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Brown – new leftie or old con?

Peter Kenyon reports on the Chancellor’s efforts to reposition himself inside the Labour Party ahead of a leadership contest.

Tony Blair announced the day after the 2004 Party Conference his intention to stand down as Party Leader after serving a full third term as Prime Minister. With a leadership contest in prospect sometime between now and 2009/10, how will the leading contender Gordon Brown be judged by the Left?

Whether you believe Blair’s stated intentions or not. The race is on. The odds at the leading bookmakers are on a leadership contest within a year, if the next General Election takes place as expected in May.

Should the Party rally round and follow Clare Short’s advice after her resignation in May 2003 and arrange an elegant succession for Brown to take over? Or will there be a contested leadership election? Support for a left candidate to take on Brown was expressed last month (February) at the Campaign for Labour Party Democracy 2005 AGM. What would that achieve? The international and domestic political realities will not have changed. Labour’s capacity to maintain economic growth, low interest rates and full employment will remain. Labour’s obligation to sustain its values in the fight for social justice, civil liberties and the rule of law both at home and abroad will not have diminished. The latest opinion polls already show Brown consistently ahead of Blair in the eyes of the electorate as the most popular politician in Britain.

To secure broader support in the Party, Brown has already come out, according to his latest biographer, Robert Peston* who says:

‘At the time of writing Brown is re-inventing himself as a genuine alternative to Blair – no longer a de facto Blairite – partly on the basis of his different vision for the future of the public services and the NHS. His platform for a future leadership election – wherever it comes – is that the ethos of public service, as distinct from the profit motive, is redeemable. He made this explicit in a speech on October 22, 2004 at a conference organised by Compass….’

In the wake of Blair’s blunders in his second term whether over foreign policy, viz Iraq, education – top-up fees, health – foundation hospitals, or civil liberties – internment and house arrest, anyone could be forgiven for wondering, “What is Tony Blair for?”

So Gordon Brown is on the move both literally and politically. Often accused by the left of being too close to America, he was in Africa in January promoting his plans to reduce Third World debt and China in February to promote British industry and services. These are practical expressions of his global perspective that has made him a marked man ideologically. For a leading world-trading nation like Britain, there is no scope for socialism in one country as far as Brown is concerned.

He shares with Tony Blair a sense of history. But that’s where the similarity ends. Blair is preoccupied with his own. Brown is steeped in the Party’s. Once mocked for a speech espousing endogenous growth theory, he is now able to show what he was talking about. History will be kinder, much kinder, to Gordon Brown, whether he gets to be Prime Minister or not.

Every previous Labour government floundered over the economy, until Brown. He dared to believe in restoring full employment. It is easy to forget that 15 years ago, politicians were frightened to even voice that idea in private. Brown struggled to understand how best to achieve social justice in the face of the global economy. His conclusions are reshaping thinking among democratic socialists. Brown knows globalisation cannot be stopped. It can only be tamed. Now his passion is shaping policy in Britain to enable Labour values to be achieved from a global perspective.

Yet it cannot be denied, he is the same man who only last year announced 84,500 civil service job cuts without prior notice to staff. So how can he be taken seriously by the left? For anyone in one of those jobs outrage, anger, frustration and a sense of betrayal are all understandable. But given the rate of staff turnover in the posts concerned, the aim of reshaping public service could be achieved without compulsory redundancy. This controversy goes to the heart of the relationship between Labour in government, rank-and-file, and organised labour, in particular. Those headline numbers have to be compared to the rate of job creation in Britain’s growing economy to be put into perspective.

Brown has been in charge of Labour economic and financial policies for over twelve years. Peston describes how after Labour’s 1992 election defeat Brown set about his job as Shadow Chancellor with such determination to shed Labour’s image as the party of devaluation, economic profligacy and inefficiency that his own stock plummeted. As a result of the so-called Granita Pact in 1994 when Blair was given a free run at the leadership, Brown has enjoyed unparalleled freedom to shape policy. According to Peston, the last time Tony Blair made any contribution to Labour economic policy was in 1995. So what are the lessons now? Brown’s prawn cocktail offensives in the 1990s may have won over the City and big business. But he forgot the beer and sandwiches. Too few Party members understood the significance of what Brown called the New Economics, and Blair, as the media savvy candidate took the leadership title replacing the late John Smith.

Nevertheless, Brown remained loyal to the Party. He knew that for Labour to succeed in government and get re-elected it had to get a grip on the economy. He set about planning a coup de grace – independence for the Bank of England. The rank-and-file struggled to come to terms with this proposal then, and many are still furious with him. At the heart of Brown’s evolving policy framework was recognition of the need for sound money. His preferred option was to transfer responsibility for setting the price of money (aka interest rates) to the Bank of England from the Treasury, from the elected to the unelected. Was it anti-democratic? At first glance, it was profoundly so. Should he be forgiven politically?

