Rebuilding Social Democracy: Core Principles for the Centre Left

170 Pages·2016·4.498 MB·English

by  Kevin Hickson (ed.)

“A perceptive contribution to debate R
The British Labour Party is in crisis. A
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about the Labour Party which now prolonged period of government between B
U EDITED BY KEVIN HICKSON
faces a crisis of existence as a 1997 and 2010 saw the party intellectually IL
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serious political force.” exhausted. The subsequent leadership of Ed I
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Lord Neil Kinnock Miliband ultimately failed with the loss of the G
2015 General Election, and the party now finds S REBUILDING
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“Every generation of social itself without a clearly defined set of aims and C
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democrats must revise their ideology values. A
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to reflect new times and this book Rebuilding Social Democracy is the first major D SOCIAL
does exactly that.” reappraisal of social democracy and thinking EM
Lord Raymond Plant, Labour Peer, on the centre left since the election of Jeremy OC
House of Lords Corbyn. With a foreword by Peter Hain, it R DEMOCRACY
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examines the key foundational principles of C
“The arguments contained in this Y
social democracy, including economic reform,
book point to one way out of the equality, welfare, public service organisation, E
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current impasse the Labour Party social cohesion, civil liberties, democratisation, IT
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finds itself in.” and internationalism, in order to find a route D
Polly Toynbee, Guardian Columnist back to political credibility for Labour. B
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“An incisive and eloquent collection Written by leading academics in the field, it KE TCheo rCeu prrreinntc Sipitlueast ifoonr atnhde acne nAtltreer nleafttive Future
of essays which engage with the identifies the values and objectives needed VIN
to move the party forward, and revive left and H
underlying political principles centre-left thought and practice in Britain as an IC
shaping centre-left politics in the K
alternative to Conservative austerity. S
world today.” O
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Dr Kevin Hickson is Senior Lecturer in Politics
Patrick Diamond, Queen Mary,
at the University of Liverpool, where he teaches
University of London
and researches on British political ideologies.
He has published widely, including to debates
“A serious and timely attempt to find
on the future of the Labour Party. He was
a solution to Labour’s ‘existential
Labour’s Prospective Parliamentary Candidate
crisis’.”
in East Yorkshire in 2015 and is a Labour
Steven Fielding,
Councillor in Crewe, where he was Leader of
University of Nottingham
the Council between 2013–15.
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ISBN 978-1-4473-3317-3
www.policypress.co.uk
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POLICY PRESS INSIGHTS S
@policypress IG
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SOCIAL ISSUES / POLITICS PolicyPress 9 781447333173 TS POLICY PRESS INSIGHTS
HICKSON_Rebuilding social democracy_pbk.indd 1 8/23/2016 12:39:45 PM
EDITED BY KEVIN HICKSON
REBUILDING SOCIAL
DEMOCRACY
Core principles for the centre left
POLICY PRESS INSIGHTS
First published in Great Britain in 2016 by
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ISBN 978-1-4473-3317-3 (paperback)
ISBN 978-1-4473-3320-3 (ePub)
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Contents
Contributors iv
Foreword: rediscovering confidence and soul v
Peter Hain
Introduction 1
Kevin Hickson
One Political economy 9
Kevin Hickson
Two Equality 25
Robert M. Page
Three Welfare 43
Pete Redford
Four Public services 59
Simon Griffiths
Five Social cohesion 77
Jasper Miles
Six Civil liberties 95
Judi Atkins
Seven Citizenship and the constitution 111
Emily Robinson
Eight Internationalism 127
Matt Beech
Nine Conclusion 141
Kevin Hickson
Index 145
III
Contributors
Judi Atkins is a lecturer in politics at Coventry University
Matt Beech is a senior lecturer in politics and Director of the Centre
for British Politics at the University of Hull
Simon Griffiths is a senior lecturer in politics at Goldsmiths,
University of London
Peter Hain is a Labour Peer, formerly MP for Neath (1991–2015)
and a Cabinet Minister
Kevin Hickson is a senior lecturer in British politics at the University
of Liverpool
Jasper Miles is completing his PhD at the University of Liverpool
Robert M. Page is Reader in democratic socialism and social policy
at the University of Birmingham
Pete Redford is completing his PhD at the University of Birmingham
Emily Robinson is a senior lecturer in politics at the University of
Sussex
Iv
Foreword: rediscovering confidence and soul
Peter Hain1
Why have social democratic parties been in abject retreat at the very
time when inequality has been so remorselessly widening, real wages
for the middle and working class declining and financial capitalism
plagued by instability?
