victory was the apparent justification of the strategy. But what has become increasingly obvious under Labour in government is the extent to which, paradoxically, the new is grounded in the old, and the leadership remains a prisoner of its own past. This is encapsulated neatly in: we won as New Labour, we shall govern as New Labour.

What you need to win and to govern are not identical. At the time, we warned that the mantra was already out of synch with the mood in the country, where expectations had been raised by the landslide and changed political terrain. Many of the good early measures, such as devolution and the minimum wage, were policies that reflected long-standing commitments. When it came to extending the policy agenda, the Government was hemmed in by its own caution and the pledge to keep to Tory spending plans. In place of actual transformation of services, the public got a diet of double counting and repackaged initiatives.

At the same time the constitutional agenda became stalled amid backpedalling on Freedom of Information and reform of the House of Lords. A genuine New Labour stamp was put on welfare state reform and getting people back to work, but other redistributionist policies did not get the prominence they deserved, in case they detracted from the dominant theme of economic prudence. Most importantly, no overall narrative of change was articulated, as stakeholding and other themes were tried but not given time to be tested, and the Third Way has never developed the intellectual muscle to guide strategy and policy.

By the time we got to the 2001 general election, a mandate to invest in public services was asked for from an electorate who thought they’d already given it in 1997. True, they no longer feared a Labour government, but there was little expectation that it would make a real difference. Competence is not sufficient condition of trust, as reflected in the abysmally low turnout. New Labour’s support remains shallow and its dominance overly dependent on a dysfunctional opposition.

In the new parliament Labour has rediscovered the joys of tax and spend and is now, in some spheres, investing enough to potentially make that difference. That is all to the good and re-legitimises some traditional social democratic territory. But what are the driving forces and principles of modernisation underlying the change processes? A return to an internal market in health and the promise of a two-tier higher education system driven by increased (and possibly differential) top-up fees, is hardly evidence of a new, progressive politics. Or, is anything a New Labour administration does by definition modernisation?

Yours ever

Paul

 

6 January 2003

Dear Paul,

What I feel most reading your piece is your sense of disappointment. Of possibility not fulfilled, of years of struggle not justified. I accept that these feelings are real. But I think you are wrong. Wrong about New Labour’s past, wrong about its future and, above all, wrong to discount the extraordinary achievements of this government.

If in that first issue of Renewal, rather than articles about how Labour might win, someone had written a prescient account of what actually was to happen in ten years time, they would have been considered an irrational utopian detached from the real world. If someone had suggested that Labour would win the largest ever majority by an opposition party, followed by the largest ever majority by a governing party, they would have been gently asked to sit down and sip a cold drink. If they had written that Labour would devolve power to Scotland and Wales, introduce the minimum wage, create one million new jobs, take one million children out of poverty, increase overseas aid by 93 per cent, and invest at record and sustained levels in the NHS and education, and what’s more put up taxes to pay for it, they would have been asked to lie down for a while. If they had then gone on to say that the Conservative Party would become marginalised as an irrelevant and unelectable rabble, and that the terms of political debate would be so changed that the right would became frightened to talk about tax cuts, and its leader would edit a book called There is such a thing as society, then you would have been certified. But New Labour has managed all of this, and much much more.

Why is it that Polly Toynbee, who left the Labour Party, can call this the greatest government there has ever been, while those who stayed to fight on and to win feel so little pride and are prepared to give so little credit?

This is not a criticism but an observation. This government has achieved more than any of us would have dared to dream of in 1993, but still some feel this sense of disappointment. This is a shared responsibility. New Labour has not been confident or clear enough about what it has achieved. But New Labour’s progressive critics share a tendency endemic to the left – more critical of what has not been done, less confident about what has been achieved, than our opponents on the right. In many respects this is a good thing – the left is different, and better, because it expects more – but this tendency carries within it the seeds of a mindset of betrayal. The besetting failure of the left in the last century was a central reason why fundamentalism was able to distort the progress of the Labour Party, and why the drive for modernisation became so necessary.

