Bryn Jones examines the metamorphosis of a political creed under Labour plc
Interviewed BBC Radio 4, Pat Mc Fadden MP, one of PM Starmer’s inner circle, referred to Labour Party members as “stakeholders”. This is an interesting choice of business jargon, redolent of the mind-set of “socially-responsible business”, in which corporate managers look out on a distant hinterland of various interested parties: those who need to be kept onside but who have no formal rights or powers. It reveals views about Party democracy by those at the top of Starmer’s claque.
Party Conference is a useful sounding board but it has little direct impact on the leadership’s actions. Indeed it’s plausible to regard the current Labour Party as resembling a kind of corporate business. The board, i.e. leadership makes all the executive decisions – delegating a few to its operations team, a.k.a. the NEC – but bringing in the equivalent of “non-executive directors”: the increasing numbers of corporate and financial figures helping to shape policies. While other business magnates are taking on the role of investors through their weighty donations. Investors in corporations don’t necessarily decide management’s policies but if their investments are not being properly served they will cause a fuss or have a quiet word in the corridors of power: opportunities that are denied to the peripheral “stakeholders”.
In contrast to this managerial outlook, the British version of social democracy aimed at spreading power through redistributive economics and public control of key industries, albeit through the existing Parliamentary system (see Chartist # 329). Labour in government seems to be applying a managerial approach to economic governance and decision making. Task forces and advisory bodies, crammed with business interests are being hurriedly formed. There are policies like prospective urban planning reforms that will side-line local “stakeholders” – community groups and local councils. Democratic mandates seem to follow the logic of corporate governance. Elections resemble shareholders’ meetings which aim to endorse the executive management. Ditto for governments, authorised by five-yearly general elections. By contrast social democracy had a general aspiration for wider democratisation: workers control, or at least representation, in the running of businesses or tenants’ groups on housing estates. Although the TUC, for one, kept the flag of industrial democracy flying into the 2000s such voices have, in the argot of football crowds “all gone quiet over there”.
Arch-technocrat Rachel Reeves, who described herself, relatively recently as a social democrat may be in need of some re-education in the principles of social democracy? For this didn’t only mean Bismarckian “cradle to grave” state welfare but the capacity to exercise democratic rights to shape such systems, albeit through traditional parliamentary democracy, and also extending these rights. Rachel’s family background and PPE degree at Oxford would have schooled her in the basics of social democratic ideas. However, induction into economist roles at the Bank of England, and Halifax-Bank of Scotland via a masters course at London School of Economics would have required a mental make-over to the orthodox canons of neoliberal economics centred on the gods of competition, fiscal balances and top-down economic management.
As Chief Financial Officer to UK plc, Rachel has wasted no time in encasing the skeleton of British social democracy in neo-liberalism’s fiscal straitjacket. The much needed and over-due pay rises for teachers, NHS and other public service workers are exceptions. As personal financial expert Martin Lewis has commented, means testing to replace an assumed right to winter fuel payments for all pensioners will bear heavily on many just above the threshold and about 800,000 eligible but not claiming pension credit. Moreover, the energy regulator, Ofgem, is predicted to permit a 10% rise in energy prices from October via the price-cap mechanism: which protects gas and electricity firms’ profits.
So much for social democratic welfare; what about the “democracy” element? Labour has made ambiguous noises about decentralisation of power. For example, the Manifesto proposed putting “communities” and councils in charge of some renewable energy schemes. Regional mayors have also been promised more powers over public transport, housing and some areas of education and training: a progressive move if regional mayors are actually more accountable than Westminster, or local councils. When it comes to Labour’s mantra of raising prosperity through growth, Labour plc ought to take seriously the expansion of ‘community wealth building’ successfully launched in Preston and parts of Wales and the local “foundational economy”. An approach that Reeves herself endorsed back in 2018, as The Everyday Economy. These initiatives extend some democratic influence over local economies; as local elected representatives can play a major role: tackling rootless, anti-social capitalism “from below”. Starmer’s board could spin-off some autonomy and control to such local political ‘subsidiaries’? Their economic promises to voters may well be achieved more quickly in this way than through grandiose hi-tech projects needing years to benefit local communities.