Will a Starmer government find a fourth way? Bryn Jones on social democratic parties’ failures to achieve antidotes to neoliberal capitalism or equalities in their own organisations.
Defending her growth-prioritising, “partnership with business, Rachel Reeves, Labour’s Chancellor of the Exchequer, described herself not as “a socialist” but a “social democrat”. A stance she defined as belief in: an “equal start to life” irrespective of social background; “strong public services” to support people from the cradle to the grave; and work that “always pays and offers security’. Equality, lifelong welfare and health services and well-paid secure jobs: who, diehard neoliberals apart, could disagree with such principles? Yet tackling, let alone achieving these goals presents an immense challenge in today’s Britain. Its economy is racked by poverty-level benefits, threadbare medical systems, increasing numbers on temporary employment contracts, with worsening social and income mobility, especially for ethnic minorities and young people in “left behind” areas. If New Labour’s “Third Way” social democracy is redundant, is there a Fourth Way?
Reeves, and similar social democrats in Europe and elsewhere, also face the problem of inequalities in their own organisations. France’s shrivelling (social democratic) Socialist Party and Italy’s failing Democratic Party have been severely criticised for relying on middle class professionals amongst both voters and party representatives. In the UK, of Labour’s 2019 intake of MPs only 13% had working-class occupations. The latest figures in LabourList suggest that 37% of new Labour MP candidates for 2024 worked in the private sector, mostly in managerial and professional roles, such as legal, public relations and “communications” work. By contrast, only around 20 of Labour’s candidates have current trade union roles. As usual sitting local councillors pre-dominate, but the most frequent occupational backgrounds are from administration, management, policy-making, research and consultancies across the private and NGO and public sectors.
This class bias mirrors the decline Labour support from working class voters during and after the New Labour years and thereafter, with the partial exception of the 2017, Corbyn election. Labour’s current prioritising of middle class Tory voters is unlikely to change this trend and may reinforce it. Policies and rhetoric aimed at asset-rich middle class voters are unlikely to rally those in the asset-poor working class. How then will Reeves and Starmer pursue improvements in her three goals of social democracy: equality of opportunity, comprehensive public services and well-paid secure jobs? Labour’s Manifesto includes some remedies for invidious employment practices. Yet aspirations for cradle-to-grave security and equalisation of opportunities are invisible. Support and protection for families with three kids or more remains taboo.
Independent sources, such as the IFS, rate New Labour’s Sure Start programme, that covered the early periods of the life journey, as highly effective. But Starmer’s Labour has avoided restoring these child-support centres. Perhaps put off by their likely £2.5 billion price tag? The educational benefits of Sure Start began to equalise otherwise gross inequalities in work and careers. Without some such investment it’s difficult to see how a Labour government will achieve Reeves’s “equal start to life” pillar. Moreover, towards the graveyard end of the life-cycle there is yet more inequality. Despite hoo-ha about maintaining the Tory-driven “triple-lock on pensions the poorest 20% of retirees lack the minimum income needed. Labour’s focus on the asset-rich middle and working classes neglects asset-poor oldsters.
Well-paid, secure jobs depend on both legislative and economic conditions. The sad truth is that Britain’s neoliberal, service-dominated economy actually requires the opposites of this maxim. Employers” hire and fire freedoms provide quick-fix, financial boosts to flagging businesses. While employment contracts, like zero-hours arrangements minimise firms” fixed costs. Starmer’s earlier pledge to ban some of these insecurities will be a battle-ground of business versus trade union lobbying. For Labour says reforms must accommodate “fostering flexibility, agility and competitiveness’. Union leaders claim to have re-committed Starmer to these original reforms but it’s difficult to see the promised levelling-up of job contracts surviving intact in Labour’s much trumpeted Shangri-La partnership with business. Especially when its influence will be institutionalised through businesses” official involvement in “all of our five national missions as well as . . . day-to-day departmental consultations.” (A Partnership for Growth, 2024).
Of course, missing entirely in Reeves’s version of social democracy and any Labour policies is the post-war social-democratic mainstay of economic redistribution: financed by progressive taxation and government spending. Apart from the one-off Windfall Tax and raids on “non-doms” and private schools” tax exemptions, Labour is resolutely refusing tax changes. An increase in tax on private equity bonuses might happen but this would net only £400 million a year. Yet, according to Tax Justice Network, higher taxation of wealth could net up to £50 billion. With extra state-borrowing vetoed, the only notional significant income raiser will be the extra tax take from the promised higher economic growth: which explains the elevation of this Truss-like mantra into Labour’s electoral lode-star.
Of course, all erstwhile social democratic parties – with the temporary exception of Portugal’s 2015- 2024 government– have surrendered their defining principles to the neoliberal pressures from international and domestic financial orthodoxy. Asked by the New Statesman if the limited electoral success of Olaf Scholze’s German Social Democrats provided comfort for a potential Starmer government, political economist Wolfgang Streeck wryly observed: “Voters seeking protection from capitalist creative destruction turn to the new nationalists rather than the old socialists . . . [others] can always vote Green . . “; adding that the lesson from Germany for Sir Keir was “Respice finem; get ready for the worst”.