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Friday, January 17, 2014

The "New Labour are Left Wing" Myth



The  very idea that the New Labour government of 1997-2010 was some kind of left-wing project is probably the single biggest myth in UK politics.

1979 and all that

New Labour was clearly a continuation of the Thatcherite experiment, she said so herself.

When Thatcher introduced right-wing neoliberal economics to UK politics in 1979 it was undoubtedly an extremist ideology. It is important to remember that the UK had been a role model to the world before Thatcher and her crew imposed this economic ideology from the extreme-right fringe, which had been forged in Latin American dictatorships

 
The social reforms of Clement Atlee's post-war government (universal health care, social housing, nationalisation of natural monopolies, the welfare state, legal aid ...) had been imitated across the liberal democracies of the world, then along came Margaret Thatcher to set about destroying this legacy.
 
As so many countries embraced the social democratic mixed economy model in the 1950s and 60s, the liberal democracies experienced the longest sustained periods of economic stability and growth on record. During this period, which was commonly known as the "golden age of capitalism", but more perhaps more accurately described as "the golden age of social democracy", several Tories occupied 10 Downing Street and ran administrations that were far more left-wing than New Labour. Tory Prime Ministers like Harold MacMillan were still clearly acting as the party of Establishment interests (as the Tories always do), but their economic policies were miles to the left of the New Labour economic agenda. 

 
The United Kingdom set a remarkable legacy of social progressivity under both Labour and Tory administrations, which was overseen by the Tory dominated and undemocratic hereditary House of Lords. This legacy has been under demolition ever since 1979, with the UK now once again trendsetters, but this time in the "race to the bottom" that is the apparent objective of  the neoclassical economic orthodoxy. When Thatcher set about this installing the neoliberal order as the new political orthodoxy, it hadn't even been fully embraced by the United States (that happened when the Reagan administration came to power in 1981).
 
After 18 years of Tory neoliberalism under the governments of Margaret Thatcher and John Major, the United Kingdom was desperately in need of an adjustment back towards the policies of the progressive left in order to rebalance the economy away from the inevitable chaos of recklessly deregulated markets and rampant rentierism. The problems for the UK were that by 1997 neoclassical economics had become firmly established as the economic orthodoxy* and the Labour party leadership had been usurped by adherents of this extremist neoliberal ideology.


New Labour distracted the trade unions and the workers with innumerable bits of pseudo-socialist window dressing in order to disguise the fact that they had openly embraced an extremist right-wing ideology that had been confined to ugly US backed military dictatorships (like Chile, Argentina and Indonesia) just 20 years previously.

 
New Labour


Of course the preceding paragraphs must read like a familiar potted history to those that have followed politics carefully and noted the dramatic veer to the right that the Labour party undertook after the wilderness years of the 1980s, but many people still don't seem to have noticed that since the 1990s the New Labour party have occupied economic territory way to the right of the Tory administrations of the 50s and 60s.

There are clearly many people that would disagree with my historical explanation and maintain that New Labour hasn't utterly betrayed its left-wing roots, however firm evidence of this dramatic shift away from socialism can be seen in the actual economic policies enacted by the New Labour regime.

New Labour policies

Please consider whether any of the New Labour policies in the long list below are in any way compatible with the concept of socialism. As a quick refresher I'll provide a brief and uncontroversial definition of socialism before I begin the list of New Labour policies.

"Socialism is an economic system characterised by social ownership of the means of production and co-operative management of the economy. "Social ownership" may refer to cooperative enterprises, common ownership, state ownership, citizen ownership of equity, or any combination of these."
Refusal to renationalise the Tories dreadfully botched rail privatisation fiasco despite a 1997 manifesto pledge to do so, and a landslide parliamentary majority to do it with. It is worth noting that public opinion was strongly in favour of rail renationalisation, the grass roots of the Labour party even more so. However New Labour continued handing out vast taxpayer funded subsidies to keep the whole shambolic mess from systemic failure. New Labour barely even tried to reform the hopeless over-priced, over-crowded jumble the Tories had created, let alone doing what the public actually wanted and bringing the railways back under democratic control. Had New Labour been the slightest bit left wing they would have taken the public railways back off the bunch of rent-seeking corporate parasites that have been bleeding the taxpayer and the rail traveler dry ever since it was privatised.
 

