How can the coalition cohere through the battles
it has already determined to promote? Readers of The Orange Book,
published in 2004 to reclaim Liberalism, may be less doubtful than is
fashionable, on this score. The Orange Book was edited by David
Laws MP, who, before his hapless descent into politics, had been Vice
President at J. P. Morgan and Company, and then Managing Director at
Barclays De Zoete Wedd before becoming Director of Policy for the
Liberal Democrats between 1997 and 1999. It may be that he was not
altogether uncomfortable in his new role as axe man while it lasted. At
least he never got to play it alongside Peter Mandelson, which fact may
have terminated yet another undesirable career and example.
David Laws announced his reclaiming agenda by enunciating three
principles which govern Liberalism. These began with freedom from all
forms of oppression, and included oppression by the State, the tyranny
of majorities, as well as ignorance, intolerance, prejudice and
conformity. They did not include freedoms which might impinge upon the
interests of the proprietors of big industries or commerce. The second
key element of Liberalism was the belief that power should be exercised
through accountable and democratic structures as close to the people as
possible. These structures also did not include those of big companies,
which might very well be improved by strong tests of democratic
accountability. Would it not be nice to subject their Chief Executives
to due processes of popular election and recall? But these might
undermine the third strand of Liberalism
‘which is the belief in the value of free trade, open competition,
market mechanisms, consumer power, and the effectiveness of the private
sector. These beliefs are combined with opposition to monopolies and
instinctive suspicion of State control and interference particularly in
relationship to the ownership and control of business.’
True, Laws sees as an essential element of
Liberalism, a fourth principle: Social Liberalism, as embodied in the
instruments of welfare handed down to us by Lloyd George.
But the sovereignty of the market did not bring
about the old age pension, which owes more to the admittedly feeble
sovereignty of the electorate, and would, if allowed so to do, be likely
to annul market dominance in short order. The sovereignty of the market
has also proved an extremely insufficient guarantee of housing standards
for poorer people. Indeed, market sovereignty itself has, during the
recent economic crisis, done much to undermine the institution of
markets. David Laws, it is true, is not now in a pole position to sort
all that out. Whether his chosen substitute is up to the task remains to
be seen.
It had fallen to the Orange champion to present
the detailed schedule of the government’s project to slice that £6.2
billion out of governmental spending. According to the Financial
Times at least 30,000 jobs, and possibly more than 50,000, will be
eliminated this year as a result.
‘But those tens of thousands of lost jobs and frozen posts will be just
a small down payment – well under 10 per cent on the massive reduction
in public sector employment over the next few years as the Chancellor
follows up … with an emergency budget in June and a full spending review
in the autumn.’
An earlier recession, points out the FT,
in the early 1990s, when the deficit amounted to only £50 billion
instead of the current £156 billion, saw cuts entailing 600,000 jobs ‘as
public sector employment fell from just under 5.4 million in 1991 to 4.8
million in 1998 before growing again’.
Baby bonds are being squeezed out to save £320
million in 2010, and £500 million the following year, when they are
finally eliminated. Something around £290 million will be saved by
ending payments to the Future Jobs Fund, which had aimed to create
110,000 jobs for unemployed youths. Thirty million pounds will be saved
by cutting out a thousand pound subsidy to employers who take on the
unemployed. A bonfire of smaller quangos will also be carried through.
But Lord Freud, the turncoat Minister for Welfare Reform, has confirmed
that very much larger economies are in prospect, as he gets to gripswith
welfare budgets, eliminating £5.2 billion which are estimated to be
expended on fraud and error, that is to say ‘what we know about’. The
implication is that there is more treasure still buried at the end of
this rainbow. Is this all rhetoric aimed at assuaging the anxieties of
the markets, or does it reflect a real commitment? Whatever it is, it
does not represent ‘the limit of our ambition’ said Lord Freud. The
Government plans to shift more than 2.5 million claimants off Incapacity
Benefit to the new Employment and Support Allowance, which is to be
accompanied by a huge welfare-to-work programme aimed at prising them
into the labour market.
Small wonder that the Institute for Fiscal Studies pronounced its
verdict that Britain now confronts ‘the longest and deepest sustained
period of cuts to public service spending since the Second World War’.
