PAUL ANDERSON

New Statesman & Society, 9 February 1996

Shadow foreign secretary Robin Cook didn’t really want his job and is now rumoured to be about to quit politics altogether. But Paul Anderson finds him as keen on taking on a ridiculous workload as he ever has been

For a man reported last week by the Daily Express to be so fed up with being snubbed by Tony Blair that he wanted to quit politics, shadow foreign secretary Robin Cook seems remarkably happy with his lot.

He is sitting in his Westminster office overlooking Whitehall, answering questions as confidently as ever. The phone rings three times as we talk, and twice it’s the leader’s office asking for help. Whatever the tensions in the Labour leadership as the election comes up, Cook is definitely in the loop. Blair knows that he needs Cook to keep the party’s soft left on board – and also for his remarkable skills in presenting arguments. Cook will have an exceptionally high-profile role in the next couple of months, simultaneously leading Labour’s response to the Scott report on arms sales to Iraq and pushing his party’s position in the run-up to the intergovernmental conference on European union. And he appears to relish the prospect.

Cook’s most pressing priority is Scott. He has been Labour’s leading protagonist on the arms-to-Iraq scandal since 1992, when as trade spokesperson his devastating parliamentary performances played a decisive role in forcing Prime Minister John Major to set up the inquiry under Lord Justice Sir Richard Scott, whose report will finally be published next week. Cook kept the Scott brief when he was shifted – against his preference – to the shadow foreign secretary’s job in 1994.

The report, which runs to four volumes and 2,000 pages, will be released at 3.30pm on 15 February – and the government has decreed that it will not be made available to the opposition (let alone the press) in advance of publication, even though ministers received copies this week.

“It’s a blatant attempt to manipulate media coverage in the government’s favour,” says Cook. “The Conservatives are desperate to limit the damage done by Scott, which is why Geoffrey Howe and others have been trying so hard to rubbish the inquiry. But they simply cannot get away from the fact that the scandal Scott has investigated took place under a Conservative government and involved Conservative ministers.”

Labour is sparing no effort to get the government to allow it to see the report before publication – and in the meantime is making as much as it can of leaks of early drafts that have already appeared in the media. Cook is particularly scathing about the extracts published by the Sunday Times last weekend, in which Chief Secretary to the Treasury William Waldegrave was excoriated by Scott for misleading parliament and the public about defence-related exports to Iraq when he was a junior Foreign Office minister. “If the final report includes anything like that sort of criticism, Waldegrave should resign,” he says.

The parliamentary debate on Scott, likely within a week of publication, will be a crucial set-piece, comparable to the Westland debate ten years ago, and Cook knows he cannot blow it. But the Tories are on the defensive, and they know that the best they can hope for is to weather the storm.

By contrast, on Europe, his other big brief, there is a surprising optimism on the Tory benches. John Major’s strategy since last summer’s leadership election, of marginalising the hardcore Eurosceptic right in the cabinet while getting the government to adopt a populist nationalist anti-European rhetoric, has served its cynical purpose better than most commentators expected. Although the most Europhile Tories, including Chancellor Kenneth Clarke, deplore it – and there remains a massive split even in the cabinet on economic and monetary union – there is growing confidence among the rest that they now have a good chance to make political capital out of Labour’s supposed “federalism” and willingness to kow-tow to Brussels.

Cook is unworried. He spent his first year as shadow foreign secretary repositioning Labour on Europe, and believes that the party policy he forged is more than robust and popular enough to withstand any Tory assault. “For a start,” he says, “it is simply absurd to describe us as federalists. Labour’s vision of Europe is of independent member-states voluntarily coming together to cooperate. We do not want to surrender our independence to some kind of super-state. At the same time, however, Britain will never get the best deal from Europe by remaining isolated. Being constantly the odd one out is a very difficult position to bargain from.” The new Labour line is a skilfully negotiated compromise between the party’s Eurosceptic and Euroenthusiast wings – and it looks a lot more likely to hold until the election than the Tories’ fragile peace. Labour’s Euro-rebels have been notable by their silence in the past year. But what does the Labour consensus mean in practice? To start with the most controversial issue for both parties,

Labour is in favour of economic and monetary union (EMU) – but not on any terms. It would back it only with the explicit consent of the British people (not necessarily a referendum: a general election “in which the public had a clear choice and the result was clear-cut” might settle it) and only at a reasonable price.

“I don’t think that anyone should underrate the very strong political will behind the creation of a single currency on the part of French president Jacques Chirac and German chancellor Helmut Kohl,” says Cook.” But there are undoubtedly problems with the Maastricht timetable for EMU. We can see the benefits of a single currency, but it can only work if there is real economic convergence among the participating countries – in terms of productivity, innovation and output, as well as public-sector deficits and inflation. Unless we get that, there has to be a question-mark over whether we will be able to give up for all time the right to devalue. Devaluation has been the way that Britain has compensated for its failure to compete over the past 30 years. It is not a strategy, but it does enable you to compensate for the failure of strategy.”

If there are echoes here of Bryan Gould and Peter Shore, the anti-European Labour Keynesians who were the most trenchant devaluationist opponents inside the party of its pro-Europe turn in the late 19805, they are faint. For Cook, the goal is not a go-it-alone economic policy, but a coordinated European attempt at reflation along the lines advocated by former European Commission president Jacques Delors in his (now-abandoned) programme to compensate for the Maastricht treaty’s deflationary consequences.

“For me the most important challenge facing Europe is how we reconnect with the peoples of Europe,” says Cook. “The problem with Maastricht is that the political elites became uncoupled from the concerns and aspirations of their peoples. We have got to get Europe back on to a people’s agenda, and the first priority is jobs.”

Sadly, he goes on, the Delors package has been lost – “largely because of sabotage and obstruction by the British Conservative government” – and there can be no return to its proposals: “They’re now four years old and Europe’s economies have moved on since then.” But “coordinated action to stimulate the economies of Europe and get them moving again” remains imperative.

“Maastricht committed every country to get its deficit down to 3 per cent, in other words to deflate. Delors rightly recognised that we needed to take compensatory measures if this was not to affect demand. In the past three years, Europe has been straining to meet the deficit criteria, but without any means to maintain demand. We have got to get that kind of reflationary package in place again to tackle unemployment.”

Not that some sort of Euro-Keynesian demand management is the whole story: there’s also the question of the quality of the jobs that Europe creates. Here, says Cook, “the specific issue for us is the government’s refusal to sign up for the social chapter. I am greatly entertained by the Tories’ intention to fight the next election promising that people in Britain will have fewer rights and worse working conditions than people on the continent.”

The social chapter, he continues, fits perfectly with Labour’s commitment to a “stakeholder society”, the “big idea” embraced by Tony Blair last month as Labour’s over-arching theme. “The Tories are barking up the wrong tree if they claim that the social chapter will compromise competitiveness. Its key commitment is to more consultation of workers. A workforce that knows the strategy of a company and is involved in drawing it up will be more committed to it and therefore more competitive. Continental companies with a culture of consensus and consultation have been able to implement long-term investment strategies – unlike most companies in Britain, where we have a culture of confrontation between management and the workforce and a tradition of keeping the workforce in the dark.”

If EMU and the social chapter are likely to be the European issues that figure most prominently in the election campaign, the most pressing question now is the forthcoming intergovernmental conference, the “follow-up-to-Maastricht” negotiations that will attempt to reach agreement on reform of the European Union’s political institutions and enlargement of the EU to include eastern Europe.

On the institutions, Cook says that the principle of Labour policy, set out in a document passed by its annual conference last year, is that “the European Commission should be accountable to the European Parliament, while the Council of Ministers should be more accountable to national parliaments”. Both national parliaments and the European Parliament should therefore be given more powers. Labour rejects the idea of a “two-tier” or “a la carte” Europe; wants majority voting in the Council of Ministers extended to cover social affairs, the environment and industrial policy, but not home affairs, taxation or security policy; and backs a simplification all round of the EU’s decision-making procedures.