Deregulation of the financial sector which New Labour did in line with the bonkers right-wing neoclassical economic theory that deregulated markets tend towards equilibrium and stability.

Abandonment of democratic control over the Bank of England, which entailed handing control of the central bank to unelected private interests, giving them absolute control over monetary policy and even introducing specific regulations to prevent the democratically elected government from trying to even influence goings on at the central bank.

Refusal to renationalise or even effectively regulate the privatised utilities companies. This allowed corporate rentiers to rinse as much profit out of the general public through cartel like price inflation of their water and energy costs, whilst simultaneously overseeing a catastrophic abandonment of infrastructure investment.

Building up an estimated £240 billion black hole of debt through the use of PFIs, which are catastrophically inefficient neoliberal economic alchemy schemes. PFIs allow private sector interests to milk the taxpayer for many times the actual construction value of an infrastructure project (school, hospital, bridge, council offices etc) for several decades after completion. PFI is basically a way of stealing from future generations in order to fund lavish, over-priced infrastructure projects. The concept of PFI was dreamt up by a bunch of conservatives as a kind of significantly more lucrative Privatisation 2.0, yet New Labour embraced 
PFI much more passionately than the Tory administration of John Major which preceded them.

Turning a blind eye to the rampant tax-dodging of multi-national corporations and the super rich minority. New Labour operated a hands-off approach to tax collection, allowing HMRC the freedom to engage in all kinds of back door deals with major corporations, costing the country £billions. This lax tax-collection regime has continued under the current government, but New Labour were just as guilty of turning a blind eye to the tax-dodging escapades of multinational corporations and the super rich minority as the Tories are now. New Labour bear a great deal of responsibility for the tax-dodging situation being as desperately bad as it has become nowadays.

Allowing the development of a vast housing Ponzi bubble built on unsustainable levels of debt accumulation. New Labour were quite happy to ride the feel good wave of false prosperity as the property bubble inflated and the public used home equity extraction to "live beyond their means". George Osborne is attempting exactly the same housing inflation trick with his Help to Buy property price inflation subsidies right now, which illustrates that New Labour and the Tories share remarkably similar economic territory, and that George Osborne is too thick to have even learnt probably the most important lesson of the 2007-08  financial sector meltdown; that debt fueled property price inflation does not represent the road to sustainable economic growth.

Refusal to invest in much needed social housing. The construction of social housing is a proven fiscal multiplier (the kind of government investment which returns more economic growth than it costs in government expenditure) yet New Labour refused to build. Instead they oversaw the mass privatisation of council housing stock into the hands of privately operated and undemocratic housing associations and continued the "sell it off on the cheap and prevent the proceeds being used to invest in new social housing" policy of the preceding Tory administration.

Refusal to regulate the Buy-to-Let slumlords. The use of rent controls, increased security of tenure for good tenants legislation, construction of new social housing and/or the application of decent living standards in private rents could easily have prevented some of the most egregious property rentiers from extracting so much wealth from the economy, and dampened unsustainable debt fueled house price inflation bubble into the bargain. New Labour did none of these things.

The introduction of "Workfare" schemes. Workfare (compelling the unemployed to abandon their labour rights and work for no wage under threat of absolute destitution) is a brazen assault on the value of labour. There is hardly a more glaring example of a political party having completely abandoned their roots than a party called "The Labour Party" introducing mandatory labour schemes that are nothing less than a direct assault on the value of labour.

The Privatisation of air traffic control, which was done in 1998. Left wing parties shouldn't go around privatising things, yet as we'll see, air traffic control was far from a unique case of New Labour privatisation.

Overseeing an exponential growth in corporate outsourcing contracts. New Labour lavished ever more (absurdly one sided) outsourcing contracts on private sector outsourcing parasites, which are companies that extract near enough 100% of their profits through milking government contracts (companies like G4S, Serco, Capita, Atos, A4E). There were countless massive beneficiaries of the corporate outsourcing boom that went on under the New Labour administration.

Planning to privatise the Royal Mail
. Long before the Tories and Lib-Dems sold off Royal Mail for a fraction of its true market value New Labour had plans to do exactly the same. The fact that the majority of the UK public have consistently opposed Royal Mail privatisation, yet all three of the Westminster establishment parties have been strongly in favour of it illustrates that they are all adherents of a right-wing ideology that is at odds with the will of the public and the very concept of socialism alike.