This failure to acknowledge the achievements of New Labour in government leads to a failure of analysis elsewhere. It is implausible to describe New Labour as imprisoned by its past, when it has shattered the greatest of its old shibboleths and raised taxes to pay for investment in public services. Its agenda of investment and reform is not a return to the internal market plus top-up fees, as you suggest, but a new attempt to balance consumer expectations of a modern society with the values and fairness of public services, a central aim of the modernising tradition of which you are a part. You may disparage the economic prudence of the first term but it is this that enables the government to sustain investment at record levels in the second, despite the world economic down-turn. The New Labour of the second term is not the New Labour of the first term, or of opposition. It was new, and is new again. Not perfect, but better than most of us dared to hope, and far better than your letter, honest and graceful as it was, leads the readers of Renewal to believe.

Yours ever

Philip

 

10 January 2003

Dear Philip,

Your argument about getting a ‘balanced scorecard’ on New Labour in office is preaching to the converted. Every point you make, we’ve made in spades to our readership many times – not just to remind about the familiar litany of achievements, but to reject the mindset of instant betrayal and inflated expectations. As we said in a recent editorial, the left tends to judge the Tories on what they do in office and Labour by what it doesn’t do.

What you and many in New Labour ranks seem to find harder to deal with is that criticism may exist from within a modernising perspective. Yes, we are disappointed, but not from hurt feelings or because we expected the Government to lead us into the socialist utopia. More modestly, we did hope that ‘the project’ might have created the conditions for a new progressive politics beyond the labourism of the old left and right wings of the movement. After initial promise, that has long faded. Instead of a radical, pluralist and collaborative politics, the dominant practice inside and outside the Party has been centralising and obsessed with control.

You say that Labour ‘was new and is new again’ and is defined by the drive for modernisation. I suspect that the heart of our differences may be about the nature and content of that modernisation. In The Guardian in 1999, when promoting the second edition of The Unfinished Revolution, you laid out three ‘central modernizing assumptions’: an electoral coalition based on the middle class; keeping up with the velocity of change means results rather than ideology; and new forms of contact between the people and government.

Now, regardless of the merit of any of these propositions, they focus largely on process rather than content. For New Labour, modernisation has been primarily about playing catch-up with the electorate, on listening and restoring lost connections. That was certainly necessary, as any of us who were around in the 1980s can testify. But this is passive modernisation, more a case of society changing us, rather than us changing society. While listening is always a good idea, the general approach has run out of steam. The electorate has moved on, in part because of the centre-left agenda promoted by the Government. If it ever was the cautious, conservative, middle-class mass that was the underlying assumption of passive modernisation, it isn’t now. Whatever justifications the government can make for policies such as the involvement of the private sector in public provision, listening to the electorate isn’t one of them.

In other words, what are the goals and direction of a modernising project? In the past few years, Renewal has focused on three key benchmarks against which policy and practice should be evaluated. Ideology and action should be egalitarian – increasing opportunity, redistributing resources and enhancing social inclusion; pluralist – devolving power, working with and learning from other political forces and institutions in civil society; and socially liberal – protecting rights and freedoms wherever possible and promoting policies in tune with the diversity of communities and families.

On all three territories, the record of New Labour is decidedly mixed. Yet, without these or other relevant criteria, when any Minister presents a new initiative it is by definition ‘modernisation’, and when anyone has the temerity to oppose it they are the enemies of progress. The outcome, unfortunately, is that the term has become largely emptied of any meaning, or worse, has negative associations in the minds of much of the electorate.

There are good signs in the second term that the Government has been reflecting on past weaknesses and making changes. Notable in this respect has been the move away from centralisation in service delivery, the shift to using taxation as a means of improving those services, and more progressive policies on drugs, immigration and gay rights. This is welcome and should be seen and presented as marrying the best of traditional social democracy and a modernising perspective. But signs are all they are. There is still no clear and credible route map to a progressive politics for transforming Britain. Given the global economic downturn and the prospect of tougher times ahead, I suspect that we are going to need that map more than ever.

