Saturday 25 April 2009

Lance Price's New Labour mythology

Lance Price has written an obituary of New Labour for the Telegraph.

The Telegraph over-eggs the pudding a good deal, offering us a reworking of the Sun's 1992 lightbulb attack on Neil Kinnock, as if great hordes (of the top 1%) really are about to foresake London for Geneva. The paper also describes Price as an "architect of Blair's victories", though the author's text more accurately states that he was at the BBC until 1998 and so was an observer of the creation of New Labour, before playing a key role for the party in the victorious 2001 campaign, leaving afterwards.

But Price does plenty of over-egging of his own too. I find his analysis unconvincing. But I think it matters as an example of an insider's mythology of New Labour which retains several significant adherents, even if the claims fall apart under scrutiny.

And this is about the party's future and not simply its recent past. There are too many people - on both the left and the right of the party - who seem to believe that the debate we now need will involve everybody instinctively restating everything they thought fifteen years ago on the eve of New Labour.

Firstly, Price overstates the importance of the income tax pledge to Labour's 1997 victory, and particularly to the re-election campaign of 2001. Price writes:

Like so many others, I watched the audacious land grab on the centre ground with awe in 1997. The bold colour posters signed personally by Blair, including one that said ''no rise in income tax rates'', were devastatingly effective ... The promise was central to New Labour's appeal to those who had never trusted the party before and was explicitly repeated in the 2001 election, that I helped plan, and again in 2005.

But the voters did not think that Labour was promising not to increase taxes at all. Indeed, they thought the opposite. Labour ended the campaign arguing that it had 24 hours to save the NHS. Those who hold to what Mark Gill of MORI has called "the myth that Neil Kinnock lost the 1992 election because he promised to raise taxes, and that Tony Blair won the 1997 one because he promised not to" rarely engage with some convincing evidence to the contrary. As Gill argued convincingly in Fabian Review back in December 2004:

The flaw in this argument is that although Tony Blair pledged not to increase income tax rates in 1997, the key voters didn’t believe him anyway: in MORI’s 1997 final pre-election poll for The Times, 63 per cent said they expected that a Labour Government, if elected, would increase income tax, only 3 per cent lower than the 66 per cent who expected a Kinnock Government to do so in 1992.

This point was reinforced at the 2001 election. As early as December 1999, the public was convinced that taxes had risen under Labour: 28 per cent thought that the Government had kept taxes down since it had been elected, while 57 per cent thought it had not. By January 2001, when asked for their ‘thinking about all forms of taxes’, 48 per cent thought taxes had gone up since 1997 ‘for most people’ and 41 per cent that their own personal taxes had risen. Furthermore, few expected a re-elected Labour Government to have a better record of keeping its tax promises: at the end of May, 74 per cent thought that Labour would increase taxes if re-elected, and only 16 per cent thought it would not.

All told, the voters elected Tony Blair with a landslide in 1997, expecting him to increase taxes, and re-elected him in 2001 believing that his Government had done so, and would do so again. (full text)

There was always a decent case both for and against the tax pledge. I think there was a strong case for the tax pledge in 1997, given Labour's need to destroy the mythology of 1978-79. Equally, as was debated extensively in opposition at the time among New Labour's architects, the New Labour script could easily have accomodated a new higher rate on those earning over £100,000, while guaranteeing the current higher and basic rates for everyone else, using the resources for some specific social purpose. Indeed, that would have been popular, just as the windfall tax was a popular New Labour tax increase.

By 2001, the tax pledge risked becoming a totemic symbol not only of New Labour's centrism but also of Labour's caution in making the argument for its own policy agenda. Several of the commentators sympathetic to New Labour such as Donald MacIntyre saw a powerful case for ditching the pledge, noting the Fabian Society's evidence that a politics of reconnecting spending to taxation. Andrew Rawnsley also made the case for honesty as the best policy, noting that a stealth strategy was feeding the idea that "that there is something fundamentally shameful about tax". This closed down the space for New Labour's own agenda of investment and reform, argued Rawnsley, which had to involve "remaking the case for taxation". The tax issue caused some considerable wobbles early in the 2001 campaign.

Secondly, Price shows no understanding of the damage done by sticking to a once-successful script beyond its sell-by date, just as New Labour's critics can fail to acknowledge its successes. Treating the 1997 tax formula as if it were some magical mantra has got us into quite a lot of trouble. The disastrous final Brown budget that caused so much political damage over the 10p rate was rooted far too much in the anti-tax New Labour instincts of the 1997 script, as Charles Clarke noted with devastating clarity in the New Statesman last Autumn.