It fell to David Laws to present his appetiser for the cuts to come, in
his first speech to the new Parliament. According to the British
newspapers, the then Treasury Chief Secretary apologised for ‘sorting
out the mess in public finances’. Mr. Laws must have been surprised by
the press he got, which presented him as a modern Demosthenes, railing
against the over-mighty state, as if it were the evil Macedonian empire.
Vigorous though our new axe man showed himself to be when faced with
evil paupers, he shrank from more potent adversaries, such as the
grossly excessive military budget.
* * *
Sacred cows, of course, remain sacred. Worse, the
sacred Trident programme, in spite of Liberal Democrat protestations of
virtue, and genteel threats to postpone if not asphyxiate it, remains
firmly in place as the keystone of defence policy. During the Election,
Generals queued up to question the sense of this policy. Immense
treasure will be lavished on new aircraft carriers, as well as the
necessary new submarines to carry the expensive new missiles with their
regenerated warheads. None of these things will come cheap. Four of
these important military commanders set their thoughts down for The
Times:
‘It is of deep concern that the question of the Trident replacement
programme is at present excluded from this process [of the Comprehensive
Strategic Defence Review]. With an estimated lifetime cost of more than £80
billion,
replacing Trident will be one of the most expensive weapons programmes
this
country has seen. Going ahead will clearly have long-term consequence
for the
military and the defence equipment budget that need to be carefully
examined.
Given the present economic climate, in which the defence budget faces the prospect of worrying cuts, and that we have already an estimated hole in the defence equipment budget of some £35 billion, it is crucial that a review is fully costed and looks critically at all significant planned defence spending. The debate has shifted significantly since the 2007 decision to proceed with replacing Trident. Internationally there is a growing consensus that rapid cuts in nuclear forces, starting with the US and Russia, but with the smaller nuclear states following, is the way to achieve international security.
There have been promising developments in the multilateral disarmament
process led by President Obama, including the recent US-Russia nuclear
arms
reduction agreement.
Through the Nuclear Threat Initiative and Global Zero, a powerful
line-up
of international statesmen, including Mikhail Gorbachev, Henry Kissinger
and
Desmond Tutu, have added their voices to the call for a nuclear-free
world.
Such a world would undoubtedly be a safer place, and while it remains a
distant and challenging goal, opportunities to bring it closer should be
given
thorough consideration by any government.
Serious concerns have also been raised by members of the services and
defence analysts about the strategic value of nuclear weapons and their
relevance to modern warfare. Indeed, three of us wrote to The Times on
this
subject in January 2009. These fundamental questions about how and
against
whom our nuclear weapons act as a deterrent must still he answered.
The potential impact of a UK commitment to replace Trident on the
international disarmament negotiations must also be considered along
with its
impression on other states. As the former head of the International
Atomic
Energy Authority Mohamed El Baradei put it: “It is very hard to preach
the
virtues of non-smoking when you have a cigarette dangling from your lips
and
you are about to buy a new pack.”
Any genuinely comprehensive review needs to weigh up all of these issues
and answer the question: “Is the UK’s security best served by going
ahead with
business as usual; reducing our nuclear arsenal; adjusting our nuclear
posture
or eliminating our nuclear weapons?”
Should the review determine that there is still a need for a nuclear
deterrent,
a number of options may be more affordable than a like-for-like
replacement of
the Trident system, which has been described as a “Rolls-Royce”
solution. The
state of the public finances requires each of these options to be
carefully
evaluated, alongside like-for-like replacement and disarmament.
It is no longer good enough to skirt round the question of what actual
military value an expensive nuclear deterrent provides to our services
by
labelling the decision a “political one”. This decision will have a
direct impact
on our overstretched Armed Forces. Allowing the military’s views to be
excluded from this decision will have consequences both predictable and
regrettable.
It may well be that money spent on new nuclear weapons will be money
that
is not available to support our frontline troops, or for crucial
counterterrorism
work; money not available for buying helicopters, armoured vehicles,
frigates
or even for paying for more manpower.
