Labour's first term - and its next / John Lloyd - [Electronic ed.] - London, 2001 - 5 Bl. =3D 25 Kb, Text . - (Working papers / Friedrich-Ebert-Stiftung, London Office ; 2001,4) Electronic ed.: Bonn : FES Library, 2001 =A9 Friedrich-Ebert-Stif= tung

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Labour's first term - and its next / John Lloyd - [Electronic ed.] - London, 2001 - 5 Bl. =3D 25 Kb, Text . - (Working papers / Friedrich-Ebert-Stiftung, London Office ; 2001,4)
Electronic ed.: Bonn : FES Library, 2001

=A9 Friedrich-Ebert-Stiftung

=3D"CONTENTS"

The British Labour Party approaches an early summer election with an= apparently impregnable lead in the public opinion polls. No event or seri= es of events appears to much affect this. The world=92s first urban societ= y is to a very large degree insulated against the hard times visited on the= countryside by the ravages of foot and mouth. An inefficient (compared wi= th most West European countries) standard of public infrastructure is still= plausibly blamed on almost two decades of Conservative starvation of the s= tate sphere =96 though in truth, Britain has been under successive governme= nts and in the private sector, a low investment country for much of the pas= t century. An assault from left and right on some of the efforts of New La= bour to boost the national image and its own, notably the national exhibiti= on at the Millennium Dome, has made some hits, but only light ones.

Two factors which have little to do with New Labour are important he= re. First, it inherited from the Conservative government of John Major an = economy which was then the fastest growing of the large states of Europe: t= he generally good conditions in the world economy until this year have ensu= red that economic management has not had to struggle with severe recessiona= ry pressures. Second, the Conservative Party is weak =96 not as in Germany= , because of a corruption scandal, but because it has been unable to define= its purpose since its heroic decade of the eighties, when the Thatcher lea= dership defined a new style of neo-liberal governance, privatised large par= ts of the public sector, reduced the powers of the trade unions and dragged= Labour into the political centre. In doing the latter, however, it itself= was unable to re-occupy that centre; and the young leader of the Conservat= ives, William Hague, has not seriously attempted to do so. The party=92s r= aucous opposition to the Euro and most of the European Union=92s policies, = its deliberate marginalisation of the pro-Europeanists in the party, its ha= rsh line on immigration, and its confusion over whether or not it is a tax-= cutting party has meant it has only once, and that briefly, equalled Labour= in public esteem over the past four years. New Labour has, of course, tak= en joyful advantage of this; but the Conservatives=92 shift to a right whic= h no longer commands the support of much more than a quarter of the British= electorate was not its doing.

But even so =96 New Labour=92s achievements in the first term have b= een considerable. This is not, one should say, the view of all =96 even of= all its supporters. As the election approaches, many commentators sympath= etic to Labour write of their disappointment that =96 given its large parli= amentary majority, its high ambitions and the many tasks which have to be p= erformed to raise the level of Britain and its people =96 its record has be= en so modest. I do not share this view. This article is an argument as to= why I do not.

The first thing one should say about New Labour is that it has chang= ed the terms of the political debate in Britain, and assisted in changing i= t more widely. Because =96 unlike the SPD, or the French Socialists, or th= e Italian Democrats of the Left =96 it had never been a Marxist party, Labo= ur never felt it necessary to be fully revisionist. Never, that is, until = the New Labour leadership =96 Tony Blair, Gordon Brown and Peter Mandelson = were the key members =96 assumed control in 1994 after the death of John Sm= ith. Almost immediately, Blair made it clear that the 'new' was more impor= tant than 'Labour'. He signalled the fact most forcefully by replacing Cla= use Four of the party=92s constitution =96 which had committed the party, = when in government, to bring almost everything into public ownership =96 wi= th one committing it to a market economy, an extraordinary shift. This was= followed by a series of speeches by the party leaders, making clear that i= t would observe the same economic parameters as the Conservative government= s; that it would not seek to take back those sectors which had been privati= sed into public ownership; that it would be an enthusiastic member of both = the European Union and NATO; that it would not significantly increase the = powers of the trade unions; and that it would retain the British/American n= uclear deterrent. Not all of this was, in fact, new; but some of it= was, and the presentation of the whole was a sustained and energetic effor= t to present the party as a progressive-liberal party, keen only on what wo= rked.