But it is enlargement to the east, initially to Poland, Hungary, the Czech Republic, Slovakia and possibly Slovenia, that Cook thinks is the most important task of the IGC. “We need to ensure that the countries of central Europe go down the road of postwar western Europe, not that of the post-communist Balkans,” he says, although he is a realist about the problems of enlargement, both for existing members and for the central European countries. There is no way the existing EU could cope with enlargement without reform, he says: in particular, and the Common Agricultural Policy has to be radically changed if the demands of eastern-central Europe upon it are not to prove intolerable. On the other side, the east-central European countries will find the shock of opening up their inefficient economies to western European competition too much to bear if it is not carefully managed.

“Both sides need a period of adjustment,” says Cook. “One possible way forward is to put some more rungs on the ladder, to allow the countries of eastern-central Europe more gradual entry to the EU – so they could join a political union that is not a free-trade area, for example, and could then join a free-trade area without signing up for some aspects of economic and monetary union. Enlargement also means looking seriously at the EU’s institutions, which are still to a large degree those of a European Community of six and are not going to work with an EU of 26. We have to make sure that the institutions work more effectively and efficiently, and we need to improve democratic accountability.”

All of which amounts to a position as comprehensive as anyone would want, and there are few Labour dissidents who are prepared to break ranks on it this side of a general election. In the longer run, however, the tensions inherent in Labour’s Euro-policy could provoke real controversy. Even now, Labour’s Europhiles talk sotto voce of the incompatibility of EU enlargement and a Europe-wide strategy for jobs, while its Eurosceptics are uneasy about how far a Labour government would insist on its tough line on convergence conditions for EMU.

In other words, Cook has done the business in opposition – which is no mean feat given the depth of Labour feeling on Europe in recent years. In power, however, the story could be very different.

New Statesman & Society, 2 February 1996

The political philosopher John Gray has just published a pamphlet arguing that social democracy is obsolete. Paul Anderson finds out why

It isn’t easy in Britain to succeed both as an academic political philosopher and as apublic intellectual. But Oxford don John Gray has managed it with apparent ease for more than a decade.

He made his name in his thirties as the most urbane and sophisticated intellectual adherent in Britain of the early-1980s new right – but it was as a critic of its nostrums that he gained his current prominence. In a series of essays in the late 1980s and early 1990s, he moved further and further away from the neo-liberalism he had once embraced. Since he published his book Beyond the New Right in 1993, he has been a regular on the Guardian‘s op-ed pages and a willing participant in all sorts of left-leaning conferences and seminars.

Now, though, the new right’s most articulate renegade has sprung a new surprise. Just when his lazier admirers thought he was safe for Blairism, he has written a tract that consigns social democracy – a term he uses to cover everyone in British politics from Tory wets like Ian Gilmour to Labour left-wingers like Peter Hain – to the proverbial dustbin of history. “The postwar social-democratic settlement in Britain, and indeed in most other west European countries, has ceased to exist,” he says, “and it is now irrecoverable.”

It’s not that he has returned to his new-right past. The argument of After Social Democracy, published this week by the think-tank Demos, is anything but sympathetic to the neo-liberal project: indeed, Gray’s starting-point is the exhaustion of the free-market ideology that gripped Britain in the 19803. His case, however, is that the mainstream left alternative to that free-market ideology is just as worn out.

“The new realities that spell ruin for the social-democratic project are the billions of industrious and skilled workers released on to the global market by the communist collapse and the disappearance of any effective barriers to the global mobility of capital,” he writes. “In this changed historical circumstance, the central economic programme of social democracy is unworkable and social democracy itself a bankrupt project.”

Part of this position is, of course, accepted wisdom even on the mainstream left. Ever since the failure of Francois Mitterrand’s attempt at a radical Keynesian reflationary programme in France in the early 19805, the majority of thinking social democrats have recognised that the mobility of capital now makes it impossible for medium-sized nation-states to go it alone on macro-economic policy. And in the past five years, there has been a growing consensus, on the left as on the right, that western Europe already faces a serious challenge from the “tiger” economies of east Asia and will soon have more competition from high-skill, low-wage former-communist countries.

What makes Gray’s perspective different, however, is his insistence that there is no social-democratic way out. For a start, he dismisses the idea that a federal Europe could act as a counter to the forces of globalisation – the basis upon which most west European social democrats, including the British Labour Party, have backed “ever-closer union” – as “hopelessly Utopian”. “Social-democratic politics cannot be recovered at the level of European institutions,” he says. “Since the Maastricht treaty, Europe has taken a neo-liberal turn. Maastricht’s deflationary consequences make the whole federalist project difficult if not impossible to legitimate democratically – and I can’t see that changing. The idea that social-democratic institutions that have gone into decline at national level can be revived at the level of Europe seems to me to be a mirage.”

He is equally scathing about the idea, common in Labour circles these days, at least partly because of the influence of Will Hutton’s The State We’re In, that western Europe provides the British left with a model of capitalism that it can import wholesale. The “Rhine model of capitalism” is in trouble, says Gray, and in any case it is not really social-democratic. Most important, “it relies on cultural traditions of consensual managerial politics that are absent in the individualist Anglo-Saxon model,” he says.

So what is the alternative? Gray favours an approach he calls “communitarian liberalism”, an idea rooted in the anti-rationalist thinking spelt out in his philosophical work, most recently in the book Enlightenment’s Wake. Like all communitarians, he rejects the abstract individualism of most liberal political theory (which is also assumed by most social-democratic perspectives on social justice): people cannot be understood as atomised individuals but are essentially social beings, rooted in families and communities. At the same time, however, he also rejects the view of more extreme communitarians that individual autonomy is no more than a myth.

“Communitarian liberalism departs from individualist liberalisms in that it conceives of choosing individuals as themselves creations of forms of common life,” he writes in the pamphlet. “It rejects the libertarian view that individual choice must always be paramount over every other human need and interest. It differs from conservative and neo-traditionalist communitarianisms by acknowledging the strength and urgency of the need for individual autonomy. Few of us are defined by membership of a single, all-embracing community, and there is no going back to any simpler, ‘organic’ way of life. It differs from social democracy by rejecting the egalitarian imposition of a single conception of justice in all contexts of economic and social life.”

Gray says that what is most important about communitarian liberalism in public policy terms is its insistence that market freedoms have a purely instrumental value, as a means to individual and community well-being. Where the impact of markets on individual autonomy or community life is disabling, competition must be limited. And where the popular consensus is that fairness demands the exclusion of the market – for example in health-care and education – the market should be excluded.

All of which is fine where there is a popular consensus on what is fair, but what if there isn’t – as with selection in schooling (which Gray favours) or welfare reform, where there is both a growing consensus that the social exclusion created by mass unemployment must be ended and also radical conflict over the best means of doing it? For Gray, there’s no point in appealing to some overarching notion of what is just: it’s a matter of conflicting ideas of fairness battling it out politically, appealing to common sense, negotiating compromises if necessary and resolving issues where compromise is impossible (and there will inevitably be many) through majoritarian decision-making.

On the future of the welfare state, for example, Gray argues that common-sense notions of “just deserts” rule out the idea of a citizen’s income as a means of ensuring social inclusion – it would be generally seen as giving people “something for nothing” – but make attractive the other much-touted welfare innovation, a compulsory savings scheme to fund pensions and other benefits. But he accepts that advocates of citizen’s income can appeal to different common-sense notions of fairness, and that, in the end, the only way of resolving the conflict is through collective political choice.

” I think it is crucial that we give greater weight to the political sphere than much recent political thought does,” he says. “Squeezing down the democratic domain to a very narrow space by trying to hive off political decisions to market forces or legal arbitration simply does not work. And to give greater weight to the political sphere, we need to make our political institutions, particularly political parties, more representative. I am strongly in favour of electoral reform, not as some subordinate element in a programme of constitutional reform, other parts of which would have the effect of stripping the political realm of its significance, but as the necessary condition of a new political settlement. The Charter 88 view of constitutional reform, valuable as it was under Thatcherism, is animated in part by a legalist conception of government in which the most important thing is to protect rights-holders from collective decision-making. The idea that these important areas of human well-being should be removed from the political process is a fundamental error.”