Suppressing discussion of these issues or dismissing alternatives before
properly examining them would be a big strategic blunder. All political
parties
must allow a full and open debate about the Trident replacement as part
of the
Strategic Defence Review.’
This broadside was signed by Field Marshall Lord
Bramall, General Lord
Ramsbotham, General Sir Hugh Beach and Major-General Patrick
Cordingley.
The Generals are probably right that the budgetary constraints that are
involved here may continue to ensure that foot soldiers may not receive
the
necessary boots in which to do their work. But some of us would like to
keep the soldiers away from foreign deserts, and economise on boots as
well as bombs. This means that the quarrels which divide the Labour
Party
remain by no means academic. The war in Iraq, and the senseless
slaughter
in Afghanistan, have not only outreached the liberal conscience, but
also
will bankrupt the neo-liberal treasury. How long before this happens?
How
soon can we expect to recover the wisdom of the late Harold Wilson, and
withdraw from commitments East of Suez?
Paupers cannot afford to police the world, especially if that task
requires
that the world be subjugated again before imperial rule can hold sway.
‘Not again!’ is a good rule.
* * *
Somewhat heavily promoted in the Labour Party’s leadership stakes is
former Foreign Secretary David Miliband. In fact, some candidates had
alleged that he was keeping quiet about the large number of nominations
he had received, in order to minimise speculation that he has been the
approved Blairite successor. Be that as it may, he has declared that the
decision to invade Iraq in 2003 should not preoccupy the Labour Party in
the discussions about its leadership. Two other candidates had
criticised
the decision to invade, and David Miliband said that it was ‘time to
move
on’ in response to their arguments. But many of us believe that the only
onward move that might be morally acceptable would be to the trial of the
perpetrators, who lied us into a massacre.
The argument will not be closed so easily. Miliband senior reiterates
the
old story that every intelligence service in the world insisted that
Iraq had
weapons of mass destruction. He has also insisted that he had, at the
time,
read the 174-page report of Hans Blix (the so-called ‘Clusters Report’).
His predecessor, Jack Straw, gave a tendentious account of this document
which Hans Blix corrected:
‘That report was an analysis of what Unscom (United Nations Special
Commission) before us had found, and what we in our analysis had found.
It put
the cases of unresolved issues in clusters, and lined out what Iraqis
could do to
help us to solve them. There was nothing sensationally new in this
document.’
The document says in its introduction:
‘The principal part of this document thus presents clusters of
“unresolved
disarmament issues”, which are to be addressed by the inspection process
(and
Iraq) and from which “key remaining disarmament tasks” are to be
identified
and selected for early solution.’
Chris Ames of Iraq Inquiry Digest recalled this fact when responding to
the former Foreign Secretary:
‘Which bit of “to be addressed by the inspection process” and “selected
for
early solution” did the allegedly very clever Miliband interpret as
meaning:
“cut short the inspections and invade Iraq”? And which bit of Blix’s
rebuttal of
Straw did Miliband not get?’
Worse, the hoary old claim that the world’s intelligence services were
unanimous in asserting Iraq’s ownership of weapons of massdestruction
had been decisively refuted by Vladimir Putin in October 2002:
‘Russia does not have in its possession any trustworthy data that
supports the
existence of nuclear weapons or any weapons of mass destruction in Iraq
and
we have not received any such information from our partners as yet.’
Neither, of course, had anyone else.
David Miliband cannot acknowledge the truth in these statements
without repudiating Blair, which would mean repudiating the former
leader’s diminishing band of supporters, who may be rather important
electors in this electorate.
There are signs that war hysteria is receding. Fewer and fewer are those
prepared to admit that they were ever in favour of conquering Iraq, even
if
this would enable them to hang Saddam Hussein. More sturdy Liberals are
discovering their long-term opposition to capital punishment, even for
the
demons of yesterday. The new upsurge of pacifism is also cautiously
invading the Labour Party, where some leadership contenders seem to
agree that there may not be many votes in future wars. Of course, the
old
wars were monstrosities, and should never have been begun. Several
hundred thousand people have been killed, millions have been displaced,
economies have been wrecked, and civil progress has been forced into
panic-stricken retreat. There may at times have been some excesses in
pacifist thought, but militarism has clearly been revealed as a
murderous
disorder in men’s thinking.