Economic "Blairism" was also defined by opposition to increasing taxes. This reflected the Reagan/Thatcher economic consensus, reinforced by Labour's 1992 shadow budget, that tax-raising political parties lost elections. This belief underpinned the disastrous and unfair basic-rate cut, financed by abolition of the 10p rate, of Gordon Brown's 2007 budget.

By contrast, as it happens, Brown's most popular budget was his 2002 which included the public case for an increase in taxes to support increased NHS spending. In fact, this was more favourably received by the public than any tax-cutting budget from the Conservative years. This is not to argue that higher taxes are always more popular than lower taxes. But it does show that Labour did well on the one occasion when it decided to engage the public in a mature debate about the trade-offs between public spending and taxation, and struggled when it did not.

What Price caricatures as a debate between New and Old Labour has always been a debate within New Labour as well as beyond it. It is entirely ahistoric to claim that a higher top rate was some unreconstructed Labour demand. The Fabian Society did most to reopen debates about inequality and progressive taxation.

But it was not only New Labour's "soft left" - such as Robin Cook and Peter Hain - who supported these calls. Several Blairites and Brownites were among those to do so too. The case for higher taxes at the top was cogently made by Tony Giddens, guru of the third way, and Patrick Diamond (the ex-Blair advisor and previously director of now back in Downing Street), and by Chris Leslie, who had a strong New Labour pedigree as a Minister and who coordinated the Brown leadership campaign. Roger Liddle, co-author of The Blair Revolution with Peter Mandelson, argues that income inequality at the top must matter, calling for a Top Pay Commission. (He notes too that the original Liddle/Mandelson book argued for " “New Labour should use the tax system to attack unjustified privilege, without weakening incentives for risk-taking and hard work").

The debate about a fairness case for a modest increase in taxes at the top was never one simply between Old versus New Labour. Nor were there fixed Brownite versus Blairite positions. Sometimes, it was a generational question. And a plausible case could be made that a convincing case was made in terms of both political strategy and policy, while those who gave priority to communications had presentational objections and were nervous of allowing the discussion to take place at all.

It is a shame that Labour did not change its position earlier and from a position of strength, to discuss the real political choices and trade-offs between spending and taxation much more openly. The problem was less the tax policy, but turning it into a totemic shibboleth that Labour dare not talk about. That position that largely united Number 10 and Number 11, with the latter defending it most vigorously after 1997 once Brown had lost the argument for a 50p rate in opposition. The political strategy of "progressive universalism' was an important and effective one, but the public argument for fairness which provides the essential foundations for this has come much later.

Finally, what Price now offers as a future agenda is gob-smackingly thin. He writes that:

Brown is largely silent on the kind of totemic policies that once defined New Labour, like choice in health and education through foundation hospitals and city academies. If, as the party's polling expert Lord Gould once called it, New Labour is an Unfinished Revolution, then its vanguards have been in retreat for two years now ...having delivered three remarkable election victories, the chances of it reviving in time to help secure a fourth are receding every day.

Is that it? 'More of the same' stopped being the tight answer a long time before 2009. And voters seem to be protesting the closure of post offices rather more than protesting the failure to develop a new vanguard agenda for the Foundation Hospital:

Indeed, I would argue that the 2001 General Election campaign should be seen as Labour's defining missed opportunity, as I also suggest in contributing to James MacIntyre's analysis of 'the fight for Labour's heart' in the New Statesman this week. (Of course, I do not suggest that those calls on political strategy were in Price's hands to make; they were primarily the co-decisions of Tony Blair and Gordon Brown).

One can absolutely understand why the leadership had a single-minded focus on securing a second term for the first time. What is striking is just how nervous they were about whether they could do it. William Hague's populism proved singularly unpopular. It is striking just how much Labour took media enthusiasm for this as a sign that it was resonating with voters. A party heading for a landslide defeat did a remarkable amount to frame the election agenda.

Labour's strategy was to close down those issues. Blair was planning a big push on Europe and the euro in the Autumn, so was keen to keep the issue out of the campaign. Brown was working out how to raise the money for increased health spending, so used the characteristic tactic of the Wanless Review to park the issue to the other side of the election campaign.