So does Gray see any sign that British political discourse is taking on board his perspective? He points to the output of Demos and the writing of Anthony Gid-dens, and says that the current debate over the lessons to be learned from the east Asian “tigers”, however crude it has been, “has at least displaced the parochialism of British political culture”. But, he goes on: “There’s a notable cultural lag in British political life, partly accounted for by the stubborn strength of fixed positions in our major parties. Most people are still tracking a world we have lost.”

WHAT’S IN A WORD?

The British left is uneasy with the idea of “social democracy” – but it needs to take it, and reports of its demise, deadly seriously, writes Paul Anderson

“Social democracy” is not an easy term to throw around in British politics. In most of continental Europe, outside Leninist circles, it has long been more-or-less synonymous with “socialism”-and it used to be in Britain too. For most of the past 40 years, however, it has meant something quite different here.

No matter that, in continental European terms, Labour has always been a social democratic party, with its left as deserving of the label as its right-from the late 1950s until what became the Social Democratic Party split from Labour in 1981, the tag “social democracy” functioned in Britain as a means of distinguishing left and right in the Labour Party.

The right, who called themselves social democrats, believed in a mixed economy, Keynesianism and the Atlantic alliance; the left, who called themselves democratic socialists, wanted more nationalisation and tended to be sceptical about Atlanticism. (The other great foreign policy question, Europe, was not a defining feature at first: both camps were split.)

In practice, the differences were of degree rather than of kind: as the experience of the 1964-70 and 1974-79 Labour governments went to show, what “social democrats” and “democratic socialists” did when they got into government and confronted the real constraints on their freedom of action was pretty much the same. But at least the nomenclature served as shorthand for real political divergences. After the SDP left Labour, “social democracy” became little more than a term of Labour Party abuse.

For several years, Labour loyalists, regardless of their views, described themselves as “democratic socialists”: not even the most right-wing Labourites dared describe themselves associal democrats. Meanwhile, the SDP under David Owen abandoned most of the policies that had once beenthedefiningfeaturesofLabour’sself-styledsocialdemocratsinfavourofanout-and-out neo-liberalism.

Recently, however, linguistic sanity has made a comeback. Although Neil Kinnock and John Smith were reticent about calling themselves social democrats, Tony Blair is not. Increasingly, “social democracy” stands in British political discourse not for the views of a faction of the Labour Party (let alone those of a small centrist splinter party) but for the broad approach to economic and social policy .adopted by Labour and its sister parties in western Europe and the rest of the industrial world since 1945.

But that’s just the beginning of the problem. If it’s now more acceptable than at any time in 40 years to describe Labour as a social democratic party, what social democracy means in practice has changed a great deal in the past 20 years.

Until the mid-1970s, if you stripped away the British left’s difficulties with the words, what it meant to be a social democrat was simple. You backed broadly Keynesian economic policies to maintain full employment, egalitarian taxation, expansion of the welfare state, corporatist management of industrial relations and a substantial state sector in the economy.

But then something started to go badly wrong. In the wake of the first oil shock, social democratic governments throughout Europe found themselves facing crises of inflation and unemployment simultaneously-just what was not supposed to happen with Keynesian economics. One by one, they were forced to adopt austerity policies that owed more to the new right than to orthodox social-democratic thinking. The final straw was the collapse of the French socialists’ Keynesian expansionist experiment in 1983 after the revolt of the financial markets. Since then, there have been few social democratic governments in the west European heartland of social democracy-and not one anywhere in the world has dared to mess with the imperatives of global capital. Most have adopted prudent, privatising economic policies barely distinguishable from those of the right.

So is social democracy dead, as John Gray and others claim? Certainly, 1960s-style “Keynesianism in one country” has few advocates anywhere. Nor are there many enthusiasts for corporatism these days outside those countries – notably Germany – where it is culturally entrenched.

But the notion that Europe, with its extra weight in the world economy, could take over from the medium-sized nation-state as Keynesian manager is still just-about alive. Despite the EU’s effective abandonment of the Delors plan to compensate for the deflationary effects of monetary union under the Maastricht treaty, there is still some hope in European social democratic circles that the Eurokeynesian dream can be revived.

There are also signs of life in social-democratic redistributive taxation, despite the now-general fears of “taxpayer revolt” that have been stoked by the scale of welfare payments in the context of mass unemployment and an ageing population. In an insecure era, the argument goes, taxation fo rwelfare spending will regain popularity.

Is all this clutching at straws? Gray is not alone in thinking that it is – but we won’t really know until a social democratic party wins an election in one of Europe’s bigger countries. As things stand, the most likely place for that to happen is Britain. It’s not just here that Tony Blair’s progress will be noted with interest.

Paul Anderson, New Statesman & Society column, 26 January 1996

Forget legal constraints – there’s no press freedom unless you’re stocked at the newsagent’s

The unnoticed bad news of the week is that one of Britain’s biggest retail newsagents, W H Smith, is planning to drop a large number of the small-circulation publications it currently sells. Forget the fiasco of the Maxwell brothers trial and what cannot legally be said about their father even after his death. The biggest threat to press freedom in Britain today is posed not by the Contempt of Court Act, but by market forces.

For W H Smith, it’s simple. There are 100-odd publications which it currently stocks that are no longer worth carrying, for purely commercial reasons. New Statesman & Society, despite its current problems, is not one of them. But my old flame, Tribune, is. As a former editor of that venerable weekly organ of the Labour left, I know that it isn’t exactly a mass-circulation business. It relies on subscriptions for most of its 6,000-odd circulation, but it sells more than 2,000 copies a week through newsagents – nearly all of which these days go through the big chains, of which W H Smith is one of the most important. And those 2,000 sales are near enough to being crucial –  don’t I know it – to the continuing survival of the paper. Tribune could not keep going if you couldn’t buy it at the railway station or in the high street.

Which means that Smith’s decision – taken, it seems, because of the competition the big newsagents now face from supermarkets – could be fatal for one of the most important institutions that underpin the pluralism of the British press. Like it or loathe it, long after Aneurin Bevan and George Orwell, Tribune still plays an essential role as a conduit for the opinions of Labour’s grassroots, as a forum for debate and as a school of journalistic talent. And it does so these days without any major subsidies – unlike in the not-so-distant past, when its relationship to the trade union bosses was rather like a drunk’s to a lamp-post.

But it’s not just Tribune: the point is that the imperatives of the supermarket can do disastrous damage to the prospects for any small-circulation serious political magazine. Unless they have the cash to invest in the subscriptions market in a big way – as NSS has had, at least recently – they are, on current trends, doomed to be marginalised and die.

Should we care ? There is an argument that the whole culture of small magazines and j ournals of opinion is irrevocably part of the past, superseded by television, the expanded daily and Sunday newspapers, the booming consumer magazine sector and the development of electronic communications. But a commitment to a critical democratic culture dictates a different point of view – or, rather, an infinite variety of points of view. Tiny, cerebral, awkward publications of all political persuasions are an essential part of any democracy’s intellectual culture, and that they are unsaleable in Safeway should not be a matter of their life or death.

Of course, it’s not the fault of WH Smith. Like any business, it operates to maximise profits. But there is a way of protecting the Tribunes of this world from the ravages of untrammelled market forces without causing much offence to capitalist ethics. After the last war, many continental European countries introduced “right to distribution” legislation to ensure press pluralism after fascism, passing laws to ensure that periodicals of democratic opinion were sold, as of right, in retail newsagents at least in all maj or towns and cities.

Those laws still exist today. A similar law here would make an excellen t addition to the list of no-cost legislation for an incoming Labour government compiled by Chris Mullin, another former Tribune editor. Press diversity is too precious to be thrown away.