Of course frustration with social democratic parties is nothing
new. The 1906 British general election sent 29 Labour MPs to the
House of Commons. Yet, just two years after this pioneering political
development, the leader of London’s dockers Ben Tillett issued a
pamphlet entitled Is the Parliamentary Party a Failure?2
A healthy impatience for progress has certainly been one of the
Labour membership’s key characteristics from the very start, guarding
against complacency and what Ernest Bevin called ‘poverty of
ambition’. But it is acutely relevant to European social democracy
today where centre-left parties seem to have lost faith in their own
philosophy, leaving voters wondering what they stand for and whose
side they are on.
In Britain former Labour Deputy Leader and Cabinet Minister Roy
Hattersley put his finger on the deep-seated nature of the problem with
his succinct indictment of Labour’s 2010 general election defeat: ‘The
Party not only failed to set out a clear and coherent idea of what it
proposed to do. It was not even sure about the purpose of its existence.’
Although in 2015 Labour won 740,000 more votes, its 30 per cent
share of the votes cast fell well short of the 43 per cent in its 1997
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FOR YOURTEHBU WILDOINRGK SEORCISA LA DNEMDO YCORAUCTYH WORK
landslide. Over four million votes had gone missing, the great majority
under Tony Blair by 2005.
Underlying the decline of Europe’s social democratic parties has been
a striking loss of self-confidence in projecting a serious alternative to
the right and its neoliberal ideology. Unable or unwilling to adopt a
distinct anti-austerity stance, they have been settling for second best
by offering a pale imitation of right-wing economic policies, and
suffering a serious loss of support with voters looking elsewhere for
hope of a better future.
In Britain this meant Labour fighting the 2015 election on a vague
call for ‘sensible cuts’ in public spending. That, it was claimed, would
restore Labour’s lost credibility on economic policy by making the Party
appear more ‘responsible’ in the eyes of an electorate that supposedly
attributed big budget deficits to alleged Labour ‘overspending’ before
the 2008 global financial crisis. Although it offered only a milder
version of Conservative austerity, it was a stance widely backed, if
not in detail then in general, by a range of Labour opinion including
leading MPs, Fabians and Progress supporters.
Paradoxically its principal architect, the then Labour Shadow
Chancellor Ed Balls had argued something rather different in his
August 2010 Bloomberg lecture. That was when he explained why, by
trying to force the pace of deficit reduction, Tory Chancellor George
Osborne risked stalling the engine of growth and trapping the UK
economy in a slow growth/no growth equilibrium that could last for
years. Which is what duly happened.Osborne’s austerity first halted
Labour’s carefully nurtured growth following the global banking crisis
and the ensuing recession, then caused the recovery to stall for fully
three years. Growth took off for just a year before dropping back as
the economy lost momentum. UK growth in 2015 was slower than
in 2014 and is forecast to be slower still in 2016. The result? Osborne
fell behind schedule on his debt targets and went significantly over-
budget on borrowing where he became a serial offender.
In the financial year 2015–16 he delivered a £76 billion borrowing
figure – exceeding the figure forecast by Chancellor Alistair Darling
in his final Labour budget in March 2010 when he planned to bring
vI
FOREWORD
down Britain’s budget deficit over the following Parliament to £74
billion in 2014–15.
Yet it was precisely Labour’s £74 billion level of planned borrowing
that the new Tory Chancellor condemned when he took over at the
Treasury. It would take Britain close to ‘the brink of bankruptcy’, he
fulminated, insisting Labour could not be trusted. Instead he replaced
it in June 2010 with new tougher targets, halving Labour’s planned
borrowing in 2014–15 from £74 billion to £37 billion and setting
himself a tight borrowing target of £20 billion for 2015–16.
Both those targets were missed by a mile. By March 2016 debt was
£275 billion above Osborne’s target and the 2015–16 budget deficit
was £56 billion higher than he had planned in 2010. So much for
the credibility of his ‘long term economic plan’. After the Brexit
referendum on 23 June 2016, with the economy rocky, even Osborne
shamelessly abandoned his destructively unattainable plan for a budget
surplus by 2020.