This bold move has denied the middle ground to the Conservatives. B= y taking socialism out of the equation, New Labour has been able to appeal = to 'Middle England' in a way it has not since the immediate post-war years.= Its left wing has been outflanked, but has been unable to make much of a = fight against the party=92s centrist policies. Business, especially large = corporations which favour Britain=92s joining the Euro, prefer the relative= ly pro-EU Labour Party to the anti-EU Conservatives.

The move towards Europe is seen very differently in Britain than in = almost any continental states (only the Scandinavian states are close to th= e UK mentality). The sense =96 especially strong in the Benelux countries,= France, Germany and Italy =96 that the Union is a common endeavour which i= s central to present and future politics, is very largely lacking. A gover= nment which, like Labour, wants to (as its phrase goes) "bring Britain into= the heart of Europe" has to make the case against the constant and bitter = opposition of a press which is largely hostile and a public which remains = =96 so the polls tell us =96 resolutely against exchanging the pound sterli= ng for the Euro. Where continental states see British foot-dragging over i= ssues like majority voting and tax convergence as being much of a piece wit= h Britain=92s persistent scepticism, the British see a government which app= ears to be readying itself, after the next election, to recommend entry int= o the Euro to the public in the referendum it must hold on the issue.

This has been the most pro-Union government since the Conservative a= dministration of Edward Heath took Britain into the (then) European Economi= c Community in the early seventies. In some ways more so: for where Heath = could assure the British that this was a mere economic arrangement with no = or few political overtones =96 a manifestly false approach =96, Labour is f= orced to admit that entry into the Euro marks a qualitative change, and tha= t once (if) in, Britain will be more firmly a part of the European continen= t than it has ever been before. But getting there will be hard: even with = another convincing win over the Conservatives, Labour will have to convince= an electorate which is no longer loyal to whatever the party for which it = has voted wants to do, but instead evaluates and judges each issue on its m= erits. It will be the largest challenge it has yet had to face.

In government, Labour has been economically cautious for the first t= wo years of its life, and has for the last two years greatly expanded state= spending to the point where warnings are being issued that it is overstrai= ning the public sector in the demands it is making upon it. The public deb= t has been wiped out, taxes have been raised a little =96 though not income= tax =96 and the tax take as a whole has grown steadily because of continui= ng strong growth. Unemployment is now below a million =96 a figure not see= n for two decades. Programmes to assist young people into work have been c= riticised as unnecessary at a time of economic expansion =96 but have proba= bly aided the decline in unemployment, while measures taken to raise the st= andards of the poor have already raised living standards at the bottom end = of the income scale by around ten per cent.

The emphasis has been on what Labour once condemned: on the supply s= ide of the economy. Above all, Labour =96 in common with other European go= vernments =96 has put much of its faith in education, training and the stim= ulation of individual enterprise to tackle the large and continuing problem= of the 'underclass' of people for whom life in an increasingly sophisticat= ed and skilled labour market is a bewildering series of exclusions. Britai= n =96 especially when compared to Germany =96 has been for much of the last= century a poor trainer of its workers. The elite schools and universities= have produced a governing and intellectual class which remains of high cal= ibre; but the lack of care for and investment in basic and technical school= ing, coupled with the lingering remains of an attitude of mind which sees t= hese as inferior, has meant a workforce less skilled than most in advanced = countries. It has also meant an underclass more stubbornly resistant to ch= ange and self advancement, and a culture which can be brutish and even viol= ent.

Labour =96 this is again a common approach of all left-of-centre gov= ernments =96 has realised it must restore power to the state; it is the sin= e qua non not just of a progressive but of any responsible government after= the leeching away of its authority and legitimacy in the closing decades o= f the last century. It does so as the trends in taxation =96 so far relati= vely uncontroversial =96 are slightly up in most OECD countries, and as the= prevailing assumptions and debate are not, as they were in the eighties an= d nineties, obsessed with cutting government spending but instead with effe= ctiveness of that spending. This is true in low tax/spend states like the = USA (around 30 per cent of GDP) and high taxation states like Sweden (50-pl= us per cent of GDP).