Prison privatisations. New Labour oversaw the introduction of several privately operated prisons and detention centres. Although pseudo-communist regimes like the USSR have utilised forced prison labour
(the Gulags), meaning that the left hardly has a clean sheet on the issue, the prison-industrial complex built on a foundation of private profit making prisons and lavishing corporations with virtually free prison labour is a particularly right wing beast. A right wing beast that New Labour were more than happy to ride.

Kick-starting the privatisation of the NHS. Alan Milburn was the New Labour health minister between 1999 and 2003. After introducing the legislation to well and truly kick open the door to NHS privatisation, Milburn walked straight onto the payroll of Bridgepoint Capital, a hedge fund that has capitalised on NHS privatisation. As with the Railways and the Royal Mail, the public is strongly opposed to NHS privatisation, yet New Labour went ahead and started privatising it anyway.

Kick starting the privatisation of the education system. By the time Labour left office in 2010 they had overseen the introduction of over 200 privately operated, yet taxpayer funded schools called academies. As soon as the Tories came to power they used the academies model to mass privatise the English education system. As of December 2013 a total of 3,522 schools had been turned into private academies. These schools (£billions worth of infrastructure) have been given away for free to be operated by unaccountable private sector interests, including several major Tory party donors. As is the case with many of the most egregiously right-wing policies of the Coalition government, the origins can be traced back to New Labour.

Introducing the ATOS administered WCA regime for the disabled.The Atos administered WCA regime of blatant discrimination and psychological torture for the disabled is one of the most appalling policies of the Tory led government, however, once again, the origins of the policy can be traced back to New Labour. Not only is the policy of employing a foreign corporate outsourcing giant to hound the disabled off their benefits a disgraceful policy, it is also distinctly right-wing. A left-wing government with a determination to abuse the disabled would surely have kept the "work" of imposing psychological torture on the disabled "in-house", rather than outsourcing it to a foreign corporation.

Attempting to introduce extremist copyright protection laws. One of the clearest indicators that New Labour were in the pockets of the corporations that any legitimate left-wing party would be working to protect us from was the fact that they spent the dying months of their 13 year rule pushing through some extremist copyright protection laws known as The Digital Economy Act. Parts of this legislation (which have subsequently been repealed) were designed to allow the copyright lobby to cut off a persons Internet for copyright violations, with no trial and no right of appeal.

Revocation of the right to trial by jury and other attacks on the justice system. Equal access to justice is definitely a left-wing principle, one which New Labour desperately tried to undermine with their revocation of the ancient British right to trial by jury and other reforms to the justice system such as their attacks on Legal Aid in 2006.

 
Privatisation of the HMRC property portfolio (into the hands of a company based in Bermuda for the purpose of dodging tax). This case is way beyond parody. In 2001 New Labour oversaw the sale and leaseback of the tax collection authority property portfolio to Mapeley Steps, a company based in Bermuda for the purpose of dodging tax! Not only was this yet another glaring illustration that New Labour behaved absolutely nothing like a socialist party would be expected to (socialist parties don't go around privatising everything they think they can get away with), it also demonstrated the shamefully lax attitude to tax-dodging corporations I mentioned earlier.
 
Backing the imperialist pretensions of the most fanatically right-wing government the US has ever suffered. The invasion of Iraq was a disaster. Admittedly imperialism in itself is not exclusive to right-wing regimes (Soviet imperialism) however it is quite easy to see that the invasion and occupation of Iraq was a policy dreamt up by a bunch of fanatically right-wing Neo-Conservatives in the US. When making character judgements it is often useful to consider the company that is kept, and the governments that the UK aligned with in order to carry out the invasion and occupation of Iraq included arguably the most right-wing government in US history, the fanatically right-wing (and corruption riddled) Partido Popular of Spain led by José María Aznar, Silvio Berlusconi's Forza Italia and the right-wing government of Japan led by Junichiro Koizumi (aside from pushing Japan into the invasion of Iraq he was also famous for privatising the Japanese postal service and regularly paying homage to Japanese war criminals).

Pseudo-Socialist window dressing

 

Even some of the seemingly left-wing policies introduced by New Labour during the early years of their 1997-2010 regime were not what they seemed.

National Minimum Wage. Even though the introduction of the national minimum wage was vehemently opposed by the Tory party, it was not much of a socialist policy because it was set at such an appallingly low level (especially for teenagers and young adults). Setting the minimum wage at such a low level legitimised businesses paying wages that are insufficient to keep their workers from suffering destitution.

