New Labour’s legacy and the challenges still facing the centre left

By James Maker

At the forthcoming general election the issues that delineate progressive politics – eradicating poverty, tackling social inequality, and creating a fairer and more sustainable society – will be at the heart of the electoral debate. Both Labour and the Conservatives have already begun to set their respective stalls on how they intend to remedy these social disfigurements.

The proposal of the supposedly ‘progressive’ Conservatives presents a compelling threat to those who wish to see public policy abolish poverty, and close the vast chasm in social inequality. Since assuming the leadership of his party in 2005, David Cameron has embarked on a modernising agenda. He seemingly consigned the Thatcherite motif that ‘there was no such thing as society’ to the past, embracing a more sympathetic, and pro-social Conservatism. He has sought to build a ‘Compassionate Conservative’ narrative that embraces democratisation and localism, denouncing the over centralisation of power in the state as an impediment to tackling poverty.

Those of us on the centre-left would welcome the advocacy of democratisation in tackling poverty and social inequality. It can be deployed as a tool to buffer the further integration of the market into civil society. Cameron, however, invokes this theme to rejuvenate the Thatcherite conception of negative liberty and the primacy of the market over the state. He presents the freedom and ‘responsibility’ of the individual to command one’s own destiny as the centrepiece of his localism. That rejects the interventionist role that collective action of inter-dependent individuals can have in creating a more cohesive and equal society. Instead, the domineering state that has created a spawn of ‘multiple perverse incentives’ must be pinned back, and the freedom of the individual enhanced. Compassionate Conservatism thus deprecates the empowering role the state can inhabit through fiscal redistribution and universal public service procurements in favour of a further injection of the profit incentive through ‘community entrepreneurship’.

The dangers posed by the right have unravelled more acutely in the aftermath of recession. After the short-termism, greed and immorality of the financial sector brought the economy to the brink of collapse, they enunciate their economic neo-liberalism as the sole remedy to the financial crisis — the same orthodox that created the mess. Monetarism reigns supreme again through the rhetoric of fiscal responsibility and deficit reduction in order appease the short-term aims of Cameron and George Osborne’s chums in the City.

Residualising the coverage of welfare provision will figure prominently in the Conservative fiscal reduction programme. They aim to cut Tax Credits and Child Trust Funds to medium earners and target SureStart on the poorest. Such a discretionary extension of means-testing welfare provision remains incredibly divisive in society, driving a wedge between the mendicants and the taxpaying public, undermining public support for the elimination of poverty and inequality.

New Labour’s persistent use of means-testing and redistribution by ‘stealth’ have already hardened public attitudes towards the plight faced by the disadvantaged and impoverished, as the 2010 British Social Attitudes Survey exposes. Conservative plans to residualise the scope of the welfare state will intensify these negative public perceptions of welfare institutions, encouraging severe financial retrenchment and further corroding the sense of mutual moral obligations towards cohabiting citizens. It is not the targeting of resources on the poor that is needed, but extension of universality to enhance the reciprocal relationship between taxpayers and welfare receivers that bonds both low and middle income groups to the common institutions of the welfare state.

Conversely, but unsurprisingly, as the poor potentially become more stigmatised, segregated and entrapped in cycles of deprivation, Cameron financially rewards the top echelons of society. Their tax plans gift £1.2bn to the top 2% of wealthiest estates in inheritance tax; an increase in tax relief on pensions will hand a further £3.2bn to the top 1.5% of earners; and they remain committed – at some point – to reverse Labour’s 50p income tax rate. Moreover, their tax breaks for married couples will benefit an estimated 4% of the population – if they can actually devise a coherent and consistent policy. As Polly Toynbee pertinently put it in The Guardian recently, the economic and social programme of the Conservatives amounted to a form of class war ‘carried out by Cameron on the poor’.

