Blairites on the march as Miliband falters

Political turmoil is not just engulfing the Tory Party over an in/out referendum on Europe. It is about to break over Labour in a big way as its Blairite wing gears up for a massive push against what they consider a weak Ed Miliband leadership.

Progress, the unashamedly New Labour pressure group, is not affiliated to the party but exerts considerable influence. So much so that the GMB union once tried to get the party conference to ban Progress.

That move came to nothing, but the trade unions still consider Progress as a “party inside a party”. They are not far wrong there. Chairman of Progress is shadow education minister Stephen Twigg, whose policies are hardly distinguishable from those of Tory secretary of state Michael Gove.

Twigg is one of four open Blairites inside the shadow cabinet. The others are Douglas Alexander, Jim Murphy and Liam Byrne, whose support for the ConDem coalition’s “welfare reform” is viewed with horror by disability groups and benefits campaigners.

With the prompting stage right of former prime minister Tony Blair himself, David Blunkett and Lord Mandelson, the Progress group want Miliband to take “tough decisions” on the economy to show the electorate he means business.

Of course, while they were in power, the Blairites took the softest approach possible. They encouraged the City of London to run riot through self-regulation and helped to create the conditions that led to the financial crash that began in the autumn of 2007.

Never mind about that. Progress has commissioned a poll which backs up their view that the party is still seen as “nice” but incapable of being “tough” in a crisis. YouGov president Peter Kellner described the polling as "profoundly troubling" for Labour.

He added: "The central fact is that no successful opposition in the past 50 years has gone on to regain power with such a weak image and without achieving much bigger voting-intention leads at some point in the parliament."

So Miliband’s attempt to rebrand Labour as the party of “responsible capitalism” and in favour of “predistribution” whereby employers get money to pay workers a “living wage”, have fallen on deaf ears as far as voters are concerned.

The middle-classes undoubtedly find it all too vague while working class voters struggling to make ends meet as austerity bite hard, are unimpressed for other reasons.

The trade unions who stumped up the cash to get Ed elected over his Blairite brother David should – but probably won’t be – shocked.  They have been pinning their hopes on a majority Labour government coming to power in 2015 and riding to the rescue of their hard-pressed members. That prospect seems more unlikely with each passing day.

Instead, the Blairites are back in business. In truth, they never left the stage. They remade Labour as a party that embraced globalised capitalism and the market-driven economy. For all Miliband’s huffing and puffing, that’s where Labour remains to this day.

It’s likely to get worse. The infighting inside the Tory Party over whether to announce a referendum on European Union membership reflects the growing presence of the right-wing populist Ukip party. Labour is already adapting to Ukip on immigration and will be tempted to respond with a shift on its EU policy. That will only enrage the Blairites further.

All in all, the mainstream political parties are increasingly as discredited as the political system they operate within. The opportunity to create a movement that is fresh and, above all, democratic that can free society from the grip of the banks and corporations should not be passed up.

Paul Feldman

Communications editor

By jingo, Labour is the true patriotic party!

A party of true patriotism, making tough decisions in the “national interest”, hiring top business figures as advisers and a party that will stand up to the trade unions. Tories? Lib Dems? Wrong, just wrong!

New Labour Mark II is on show in Manchester this week, with messages that many a Tory would be happy to embrace. On Sunday, leader Ed Miliband hit back at Len McCluskey, the leader of the Unite union, by defending Labour's commitment to a public sector pay freeze. The party, he said, was not in thrall to "sectional interests".

Yesterday, shadow chancellor Ed Balls told delegates that there would be “tough choices in the years ahead” and that “we cannot make any commitments now that the next Labour government will be able to reverse particular tax rises or spending cuts”. (In the meantime, naturally, Labour councils will keep on implementing ConDem austerity budgets.)

Balls has no political memory to speak of. So there were no references to the disastrous policies that he and Gordon Brown were responsible for when in office. Balls was unable to say how giving the banks an essentially free, unregulated hand had helped fuel the build-up of fictitious credit that played a role in bring the financial system to its knees and precipitating the recession.

He would not have wanted to recall, of course, the speeches extolling the virtues of the City of London on the eve of the crash, like the one in September 2006 when he told a Hong business audience: “The FSA [Financial Services Authority]… has confounded those who feared the FSA might become a heavy-handed and inflexible regulator. Today our system of light-touch and risk-based regulation is regularly cited - alongside the City’s internationalism and the skills of those who work here - as one of our chief attractions. It has provided us with a huge competitive advantage and is regarded as the best in the world.”

And brushing aside Labour’s “public finance initiative” leaseback funding of new hospitals and schools – which have left many of them struggling to pay exorbitant charges to the private sector – Balls announced that the party was going to employ Sir John Armitt. He would advise on how to manage and fund infrastructure projects.