New Statesman & Society, leader 12 January 1996

The idea of a “stakeholder society”, as advanced by Tony Blair in his speech in Singapore this week, is an excellent one. But what would it mean in practice?

Tony Blair’s speech on the “stakeholder economy” and the “stakeholder welfare system” in Singapore this week was one of the most significant he has made as Labour leader. It contained nothing in the way of detailed policy. But for the first time Blair articulated an overarching ideological theme for what he hopes will be a long spell in office.

So what’s the big idea? Essentially, that the central aim of all economic and social policy must be to encourage the involvement and participation of all citizens in economic activity and welfare provision, within the broad framework of a market economy. “It is a stakeholder economy in which opportunity is available to all, advancement is through merit and from which no group or class is set apart or excluded,” said Blair. If we fail to create such an economy, “we waste talent, squander potential wealth-creating potential and deny the basis of trust upon which a cohesive society, One Nation, is built”. “The development of an underclass of people, cut off from society’s mainstream, living often in poverty, the black economy, crime and family instability,” he went on, “is a moral and economic evil.”

None of which is particularly controversial or even novel, one has to admit. But Blair went on to discuss what the imperative of discouraging exclusion means in practice – and in doing so gave a tantalising glimpse of what could be an extensive and genuinely radical programme for government.

Most attention has been given to what he said about a “stakeholder welfare system” – which is not altogether surprising. Blair was in Singapore, after all, and Singapore has a welfare system very different from our own, one feature of which is a compulsory savings scheme to provide pensions and other benefits.

It is no secret that Labour is looking very closely at this idea, and so it should: it is in essence a genuine national insurance scheme along the lines recommended by William Beveridge in his 1943 report but only imperfectly implemented after 1945, and, as Frank Field and others have argued, a version of it could serve Britain well. Of course, the devil is in the detail with anything like this, and the value of a compulsory savings scheme would depend crucially on its size, the extent of any compensatory tax cuts, what happens to non-contributory benefits and a whole lot besides. But the principle is sound enough, and it would be foolish for the left to dismiss it out-of-hand because of lack of familiarity or because other elements of Singapore’s welfare system are deeply unattractive.

Welfare reform, however, is just one part of the “stakeholder” idea. Blair also talked of guaranteeing that education serves “all our people, not an elite”, and of ensuring that new technologies “are harnessed and dispersed among all our people”.

More interestingly, he went on to suggest that far-reaching change is needed not just in the relationship between business and government, but in the whole British business culture. “We cannot by legislation guarantee that a company will behave in a way conducive to trust and long-term commitment. But it is surely time to assess how we shift the emphasis in corporate ethos, from the company being a mere vehicle for the capital market, to be traded, bought and sold as a commodity, towards a vision of the company as a community or partnership in which each employee has a stake, and where a company’s responsibilities are more clearly delineated.”

Once again, the devil is in the detail here. If all that a Labour government does is exhort companies to be nice to their workers and to resist the temptations of takeovers, it won’t have very much effect. What is exciting is the prospect that it would do a lot more – from legislation to make takeovers and asset-stripping more difficult to the introduction of incentives for the creation of worker co-operatives. A Labour government that is really serious about tackling the domination of the British economy by what Will Hutton calls “stock-market capitalism” would be a novelty indeed.

Of course, there are plenty of problems with Blair’s approach, the biggest of which is that it relies on Labour’s ability to make rapid and massive reductions in unemployment. That would be difficult enough at the best of times: as Blair and shadow chancellor Gordon Brown have argued consistently in recent years, the globalisation of the economy means that a Keynesian “dash for growth” is no longer a feasible option for a medium-sized country like Britain. It will be even more difficult if Britain is struggling under self-imposed austerity to meet the conditions laid down in the Maastricht treaty for economic and monetary union. What price stakes when the chips are down?

New Statesman & Society leader, 15 December 1995

Throughout the European Union, politicians have lost any sense of vision for the continent – and in Britain, as the election approaches, it’s even worse

After six months in which Europe has taken a back seat in British politics, this week’s European summit has refocused attention on the future of the continent. For a month or so, the leading figures from the major political parties have been making keynote speeches about qualified majority voting, enlargement and the European Parliament. Meanwhile, the TV current affairs industry and the quality newspaper pundits have been working overtime to find Euro-rebels and Euro-splits.

It should surprise no one, however, that nothing new has emerged from all this. The parties’ official positions and disagreements on Europe are well-rehearsed, and the supposed main talking-point of the summit, the 1996 Intergovernmental Conference (IGC) on European union, has long been destined to be a damp squib.

Of course, back in 1991, when the Maastricht treaty was negotiated, it looked as if the 1996 IGC might be something rather more important, a real battle between out-and-out European federalists and the rest over the very principles of the EU. Then, however, came the popular backlash against the whole European project in the Danish and French Maastricht referenda, and after that the collapse of the exchange rate mechanism (which was supposed to be the midwife of monetary union).

Subsequently, just about every government in Europe got cold feet. Neither the politics nor the economics of closer European integration seemed quite the priority after 1992. It became increasingly clear that only Germany, the Benelux countries and France were on track for EMU before the end of the century, with the rest either failing to meet the economic convergence criteria laid down by the Maastricht treaty (Italy, Spain, Greece, Portugal, Ireland) or else unable politically to embrace the idea (Britain, Denmark). Meanwhile, the Euro-Keynesian dream of European Commission President Jacques Delors – in which an expanded EU budget com-pensated for the effects of EMU and gave a boost to growth on top of that – was scuppered by British intransigence. Long-promised reforms of the Common Agricultural Policy, the EU’s biggest redistributive existing programme, got stuck in the mud of procedure.

As for the democratisation of the EU’s political structures, well, all that really happened was that ancient national prejudices found new confidence. Britain and France were able to block serious consideration of Germany’s plans for the expansion of the European Parliament’s powers to make accountable the secretive intergovernmental and appointed elements of the EU set-up.

Which, roughly, is where we are now – with the addition of German jitters about giving up the Deutschmark, a serious French crisis that could force Paris to give up on meeting the Maastricht criteria for EMU, and a lot of hot air about enlargement eastwards (which should be a strictly long-term project). The next IGC will see very little constructive on the long-overdue democratic reform of the EU’s political structures that it was supposed to address. So, except on EMU, which will inevitably be the subject of protracted argument, this week’s summit is a photo-opportunity and little else.

The faltering pace of European integration has had a marked effect on British politics: both major parties have adopted significantly more sceptical rhetoric on Europe in the past three years. It has been most noticable on the part of the Tories, whose Europhobes appear to have won the battle for the party’s ideological soul (even if their representatives have been marginalised in the cabinet). But Labour, too, has taken a step away from its Euro-enthusiasm of the early 19905 since Robin Cook became shadow foreign secretary. Labour’s “yes, but” and the Tories “no, but” have a lot in common: “perhaps” to EM U, a vague commitment to E U enlargement, no to big increases in the European Parliament’s powers. All that is between them is the social chapter and disagreement on the extension of qualified majority voting in the Council of Ministers.

This is perhaps understandable in the light of the internal politics of the two parties and the scepticism clear in the opinion polls. (The latter is a particular problem for the Tories because of Sir James Goldsmith’s promised intervention in the next election.) But it also has a detrimental effect on the European debate in British politics. Labour’s sceptical turn means that the left’s case for much closer European integration is now rarely made. What Europe desperately needs is a counter-cyclical and redistributive EU economic policy, based on a massively increased EU budget, and, to control it, a giant increase in the powers of the European Parliament. But it will never get it unless someone starts trying to persuade the public of its merits.

New Statesman & Society leader, 8 December 1995

The crisis in France marks the beginning of what promises to be a protracted battle over the future of western Europe’s welfare systems

A re-run of May 1968 it is not. Despite the superfi­cial similarities – an unpopular right-wing gov­ernment, students and workers on the streets of Paris, the riot police wading in with truncheons and tear-gas – the current crisis in France is not a case of history repeating itself.

