Labour’s Identity Crisis

Labour’s Identity Crisis

The Labour Party’s biggest challenge is the lack of a credible alternative to the Conservative-Liberal narrative of crisis and austerity.


Autumn in England means drizzly mornings, dark afternoons and a quick snapshot of the balance of political forces as the main parties all hold their annual conferences. This year also brought a cruel lesson in the frustrations of opposition. The Labour Party conference in Manchester was mesmerized by the final act of a fratricidal struggle between the brothers Miliband, and though Ed triumphed in the contest for party leader, his older brother David’s histrionic departure, not just from the conference but from frontline politics, dominated the headlines. It wasn’t until the announcement of his shadow cabinet that Ed Miliband began to suggest what kind of opposition he intends to offer to the Conservative–Liberal Democrat program of massive budget cuts.

Meanwhile, at the Tory Party Conference in Birmingham George Osborne, who will someday inherit a baronetcy (and several million pounds) from his father and currently serves as Chancellor of the Exchequer, announced the elimination of child benefits—monthly payments made to all families with children—for households where either parent earns more than £44,000 ($70,000) a year. He also announced that total welfare payments to any family—which increase with the number of children—would be capped at the level of the national median income, £500 (about $800) a week.

Apart from underlining the government’s ability to suddenly change the terms of the debate, Osborne’s moves, though greeted with outrage by Labour and most of the left, showed tremendous cunning. Given the seemingly universal acceptance of fiscal austerity as the only feasible response to Britain’s trillion-pound government debt, continuing to hand out £1,000 a year (for the first child—and £700 for each additional child) to parents, regardless of their income, is hard to justify. The next day’s Daily Mail headline, "Millionaires Should Still Get Child Benefit, Says Miliband," is a fair indication of Labour’s difficulties. And Tory culture secretary Jeremy Hunt’s pronouncement that "if people are living on benefits, then they make choices but they also have to have responsibility for those choices," explaining the government’s plan to limit total benefits regardless of the number of children in a household, struck a note of right-wing populism that left Labour sounding like flat-footed defenders of an unpopular status quo.

What about the Liberal Democrats? you ask. The party’s first conference in power in nearly a century saw former Nation intern Nick Clegg, now deputy prime minister in the coalition government, declare that his party had "no future" as "a receptacle for left-wing dissatisfaction with the Labour Party." Yet Liberals were happy to claim credit for postponing—hence making slightly less likely—a commitment to build a new generation of British nuclear-armed submarines. All fifty-seven of the party’s MPs also signed a pledge to oppose any move to increase university tuition fees—a promise that in many cases lasted less than a month.

During the summer Ed Balls, another contender for the Labour leadership, made repeated, essentially Keynesian attacks on the Conservative-Liberal argument that immediate and drastic cuts in public spending were inevitable, leading some inside the party to hope that whichever Miliband ended up as leader would appoint Balls as shadow chancellor. But Ed Miliband, perhaps fearing a replay of the toxic rivalry between Tony Blair and his chancellor, Gordon Brown (or perhaps swayed by the fact that in the ballot of Labour MPs for a place in the shadow cabinet, Balls only finished third, fifty-three votes behind his wife, Yvette Cooper), opted instead for Alan Johnson, a Blairite veteran who’d been secretary of education under Blair and secretary of health and then head of the Home Office under Brown. Unlike Balls and Cooper (and Ed Miliband and David Cameron), who all studied politics, philosophy and economics at Oxford, Johnson ended his formal education at the age of 15, when he left school to stack shelves in a supermarket before becoming a postman at 18 and then slowly rising through the ranks of the Labour Party and the Communication Workers Union.

Orphaned at 12 and brought up by his older sister in public housing, Johnson is unlikely to see the government’s attack on benefit recipients as a purely theoretical matter. And though he may lack academic credentials, he also comes without the baggage trailing anyone (like Balls—or Miliband, for that matter) who worked under Gordon Brown in the Treasury during New Labour’s long love affair with the banking industry. Johnson wasted little time ripping into the opposition, calling the coalition’s plans "more damaging than Thatcher" and pointing to Ireland, where repeated austerity budgets have strangled any economic recovery, as an illustration of the perils of "cutting too deep too soon."