That, however, did not stop him continuing to play the Greece
card which robbed his faint-hearted critics of their resolve just as
effectively as kryptonite robbed Superman of his strength. They were
afraid to back an alternative to austerity after swallowing the Osborne
line that to do so would trigger inflation or lose confidence in the
bond markets, raising the risk of being unable to borrow except at sky
high interest rates or, like Greece, not being able to borrow at all –
propaganda simply swallowed by spineless uncritical British newspapers
and broadcasters, which made challenging it difficult for politicians.
Yet all the Chancellor’s scaremongering about Britain becoming
another Greece proved to be nonsense. Just like under Labour
Chancellor Darling even during the banking crisis, Britain has had no
problem financing its budget deficit and the yield on UK government
debt dropped to an all-time low of 1.22 per cent in February 2016.
The Chancellor kept crying wolf while the bond market kept behaving
more like Britain’s best friend.
vII
FOR YOURTEHBU WILDOINRGK SEORCISA LA DNEMDO YCORAUCTYH WORK
From consensus to financial crisis
Fifty years after Ben Tillett’s outburst, Tony Crosland in his seminal
book, The Future of Socialism,3 pointed out that the 1945–51 Labour
government had overcome severe postwar austerity to carry out a
social revolution that exceeded even the most optimistic expectations
of 1930s radicals such as GDH Cole and Evan Durbin. What is more,
Crosland was confident that the Conservative Party had accepted the
postwar social framework.
A political consensus saw cross-party support for a welfare state
inspired by Beveridge, full employment policies based on Keynes, and
tax and spending measures that encouraged greater equality and fewer
class differences. That consensus lasted until the advent of Thatcherism
when the neoliberal challenge to the hegemony of social democratic
ideas began – and from which we are still suffering today. Since 1980
neoliberals have disputed the role of the state acting on behalf of society
in support of the public interest. Instead, they denigrate collective action
and back market forces and self-reliance.Of course social democrats,
or democratic socialists, respect the productive power of markets. We
want to harness market forces to the promotion of the common good.
When Brad DeLong in 2014 compared GDP per head in east European
centrally-planned economies with that in matched west European
market-based economies before the fall of the iron curtain, he found that
productivity in the soviet bloc states was less than 20 per cent that of the
market-based economies. Only a dogmatist would ignore such evidence.4
Social democrats, however, also know that markets require regulation
because they often fail, sometimes spectacularly so, as in 2008 when a
global financial crisis brought the entire economic system to the brink
of complete collapse. Progressive economic management requires a deft
balance between free-market forces and responsible state intervention.
As JK Galbraith explained in The Great Crash, we are conservatives
who seek antidotes to the suicidal tendencies of the capitalist system
and are therefore dismissed as radicals.5
In retrospect, the 2007–08 global banking crisis showed that
Labour had been blind to a threat of financial instability. Critically,
vIII
FOREWORD
we had allowed recklessly irresponsible bank lending to become a
law unto itself, untroubled by a flawed system of financial regulation.
In common with most other governments across the world, we had
permitted market forces to have their head, and they had run away
with us, as, like lemmings, the herd instinct took financial institutions
right over the edge.
Today, the casino side of banking still poses a deadly threat to
economic stability, with bankers facing the same temptation to take
reckless risks in the belief that the taxpayer will step in to save them
when things go wrong again. As they surely will, because free-market
systems are inherently unstable and financial markets are prone to
periodic failure. Except that next time the banks may become too big
to save. It is all very well saying, as the IMF did in 2014, that across the
advanced economies the net cost of rescuing the banks was at most 3
per cent of GDP, once the crisis had passed and government equity
stakes in bailed-out banks had been recovered. But at the peak of the
crisis the total value of support from governments and central banks
by injecting capital, providing liquidity and guaranteeing liabilities,
was equivalent to 74 per cent of UK GDP and overall 25 per cent
of world GDP.
Former IMF chief economist Simon Johnson has summed up the
situation: ‘We are nearing the end of our fiscal and monetary ability
to bail out the system. We are steadily becoming vulnerable to disaster
on an epic scale.’6 The left should be insisting upon stricter rules for all
financial institutions, including the shadow banking sector of private
equity outfits and hedge funds, so that the public interest becomes
paramount.
Neoliberalism ought to be lying in pieces, fit only for the rubbish
bin of history. The global financial crisis that threatened to plunge the
world economy into a second great depression and from which after
eight long years European economies are still only slowly recovering,
ought never to have happened according to the efficient markets
hypothesis. Neoliberal theory says that the financial system is self-
correcting. Sudden shocks on the scale of the 2008 banking crisis
ought not to occur, and if they do the system is supposed to correct
Ix