New Statesman & Society leader, 1 December 1995

It is by no means clear that the agreement on Bosnia signed last week in Dayton, Ohio, is ‘more just than continuing the war’

The Bosnia peace agreement initialled by the pres¬idents of Bosnia, Croatia and Serbia last week in Dayton, Ohio, after three weeks of gruelling secret negotiations, is a shabby compromise.

On that, just about every impartial observer is agreed. It is all too easy to see that the ten articles, 11 annexes and 102 maps agreed in Dayton, which will form the basis of a treaty to be signed later this month, do not constitute a just peace. But is it, as Bosnian president Alija Izetbegovic claimed, “more just than continuing the war”? Is it true, as he put it, that “a better peace could not have been obtained”?

Looking on the bright side, it at least means that people are not killing one another – and that, after three-and-a-half years of the bloodiest war on European soil in half-a-century, is a start. The Dayton agreement keeps Bosnia as a single state, with the same internationally recognised borders as when the war began in 1992. Bosnia will have a single capital, Sarajevo, and a central government with a parliament, a supreme court and a national bank. All those found guilty of war crimes by the UN tribunal will be barred from office, including the president of the Bosnian Serb breakaway republic, Radovan Karadzic, and its senior military man, Ratko Mladic. And all those who have been forced to leave their homes during the war will have the right to reclaim them or get compensation. All of which is fine on paper. In reality, of course, no one believes that the right to return or compensation for the victims of “ethnic cleansing” will mean anything at all in practice; nor does anyone seriously think that Karadzic and Mladic will be effectively removed from political influence, let alone brought to justice. The likelihood that the political institutions agreed in Dayton will ever work is slim indeed.

And that is the bright side. Other elements of the Day¬ton deal are lousy even on paper. By dividing Bosnia into two “entities”, with a Bosnian-Croat federation control¬ling 51 per cent of the land area, including Sarajevo, and a Serb republic the rest, Dayton effectively sanctions the Serb land-grab that began the war and the Serbs’ subsequent murderous “ethnic cleansing”. The idea that people of all religions and none can live together in a cosmopolitan, multicultural Bosnian society – for years the rallying cry of the Bosnian government in its struggle against the Serb aggression – has been buried, just as it would have been buried by the previous (unsuccessful) plans for an ethnically divided Bosnia put forward by David Owen and Cyrus Vance in 1993 and the Contact Group in 1994.

To make matters even worse, the way the country will now be divided blatantly favours the Serbs. The only minor concessions they have had to make of territory they held on 12 October, when the ceasefire began, is a small area in and around Sarajevo and the corridor from Sarajevo to Goradze – surely the most modest possible price to pay for their vicious ethnic cleansing in eastern Bosnia.

In northern Bosnia, the maps actually give them back some ofthe territory they had lost to this summer’s offensive by Bosnian government and Croatian forces. The Dayton deal takes absolutely no account ofthe fact that, when the ceasefire began, the Serbs were facing a rout in northern Bosnia, with the surrender of their real capital, Banja Luka, weeks if not days away if the fighting had continued. In Dayton, the Serbs achieved by negotiation what they could not have managed by force of arms, the maintenance of their control of territories west of the Brcko corridor. Despite their now-official pariah status, Mladic and Karadzic have grounds to be pleased.

So too has president Franjo Tudjman of Croatia, who in Dayton secured agreement from the Serbs to return Eastern Slavonia – after this year’s military successes in Western Slavonia, the only part of Croatia under Serb control. The Croats have also acquired, in the Bosnian-Croat federation, a dependent buffer state between themselves and Serbia.

The losers, as ever, are those Bosnians (mostly, but by no means all, Muslim) who have supported the struggle of the Sarajevo government to maintain a multicultural, tolerant society against the ethnic cleansers. They feel, with reason, that the Americans pulled the rug from under them just as they were beginning to win. Contrary to Izetbegovic’s claims, even if the Dayton deal was all that was on the table for negotiation, it is not clear that the peace it has created is more just than a continuation of war. It is no wonder that there was no celebration in Sarajevo at the news ofthe peace agreement – and it will be no wonder if the Dayton agreement breaks down sooner rather than later because of its injustice to the Bosnian cause.

New Statesman & Society, 1 December 1995

The budget was not quite the cynical attempt to buy the next election for the Tories that everyone expected, writes Paul Anderson. But wait for next year’s effort

It was not what had been expected. The backbench Tories and the Tory press had assumed that the income tax cuts would be enough to make an early 1996 general election at least an option; Labour had done the same.

Just a week ago, Gordon Brown was talking about tax cuts of “even 3p, 4p, 5p in the pound” as the sort of outrageously irresponsible election-priming package that Chancellor of the Exchequer Kenneth Clarke would pull out of his battered briefcase on Tuesday; the Tories were looking to precisely the same level of hand-out to get the feel-good factor going.

Instead, it was a damp squib: a penny off the headline basic income-tax rate, 15p on fags, some incentives for savers and a load of dull technical stuff that has little or no popular appeal. The consensus in Westminster is that it means a 1997 general election, almost certainly in May or early June, after next year’s income-tax cuts have found their way into pay packets at the beginning of the 1997-98 finan¬cial year.

Labour feels rather pleased that it doesn’t have to gear up at once for an elec¬tion campaign; the Tories, for all Michael Heseltine’s attempts to talk the tax cuts up as “£9 a week for the average family”, are torn between despondency at the fail¬ure of the Chancellor to play his trump card and a sense of relief that the day of reckoning has been postponed. With the exception of the ever-supine Express, the best that the Tory press had to say for it was the Telegraph’s sniffy “quite good economics and quite good politics”. As far as the Sun was concerned, Clarke “blew a golden opportunity to revive the Tories when he cut income tax by just a miserly 1p”. The most important political event of this parliament has turned out to be, well, rather less important than next year’s version of the same.

So what was he up to? Clarke is not stupid. He knew that everyone on Fleet Street was expecting at least 2p off the basic rate for Wednesday morning’s front pages, and that plenty of MPs on both sides of the House were of similar mind. But he also knew that the markets were expecting a gesture of responsibility – a continued campaign to reduce public borrowing – and that public opinion has turned against tax-cutting in favour of maintenance, if not improve¬ment, of public services.

Most important of all, he knew that his party is so far behind in the opinion polls that an early election would be suicidal. The answer? Try to give everyone a little in the short term, but reserve options after that.

Which is precisely what he has done. The tax-cuts are certainly there, if not quite on the scale expected. There are four crucially important measures – a reduction in the basic rate from 25p to 24p, increases in tax allowances, an extension in the scope of the 20p band of income tax and a reduction in tax on income from interest on savings – the cost of which adds up to around £4 billion next year. The various other tax cuts and increases cancel one another out. In the context of Clarke’s stated intentions of getting the basic rate down to 20p and abolishing inheritance and capital gains taxation, the package acts as a tempting hint of what is to come in the 1996 budget, even if it doesn’t add up to very much on its own.

But then the £4 billion giveaway is itself cancelled out by cuts in public spending. No matter that some of the spending cuts are achieved by sleight of accounting hand, many are real, includ¬ing those in defence (end of the cold war), civil service bureaucracy (cheap computers) and social security (meanness to the poorest). More important, however, the scale of the public spending cuts in some departments is enough to maintain or increase expenditure in others – at least on paper: more for education, more for the health service, more for the police. The detailed tables in the Financial Statement and Budget Report, the “Red Book”, show that the headline increases hide cuts on previous projections in some areas in the longer term, and there are some vicious cuts of which Clarke seems proud, notably the reduction in housing benefit entitlements for the under- 25s. But the political message that the Tories care about the welfare state is convincing enough.

In his presentation of the slicing of the public spending cake – and indeed in the manner of his tax-cutting, which is broadly progressive in its impact – Clarke has stolen a march on Labour’s claims that the Tories have lurched to the right since John Redwood’s challenge to John Major’s leadership this summer. This was a One Nation budget speech, and the more honest Labour observers admitted their surprise at the substance as well as the rhetoric: they had been reck¬oning on a much more brutal “slash-and-burn” assault on spending.