In the face of this public smokescreen built by the Conservatives, Labour lacks a sustained record on preventing poverty and inequality. Whilst the Government should attract praise for bringing the subject of poverty back to the top of the political agenda, making significant inroads into child and pensioner poverty up to 2005, instead of facing up to the difficult choices required to implement sustainable results they fudged the most important socio-economic challenges in favour of the mythical electoral bounty of ‘middle-England’ — a point, sadly to say, the recent publication of the National Equality Panel report An anatomy of economic inequality in the UK vividly displays.

As the rich escape scrutiny through tax havens, the rhetoric of ‘wealth-creation’ and the ‘trickledown’ effect, taxation became more regressive, marginal tax rates on Tax Credits penalised the poor seeking work as a route out of poverty, social security benefits remained below the poverty-line for those suffering economic hardship, and education became more marketised and selective.

New Labour thus chose an inherently biased notion of ‘rights and responsibilities’. The poor are demonised for their welfare dependency, benefit fraud and anti-social behaviour. The latest musings of the government are to offer cash incentives to whistleblower citizens that tell tales on ‘benefit cheats’ – yet another example of the neo-conservative entrapment Labour’s welfare-to-work strategy finds itself in. There remains no discussion on how to enforce, or even persuade the affluent to pay existing or higher taxes, to discourage them from purchasing their way out of common institutions such as the NHS, or how to consume less to halt the march of global warming.

After the progressive policy moves of the 50p tax rate and windfall tax on bonuses took tentative steps towards addressing these imbalances towards the well-off and super rich, Labour has reverted back to the doctrine of ‘meritocracy’ that has defined their period of governance. Under pressure from the Blarite fundamentalists within the Cabinet, and his own misguided electoral beliefs, the Prime Minister speaks of “breaking the glass ceiling” by improving social mobility and expanding the middle class in a society of “aspiration”. This narrow focus of equality of opportunity through meritocracy and social mobility ignores the structural inequalities that plague our society, and makes these remedies to poverty and inequality redundant. As Michael Young wrote in The Rise of the Meritocracy in 1958, “the Labour Party was created to change society in such a way that there is no poverty and deprivation from which to escape. Meritocracy only offers shifting patterns of inequality”.

It is only by rediscovering the social democratic principle of equality of outcome that will allow Labour to truly equalise life chances. The acclaimed research of Professor of Sociology Gösta Esping Andersen has shown that rising income inequality (at present in Britain the richest 5th of households receive 51% of all original income while the bottom receives 3%) severely jeopardises the ‘opportunity society’ structure.

Reversing the trend towards increasing income inequality and mounting poverty requires a progressive tax regime that doesn’t penalise the poor and reward the rich; tax evasion to be treated as a criminal offence in the same manner as benefit fraud is; a comprehensive education system that reflects its founding principles of equality of access, not just selection on ability or the aptitude of the privileged and wealthy to benefit most from marketised provision; and a commitment to the continuation of funding, and extension, of early intervention programs such as SureStart that are critical to determining the life chances of children from all social backgrounds.

With the exception of this latter policy, Labour’s electoral programme falls short on the objectives of the centre-left. However, it must be remembered that the prospect of a Conservative Government, and the subsequent implementation of their regressive policy programme, harbours a more potent danger to society than the Government’s. Whatever the electoral aftermath may be, if the progressive-left is to achieve its core beliefs of a more just, fair and sustainable society, distinct from the meritocraticism of the past twelve years, it will require its political leadership to display the degree of ideological conviction the New Right displayed during its ascendency in the 1980s.

This is what makes organisation such as Compass, which challenges the prevailing politico-economic orthodoxies, so important. As Jon Cruddas recently told the New Statesman:

“What matters is the real issues – of political economy, the future of social democracy, what’s happening on the right . . . It’s fair to say that Compass, myself and a few others will make sure that we have a contribution to make when the time (post-election) comes.”

A new post-electoral agenda must be committed to building the Good Society by looking beyond short-term electoral populism of a ‘what works’ continuation of neo-liberalism and neo-conservatism with a sprinkling of social justice. The Labour Party must aim to be symbolic of a united centre-left that doesn’t simply go with the political hegemony, but seeks to execute an agenda that creates its own.

This article was also published by Compass.

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