Britain - Everything you always wanted to know about "New Labour", but never dared to ask

Apr/May 1996

So far the policies of Tony Blair's "New Labour" have been revealed mostly in fits and starts, in general as a function of the media impact expected by Blair's spin doctors. Very often, the statements made were contradictory due to the difficulties experienced by Blair's team in getting their frontbenchers into the habit of thinking twice before they spoke. In any case, there was still no comprehensive and up-to-date exposition of these policies.

A new paperback released in March, called "The Blair Revolution - can New Labour deliver?", by Peter Mandelson and Roger Liddle, has now filled the gap. The two authors are both top advisers of Tony Blair. Mandelson, the Labour MP for Hartlepool and front bench spokesman on the civil service, has been one of Labour's chief PR men since 1987. Liddle is managing director of a public policy consultancy firm, a former special adviser to Callaghan's Labour cabinet in the late 70s and was a founding member of the SDP in 1981, who later rejoined the Labour Party. In other words, this book is definitely not critical of Blair. On the contrary, it can be reasonably described as the unofficial pre-election Labour manifesto. It is also quite unambiguously an apology of "New Labour" and its leader. But it is more than just that, in so far as this book tries to carry across an image and a series of rationalisations which are visibly aimed at convincing the audience to which it is addressed. So, what exactly is "New Labour"?

Praising the market

One of the most conspicuous concerns of the authors is certainly to paint "New Labour" in the most reassuring colours. They try hard to convince even the most hardline free-marketeers that yes, "New Labour" can deliver what is expected of it, in just the way it is expected, and business need have no fears.

"New Labour, says this book, does not accept the classic view of the left-right divide (..) It is about building a new synthesis to which all of the centre and left can subscribe" (p.17). Next follows a whole series of paragraphs, each one detailing one reason that makes "New Labour" different from the left - proof that, after all, in order to "subscribe" to "New Labour" the left is expected to have to change quite a few of its ideas!

Not surprisingly "New Labour" does not either accept Marxism: "this quasi-scientific view of the world" which "rests on economic determinism and class analysis propounded by those who claim to speak for the 'working class'" (p.29). Because one thing is certain: "New Labour" does not claim to speak for the working class. In fact in the 265 pages of the book, the word "workers" is only used twice... each time to repudiate more or less explicity the use of such an evil language. For "New Labour" workers are not defined by the fact that they work - and therefore that they produce everything in this society - but by the fact that they are employed. Hence the use of the word "employees" throughout the book, which at least, for them, has the merit of leaving the "primary" role to the employers?

While "New Labour" does not accept "a quasi-scientific view of the world", it "welcomes the rigour of competitive markets as the most efficient means of anticipating and supplying consumers' wants, offering choice and stimulating innovation" (p.22). Therefore the blindness of market forces (presumably when this blindness affects workers' jobs, it should be called "rigour" instead) is considered as an efficient way of managing the economy. In one sentence, a century and a half of capitalist crises are wiped out, including the current one, and by the same token, the three million plus who are effectively unemployed today become necessary casualties of the "rigour" of the "modern labour market". That kind of "rigour" is obviously not a symptom of inefficiency for "New Labour". It is just tough for those who happen to be at the receiving end! For the others, those on the right side of the market forces, "substantial personal incentives and rewards are necessary in order to encourage risk-taking and entrepreneurialism. Profit is not a dirty word - profits are accepted as the motor of private enterprise" (p.22).

To sum up, "New Labour" is not merely "'taking Labour to the right' nor painting a glossy image over old and unpleasant realities underneath". It is "a deliberate move forward from both the postwar Labour Party of Wilson and Callaghan and the Conservative Party of Thatcher and Major - a political project requiring much greater radicalism and originality than simply 'moving right'" (preface - p.vii).

The fact is that throughout this book a lot of time is spent distancing "New Labour" from the policies of Labour's pre-1979 governments. Even more time is spent paying tribute to "the positive sides of Thatcher's radicalism" while Major seems to be accused of having betrayed the spirit of his mentor's thinking. Mandelson and Liddle are throwing a very large net indeed out towards their potential readership. And they obviously hope to catch quite a few unrepentant Thatcherites.

Labour's "Asian model"

Tony Blair's choice to launch publicly his new vote-winning, image-building gimmick - the "stakeholder society" - in front of an audience of businessmen in Singapore must have horrified a good number of loyal Labour supporters. Some may have thought this was a mere publicity stunt, others that it was a mishap.