It cannot, however, simply strengthen the state. It has not the res= ources, competences and flexibility; at a more mundane level, it finds it h= ard to afford the salaries. This is a vast and understated problem for pro= gressive governments, most clearly seen in France. There, the ENArques who= had governed French society and French business since the war are learning= =96 as Erik Israelewicz, editor of the business daily Les Echos put= it =96 that "power no longer, or only marginally, remained in government m= inistries, but has moved to the boardrooms of private companies". (The Fre= nch socialist-green-communist government is increasing the number of these = private boardrooms through a continuing series of privatisations). Public = service is in danger of becoming a sink, rather than a goal, of talent; tha= t problem remains largely unsolved anywhere (the diplomatic service of the = USA, global hegemony that it is, is suffering a severe recruitment crisis).= Thus partnership at every one of its operating levels, from global to ind= ividual, is no longer an option. The task is no longer to replace capitali= sm but to engage it in the central social tasks which only the state and de= mocratic institutions can confront; and in this, all left-of-centre parties= /governments have much to learn, especially in distinguishing themselves fr= om a capitalism which tends to swallow the public sphere in its search for = extra areas of profit. The simultaneous promotion of an efficient and prod= uctive private sector with the development of an efficient and welcoming pu= blic sphere is the goal of all responsible governments; for the moment, the= left-of-centre parties have the initiative.

That initiative is, however, less secure than it was. At the end of= the last century, the social democratic parties of the rich world celebrat= ed an almost complete hegemony in Europe and North America. Of the states = of the Group of Seven major industrialised countries, only Japan did not ha= ve its major party of the left in power; of the major states of Europe, onl= y Spain returned a government of the right. The concerns of the left =96 t= he revival of the public sphere, the furthering of greater equality, the ef= forts to frame foreign policies and actions within an ethical dimension, th= e concern to improve the lives of the poor and to improve working lives =96= were all, in different ways in different countries, given a new prominence= . These remain central to the left=92s project, and remain actively discus= sed within the framework of the 'third way' or 'progressive governance' sem= inars which bring together the leaders of left-of-centre governments each y= ear. But there are now new challenges =96 challenges which Labour will hav= e to confront if, as expected, it wins its second term.

The election =96 disputed as it was =96 of the Republican George Bus= h as President of the USA, and his evident intent to govern from the right = rather than the centre, at least in economic policy, again raises the examp= le in the world=92s leading economy of a model of low taxation coupled with= an encouragement of social =96 often religiously-based =96 activism as an = answer to social problems and division. This is a model which finds more o= f a welcome in Britain than in most European states; especially when couple= d with an increasing scepticism on the part of Bush administration figures = towards the European Union, one which chimes well with the British right. = Britain=92s tax-and-spend ratio =96 at around 40 per cent =96 is situated b= etween the European high-spenders and the US low-spend; it presently comman= ds general assent, but could come under renewed pressure if public services= are not seen to improve and if the USA is successful in reviving its econo= my through tax cutting. In the June election, the Conservatives=92 largest= theme is that the taxes have been wasted =96 "You=92ve paid the taxes: now= where=92s the service?" is the message. It is not likely to succeed this = time: it could grow in acceptance later.

This pressure will be deepened if the right wins in Italy. Italy wa= s the first of the major European states to return a government of the left= ; and in the Ulivo, progressives outside of Italy saw a government prepared= to tackle corruption, inefficiency and clientelism in the Italian state, w= hich had grown huge under previous governments of the Christian Democratic = right, and of the centrist coalition led by Bettino Craxi. In many ways, t= he Ulivo governments did fulfil their promise. The public deficit was brou= ght down in order that Italy qualify to enter the Euro, inflation was reduc= ed, government became clean (there were fewer high-level financial scandals= in Italy in the late nineties than in France or Germany), and large effort= s were made to improve regional governments and tackle the old problem of s= outhern under-development and criminality. But the other old Italian probl= em =96 fissiparous coalitions and debilitating quarrels between the parties= and leaders which form the coalition =96 could not be overcome. The left = lost its aura: in Silvio Berlusconi it has an opponent of some charisma and= huge wealth, who also owns the major part of Italian TV. He, too, propose= s large tax cuts as a way to stimulate the Italian economy.