Yours ever

Paul

 

16 January 2003

Dear Paul,

I think you are looking for differences when we should be looking for solutions. Much of your letter seems to me to be an argument about shadows, mutual misconceptions getting in the way of understanding. Positions held through habit not fresh reappraisal. I am sure we are both guilty of this. In all honesty, just as I did not recognise the record of this government in office from your first letter, I do not recognise the New Labour project as described in the second. You make a number of claims about New Labour which are no longer true, if indeed they ever really were – straw differences, not differences of substance. The important thing is to knock down barriers of misunderstanding and to build a foundation of agreement that enables us to move on.

The reason the record of the government is important is that I am sufficiently Marxist enough to believe that ideas cannot be separated from their concrete application. The record is not good by accident but because it was, and is, rooted in a ‘modernising project’. New Labour could never have been as successful as it has been in government were it not based on a coherent and substantive intellectual base. I remember, as I am sure you do, endless occasions in the early and mid 1990s in which Tony Blair and Gordon Brown would painstakingly work to construct the new policies, the new principles that were the intellectual architecture of what was to follow. New Labour was never just a ‘branding device’ to satisfy nervous voters, it was always a new approach to progressive politics, making social democratic values viable in the new world. There was always a route map. That is why the record is important, it is the vision made actual.

Your letter contains a double critique of New Labour. On the one hand New Labour controls too much, on the other it listens too much. Of course it is true that New Labour sought discipline after a decade of chaos. And it is also true that in its first term New Labour sought to achieve change and do this through the power of the centre. Both instincts were understandable and in their way right. But it was never the whole story. More power was devolved in Labour’s first term than ever before. And New Labour has moved on. Decentralisation of decision-making, the shift of authority from the centre to the local, was the theme of the Prime Minister’s conference speech and the guiding principle of second term public service reform. Politically New Labour is striving – despite the pressures of the media – to move to a more accessible and more pluralist politics, more relaxed, more inclusive, and more accountable.

Of course listening was essential in the remaking of Labour. It was, and is, crucial to maintain a bond of connection between a progressive party and the people it represents. Labour had to reassure before it could govern. But the idea that New Labour simply follows behind a ‘cautious, conservative, middle-class mass’ is to retreat to cliché and to ignore the reality of this second term. It is simply not possible to make this claim in the face of a government prepared to defy the conventions of a generation and to increase taxes to pay for public services, or to lead public opinion on Iraq, the reform of University funding, on the Euro. You may not agree with everything this government does but to say that it slavishly follows public opinion is untenable.

Much of your letter constructs a caricature of New Labour, obsessed with control, following public opinion, apparently lacking vision and a route map, focused on process rather than content. This seems to me to be wrong, undervaluing the strength of the New Labour project, just as you undervalued the strength of New Labour’s record.

I fear that what these letters reveal most is a series of mutual misconceptions. We should escape from this, break down the barriers. If we do this we can move on the real debate – about the nature of the modernised progressive project as we move forward. Here there are real differences. I find the anchor points of your modernising project partial and static. You are right of course to put egalitarianism first, certainly in the terms that you describe it. You are right about political pluralism. In fact I would go further, seeking a new politics of participation. But you are wrong to downgrade the importance of responsibility and the rebuilding of civil society. No mention of crime, no mention of the economy. These must be central to any modernisation project.

But above all, I find your template too static, neglecting the central modernising insight, which is the need to find new ways to give validity to old values in a changed world. This is a new world of globalisation, insecurity, citizen and consumer assertiveness. This needs a new politics, new relationships between government and citizen, a new role for the state, the right balance between private and public provision, the right balance between liberty and security and new ways of meeting consumer expectations in public services.

These are hard and complex issues. Answering them must be the shared responsibility of all of us. That is why ten years on we should look afresh and honestly at what we are, where we have come from, and where we have to go. It is time to drop the caricatures, stop fighting shadows and start to build the next ten years.

Yours ever

Philip

 

20 January 2003

Dear Philip,

You talk of mutual misconceptions, but it appears that the mistakes and bad habits are all mine. I can’t actually find in either of your letters a single example of acceptance of a criticism or reflection on a mistaken policy or idea. For example, in both you refer to the boldness of increasing taxes to pay for public services, while neglecting to mention that New Labour had contributed hugely to making tax a dirty word, whilst leading figures could not even bring themselves to utter words such as redistribution in public.