But reading Mandelson's and Liddle's prose, there can be no doubt that, on the contrary, Blair's choice was meant to convey a very definite message, but of course one which was not addressed to rank-and-file Labour supporters.

Let us see what they have to say. They start from the issue of job insecurity in Britain, admitting that "for the great majority the world has become a much chancier place. Why is this? In part it reflects the mounting competitive challenge. By the year 2000, for example, the countries of the Asian Pacific, excluding Japan and China, are forecast to account for nearly a third of world manufacturing output (...) Some 400- 500 million people living in East Asia will enjoy living-standards as high as, or higher than those in Europe" (p.5). Leaving aside the statistical data which is blown up out of proportion (as it usually is by all those whose aim is try to convince us that capitalism has got a future despite all the evidence to the contrary), this means that the British economy would be seriously threatened by the competition of East Asia; that workers here should happily accept watching their jobs and conditions deteriorate in order to improve British competitiveness. And since all this is simply the result of the "Asian economic miracle", British capitalists are left off the hook since, after all, they are also victims of the "rigour" of the market. What then about Swire Pacific, Jardine Matheson, Trafalgar House, Hanson, HSBC, Barings, etc.. all those wealthy British-based multinationals who divested a large part of their capital from Britain long ago and are now using it to exploit the many opportunities for a quick buck which are on offer on the so-called Asian "emerging markets"? Where do their profits go? Into the pockets of the Asian poor? What a joke!

Then the reasoning goes on to say: "This economic boom is not based on low wages, low public expenditure and deregulation - as the British Conservatives maintain. These countries are huge investors in what economists call public goods." (p.6). Now, what did Blair do in Singapore? He was taken round by the local dictator in person and was quoted as praising the island's "Central Provident Fund" which caters for the welfare of the local working class. Within a week, his Social Security spokesman, Chris Smith, was pouring articles into the papers along the same lines. And what is this "Central Provident Fund"? It is a system whereby 20% of the wages of all workers are compulsorily put in a special fund so that they have enough to live on when they retire. But it is this fund which has provided most of the "public spending" of the past years, to finance the free facilities (oil refineries, industrial parks, transport, satellite telecommunications, etc..) on which Singapore relies to attract multinationals. Of course, this fund does not benefit the large number of foreign unskilled workers who are brought into Singapore when they are needed and expelled as soon as they are laid off - even though they contribute towards it. As to deregulation, if smoking and spitting is strictly forbidden almost everywhere, exploiting workers to exhaustion is not. It is not for nothing that Singapore is the largest assembler of computer disk drives in the world - unskilled manpower remains very cheap there. And Singapore is far from being the worst among the "Asian Tigers".

So what are we meant to understand? That Labour's message to British bosses is that the "Asian model" is alright with them; and that for Labour job insecurity and its corollary, low-pay, should be considered the norm for these "modern times".

Whose stake in the "stakeholder society"?

The choice of language itself - the word "stakeholder" - is not particularly innovative, nor is it innocuous. In fact it belongs to the language of management consultants. Mandelson and Liddle explain it in the following terms:

"Many senior business people take the view that boards should in fact be required to take into account the full range of interests of those with a stake in a company. The danger in any such step is that it would weaken the external discipline that the threat of take-over puts on companies to be efficient and profitable. In other words, it could protect the sleepy at the expense of the thrusting and go-ahead. There are, however, alternative efficiency disciplines that could be introduced on senior management. Some have proposed that chief executives' contracts be for a fixed but renewable term of four years - in effect compelling the board and institutional investors to review corporate performance formally on a periodic basis and decide whether management changes are necessary." (p.88)

Who are "those with a stake in a company"? In management consultancy terms, they are, in addition to shareholders and boardroom members, the suppliers, the customers, the subcontractors and possibly the managerial grades. But certainly not the workforce, judging by the models of "stakeholding companies" cited by Blair several times in the past: for instance famous job-slashers like NatWest and Midland Electricity, union-bashers like Unipart, etc...

So this is the model on which Labour's "stakeholder society" is based. But what does that mean at the scale of the whole of society? Who are those with a stake in Labour's vision?

