Labour’s recent economic policy positions highlight a curious rightwards drift under Corbyn and McDonnell
The chaos and dissent so obvious within the UK Labour Party since its 2015 General Election defeat has helped to cover up its actual dearth of policies. It is by no means incumbent on any Opposition to put forward a fully-worked-out roster of actual plans, especially at this relatively early stage of a parliamentary term. But so far little more than ‘anti-austerity’ rhetoric has emanated from the party since its leadership upheavals in the summers of 2015 and 2016. Even more intriguingly, what details we are now getting suggest that Labour is merely drifting in policy terms, or even moving rightwards since the end of Ed Miliband’s leadership. It is certainly not on the kind of left-wing trajectory that many members and supporters perhaps imagined when they signed up for Jeremy Corbyn’s leadership.
Labour’s sober demeanour is most obvious in the economics field. For one thing, Labour’s current overall posture on public spending might now be quite similar to Theresa May’s. John McDonnell, the Shadow Chancellor, has since March been committed to reducing the current deficit to zero over a five-year planning horizon. But given that the Chancellor Philip Hammond has just announced that he is significantly loosening budgetary policy, and that the Conservatives seek to reduce the overall deficit to zero only at some unspecified point over the next Parliament, that may not in practice give Labour much more room than Mr Hammond when it comes to spending on health, education, welfare and the like. Here the Conservatives’ new post-Brexit realism has closed up much of what difference there was between the parties, a situation that could potentially get even worse for Labour. The Government’s plans are now extremely vague, lowering the political costs of further electorally-motivated changes in the future. If Mrs May and Mr Hammond decide to drop even this new pledge – and the Conservatives in office have torn up all their others – Labour could be left high and dry, committed to spending much less than the government, since they might not then have the political capital or time to row back on their own promise to be quite so prudent.
One can see the same effect operating in most policy fields. The Government at the moment seems reluctant to guarantee the standing ‘triple lock’ on pensions, under which the basic state pension increases by the greater of price rises, wage increases or 2.5% every year. Mr McDonnell has now said that Labour definitely will commit to such a policy. Given the enormous progress made in reducing pensioner poverty over the past two decades, and the fact that older Britons are now one of the better-off groups in the population, using scarce resources to help richer citizens without means testing seems like a bizarrely retrograde version of the redistributive politics that Labour’s left claims to espouse. The same very odd logic holds when you look at tax policy, since the Shadow Chancellor has just agreed to back a large upwards shift in how much workers can earn before they are charged the higher 40% rate of income tax – another regressive measure, cutting taxes for the top 15% of earners, that Labour under Mr Miliband would probably have rejected.
Labour’s newly-regressive present stance can also be seen in its depressingly hard-line attitude to state surveillance, since the Opposition just inexplicably waved through the new Investigatory Powers Bill – arguably one of the most extensive extensions of government spying powers ever seen in the developed world. It is also clear in the party’s new attitude to Brexit: Labour members have been urged by Mr McDonnell, no doubt happy to see the repeal of European competition laws that rule out selective industrial assistance, to seize what he portrays as its enormous and exciting opportunities. Labour’s conservatism now even seems to extend to a desperate search for a new and more conservative stance on immigration, since despite Diane Abbott’s recent pro-immigration comments other Labour spokespeople now seem to imagine local trade union bargaining on wages and working conditions being used to reduce Britain’s attractiveness to migrants. This is yet another version of Mr Miliband’s face-both-ways emphasis on minimum wage enforcement and action on people smuggling that we saw during the last parliament.
Why has Labour seemed to become if anything more timid, more conservative, under Mr Corbyn? There would seem to be four plausible explanations. There is, firstly, perhaps just the desperation that comes from looking at Labour’s dire poll ratings. It is possible that they are just scrambling to get back to where they were in the last days of the Miliband interregnum. The second potential cause of Labour’s new conservatism is the party’s sheer want of front-bench talent. Mr McDonnell, for instance, has little economic experience, has never been much of a diplomat, and has never served in front-rank politics before. Sometimes that lack of sheer lack of practice gives him away, just as it did during the first days of his Shadow Chancellorship – when he signed up to George Osborne’s fiscal targets before being forced to back away from that commitment by howls of anger from within the Labour Party.
Another reason for Labour’s rightwards drift may originate within the party’s ongoing – but now quieter – civil war. Mr Corbyn’s and Mr McDonnell’s enemies, having been frustrated in their post-Brexit head-on assault on the leadership, have now carried their resistance underground. Many Labour MPs are simply waiting, as they see it, for the new leadership team to implode under the weight of its lack of ability and the inevitable factionalism that will emerge on the Labour left. So the Leader and Shadow Chancellor are simply being left to get on with things, in the expectation that they will fail to carve out any new political space at all. Fourth, and last, is the dawning realisation among some Labour activists that this small-‘c’ conservatism is exactly what Mr Corbyn and Mr McDonnell want and represent. As inheritors of Tony Benn’s alternative economic strategies from the 1970s and 1980s, it might just be that this Labour leadership prefers to adopt a cramped, shuttered attitude in an age when ‘open’ and ‘closed’ are more apposite descriptors for our politics than ‘left’ and right’. Narrow, nationalist, illiberal and autarkic, to this way of thinking a retreat from the EU, non-Keynesian economics that aim to change the structure of the economy more than the level of demand, and a stronger, more intrusive state are more than congenial to a Labour Party that is trying to slough off its European social democratic clothes forever.
Much will depend on whether Labour’s rightwards course is being caused by electoral tactics, incompetence, internal politicking or an entirely new Labour ethos of nationalistic populism. Just as the Conservatives risk much if their post-Brexit euroscepticism turns out to be false or misleading, so in this way Labour could alienate its last bastions of support: public sector workers, older left-leaning voters now prepared to take a fresh look at Labour after what they perceived as the ideological betrayals of the Blair years, pro-European urbanites and younger – but economically increasingly marginalised – middle-class professionals. British politics is in near-unprecedented flux. During this of all times, Labour seems determined to flirt with its own extinction as a national party of government at Westminster.
Glen blogs, in a personal capacity, at Public Policy and the Past, and can be followed on Twitter at @gsoh31. A longer version of this blog is available at http://publicpolicypast.blogspot.co.uk/2016/12/labour-is-moving-rightwards-not.html.