Just as important, the package was carefully designed to please the markets with its prudence. Of course, the figures for public sector borrowing are embarrassingly wide of the mark set down this time last year, the result, according to Clarke, of slower domestic growth than expected caused largely by a downturn in Britain’s main foreign markets, which led to a shortfall in government receipts.

All the same, the projection remains that public borrowing is on a steady downward course. Even if Clarke’s figures rest on an over-optimistic assump¬tion of growth in 1996-97, the neutrality of his budget – the balance between tax and spending changes – is enough to show the markets that he means business about reducing the PSBR in the medium term. With low interest rates to compensate for his tight fiscal stance (and a little luck with international conditions) it is just possible that he could pull off his trick and give himself space for further tax-cuts next year.

But will it work? There’s no doubt that Clarke has adopted a very risky strategy politically, effectively putting a wager on the current stagnation of the British economy being temporary. If he is right, he will have plenty of room for man¬oeuvre next year. But if he is wrong, he could face political disaster. Forget about a full-blown recession: all it would take to make a real mess of his PSBR figures would be for growth to continue as it has in the past six months. If that happens, in November 1996 the Chancellor will have to choose between pleasing the markets (with austerity) and pleasing the voters (whether through tax-cuts or public spending) – unless he can persuade the markets that Britain is facing a dire reces¬sion that necessitates a temporary relax¬ation of fiscal policy.

In the meantime, he is hoping that monetary policy, in the form of low inter¬est rates, will give the economy the vigor¬ous boost it needs to reach his optimistic targets for growth. If the budget was a damp squib, it still leaves Clarke with the initiative. He is in for a nervous 18 months.

THE DOG THAT DIDN’T BARK

Labour breathed a sigh of relief at the budget: Clarke didn’t impose a windfall tax on utilities

And so, in the end, Kenneth Clarke decided not to pinch all of Labour’ s clothes. Most important of all, he was scathing in his budget speech about the windfall tax on utilities’ “excess profits” that shadow chancellor Gordon Brown has promised to pay for Labour’s flagship emergency employment programme. “A windfall tax would damage investment and threaten the quality of customer service,” intoned the Chancellor. “It is an illusion that a windfall tax is paid by the company. lt is paid by the shareholders, including many small shareholders and pension funds. And it would mean higher future prices for customers. The whole point of privatisation is to benefit customers, not the exchequer. I do not intend to introduce such a tax.”

Labour’s big fear, given everything that the party had invested in the windfall tax, had been that Clarke would adopt a version of it and watch laughing as Labour cast around desperately for some populist alternative means of funding its programme. The signs of relief when he attacked the windfall tax were visible on the faces of the opposition front bench.

Of course, Labour still has a problem. With the opinion polls in their current state, it would be a big surprise if the public utilities don’t make sure that they have nothing like “excess profits” in 1995-96 or 1996-97 as the general election approaches. By their nature, windfall taxes rely on an element of surprise if they are to work: by the time a Labour government comes in, it is likely that the utilities will be virtuously ploughing back their profits into investment.

At least, though, that gives Labour a year, not five minutes, to think up some alternative to the windfall tax, and the windfall tax still has enough life in it to last at least for the duration of the debate on the budget. Labour’s other great worry had been that Clarke’s tax cuts would be of a magnitude or nature that would make it very difficult for Labour to accept them. In fact, they were nothing of the kind. Blair immediately announced that Labour would not be voting against the tax cuts in his response to the budget speech, and he is unlikely to face a giant backbench revolt for saying it. The way the chancellor has cut income tax, reducing the basic rate, extending the lower rate and putting up allowances is, fort he most part, progressive, and the modesty of the cuts mean it is easy enough for Labour to live with.

Which leaves Labour with only minor problems arising from the budget-unless, of course, Clarke’s package has an unexpectedly miraculous effect on the Tories’ standing in the opinion polls. lt will be easy enough for the opposition to welcome those elements of the budget that are in line with its thinking – the increases in spending on education, the health service and the police, the measures to help the elderly who need care, the extra taxes on tobacco, or the green-tinged taxes on landfill and on petrol – while denouncing the whole as unimaginative and inadequate, particularly on unemployment and industry, and attacking the Tories for putting up taxes in the past three years.

For the first time since John Smith’s pre-election shadow budget of 1992, Labour is helped by thefact that it now has a reasonably worked-out set of proposals of its own. It’s not just the windfall tax, designed in Brown’s words “to unlock a new solution to long-term and youth unemployment” by providing extra cash for training. Nor is it Labour’s alternative tax-cutting strategy, outlined by the shadow chancellor last month, according to which Labour would aim at “a starting rate of income tax of 15p or preferably 1Op” and “cut VAT on fuel to 5 per cent”, rather than trying to reduce the basic rate of income to 20p and abolish capital gains and inheritance taxation as the Tories want.

Labour can also legitimately point to its plans for tax-breaks and development agencies to encourage investment, as laid out in its “Budget for Britain” a month ago, its long-standing scheme for releasing receipts from council house sales for new building and its ambitious policies (albeit not yet fully formed)for partnerships between public and private sectors in developing the infrastructure (including a controversial deal with British Telecom under which BT would cable Britain’s schools for free in return for being allowed into the lucrative cable market).
Of course, all these measures have their critics. Andrew Dilnot, director of the Institute for Fiscal Studies, described Brown’s 1Op income tax proposal as “a con”, and the Economist denounced his plans for investment tax breaks as “a gimmick”. Others say that, even leaving the BT deal aside, private-public partnerships could well be less of a panacea than Labour thinks and that the release of capital receipts will not have the effect Labour claims.

But Labour’s plans are credible enough to impress much of the City, significant parts of industry and many pundits. Whether they work the same magic on the voters, of course, remains to be seen.

New Statesman & Society, 24 November 1995

Labour’s love affair with the Australian Labor Party isn’t its first infatuation since it lost the 1979 general election. Paul Anderson looks at the other models Labour has admired in recent years

Australia, it seems, is the flavour of the mid-1990s for the British Labour Party. Labour leader Tony Blair is a good mate of Australian Labor Prime Minister Paul Keating. Blair’s deputy, John Prescott, has just been on a fact-finding mission Down Under. It is reported that other Labour frontbenchers have been told to make their way there to find out how gov¬erning is done.

And, of course, it makes a certain amount of sense. British Labour’s leadership is short on experience of govern¬ment, and Australia is closer to Britain in terms of political culture than anywhere else that currently has a left-of-centre administration. Observing the Australian Labor Party is probably as good a way as any of finding out about what it’s like to be in power.

But at least a word of caution is in order. As John Pilger has argued in his New Statesman & Society columns over the years, the ALP is deeply unattractive in many ways. The last thing Labour needs to emulate is the obsequious attitude of the ALP governments to Rupert Murdoch, Kerry Packer and Alan Bond.

There’s also a more general point – that Labour has a history of viewing left-of-centre governments abroad through rose-tinted spectacles. Over the past 16 years, Labour has latched on to a string of different models in the hope that they might provide the magic formula for elec¬tion victory – and each has turned out to be less useful than Labour thought in the first flush of enthusiasm. Labour has cer¬tainly got some learning to do – but it’s mostly learning from others’ mistakes.

THE FRENCH SOCIALIST PARTY 1981-83

The British left has always had a soft spot for France – but there was little in the way of electoral politics to inspire Labour between 1945 and 10 May 1981, when Francois Mitterrand won the presidency of the Fifth Republic at his third attempt.