Working Tax Credits. In order to stave off the absolute destitution of the working masses and their families, New Labour introduced Working Tax Credits, which are basically state subsidies for employers that pay poverty wages. If corporations were compelled to pay a living wage the need for these kinds of subsidies would be massively reduced. If we look a bit more closely at the economic ideas that underpin Working Tax Credits we can see that it is a particularly bureaucratic form of Negative Income Tax, which was an idea originally developed by the Tory politician Juliet Rhys-Williams and further promoted by Milton Friedman (the spiritual leader of the pseudo-economic ideology of neoliberalism).


Percentage of family income spent on childcare
Child Tax Credits. On the face of it Child Tax Credits also appear to be a left-wing policy, but if we compare them with a genuinely socialist policy such as free childcare for all working parents we can see that at best, Child Tax Credits are poorly conceived pseudo-socialist window dressing. The big problem with Child Tax Credits was that nothing was done to prevent child care providers from inflating their prices in order to soak up all of the tax credits they knew the parents were receiving plus a bit more for good measure. New Labour allowed the cost of childcare to spiral out of control, meaning that British parents pay out the highest childcare costs in the developed world as a percentage of net family income.

Miliband's Labour party

Some people seem to be under the impression that under the leadership of Ed Miliband, the Labour party have taken significant steps back towards the left. Once again, a look at some of their actual policies shows that they are certainly not a socialist party, and if they have shifted back towards the left, they have only taken a few almost imperceptibly small baby steps away from the course of orthodox neoliberalism.

Renationalisation. The Labour stance on renationalisation has not changed since Miliband came to power. The Labour leadership are vehemently opposed to it despite the fact that the vast majority of Labour voters want to see the NHS, the railways, the Royal Mail and the utilities companies renationlised and run as not-for-profit public services. It is not just Labour supporters that favour renationalisation, the public as a whole are strongly in favour or renationalisation and even a majority of Tory voters favour renationalisation of the energy companies and the rail network! After decades of egregious profiteering from the rail franchises and utilities companies it is beyond doubt that there is a strong public appetite for the explicitly socialist policy of returning these vital services to public ownership, yet all Ed Miliband seems capable of doing is offering the feeble pseudo-socialist policy of capping (already massively inflated) energy prices for a few months.

     
[evidence to support all of these assertions in the above paragraph can be seen in this article]

Trade Unions
. Another indicator of Ed Miliband's determination to steer Labour away from socialism is his bizarrely cowardly reaction to the Falkirk debacle. Instead of turning the tables by focusing on the rogues gallery of tax-dodgers, banksters, asset-strippers, and vested interests that fund the Tory party, he meekly caved in and tried appease the right-wing press by attacking the trade unions (an utterly futile task, the right-wing press will never side with him). By doing this he allowed David Cameron to land punch after punch without reply. The trade unions are not perfect, but they are democratic organisations which represent millions of ordinary working people. If anyone seriously believes that trade union influence over the Labour party is worse than the dodgy characters that fund the Tory party, they should perhaps familiarise themselves with some of the biggest donors to the Tory party
and how David Cameron's so called "Leaders Group" operates.

Workfare. In my view, the Labour stance on "Workfare" mandatory unpaid labour schemes is the single strongest indicator that the Labour party have utterly abandoned their left-wing credentials. The decision of the Labour party leadership to collude with Iain Duncan Smith to get his "I'm Above the Law" Retroactive Workfare Bill through parliament in a single day by whipping their MPs into abstaining on the vote was a betrayal of the people that Iain Duncan Smith unlawfully robbed and more importantly a betrayal of their left-wing roots so dire that they could probably have only have gone further by smearing excrement over the graves of Kier Hardie and Clement Attlee.

[A list of the few honourable Labour party MPs that defied Ed Miliband in order to vote against Iain Duncan Smith's disgraceful "I'm above the law" bill can be seen here]


Conclusion
 

The Labour party is no longer a party of the left. Embracing the neoclassical economic orthodoxy and positioning themselves ever so slightly to the left of the Tories - as they undeniably have - does not make them a socialist (or even vaguely left-wing) party.


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The "Making Work Pay" fallacy
         
The economic case against tax-dodging
                                          
Who is to blame for the economic crisis
                                            

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