I thought we were debating whether New Labour is and should remain new. You, meanwhile, seem reluctant to move away from a trenchant defence of the Government’s record, arguing that this is in effect the same thing because it is the ‘vision made actual’. We have already agreed that there is a lot in that record worth defending. However, attributing retrospective coherence and vision to five years and two periods of office is a gloss on what has been a considerably bumpier and uneven progress. There is no shame in this. Governing is difficult and Labour’s ‘Newness’ didn’t prepare it for more than a few of the challenges it faced.

The point I was trying to make is that once the Government had reconnected and reassured, it had to move on; and indeed, as you say, it is not just following public opinion. That’s why it’s important to have benchmarks for a modernising project.

You may not like ours very much, but what have been New Labour’s? Traditional values in a modern setting may be an ‘insight’, but it assumes a firm grasp of what that new world entails, which generalities about ceaseless change do not provide.

Third Way thinking was and is a useful way of generating some core guidelines for engaging with social change. At that core, it seems to me, were two central propositions. The first looked back critically at the relations between state and people, particularly with reference to welfare. Traditional relationships encouraged passivity and standardisation, neither of which was adequate in a more turbulent, socially diverse and consumer-oriented world. Emphasis was therefore placed on moving away from producer interests and encouraging a new balance between rights and responsibilities. Welfare reform policies focusing on the minimum wage, childcare support and other measures have been largely successful in enhancing opportunities and encouraging labour market participation. As you hint between the lines, public service reform has been less successful, in part because it has been attempted through very old Labour command and control politics. Delivery, as we agree, has got to let go of the some of the central reins and involve managers, employees and consumers. More controversially, perhaps, some limits around the public realm need to be set, where privatisation and markets do not go.

The second was about moving Labour away from its old hostility and suspicions of markets and towards an embrace of globalisation and the ‘new economy’. The co-incidental rise of the dotcom-led stock market boom and the 1997 victory meant that New Labour and New Economy appeared to be indivisible. While an ideological and policy shift was necessary, this was an uncritical embrace that involved a reversal of the social democratic axiom that markets should be made fit for people. In the brave new world, people had to make themselves (with a bit of help from the state) employable and flexible enough for markets.

Beneath the rhetoric of wired workers and portfolio careers, most of the jobs being created in the new economy were at the low-skill, low-wage end of the service sector. Ecommerce and IT did not sustain what was in effect a phony boom of inflated equities and expectations. Moreover, amidst the orgy of financial re-engineering, huge increases in wealth were generated for stockholders and corporate managers, exacerbating the already powerful market tendencies to inequalities of power and resources.

What is new about this economy is not knowledge assets or any other miracle ingredient, but a form of (largely Anglo-American) capitalism that has moved, to use Lazonick and O’Sullivan’s term, from retain and reinvest to downsize and distribute. One of the touchstones of New Labour has been a preference for what works over ideology. Financialised capitalism doesn’t work. Markets have, as Schumpeter observed, always been about creative destruction. The obsessive pursuit of shareholder value now means that destruction is decisively outweighing creation.

The negative outcomes can be seen in threats to pensions, increased job insecurity and workloads, and a structural imbalance between growth fuelled by household debt and real productivity gains. Social democracy cannot go back to central planning and a siege economy. But it has to strive for a model of capitalism that can be stabilised and re-oriented through new forms of international regulation. Government should not just promote practices that encourage growth and innovation, but should persuade or compel capital to behave as if there were other stakeholders in the world. It should not just equip citizens for markets, but protect them from its negative outcomes, through policies such as an enhanced minimum wage, family-friendly employment and laws to require companies to contribute to employee pensions.

The challenges to modern governance have moved on from those that formed New Labour. So have the fears and aspirations of the electorate. We’ve made a good stab at governing with the ideological, practical and policy resources at our disposal. But the old mantra of ‘elected as New Labour, govern as New Labour’ is well and truly dead and should be given a quiet burial.