Mitterrand’s success and the subsequent landslide victory of his Socialist Party (PS) in June 1981’s elections to the National Assembly came as a pleasant diversion for Labour, which at the time was tearing itself apart in the wake of the defection of the Social Democratic Party. Mitterrand’s economic programme-widespread nationalisation, vigorous reflation, workers’ control of industry and big increases in welfare benefits and pensions-was similar to the Alternative Economic Strategy that Labour had embraced after its 1979 election defeat, and many Labour intellectuals believed that the French socialists would be able to disprove in practice Margaret Thatcher’s dictum that “there is no alternative” to monetarist austerity. Almost as important given the concerns of the time, Mitterrand had declared for denuclearisation of central Europe and included four communist ministers in his first government-leading many left-wingers this side of the Channel to expect that France would at least act as a force for disarmament and east-west detente.

In fact, the new French government soon proved as vigorous in its pursuit of the cold war as any other in the west. Almost immediately after his election, Mitterrand gave strong backing to Nato’s plans to station Cruise and Pershing II missiles in western Europe, and his government continued to modernise France’s own nuclear weapons. Anti-nuclear opinion in the Labour Party – in the driving seat in the early 1980s – had turned against Mitterrand long before the sinking of the Greenpeace ship Rainbow Warrior by French agents in 1985.

On the economic front, British left disillusionment set in in 1982-83, when Mitterrand was forced, by a mixture of inflation and an unsustainable trade deficit, to perform a series of humiliating U-turns. From spring 1983, he presided over a fiscal and monetary regime in many respects more austere than Thatcher’s. The failure of the PS’s initial economic strategy did much to persuade Labour’s policy-makers thata “go-it-alone” Keynesian reflationary programme was no longer feasible for a medium-sized nation state-but the only Labour people who saw the post-austerity PS governments of 1983-86 and 1988-93 as any kind of model for Labour were admirers of their enthusiasm for European economic and monetary union. Now the PS is out of power, with little prospect of returning in the near future, it has few friends left over here.

THE SWEDISH SOCIAL DEMOCRATS 1982-91

The Swedish Social Democrats have been feted by various Labour admirers here since the 1930s, when, having adopted a radical proto-Keynesian economic policy, they began an uninterrupted period in office that lasted until 1976. But it was during the 1980s, from their victory under Olof Palme in the 1982 general election to their defeat under Ingvar Carlsson in 1991, that their popularity with Labour reached its peak.

One reason was British left-wingers’ admiration for the Swedes’ neutrality – but more important by far was the economy. As Britain was experiencing the ravages of unemployment and theory government’s cuts in spending on the welfare state, Sweden under the Social Democrats was enjoying full employment and the most generous welfare provision in the world.

The Swedes seemed to have succeeded in developing a “third road” model of economic management that avoided both the inflationary dangers of traditional Keynesianism and the mass unemployment of deflationary neo-liberalism. Things began to go wrong in the late 1980s, when inflation started to rise and the economy began to experience balance-of-payments difficulties. The Social Democrats responded with an austerity programme, unemployment increased and their popularity slumped. In 1991, they suffered their worst electoral defeat in more than 60 years.

Although they were returned in the next general election in 1994 – free-market conservatism proved anathema to the electorate – by then Labour had decided that it could not afford to place itself in the high-tax, high-spending camp. The Swedish Social Democrats are likely to be important allies for a Labour government in the European Union. But they are just a little too traditionalist for Tony Blair.

BILL CLINTON’S NEW DEMOCRATS 1992-93

Labour’s enthusiasm for Bill Clinton before and immediately after his 1992 election campaign knew no bounds. Labour had just lost a fourth general election in a row, and Clinton’s success was widely acclaimed in the Labour Party – and not just by the right.

Although it is the enthusiasm of Labour “modernisers” that is best remembered now, Clinton’s insistence during the campaign on the priority of his economic policy message – encapsulated in the famous slogan that dominated his campaign war-room, “It’s the economy, stupid” – was embraced by many on the left. ItwasBill Morris, general secretary of the Transport and General Workers Union, who declared of Clinton at a big conference on “Clintonomics” organised by his union and the Guardian in January 1993: “To say that we have nothing to learn is just arrogant nonsense.”

Nevertheless, it was undoubtedly the Labour right that bought the whole Clinton package. Probably the most significant purchaser wasTony Blair, whose actions and rhetoric ever since have echoed Clinton’s in 1992. As shadow home secretary, he emphasised how tough Labour was on crime just as Clinton had emphasised his own anti-crime credentials (although Blair did not go to the lengths of having anyone executed to prove his seriousness). More important, as Labour leader he has wooed middle-class voters by constantly stressing the extent to which Labour has changed into “new Labour”, returning to values that it abandoned in the 1960s and 1970s – exactly as Clinton talked about being a “New Democrat”. On a more mundane level, the next general election campaign will be fought by Labour very much on the lines Clinton fought in 1992, with a highly centralised command structure and what Labour media adviser Philip Gould called “speed of response and rebuttal” at the heart of the party’s efforts. Labour will soon be moving its key election campaigners into a new hi-tech campaign war-room in MillbankTower.

For all this, there are few senior Labour figures these days who are keen to praise the US president in public. Despite the admiration that Labour politicians and advisers had for his campaign, his record in office has been something of an embarrassment, particularly since the Republican landslide in last year’s Congressional elections and Clinton’s subsequent desperate lurch to the right in preparation for next year’s presidential election.

THE AUSTRALIAN LABOR PARTY 1995-

The Australian Labor Party has been in power uninterruptedly since 1983 and has won four successive general elections-but it’s only really in the past few months that Labour in Britain has started to enthuse in public.

Australian Labor’s biggest fan here is Tony Blair. The Blair family lived in Australia briefly when hewasa small child, and he counts many Australians among his closest friends. In 1982, the young Blair visited Australia, and delivered a lecture on the British Labour Party in which he argued thatthe party had to accept the mixed economy: according to John Rentoul, “It is possible to trace the death of Clause Fourto Perth, Western Australia, in 1982.”Duringthat visit, Blair also met many senior Australian Labor figures, including Bob Hawke, who was soon to seize the leadership of the party; he met Paul Keating, the current leaderand prime minister, on his next visit (with Gordon Brown) in 1990.

But it is only since Blair’s most recent trip to Australia this summer, when he stayed with Keating before addressinga conference of Rupert Murdoch’s News Corporation, that British Labour has really started to makeafuss aboutthe lessons it can learn from its sister-party Down Under. Labour deputy leader John Prescott made a highly publicised fact-finding tripto Australia last month-and Rotherham MP Denis MacShane enthused in the Guardian about the “compelling model” of the Australian Labor government.

As regular readers of NSS will know from John Pilger’s recent columns, Labour’s admiration for Australian Labor is anything but uncontroversial. Hawke and Keating (who ousted Hawke in 1991) have certainly proved adept at winning elections, and there are undoubtedly elements of their approach from which Labour can learn positive lessons, such as the accords with the trade unions that have kept industrial relations remarkably sweet. But the ALP’s record of providing giant tax breaks and other advantages to big business (particularly giant media corporations) is not the sort of thingthat plays well with British Labour-and the ALP’s election-winning streak will come to an end in next spring’s general election unless the party recovers from its current low popularity ratings.

THE GERMAN SOCIAL DEMOCRATS 1987-92

The German Social Democrats have not won a general election since 1980, and have been out of government since 1983. But that didn’t stop Labour from thinking that the SPD was the answer to its dreams between 1987 and 1992.

One reason was foreign policy, at which the SPD was considered, with some justification, to be expert. Labour leader Neil Kinnock had come to the conclusion after his 1987 general election defeat that unilateral nuclear disarmament was a millstone round Labour’s neck-and was insistent that the party should adopt a defence policy that would not leave it isolated in Europe. Labour’s stance on Europe also needed to be beefed up: although the promise of withdrawal from the EC had been dropped before 1987, ithad not been properly replaced.

The West German Social Democrats appeared to be the ideal partners with whom to develop a new foreign policy. They seemed a good bet to win the next general election in West Germany, due in 1990, which, because of West Germany’s economic and political dominance of western Europe, would have made them the most powerful left-of-centre party on the continent. The SPD also had an impressive group of foreign affairs specialists who were more than happy to help Labour sort itself out. The two parties’ leaders had a string of high-level meetings at which they coordinated efforts on the future of Europe and defence and disarmament policy.