Armitt, who chaired the Olympic Delivery Authority, was before that top dog at a number of major construction companies and, under New Labour, chief executive of Railtrack and its successor, Network Rail. A 2006 survey made Armitt the highest-paid public-sector employee in the UK, with a salary and bonus of £878,000 - rising to more than £1m  when pension contributions were included. A Labour-sponsored fat cat.

Today, shadow work and pensions secretary Liam Byrne indicated that Labour would make cuts in the welfare budget should it win an election. You have to ask what would be the point in voting Labour? This hardly constitutes a sharp difference with the Tories, unless Labour is trying to put clear blue water between the two parties.

If, however, you favour a touch of crude patriotism with your breakfast, then Labour is the party for you. The conference slogan is “rebuilding Britain”. Balls himself pledged to “rebuild Britain anew in the long term national interest", a phrase which sends shivers your spine. Miliband will no doubt repeat the mantra in his speech.

The political system is dying on its feet, tied inextricably to corporate and financial power that is itself in a deep crisis. The Labour leadership is simply a variant of the corporatocracy that rules over us, full of smooth operators and shallow thinkers. We must be able to do better than this.

Paul Feldman

Communications editor

The incorporation of Labour

The assimilation of Labour into accepting the Tory Party’s narrative is moving at such a pace that it is no wonder that David Cameron finds his party ahead in the polls.

In virtually every major policy area, Labour’s own views are hardly distinguishable from those of the government; on crime, immigration and anti-terror laws, Ed Miliband’s crew are actually to the right of the ConDem coalition.

Only this week, Liam Byrne, the shadow work and pensions secretary, claimed that the benefits system had “skewed social behaviour”, provided “unearned support” and run up an unsustainable housing benefits bill.

In an articlefor the Guardian, Byrne called for “fresh thinking” and an abandonment of the party’s “old agenda”. In practice, Byrne and Labour are backing Iain Duncan Smith’s “welfare reform” bill.

On education, where Michael Gove is busily breaking up what remains of the comprehensive schools system, there is tacit backing from Labour. As the astute Tory commentator Peter Oborne
notes: “Gove is the first post-war education secretary to challenge effectively the power of the teaching unions – and move against an educational establishment that is constitutionally opposed to excellence and high standards. Amazingly, he seems to be bringing the Labour Party with him.”

Similarly on the economy. The ConDems have insisted draconian cuts in spending were made necessary partly because of the failed economic policies of the Blair/Brown governments. Shadow chancellor Ed Balls originally rejected this simplistic, half-truth.

Now, according to Oborne, even Balls agrees with “the need for drastic cuts in public spending” and only “the relatively minor detail of timing” is in dispute. “In all essentials, Ed Miliband’s Labour Party now accepts the fundamental economic insights of the Cameron Coalition.”

No surprise then that Miliband, propelled into the party’s leadership by the three largest trade unions in the hope he would be their prisoner, is struggling to find a coherent strategy that differentiates Labour from the Tories. Enter Lord Glasman, a founder of so-called Blue Labour and a Miliband advisor, whose statements on immigration could have come from the right-wing of the Tories.

Just to make sure Miliband gets the message, Glasman has told him that “there seems to be no strategy, no narrative and little energy” at the top of the party. Glasman urges the termination of what he terms “an unhappy and abusive relationship with the unions” and to end being identified with the interests of public sector workers.

Miliband is almost there. He opposed last year’s strikes in defence of public sector pensions and there are reports that he intends to reduce the reliance on trade union funding (Rod Aldridge, the former chief of outsourcing firm Capita who donated £1m to Labour was given a knighthood in the New Year list. One of Miliband's newest advisers is Andrew Rosenfeld, the property tycoon who has also given £1m)

Glasman is kicking at an open door when he urges Miliband to “leave behind stale orthodoxies and trust his instinct that change is essential”.

Oborne’s view that the “facts of life are Conservative” and that Labour has accepted this is, of course, used to damn what he terms the “Left” which he identifies with the 13 years of Blair/Brown governments.

This is historically inaccurate as well as misleading. New Labour long ago accepted the facts of corporate-driven globalisation and came to believe in a “new paradigm” of a crisis-free capitalism, with uninterrupted growth and riches for all. It was a view shared by many economists and politicians around the world, including the present Tory leadership.

The “facts of life” are actually those of an economic and financial system in profound crisis globally and not principally because governments spent too much. Reliance on credit/debt was the only way to sustain ever-growing consumption and, more significantly, profit levels.

So the credit crunch and financial meltdown was an expression of this permanent, inner-tension between production and profit that lies at the heart of capitalism. And the result is not just the wiping out of vast areas of capacity, leading to mass unemployment, but the integration of Labour into the ConDems’ desperate strategy to turn things round.

Paul Feldman
Communications editor