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So, Maggie is apparently unhappy with how the PM is handling the economy. Strip away the fact that her government legislated to ban Christmas and made it compulsory to jab puppies with knitting needles. Ignore, for a minute, the fact that the big-bang loadsa money ethos of the 80s which created a culture of invincibility in the City and destroyed our manufacturing base got us in the mess we’re in and is hampering our ability to get out of it. No, let’s not dwell on the apartheid-supporting, democracy-emasculating, section-28isms, which, when we look back are kind of endearing. I mean, she never really meant any harm did she?!

Let us instead take a little closer look at one of the underlying arguments that the Lady (and many other Tories) is making. That argument is this: the Tories are the economically competent ones who have always come in to clear up the mess of a Labour government. To see if this is true, or indeed a pile of horse-shit, let’s work through post-war governments of both stripes (with tongue slightly in cheek) and hopefully try and dismantle some of the mythology around Thatcher that she somehow was Britain’s saviour.

OK.

1945-1951: Labour. Despite the fact the country had nearly bankrupted itself defeating the Thousand-Year Reich, the government managed to create the NHS, a universal welfare state, and nationalise pretty much whatever wasn’t bolted down (and a lot of things that were). Yes, there was a devaluation, but this was more than anything brought on by the ridiculously over-ambitious crash rearmament programme that preceded the Korean war. In implementing Beveridge, it aimed for a total employment figure that, whilst well meant, 30 years hence would prove massively inflationary.

1951-1964: Tory. Some good stuff might have happened but I’m not propagandising for the other side. Suez wasn’t so good, causing a run on the pound so epic that Britain was forced into a humiliating climbdown. Later, under Macmillan, the whole Treasury Team (Chancellor and Ministers) resigned because the Tories handling of the economy was, to put in bluntly, piss-poor.

1964-1970: Labour. England win the World Cup, liberalisation of laws concerning homosexuality, divorce and abortion, and the OU is founded/new universities are built offering access to higher education for hundreds of thousands of people. Another devaluation, arguably reflecting the UKs deteriorating industrial performance since the mid-50s onwards (when much of European industry was able to start competing again after being flattened in the war) and the unwillingness of governments of either party to take on vested interests and modernise. In short, not spectacularly competent on the economy, but no worse than the preceding Tory shambles.

1970-1974: Tory (well some of them would like to disown Heath but he was one of yours guys. Sorry!) Anyway, Rolls Royce nationalised, percentage of the economy controlled by the state highest ever recorded. 3 day week. Miners strike. Other bad things.

1974-1979: Labour. Industrial unrest continues. Inflation takes hold (see 1945-1951), unions don’t help. ‘Winter of Discontent.’ BUT by 1976, an ideological shift (if not shared by all Labour members as a whole) had taken place. Callaghan addresses the Labour conference and rejects throwing money at things. Healey goes to IMF and shows signs that he gets it too. In short, much of the heavy lifting for Thatcher is already going on. But boy did she put her own stamp on it…

1979-1997: Tory. That woman (followed by some grey bloke). Rather than saying, yes, Britain suffers from some serious structural problems (outdated industry, over-mighty unions) that with work, patience and courage can be turned around, she unleashes an economic blitzkrieg which, when dealing with the ossified Morrisonian public corporation dinosaurs only means one thing. Unemployment. Massive, intergenerational unemployment. Crime rockets. Homelessness soars. Riots in Toxteth, Notting Hill and Trafalgar Square. Wearing of red braces and stripey shirts made compulsory within the square mile, as are phones the size of hot-hatches. Sunshine privatised and metered back to the poor… Then Major comes along and does something. No-one remembers what exactly it is he does (except for muffing it up royally on Black Wednesday and losing an MP in bizarre circumstances). Also, the Hamiltons. Don’t forget them.

1997-?: Labour. A new Jerusalem. Death and illness are abolished. Poverty and suffering outlawed. Commentators complain when budget surpluses and proceeds from wavelength auctions are used to pay off national debt. “Surely a bit of debt doesn’t matter?” they say…

So, to wind up an overly long piece, what I’m saying is that post-war economic management by governments of both colours was pretty ropey. But, and this is a big but:

1. Labour governments still managed to do some pretty awesome things whilst we were going to hell in a handcart.

2. Callaghan (and Healey) are the ones who deserve the credit for bringing us to our senses. As Oliver Kamm puts it, “[Callaghan’s] greatest single achievement was to destroy Socialism as a serious proposition in British politics. The principal turning point… in the past 60 years was not 1979, when Mrs Thatcher took office, but 1976” (see 1975-1979 for the reason why).

So, unsurprisingly it appears that Lady T is talking rubbish.

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The Prime Minister looks set to endorse plans to raise the profile of the Armed Forces through parades at football grounds, an Armed Forces day, and more school based cadet forces. As somebody who was in a cadet force myself, I can recognise the benefit in terms of instilling self-esteem in young people: what bothers me is that this is another plank of a ‘Britishness’ agenda that increasingly seems to be defining Labour as a party whose main ideological foundation is a kind of nationalism-lite.

In fact, it reminds me of the ruling parties in Communist Eastern Europe from the 1960s onwards: given that the idealism of communism had been destroyed by the brutal military put-downs in Hungary and Czechoslovakia, the governments of those countries resorted to narrow nationalism and a diet of debt-funded consumerism to buy, if not the consent, then the quiet acquiescence of their populations. This period is now commonly known to historians as goulash communism.

