Thursday, November 27, 2008


Is New Labour Dead?

At PMQs Cameron rounded off a slashing attack on Brown by declaring New Labour id dead! Today we learn Peter Mandelson disagrees. At an institute of Director's dinner he said:

"We still stand for rewarding hard work and entrepreneurial risk. I reportedly once said that New Labour has no problem with people becoming very rich, as long as they pay their taxes. New Labour also continues to recognise that the progressive commitment to strong public services is matched by the obligation to reform and to ensure value for every pound of public money spent."

Labour would not flee the centre gound he insisted, defending the pre bugdet report as necessary 'essential measures'. Well he would say that, one instantly thinks.

More thoughtful is the article by Ken Livingstone who points out:

New Labour's thinking was part of an international consensus that lasted for more than 25 years. A rampaging financial storm has destroyed that consensus.

He goes on to castigate Conservatives for having always been on the wrong side of the argument with their 'laissez faire' economic philosophy as opposed to Labour's interventionism. He asserts:

But nevertheless the fact that direct taxation on the very highly paid is to be raised is a symbolic and important practical step.

He favours an increase to 50p in the £. My view is that some New Labourism will remain- the involvement of the private sector in public sector activities for example. But, to be realistic, New Labour was always a political strategy to win power by a Labour Party whose natural constituency had shrunk and which needed middle class votes. That electoral aim will continue, but will now, perforce, be obliged to find different means and different arguments.

I recently argued on my blog that Labour could do nothing to prevent this bubble without international support, which would never come from a Bush White House or a Europe of centre right regimes.

Now we have bold rhetoric from Obama (and possibly bold action too) it is much easier for Labour to be bold.

Livingstone rightly welcomes more redistributive tax rates, but is silent on the issue you raise; the relationship with the private sector.

What we have learnt is the state can be expected to provide a safety net for private corporate interests (e.g. bailing out banks) as well as private individuals (e.g. thorough benefits). This apparent obligation on the state should in turn justify greater regulation. But I don't think that means that the public sector is going to cease trading with the private sector.
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