His success is based on another issue, which all governments must fa= ce with greater coherence and determination: mass immigration into Europe f= rom the east and south. It is one of the more difficult features of the co= mplex of movements we call globalisation =96 the ability of large groups of= relatively poor people to fulfil their ambitions, usually with the aid of = 'people carrier' gangs, to make a better economic life for themselves than = they can hope for in their countries =96 whether China, or Albania, or Nige= ria. The USA is a society in part founded on this phenomenon, and is relat= ively good and liberal in continuing to deal with it. Europe is not. Its = two old nations, Britain and France, had been constrained to 'welcome' impe= rial citizens; its largest economy, Germany, has only with this centre-left= government tackled a legislative-psychological block on anyone not of the = German race being a citizen; most other states, as big Italy and little Ire= land, had been used to export their huddled masses, not receive them =96 on= e of the largest reasons why the part-xenophobe Italian right is likely to = win the election next month. In its second term, New Labour must do much m= ore in two directions: one, to clarify, make transparently just and justify= immigration laws; and second, make the case for larger engagement with and= export of aid to countries whose citizens flee them.

This cannot be done for much longer with a combination of anti-racis= t measures for ethnic minorities who are already citizens, coupled with eve= r-tougher controls on those who are not. The moral issues, for the left, a= re too compelling to allow for comfort; more materially, the need for most = European societies to retain their population levels by means other than bi= rth =96 which is now failing =96 becomes urgent. Europe faces a large ques= tion which can only be resolved by its left: how to transform its states in= to receivers, rather than exporters, of immigrants? How, that is, to becom= e more like the USA and Canada in at least this area.

These are vastly difficult issues to confront. The right has an eas= ier task, in playing upon a popular reluctance to see massive change in soc= iety, competitors for jobs especially at the lower-paid end of the labour m= arket and cultural differences. No European society is free of ethnic tens= ion; indeed, it is tending to grow rapidly. As this is written, one of Bri= tain=92s Victorian industrial towns, Oldham, is confronting a stand-off bet= ween its large Asian minority and some whites, who charge that Asian youths= have declared some parts of the town as 'No-go' areas for whites and have = been inflamed by the savage attack by an Asian gang on an elderly white man= . Spokesmen for the Asian youths say that they are the constant subject of= racist attacks, and that the police do little. The scene can be reproduce= d across the continent: the grievances of both sides deepening as the perce= ption that the state has abandoned them to the attacks of the other side ta= kes hold.

Will it be possible to create, in our old societies, a new approach = to race, culture and difference? One state which has made this a large par= t of its civic foundations =96 Canada =96 recommends itself as an example. = There, multiculturalism is the assumed basis of the state, coupled with an= attachment to civic duties and rights to which all must adhere. Through f= acing and to an extent surmounting the challenge of a Franco-American cultu= re in Quebec Province by a nationwide elevation of French to parity with En= glish, Canada has countered the charge that all nationalities are forcibly = assimilated into an Anglo-Saxon culture which destroys them. Immigrants to= the society are given clear guidance and rules of governance, but they are= not made to conform to a cultural type.

If something of this kind is not attempted and immigrants =96 especi= ally the poor =96 are kept out with ever-tougher controls, the illegal immi= grant population will simply swell, and the anger of the society against th= em grow. Illegal immigrants, by definition, cannot be citizens; to make ci= tizens of immigrants from cultures widely different from our own takes the = kind of conscious, state-led effort with which the left=92s traditions fit,= and are comfortable. It is one of the largest challenges facing us.

New Labour=92s second term will be more testing than its first =96 i= t cannot count on good economic times; it must win a referendum on the Euro= if it wishes to deepen its engagement with the European Union; it no longe= r has a close ally in the present IUSD administration; the opposition will,= probably, begin to regain strength. Old problems =96 such as the guerrill= a attacks in Northern Ireland =96 have diminished but are not solved, and m= ay again become critical. Yet in its first four years, Labour =96 out of p= ower, before then, since 1979, with no period in which it has had two full = terms of government, with a history of economic crises badly handled =96 ha= s proved itself to be capable of good governance. That was a necessary sta= rt; the next step is to make stronger the sinews of the public sphere, impr= ove the openness and democratic habits of the society and lay the base for = the 21^st century being a progressive one.

John Lloyd is a former foreign correspondent for the Finan= cial Times and Associate Editor of the New Statesman

The opinions expressed in publications of the Friedrich-Ebert-Sti= ftung London Office are those of the author(s) and do not necessaril= y represent the views of the Foundation.

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=A9 Friedrich Ebert Stiftung | te= chnical support | net edition=20 fes-library | Juni 2001

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