Relations between the two parties remain good – but they are nothing like as close these days, largely because the SPD has rather turned its back on the outside world since German unification in 1990.The party lost both the 1990 and 1994 general elections, and since then has been locked in internal dissent as its opinion-poll ratings have slumped. All the same, the SPD remains, with Labour, the European centre- left party with the best prospect of winning a national election in a large EU country – which means that Tony Blair will be keen to keep things sweet.

THE NEW ZEALAND LABOUR PARTY 1984-86

The victory of David Lange’s New Zealand Labour Party in 1984 was a cause for celebration on the British Labour left, which was still reeling after the party’s disastrous 1983 general election result. Lange was committed to a radical anti-nuclear policy, which included a refusal to allow American nuclear-armed ships to use New Zealand ports. Although New Zealand was a minor player in the cold war, with no nuclear weapons stationed permanently on its soil, Labour’s victorywasseen by many in its British sister-party as heartening proof that a firm stance against nuclear weapons need not prove electorally damaging.

The problem was that the anti-nuclear policy was just about all that the New Zealand Labour Party stood for that any self-respecting British leftist could possibly stomach. Lange’s government, with finance minister Roger Douglas playing a crucial role, set about privatising the country’s public sector, dismantling its welfare state and opening the economy to market forces with a gusto that matched Margaret Thatcher’s. “Rogernomics” so disillusioned the Labour left that in 1989 it split to form New Labour, the electorate revolted, and in 1990 the conservative National Party was returned to power in a landslide.

The strength of popular support for Labour’s anti-nuclear stance was such that the National government kept it – but by then no one in the British Labour Party could give a damn. These days, the only reason anyone on the British left mentions New Zealand is that it is a model for electoral reformers, having decided to abandon first-past-the-post and adopt a mixed-member system of proportional representation in a referendum in 1992.

MINOR INFATUATIONS 1979-95

There are several examples of left-of-centre parties abroad for which Labour has had only brief or intermittent affections. The party has never really felt at ease with the Mediterranean socialists of Spain, ltaly and Greece, all of whom have been in power for most of the past 16years (although the Italian Socialist Party was effectively destroyed by corruption scandals in the early 1990s), largely because their economic liberalism is, even now, out of keeping with mainstream Labour thinking. Nevertheless, the governments of Felipe Gonzalez’ Spanish Socialist Workers’ Party (PSOE) and Andreas Papandreou’s Pan-Hellenic Socialist Movement (PASOK) both had their admirers in their first years in office, largely because their foreign policy rhetoric was in tune with Labour’s at the time.

Relations have been much closer with the social democratic parties of the smaller northern European countries, particularly the Dutch Labour Party and the Norwegian Labour Party, although neither could really be said to have been a model for British Labour.

Far more important was the enthusiasm of many in Britain (particularly among the European Parliamentary Labour Party) for former French finance ministerJacques Delors as President of the European Commission, in which capacity he produced a plan for economic regeneration in late 1993 that many Labour intellectuals hoped would be the first step on the road to a Europe-wide Keynesian programme of job creation. The plan was effectively killed off last year by the British Tories, and little has been heard of the possibilities of Euro-Keynesianism since Delors’ retirement.

Outside western Europe, Labour has had few dalliances. Plenty of Labour people thought that Nicaragua under the Sandinistas was a good thing, but very few believed that Labour had very much to learn directly from Managua – and much the same goes for Mikhail Gorbachev’s Soviet Union and Nelson Mandela’s South Africa. Israel’s stock was low in Labour circles until the 1993 Oslo declaration, and even under the current Labour government has nothing like the status that it had in the 1940sand 1950s.

Which leaves nothing apart from a handful of admiring gestures towards the tiger economies of South-East Asia-although so far not even the boldest Labour moderniser says publicly that Britain should emulate them. Perhaps that’s what comes after Labour wins an election…

New Statesman & Society leader, 24 November 1995

If Princess Diana’s interview has damaged the monarchy, that can be no bad thing. The lot of them are an affront to democracy

For the benefit of anyone who has been in a coma for the past few days: Princess Di did commit adultery with James Hewitt, doesn’t think she’s going to be Queen and has a capacity for pitying herself in public unmatched outside Hollywood.

Those are the highlights from Monday’s much-hyped Panorama interview with the Princess of Wales, viewed by some 20 million people worldwide. There’s little point in adding to the mountains of vacuous commentary on the supposed constitutional implications of Diana’s bizarre broadcast: there are none, or at least none directly. If she and Prince Charles don’t divorce, she’ll still be Queen even if she has affairs with the entire England rugby team; and her children will be next in line for the throne, whatever happens to the royal marriage.

What we saw was, nevertheless, a fascinating spectacle – a poor little rich girl whingeing about how she has been hard done-by. Diana’s claim that she accepted half the blame but no more for the break-up of her marriage was just one ploy in many to gain sympathy: in reality, she sees herself as the perpetual victim. Nothing is her fault. She has been hounded by the media, betrayed by Charles, plotted against by his office. Yet she doesn’t want to get out of the public gaze: she thinks that she deserves a role – presumably paid for by the taxpayer – swanning around the world and hanging around hos¬pices for the terminally ill and consoling “drug addicts, alcoholics, battered this, battered that”. And she won’t take the initiative in getting divorced. Even her extra-marital affairs seem to have just happened to her.

Yes, Diana is an icon, but not because she is a strong, independent-minded woman as she claims to be: rather, she epitomises the narcissism and refusal to take responsibility for one’s actions that is endemic in western consumer societies.

Not that the rest of the royals deserve any personal sympathy either. From what has emerged in the past few years, the Windsors appear to be some of the most spiteful and insensitive human beings imaginable.

Despite the claims of Charles’ allies to the contrary, the farce that has surrounded the breakdown of his marriage has been down to him as much as to Diana. If she was responsible for Andrew Morton’s book of her life, it was he who first admitted to adultery, with Camilla Parker-Bowles, in a television interview with Jonathan Dimbleby – a revelation that showed him to be a pious hypocrite. The other younger adults in the family (except Princess Anne) appear to be at best buffoons. If the Queen died tomorrow, it would be difficult to find a credible monarch to replace her. If Princes William and Harry turn out like their relatives, things will get even worse.

Which is where constitutional questions do come in, albeit tangentially. For what Diana said to Panorama has undoubtedly added to the damage done to the popular standing of the monarchy in recent years. And, although in theory the popularity of the monarchy is not a constitutional question, in practice it becomes so as it declines.

Put bluntly, if the reputation of the British royals continues to slump, it will not be long before Britain as a polity will have to confront the question of whether or not it needs or wants a monarchy. So far, the monarchy has been able to cope with growing public disillusionment by way of minor reforms of its privileges: the Queen’s agreement to pay tax, or her decision to open Buckingham Palace to the public.

Further moves in the same direction, such as a radical reduction in spending on the civil list, are the least we can expect in the next few years. For their own survival, it might be enough for the Windsors to turn themselves into a Scandinavian-style monarchy, all bicycles, proper jobs and modest houses. But there comes a point at which this is not enough – when the issue becomes not the royal family’s dissoluteness or its cost to the taxpayer, but whether the hereditary principle has any role at all to play in the government and politics of a democracy.
That point could be closer than most commentators think.

If Labour wins the next election, the politics of the hereditary principle will move centre-stage as soon as Labour publishes its plans to abolish hereditary peerages. So too will the position of the royal prerogative when Labour’s bill of rights emerges. Of course, Labour has no intention of putting reform of the monarchy – let alone its abolition – anywhere near the political agenda, but it increasingly looks as if, in the long run, it won’t have any option but to do so. As far as NSS is concerned, that is no bad thing. The day that we are rid of the anti-democratic absurdity of monarchy cannot come soon enough. And if Diana’s performance this week helps bring on that day, it will have done endless good – however unpleasant the personality she revealed.