Look at the record. To what do we now owe the return of full employment and the longest period of sustained economic growth for some 200 years? Was it luck? Or should Gordon Brown now be given recognition for an inspired move to enable him and his successors as Chancellors of the Exchequer (aka finance ministers) to concentrate on strategic economic and financial thinking? The alternative was doing what every other Labour chancellor has done - worry day to day about the price of money, and the exchange rate. Such concerns cost Labour its reputation and ability to govern throughout the 20th century. Brown had the prescience to realise that the public places greater trust in bankers to look after their money, than politicians. Labour owes its reputation for sound economic management and the freedom to work for social justice to him personally and the team he built around him. The system for setting interest rates is open and transparent. Incidentally, there are profound lessons here for the future conduct of government and the restoration of due process, collective cabinet responsibility and executive accountability to Parliament.

Every member of the Labour Party, especially prospective parliamentary candidates, needs to think about the implications of Gordon Brown being moved from the Treasury on international financial markets should Labour win a third term with Blair still in place as Leader. Blair has repeatedly sought to pressure Brown into taking Britain into the European Monetary Union. Brown has steadfastly resisted until the now famous five economic conditions are met. The risks of political interference in the economy if the Blairites win a landslide 3 rd term cannot be understated.

For revolutionary socialists maintaining the confidence of world markets is just propping up the capitalist system. At least democratic socialists recognise that the world has moved on and the route to social justice is through understanding markets and their limitations. And Brown could be said to be at the forefront of that movement.

More damaging politically to Brown’s reputation is the allegation that Labour economic policy is just Thatcherism continued. Matthew Watson summed this up in a paper to the Political Studies Association annual conference in 1998:

‘An important step on the road to the wholesale acceptance of the Thatcherite economic agenda – an odyssey which the Labour Party itself prefers to describe as its ‘modernisation’ – was Gordon Brown’s 1993 pamphlet, How We Can Conquer Unemployment’ .

Set against that is the Brown’s record as an interventionist, which was clearly signaled before Labour won power in 1997. Writing about his Medium Term Strategy in the Guardian in 1996, Brown said:

‘At the heart of the debate about modern theories of growth is a simple contention: while crude, free-market dogma has failed Britain, good government intervention can make a difference’.

Having spelled out his intentions, he wasted no time in office as Chancellor to demonstrate that Labour was serious. A windfall tax was slapped on the privatised utilities to pay for the New Deal to get young unemployed people back to work. An internal battle was won reportedly to fend off attempts by Blair to secure an opportunistic exemption for British Telecommunications plc (aka BT). This was on the pretext that BT was willing to pay for the wiring up of every school in the UK. Brown’s plan survived thanks to legal advice that there could be no favours. Typically for Blair who announced the BT offer at party conference, it was never sealed. Under Brown, Labour instituted the minimum wage despite widespread opposition from business. These measures together with major reforms to the welfare system, also engineered through the Treasury, are putting millions of pounds into the pockets of those on low incomes, including pensioners.

But the allegations of neo-conservative economic thinking persist due to Brown’s apparent uncritical stance towards private finance initiatives to boost investment in public service infrastructure, the lone parents benefit fiasco or the miserly 75 pence increase in the state pension in the 1999 budget. There are major issues concerning the future of pension provision and affordable housing to be addressed too. And he still retains a reputation for command and control ambitions possibly exceeding those of the current Party leader.

But looking forward there can be in no doubt that Gordon Brown’s prudence has opened up new possibilities for democratic socialism with his planned increases in public spending and investment. He has laid Labour’s economic bogies of deflation and economic profligacy to rest. He has proved he is neither a laissez-faire neo-liberal nor a neo-conservative. He is already honing his democratic credentials by leading a Cabinet rebellion over House of Lords’ reform, and demanding an elected second chamber not an appointed chamber as favoured by Blair.

According to Peston, Brown is credited with the most extensive Cabinet consultation ever over the case for Britain biding its time over entering the European Monetary Union, reopening the door to a return to collective cabinet responsibility. Sadly missing are any clear signs of his intentions towards the Labour Party itself, now a shrunken shell of a mainstream mass membership political body. Twice Blair refused to nominate him to the National Executive Committee. So on that count we may have to wait. He has also got some fence building to do concerning rich and poor, PFI, pensions and the housing market. Maybe that will have to wait until the tax straightjacket, being imposed by Blair, can be shed as part of a more honest relationship to be built by Labour-in-government with both a long-suffering party, and the electorate.

When the time comes to elect a new Labour leader, the democratic left could well ponder the full credentials of Gordon Brown - 21 st century global leftie?

* Peston, R. Brown’s Britain (2005) Short Books, London