"The thrust of New Labour policy should be to create a new culture of long-term investment. A new government can show the way by giving a massive early boost to public-private partnership in modernising Britain's infrastructure. This would enable a modest injection of public money to lever a much bigger amount of private capital into projects which in the past would have relied exclusively on taxpayer finance" (p.89). This is a recurring theme throughout this book - the "public-private partnership" the aim of which is to give the capitalists a stake in using their cash in order to develop new production or infrastructure, in return for public subsidies, of course. This is not different from the Tories "Private Finance Initiatives" which has been a complete flop for over a year and finally has ended up giving a huge handout to a consortium led by Branson in order to get it to build the fast link between London and the Channel Tunnel. The writers acknowledge this: "The Conservatives have in theory adopted this policy, but in practice they have failed to make it work. Instead it has become an excuse for public-expenditure cuts in the public services" (p.89). But how does Labour plan to overcome the reluctance of the capitalists to invest in ventures which, in their view, are not profitable enough? Short of compulsion, the only way is to raise their stakes - i.e. to offer them more cash incentives.

Likewise for creating jobs. If the capitalists are to have a stake in Labour's society, their profits must be protected, even at the cost of jobs. Introducing a compulsory reduction in working hours without loss of pay is ruled out: "Unless the planned fall in hours result in a compensating reduction in pay, then costs will rise and industrial competitiveness will suffer" (p.100). In other words, hands off profits: the bourgeoisie should not be asked to fork out a penny for fear of their renouncing their part in the "stakeholder society". Whereas the favoured way of creating jobs will be "recruitment subsidies to encourage private-sector employers to take on the long-term unemployed. This financial incentive should be part of a concerted drive to encourage companies to extend their corporate social- responsibility" (p.101). As if that had not been tried already with the sole result of generating more job cuts as workers were made redundant to make room for the cheap labour paid for by the government. Anyone who has been on any of the many so-called "training" schemes knows that. But Labour obviously does not bother about being credible with the unemployed, who already know the score. They just want the bosses to know that there will be more state handouts on offer under a Labour government.

As to the unemployed, the youth, the low paid, their stake in Labour's society will be quite different. First the stick: "It is not right that some people should collect the dole, live on the black economy, and then refuse to cooperate with society's efforts to reintegrate them in the labour market. It is dishonest and corrosive (..) In circumstances where new opportunity is being offered and refused, there should be no absolute entitlement to continued receipt of full social-security benefits" (p.102). This could have been written by one of today's snooper squads of the DSS. It looks as if the JSA is there to stay under Labour!

Next comes the carrot: "Pension contributions could be channelled not through the state but through mutually owned funds (..) The new muutual funds would give individuals the choice of a personal pension into which their savings would be paid. This would give individuals freedom to choose when to retire and what type of provision they wish to make for the rest of their family" (p.145). What a nice idea! Having the possibility to take out one's pension at 50, for instance, and retire to a tropical island... A stakeholder dream. Except of course, that not every worker will be able to accumulate enough money to pay for a decent early pension. That maybe a possibility for the middle- class but certainly not for the average worker, let alone for the low-paid. On the other hand, Labour plans to do what the Tories have failed to achieve - to channel all the money saved for pensions into the hands of the private sector. The banking and insurance magnates are indeed there among the stakeholders.

As to the low-paid, the unemployed, those who cannot retire to the tropics, and still need social-security payments to top up their pensions, Labour has got their own idea for them: a long chapter explains how Labour plans to revive the "extended family", so that the young generation can take care of the old without the state having to interfere. Another "idea" borrowed from Major's policies - but at least Major was open about its aims, saying it was designed to reduce social expenditure!

There would be many other chapters, issues and items to go through in this book. But all of them are in the same league. Labour's programme is definitely not addressed to the working class. Its language, its aims, its preoccupations are those of business, of the rich, of the caste of well-off professionals to which most of today's Labour leadership belong. Not only does Labour not try to conceal that they are stealing the Tories' agenda, but they actually brag about it, boasting almost openly to be better at it than the Tories themselves.

And it is not just in its manifesto that Labour has this attitude. Whether his audience is made of businessmen or of trade-unionists, Blair has the same language - the language of a statesman of the bourgeoisie who is fit for the job and prepared to go the whole way through what is expected from him. He gave a good example of this at the Scottish Labour conference earlier this month when he said: "We could not succeed through tax and spend, even if we wanted to". Then having explained that members of the shadow cabinet had established contacts with senior civil servants in their areas of responsibility, he added: "I have asked them to look for savings in their own departmental areas".

Labour is not even in government yet and will probably not be there for another year. Yet its leader is already looking for ways to cut expenditure - which means finding those cuts which Major's ministers have failed to spot so far! The contest for Britain's most effective expenditure slasher is obviously now open... There cannot be a better illustration of what the working class can expect from the next Labour government. And let us make no mistake: in this championship, Blair is more likely than not to win the title. Unless of course he is confronted with another, much more serious challenge - that of a working class fightback.