Following the launch of our new pamphlet at the Labour Party's conference in Liverpool this week, Patrick Diamond reflects on Labour's image, its internal strategic disagreements, and how transformational the Party's programme for the next election will be.
This year’s Labour Conference in Liverpool will be judged an unqualified success by party strategists. The Conference proceedings managed to exude 'confidence but not cockiness', projecting an image of a competent party conscientiously preparing for power, yet not taking victory at the next election for granted. That was certainly wise, not least because the electoral mountain Labour has to climb to secure an overall parliamentary majority remains enormous.
Nonetheless, there was an unmistakeable sense of a new dividing line emerging within the party this week: of 'transformers' versus 'consolidators'. The internal divisions inside Labour for much of the last century were viewed through the lens of Left versus Right. As such, the major ideological debate focused on the role of the state in the economy. In the immediate post-war era, the issue was how far Labour should extend the goal of nationalisation and public ownership, and the extent to which a government of the Left must intervene in the economy to further egalitarian justice and economic efficiency. Many of these questions resurfaced in the Corbyn years. Yet in the wake of the devastating defeat in 2019 followed by the coming to power of Keir Starmer, the party has appeared ideologically becalmed.
The new debate is not an ideological dispute about economic doctrine, but a strategic disagreement about how Labour should approach its next period in power. That division - ventilated during a fascinating Governing in Hard Times: Urgent Questions for the British Centre-Left [PDF 5,636KB]this week - is between 'consolidators' and 'transformers': those who believe Labour needs to set out a radical transformational programme for government, and those who argue the party must embrace a 'safety first' approach focused on sound management of the economy and delivery on the 'bread and butter' issues that most concern ordinary ‘working families’.
Of course, the ostensible division between consolidators and transformers might appear confected. Most political figures inevitably exhibit both mind-sets, depending on the dynamic of events, contingency and political circumstances. The astute politician is prepared to go with the grain of public opinion and to accept current governing realities, but always seeking to discern when windows of opportunity open up to pursue more radical change. Both Keir Starmer and Rachel Reeves’ speeches to the Liverpool Conference can be depicted as consolidatory and transformational. There was not surprisingly a strong emphasis on ‘iron clad’ fiscal discipline and economic stability marked by the remarkable endorsement of the Shadow Chancellor by former Bank of England Governor, Mark Carney.
Yet neither Starmer nor Reeves’ speech was a full-throated commitment to economic orthodoxy and the status quo. There was striking emphasis on Labour’s commitment to green investment and decarbonisation, the renewal of national infrastructure, a landmark house-building programme (including major reforms of the planning system) creating a generation of new towns, a fresh agenda for workers’ rights, accompanied by targeted tax rises levied on private school fees and non-doms.
There was rather less substance on improving public services, yet if such reforms were enacted, the impact on UK society and politics would be substantive. Starmer talked explicitly about breaking down barriers to working-class opportunity while focusing on how to rebuild security so that people could lead lives they have reason to value, a conscious echo of Harold Wilson and Tony Crosland’s ethic of social democracy. As such, the dividing line poses a fundamental question about what it actually means for a Labour Government to be transformational in the new hard times?
Does a transformational programme necessitate bringing a major segment of the national economy into the public sector? Is transformation concerned with a ‘progressive supply-side agenda’ to forge a neo-corporatist developmental state? Is transformation about injecting significantly higher levels of public expenditure into the welfare state and public services? Or is transformational change primarily focused on external policy, reconfiguring Britain's alliances abroad, rethinking the embrace of 'hyper-globalisation', seeking closer association with the European Union? The distinction between consolidation and transformation is by no means clear-cut.
A more apposite definition of transformation is the enacting of policy change that cannot be swept away by an incoming government, since it is permanently embedded within the institutional framework of British politics. A frequently aired criticism of the post-1997 governments is that their programme for power was superficial: it was too easy for Conservative-led governments after 2010 to reverse progressive achievements, not least in the form of cuts to public investment during the austerity era. There were exceptions, notably devolution to Scotland, Wales, and Northern Ireland, while in social policy, the introduction of the National Minimum Wage appears irreversible, at least for the foreseeable future. But there was little sense of a new governing settlement akin to 1945 (or indeed 1979).
The opportunity for Starmer's Labour is to create a new and lasting governing consensus in British politics which the current Conservative government has not been able to develop given the tergiversations over Brexit and its own ideological contradictions. If the 2008 financial crisis marked a major crisis of confidence in western market liberal doctrine, no major party in the UK polity has yet managed to define the terms of a new settlement, even if in the Corbyn era, Labour embraced more radical economic ideas.
The scope for transformation is for Labour to pursue a major recasting of the institutional framework in the UK polity, epitomised by the shift towards devolution and decentralisation, most notably in England, accompanied by an embrace of proportional representation that permanently alters the rules of the electoral game. Moreover, transformation in an area such as decentralisation is not merely about bold political rhetoric: it has to be matched by detailed policy commitments enabling the actual devolution of fiscal powers, flexibility for local governments to borrow for investment, and to build sub-regional institutions freed from central interference so that our cities and towns have powers comparable to other European liberal democracies.
Even so, it is hard to escape the conclusion that Labour’s commitment to the new politics is somewhat half-hearted, while there are substantive disagreements over key proposals, as illustrated by the Shadow Cabinet’s reaction to the Brown Review. If the mantra is three priorities - 'economic growth, economic growth, economic growth' - would a Labour government actually invest its political energy and resources in long-term institutional reform?
Given the current configuration of geo-political risks, the burden imposed by post-Brexit adjustment and the ongoing impact of international economic constraints, institutional reform of the British state may well be the most transformational agenda realistically on offer. As such, the party has some way to go in defining a programme for power that will permanently reshape Britain.
Professor Patrick Diamond is the Director of the Mile End Institute and former Head of the Number 10 Policy Unit. His latest book is Labour's Civil Wars, which was co-authored with the late Giles Radice and was recently updated to assess Starmer's leadership of the Labour Party.