But this strategy had an enervating effect on Labour's own domestic agenda too, which lacked the political edge it had in 1997. With hindsight, it might not have mattered so much. Nobody knew that 9/11 was about to change everything. But somehow a technical policy agenda about the governance of public services - which may have had many merits as policy, but was only comprehensible to the policy wonks - was punted as a transformational big political idea.

But Labour's message was "investment and reform". Reform was important to sustain public confidence that more money would be used well. It is obvious that the question of where the money is coming from is foundational. (More choice is more expensive too). There is no doubt at all that Tony Blair changed his mind about public spending during the 1997 to 2001 Parliament. Having believed that current spending could be redirected, he began to advocate higher spending, particularly the ambitious commitment to match the EU average on health spending on the Frost TV sofa. Of course, this needed to be funded. Blair had also pledged an end to child poverty by 2020, making the explicit policy commitment to redistribution and 'narrowing the gap' in relative income terms, though he was strangely unable to acknowledge when pressed during the famous Jeremy Paxman interview in the 2001 campaign that this was indeed the policy that he had set out for his government.

Overall, the 2001 campaign was somewhat better than that of 2005. "Schools and hospitals first" did at least have some political content. Labour's argument was to prioritise public services over tax cuts. (By 2005, the slogans "Your family better off" and "Your country's borders safe" offered no contentful clue whatsoever as to which political party might attach its logo to them). Once again, heading into an election that nobody thought that Michael Howard could win, the opposition leader dominated the political agenda, as themes of MRSA and immigration framed the public debate. By the end, Labour's main argument was the implausible one that Howard and the Tories could genuinely win).

Unlike the post-Iraq election of 2005, the 2001 mandate was Labour's great realignment opportunity to redefine the centre-ground of British politics. It did well to almost exactly replicate its 1997 majority, on a much reduced turnout. It had run a personality-based campaign decked in purple to re-elect its Prime Minister. Yet after the election, Labour had little confidence that it had won a mandate for an argument it had been careful to make only in code. It would have won a similar landslide had it had the confidence to put its (popular) case on the table too. But the instinct to run away from the Tories' unpopular populism meant there was a campaign remembered only for John Prescott's right-hook.

Both the victors and the defeated were not entirely sure as to what it was a mandate for. Labour's lack of confidence in its own message also helps to explain why it took the Tory opposition a further Parliament to have a serious inquest about their successive defeats. Like Bill Clinton, who in 1996 campaigned for a four year term to "build a bridge to the 21st century", New Labour had the bully pulpit of British politics and too often chose not to use it. (Indeed, Blair's stock response to critiques of Clinton, such as those offered by Douglas Alexander, was to note that Clinton had done the most important thing: he got re-elected).

I entirely reject the idea - the frame of too many internal debates - that being elected and being Labour are alternatives to be traded-off. (Indeed both right and left of the right of the party betray a shared lack of confidence in how Labour values can chime with the public). I am sceptical that a great dose of ideology being offered from opposition will get us to the New Jerusalem: the evidence for either right or left on that is weak. So what really really matters is how you use the bully pulpit of power when you have it to make public-facing arguments. Is it possible to govern and campaign for re-election while shifting the frame in which future elections take place? Reagan and Thatcher did. The key test of the Obama Presidency may prove not simply whether he wins a second term, but what argument he seeks to fight for a second term on.

Certainly, New Labour has shifted the centre-ground of British politics too. It has done so mostly through policy, and often by stealth. David Cameron's ambiguities reflect New Labour's own deliberate blurring of its own public identity. This is why one reason none of us really know where the new centre-ground of British politics will end up.

New Labour made much of its cautious management of expectations ahead of 1997. But how much more radical and political that manifesto, shaped in opposition, looks to its policy-heavy successors formed in government for 2001 and 2005. (Those manifestos are practically identical: I wonder how their authors would fare in a pub quiz of 'spot the difference').

This is a problem for a party whose mission is one of social change. And most of Labour's legacy achievements in power - the minimum wage to devolution - come from that first term. The tax pledge was a means to those progressive ends. And, as both Jon Cruddas and Chris Leslie have noted, ministers would often balk at the populist fairness language put up in 1997.

So I can not see what Lance Price achieves in penning his obituary for New Labour when he seems to have entirely neglected to set out any positive purpose which might resonate about what he might advocate resuscitating New Labour for.

Our political choice is not between Labour's greatest hits of 1996 or 1976. Both would fail now. The hard truth is that everybody is going to have to dig quite a lot deeper than that.

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