The Labour Party will never recover until this begins to obtain due
recognition, and its war drums are finally silenced.
But there is another re-evaluation which is vitally necessary to the
recovery of political life in Britain. Socialism has to become again a normal
part of political discourse. The decision to repudiate the Labour
Party’s
Clause IV was presented as a revolt against archaic language. But
archaic
language could have been modernised without occasioning distress. No one
was discussing the archaic language involved in the Ten Commandments,
which could with profit have commended itself to Mr. Blair.
Cynics among us believe that the radical impulse to doing away with the
Labour Party’s constitutional commitment to some form of socialism was
driven by the fashion for privatisation, and perhaps the desire that
well-placed personages in the political firmament might also ‘become filthy
rich’. Be that as it may, now that The Orange Book rules, and an Orange
Demosthenes can rant us all into more and more acute social distress, it
is
surely time that we must rediscover the antidote to market collapse,
ruin in
the banks, and capitalism in distress. The annulment of Clause IV
notwithstanding, Labour nationalised failing banks. What terrifies
surviving bankers is the thought that perhaps future governments might
not be willing to follow this example. But who will agree to the
reinvention of socialism as a last ditch saviour of an economic system
in
collapse? Might it not more commendably save the people?
That is why we devote some attention to the long lost issue of Clause
IV, which served in earlier years to differentiate the emerging Labour
Party
from Liberal hegemony. The Liberals were the party of business, and the
workers still tended to regard themselves as part of business, so that
it was
possible to invent Lib-Lab Members of Parliament. But the interests of
business were not identical with those of employees, or the mass of the
ordinary people. Today The Orange Book apostles are preaching a doctrine
which makes this abundantly clear, and for those who are slow to learn,
they are implementing policies to match. If there was never any
socialism
before, it would be necessary today to invent some.
Socialism has, for all that, left us all with a serious problem over the
years: how do we socialise the entrepreneurial function? This problem is
brought no nearer to solution by selling off the Post Office to the
highest
bidder, especially when that bidder may in fact have tendered an offer
which is lower than low.
* * *
During this tumultuous meltdown of established verities, the newly
discovered opposition has been trying to reorient itself. A number of
left-wing Members of Parliament increased their votes during a General
Election which saw the eclipse of several former stars of New Labour. It
is true that two cheers have been heard, but the overall picture has not
been
encouraging. Alternative policies have been scarcely visible, and
certainly
insufficiently potent to challenge the new orthodoxy of neo-liberalism.
True, Labour’s neo-liberals have suffered a serious blow with the
defection
of The Orange Book reactionaries to the coalition. Their ‘approach’ is now
discredited and in disarray. But the reincarnation of the Labour Party
is by
no means assured. It will be incredibly difficult to set in motion the
reforms that could allow it to recuperate its strength from below.
Swingeing changes have gravely undermined its former democracy. The
Labour Party Conference has been not only housetrained, but broken, as
all its effective powers have been leeched away.
The National Executive Committee, which was at times a strong
upholder of the rights of the membership, has been taken over for the
most
part by poodles. Time was when new policies could be originated, quite
literally, from the bottom up. Proposals put forward by ward parties
could
advance through the Constituencies up to the National Conference, and be
carried into effect. A whole series of reforms of the Party structure
were in
fact initiated in precisely this way. No longer is this imaginable,
unless the
most serious changes can be initiated. And where could this be done but
at
the top of the Party? Its grassroots are parched and would find it
difficult
to identify green if ever they saw it. In this sense, what the Party
would
need to enter into a true recovery would be a process akin to
perestroika.
It is true that reforms initiated from above can be blocked or reversed
from above, unless they catch on and inspire new momentum among the
democrats. Democracy requires not only self-confident advocacy, but a
minimum sense of possibility, of openness to change. That is what is
likely
to be initiated from the top, or nowhere.
The famous perestroika began when the most powerful people in the
Soviet Union, the heads of the security services with their political
nominees, understood that things simply could not continue in the manner
to which all had become accustomed. Can things in today’s Labour Party
continue as they were? All the talk about a political class originates
from
registering the changes in the Labour Party which have not only
disenfranchised, but to a large extent excluded, the victims of
political
policy. What Mrs. Thatcher began, Mr. Blair effectively consolidated.