But neither he nor anyone else in the Labour Party has offered more than reflexive opposition to cuts aimed at the most vulnerable, and that, however well intentioned, just isn’t good enough. As long as Labour accepts the Tory-Liberal consensus that deep cuts are inevitable, and that the only territory up for debate is the speed or scale or "fairness" of the process, voters may well prefer the government’s promise of a short, sharp shock to the prospect of prolonged torment under Labour.

Miliband’s defenders point out that the government coalition can’t be effectively countered by an opposition still riven by a decade of internal warfare. Healing his own party has to be Miliband’s first priority, which is why his shadow cabinet—Labour’s government-in-waiting—has so many MPs who voted for David instead of Ed.

The problem is that by the time Labour gets a chance to make its case to the voters, it may be too late. Because if Cameron’s early moves are any indication, the Tory program goes far beyond mere austerity. Taking the child benefit away from the relatively well-off will indeed save money—about £1 billion a year. But the real point about the child benefit is that it, like the National Health Service, is universal—a part of the welfare state available to rich and poor alike. Turning universal benefits into services that cater only to the poor is the first step toward making them politically expendable (which might be why the right in the United States keeps trying to turn Social Security into a poverty program).

The tactic is to pick off the least defensible—or least popular—portions of the welfare state; the strategy is to slowly, stealthily dismantle the whole edifice. With their proposals to turn public schools into "free schools" detached from local government control (and in some cases turned over to private corporations) and allow hospitals to leave the NHS to become "not for profit" corporations (whose nonmedical services can then be contracted out to for-profit American corporations), a pattern begins to emerge in which the assets of the state are slowly but surely turned over to the private sector. The justification will be efficiency, not ideology, but the process is liable to prove irreversible. The latest announcement that the cap on university tuition fees will be removed, creating a market in higher education, fits this pattern—as does the Liberal-Democrat U-turn on what was one of the party’s core policies.

Labour’s biggest handicap in opposing such developments is its own record in government, when both Blair and Brown repeatedly turned to the private sector to build schools, clean hospitals, run railroads, design IT systems, detain undocumented immigrants and design and operate prisons. But the lack of a credible, compelling alternative to the Conservative-Liberal narrative of crisis and austerity is, in the long run, even more damaging.

The economic case against austerity is familiar—and not just because American liberals like Paul Krugman and Joseph Stiglitz keep making it with eloquence and precision. John Maynard Keynes may be a prophet without honor in his own country, but Martin Wolf, columnist for the Financial Times, card-carrying centrist and author of Why Globalization Works, has been just as forthright in pointing out that Britain’s ratio of debt to GDP is below its historical average—and that whatever the politicians and the Murdoch press may say, the markets remain "remarkably relaxed" about Britain’s deficits, with ten-year bonds yielding only about 3 percent. Wolf also discounts the suggestion that such calm is a credit to the government’s commitment to austerity, noting that borrowing costs have fallen by only 0.2 percent since the election.

What’s lacking is the political will—or to use a much abused word, ideology. David Cameron is clever enough to cloak his dismembering of the welfare state in his devotion to "the Big Society," a right-wing communitarianism that is easy to ridicule but that serves the purpose of insulating his government from the dog-eat-dog social Darwinism of Margaret Thatcher. Perhaps it’s worth reminding ourselves that, economics aside, Keynes’s appeal was chiefly as an alternative to Marx. Like the rest of the Western left, Labour has yet to construct a political narrative that acknowledges the role of individual aspiration and the market but that also addresses the desire for solidarity and shared purpose. It may be unfair to expect Ed Miliband, a young man who won’t even celebrate his forty-first birthday until Christmas Eve, to square that circle. But until someone does, the Labour Party will continue to be defined by what it opposes rather than by what it offers.

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