Best wishes

Paul

 

24 January 2003

Dear Paul,

If your first letter was imbued with a sense of sadness at promise unfulfilled, your last reflects an anger at arguments unheard. You are sure you are right. You are angry that I will not recognise this.

I am the last to say that New Labour is perfect. God knows my criticisms of New Labour, far more trenchant and far less measured than anything you have had the grace to have written in this correspondence, have on more occasions than I would like to recall been splattered over the front pages of our national press. I am congenitally dissatisfied with the progress we have made, I always want us to do more and do it faster, and so I believe does everyone connected in any way with the New Labour project. But it cannot be right to confuse a legitimate and heartfelt desire to improve New Labour with a critique of New Labour which is based not on reality but apparition.

My plea in my last letter that we break down contrived differences and misconceptions and move on to the issues that matter was not rhetorical but real. It is clear that in this debate there are issues of substance but they are being crowded out by issues of misconception. And as I have said before this is a shared responsibility. I remember a fierce argument I had with Neal Lawson at a reception a year or so ago. I was privately harbouring the perception that New Labour was getting into its stride, more confident, more radical, bolder. Neal came along and slammed the government for not understanding the importance of vision. We rowed, I lost my temper. How could Neal not understand the centrality of vision to New Labour, and how in its second term New Labour was exemplifying that vision in bolder more confident ways? This was an argument based on misconception. He was arguing about a New Labour that we had moved on from, I was defending a New Labour that had not yet fully appeared. This was not his fault but mine, not prepared to explain that New Labour was changing, that it was entering another phase.

I believe that in your messages you have been fighting shadows, my fear is that I have failed to persuade you of this. My view simply put is this. New Labour has had from the start a vision and a modernising project; the strength of that vision is revealed by the government’s record; the success of New Labour’s modernising project has changed the nature of the political landscape in Britain; the consequence of this is that New Labour has changed, and will change again.

Although you deny this, arguing that New Labour remains in some way locked in the ‘fears and aspirations’ of the electoral conditions in which it was formed, your last letter reveals the fallacy of that point of view. On tax, probably the most crucial talisman of New Labour then and now, you accept, I think, that New Labour is now bolder and has a changed position on tax, but attack New Labour for helping make tax a ‘dirty word’. You make the same point in relation to redistribution.

I am sorry Paul but you simply cannot have it both ways. You cannot on the one hand criticise New Labour for changing its position on tax and then criticise it for lacking consistency. Either New Labour has changed or it hasn’t. It is true that in 1997 New Labour was cautious on tax and redistribution. That was because New Labour had to prove that it would not return to the excessive levels of taxation rightly associated with past Labour governments. That it understood that paying high levels of tax can be a struggle for hard working families. Labour was acting within the political landscape of the time. But by 2001 New Labour was prepared in its election campaign to put public service investment before tax cuts, and in the Budget of 2002 put bluntly the case for tax increases to pay for investment in schools and hospitals. New Labour had changed the political landscape, and in so doing was able to change itself. This process of change is evidence not of a political project stuck in the 1990s but of a dynamic political project, new once, new again.

I do not want to duck the hard issues. I know that issues around political pluralism and participation, of opportunity and equality, of the relationship between markets and government, are profoundly important and not yet fully resolved. I know that New Labour has a long way to go to meet the expectations of that extraordinary optimism and hope of ten years ago. But we will only realise the full potential of New Labour if we are honest with each other and with ourselves. There is no point in fighting shadows.

New Labour in its second term has huge ambition; the reform of public services rooted in decentralisation, choice and diversity; the eventual elimination of child poverty; full engagement in Europe; economic stability and sustained levels of record investment in a world of global economic stability. If these ambitions are achieved New Labour will have begun to realise its original goals; the route map that you doubt exists: the renewal of the nation based on the rebuilding of community and civil society in which opportunity is matched by responsibility. A renewed nation, a new social democratic politics.

I say again to you Paul. Break down the false barriers that divide us and get on with the real debate. Stop fighting a New Labour that no longer exists and start engaging with New Labour as it is now. Not perfect, but changing, new again.

Very best wishes,

Philip

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