Not
for nothing did Mrs. Thatcher boast that New Labour was perhaps her
greatest achievement.
It is an extreme example to look at the evolution of the coalfields,
with
the obliteration of independent-minded political action, the affliction
of
mass unemployment, and the consequent loss of hope. But I think of a
formerly vital trade union branch secretary, who, in order to survive,
had
to accept a job on minimum possible wages as a Securicor official, and
work every hour that was obtainable, Christmas Days and other holidays
included. What scope had he to practise the skills he had earlier learnt
in
forming social policy and mobilising to develop it? I think of other
miners,
their talents unwanted and unrecognised, languishing on the sofas in their
kitchens, whilst their children trooped out of the houses to school and
back, also profoundly uncertain of their futures, and steeped in that
deep
pessimism that is secreted in this culture of neglect.
Yes, there have been new kinds of work, new skills, and new sources of
optimistic development. But, entrapped in the prevailing areas ofdistress,
such developments have not, as many anticipated, created a vibrantnew
culture of democratic self-expression, of human growth and development,
of confidence in our collective powers. In a way, New Labour was the
political expression of this demoralisation, and the annulment of
confident
democracy in the Labour Party is its result. As it blanketed the country
its
influence was uneven: pockets of self-assertion remained. Freedom could
never be completely extinguished. But institutionally, modern Labour is
now virtually devoid of social aspirations. It is going nowhere: it
offers
freedom to none but the political classes themselves, and that freedom
is a
poor, stunted, miserably acquisitive and unhappy experience.
There remain large numbers of Socialists seeking forms of association
that might give them the influence that they would need to associate those
who wish to pioneer new social forms. But they, too, are mired in deep
difficulties, because, not unnaturally, they seek comprehensive
solutions to
the problems which have beset the overall Labour movement. The search
for the one true way never stops. But if it is allowed to pose each
reformer
against all, then the one true way will never be found, because that way
lies
in democratic association itself, and only an ample movement which
encourages both thought and action will ever permit it to be found.
We cannot create the perfect revolution in the village hall, but it
might
be in the village hall that we can agree on a common approach to sorting
out a wide variety of problems, and maybe not only local ones, in
collaboration. Raising our sights may then become possible.
It could be that no one will recuperate the Labour Party, in which case
it will continue to shrink into ever-diminishing circles of
recrimination and
despair. But if it were possible to light again the flame of democratic
aspiration, then no one can be sure that its finest days are not yet to come.
Ken Coates
***
Once again we must ask: ‘Who governs?’
‘ … The implicit premise of the coming retrenchment is that market
economies are always at, or rapidly return to, full employment. It
follows that a stimulus, whether fiscal or monetary, cannot improve on
the existing situation. All that increased government spending does is
to withdraw money from the private sector; all that printing money
does is to cause inflation.
These propositions are a re-run of the famous ‘Treasury view’ of
1929. By contrast, Keynes argued that demand can fall short of
supply, and that when this happened, government vice turned into
virtue. In a slump, governments should increase, not reduce, their
deficits to make up for the deficit in private spending. Any attempt by
government to increase its saving (in other words, to balance its
budget) would only worsen the slump. This was his “paradox of thrift”.
The current stampede to thrift shows that the re-conversion to
Keynes in the wake of the financial collapse of 2008 was only skin-deep: the first story remains deeply lodged in the minds of
economists and politicians.
But this story alone does not explain the conversion to austerity.
Politicians clamouring for cuts in public spending do not cite Chicago
University economists. They talk about the need to restore ‘confidence
in the markets’. The argument here is that deficits do positive harm by
destroying business confidence. This collapse of confidence may come
in several forms – fear of higher taxes, fear of default, fear of
inflation.
Deficits thus delay the natural (and rapid) recovery of the economy. If
markets have come to the view that deficits are harmful, they must be
appeased, even if they are wrong. What market participants believe to
be the case becomes the case, not because their beliefs are true, but
because they act on their beliefs, true or false ... ’
Lord Skidelsky, Financial Times, 16 June 2010