It is obvious to the most casual observer that there are many social ills that still need tackling in this country, from social exclusion, low-skills, child-poverty or the ballooning problem of credit card and mortgage indebtedness amongst a surprisingly large segment of the population. With that in mind, I would’ve hoped that a Labour Government could find something more stirring to motivate and market itself by than the hollow tub-thumping of credit-fuelled goulash socialism. Waving the flag and sitting idly by as growth is funded by ever more debt should not be an option.

After the mammoth last post, this one will be shorter, I promise. Anyway, I was just revisiting some of the impressions that voters had of the party in the early 1980s that made it so unelectable. The top responses by lapsed Labour voters for not voting Labour were:

1. Extremism (commitment to widescale nationalisation, general Militant dicking-about).

2. Trade Union domination.

3. A lunatic defence policy (unilateral disarmament).

4. Weak leadership.

5. The perception of being against aspiration/not caring about the economy.

Certainly something to think about, especially by those who would rather retreat to the comfort of a full-blooded socialist programme. The dangers of talking to ourselves rather than to the public, searching for some elusive ideal of a true faith rather than understanding the hopes and concerns of the average person, have been amply demonstrated in the past. We repeat them only at a great cost to ourselves and the country.

John McDonnell and his cohort are piping up with a recipe to save Labour from disaster with a petition for a ‘May Manifesto.’ One thing that amused me when I Googled this was being asked the question, ‘did you mean McDonnell Mau Manifesto?’ A wise search engine that Google…

As a highlight, here are some uncosted policies for starters:

1. An increase in the basic state pension, immediately restoring the link with earnings, lifting people off means tested benefits and providing free care for the elderly.

2. An immediate start on a large scale council house building programme and assistance for those facing repossession.

3. Immediate end to programme of local Post Office closures and liberalisation of postal services

4. An end to the privatisation of our public services.

5. A new pay deal for public sector workers to protect their living standards and tackle low pay.

6. Abolishing tuition fees and restoring maintenance grants for all students

7 and 8 were something about more days of sunshine and a free puppy for everybody to stroke. That said, I’ll put my hand up and say that some of the proposed ideas, such as looking at defending agency workers and scrapping ID cards, are sensible.

As for Post Office closures, it’s a populist point to oppose them but usage patterns are changing: people always express a preference to have a local Post Office but when you ask them the last time that they used it, they rarely remember. Certainly there is a case for some level of provision, but the Government cannot simply spend the sums it is currently spending to keep open offices that have 5 customers per day: it’s not sustainable.

On tuition fees, we inherited a HE sector in crisis in 1997: in twenty years, numbers had increased by 45% whilst per student funding had fallen by 40%. A difficult circle to square. Again, nobody likes paying for something but by and large tuition fees are reducing some of the drain on central funds so there is more money to do top class research. On top of that, they are not regressive (as some would suggest) as they are also freeing up money for bursaries for the poorest students.

We can all probably agree that it would be nice to pay public sector workers more, increase pensions, scrap tuition fees or provide more social housing. But the problem, as I say, is that these plans are uncosted. It is a hall-mark of McDonnell, and an innumerable number of well-meaning people before him, to make repeat demands on the public purse without any clear idea of how to pay for it. There is, of course, mention of ensuring that the wealthiest and corporations pay their fair share but given the levels of mobility in the world today, punitive tax rates will simply mean that the rich leave the country and corporations relocate. Hardly a recipe for success.

Compass [1] amongst others are proclaiming the death of New Labour. They, amongst others, claim that a shopping list of new policies (or rather reheated old policies) such as more redistribution via punitive tax rates and renationalisation of the railways are what is needed to get Labour back on track towards winning a fourth term. They say that we should accept the fact that the South East is naturally Tory and go back to energising our core who seem to being peeled off by parties to the left (if the success of numerous socialist parties in Wales is anything to go by). We may not have liked New Labour, they say, but we could stomach it as long as it was winning elections. Now it doesn’t even do that, it’s time to return to a full-blooded socialist agenda.

There are several things about this argument that are wrong: firstly, New Labour wasn’t just about winning elections, important as that is. Besides, even if it was this argument tends to be based on the fallacy that New Labour targetted the middle and aspirational working classes at the expense of the core vote. It didn’t: it had policies that appealed to both. The need to maintain our position on the radical centre is as important today as it was in 1997 if we want to hold off the Tories in the south and the various attacks from the left elsewhere. Ulimately, disunity now will lead us back into opposition for a generation and that will be a disaster for the people we all entered politics to help.

However, as I say, my point isn’t about elections alone. New Labour was born out of a reading of the history of previous Labour governments: you only have to look at this history to see how, even with the best of intentions, Labour ultimately let down those people we entered politics to help. Whether this was done by having unrealistic policies or plain irresponsible attitudes towards the management of the economy, the fact remains tht Labour acquired a reputation for being an economic disaster zone.

So, where does this leave us today? As the title of the blog suggest, I think that New Labour is still absolutely necessary. It’s necessary for people who want low and stable interest rates; necessary for the people who need help to find work; necessary for the people struggling to raise a family on a low income; necessary for those who are sick, or infirm; necessary for those people who need a good local school for their child. We abandon these people if we think for one minute that ideological purity is more important than getting things done on the ground. We abandon them by wallowing in self-indulgence rather than trying to rebuild a progressive, election-winning, coalition.

The lesson of New Labour is that social justice and economic efficiency are compatible: the trick is to find new policies that are both popular and don’t undermine confidence in our ability to run the economy. The thing about modernising is that it never stops: the needs of 2008 are different from the needs of 1997. We have to reflect that in policies that recognise the hopes and aspirations of people here and now. I for one entered politics to make life better for the vast majoirty of people, not to prove my left-wing virilty.