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The road to hell is paved with good intentions

The McBride affair exposes the dark heart of New Labour argues Neal Lawson

I have never met or dealt with Damian McBride and I cannot look into his heart and tell you whether he is a good person or not. But unfortunately for him his now infamous email serves as a means of crystallising everything that is wrong with New Labour. But in highlighting what has gone so badly wrong ‘Smeargate' or whatever you want to call it sheds light on what needs to be done to get Labour back on track.

Few things in life or politics are black and white; the McBride affair is. As a piece of pitch black dark arts it doesn't get much worse. His email is at the extremity of New Labour's political problem. There are shades of grey in New Labour and even, we must not forget, patches of white. Whatever else we may think, the Labour government cannot and should not be written off as 12 wasted years. It's not true and such a view only does the Tories work for them. But what matters is not the wayward points on a scatter graph but the line of trend; and that is undoubtedly away from the things we should cherish – equality, democracy and sustainability. Something is clearly very wrong in the heart of the beast and McBride reveals it.

For this is where you end up when, even with good intentions, you believe too much in the wrong things and not enough in the right ones. More than anything New Labour has a deficit of belief in democracy and an over abundant belief in the power of the market. In the mists of its time it is unclear whether Brown and Blair and the small pack of outriders who formed ‘the project' always believed in markets over democracy – more likely the social, economic, technological and political forces moved them in that direction. After all – we make history but not in conditions of our own choosing. Whether they believed that markets were right in principle and practice – or just the means through which they could capture and keep power is irrelevant. This is where they ended up; free market fundamentalism in its globalised form was something to be accommodated to rather than shaped for societies' needs. They inverted the purpose of Labour- to be the servant of the market not its master.

Labour they concluded could not win as Labour. To win it had to be new Labour which in reality meant not Labour. In not being labour it has to be capital. To square the circle the case for capital had to be argued for on the spurious grounds that it would deliver social justice; you just have to read the Spirit Level to find this is untrue.

Here we have to remember that markets and democracy are zero sum. More of one means less of the other. We either allocate goods and power through the market or democracy. The former means decisions are made by closing down the space between producers and consumers to ensure direct and easy signals between the two. The latter involves mediating organisations through which dialogue, discussion, decisions and consensus building can take place. The market method deliberately and systematically rolls back the frontiers of democracy. Of course the upshot is a more divided and less equal society and now one of the periodic crises that must go along with free market fundamentalism as its tends towards over accumulation.

So where does Damien McBride and the top down come into this? The first point of entry is the need to govern the party against its core purpose, which was to be the champions of democracy and therefore socialism. Because only a few people get ‘the project' the rest could not be trusted so had to be systematically excluded and sidelined so that the party became just an empty vehicle for a different political project. Just as the economy is deemed to work more efficiently if you strip out democratic and pluralistic structures so is the party. The leadership talk directly to the people with no need to confront the beliefs of a party that wants to build a different kind of world. But this takes you to a very dark place in which the only reason to win is to win. You don't have a vision of a better kind of world and you don't have a route map to get there. You just have spin and control. There is no difference between targeting and smearing the official Opposition or the opposition in your own party. The opposition is not the Tory party but anyone who stands in your bosses' way. Everyone is fair game because all that matters is keeping your person in power.

And here Smeargate gets tied into Gouldgate and the attempt in Erith and Thamesmead to parachute in the 22 year old daughter of Philip Gould, one of the five people who in effect became the Labour Party after 1994. Again I don't know Georgia Gould and know nothing of her politics. I assume her intentions are good. But the fact that a 22 year old who has never had any job has the sense of belief in herself that she can represent a parliamentary constituency beggars belief. What are her and her minders thinking of? The party has become the play thing of an elite who use it for their project and not the one for which it was intended; to act as a counter balance to the forces of the market and to socialise rather than individualise the risks and rewards of life. They do this because they can; because they have control of the machine. But also because no one else can be trusted to understand and prolong the project.

So, what is to be done? It is highly doubtful that Brown can step decisively out of this space into something new and profoundly democratic. We can hope for that if we want or we can organise the ideas and forces that condition the context in which leaders make their decisions. In this way we empower ourselves.

For the conditions are right for so much more. This can be a centre-left moment and that is the reason Cameron cannot fly away in the polls – despite McBride. The public know they need active government and democracy not markets; they need a party of Labour not capital. But the immediate room for this is not in Labour but outside.

So Compass is changing its strategy. We remain a pressure group orientated around Labour but our gaze has turned outwards. A transformed Labour party remains a necessary but far from sufficient vehicle for our political aspirations. Energy, ideas and enthusiasm are not in the Party – they are outside.

In March John Harris and I wrote an article for the New Statesman called ‘No Turning Back' (NTB). It was the culmination of a number of conversations and in particular a weekend event for 50 or so key people around Compass. It was about heading for the hills and the high ground to find ideas that would really mean no turning back to before the crash and tap into new sources of commitment and activism. It has already opened up some rich terrain and taught us much. Like the fact that of our quick starter for ten policy ideas for NTB, nine of them were in the 2005 Green party election manifesto and the Lib Dems could claim six. New Labour could of course claim zero. New doors and potential alliances are opening up for us. Not least around the issue of electoral reform and the need to break open the Westminster system in a way that would put the politics of sustainability and social justice firmly on the map.

The Labour Party is reaching the inevitable end point of a project based on governing against the central tenets of its historic mission. When or even whether it can be renewed in the name of democracy and socialism is now a moot point. But some signs of revival are apparent. Like Mandy Rice Davis I would say this wouldn't I, but in the space of five years Compass has built a reasonably coherent political base which provides, we hope, a desirable and increasingly feasible alternative to New Labour. We are overflowing with policy ideas and are building the campaigning skills to match them. Jon Cruddas is building a solid reputation as a thinker and leader and recently Sam Tarry the energetic Chair of Compass Youth was elected Chair of Young Labour. The machine can be beaten. And we are forging links with like-minded politicians and forces across Europe as well as the big NGOs who want a more sustainable and socially just world.

Whatever the outcome of the next election the next two years will be critical in determining whether Labour can be transformed again; from without as well as within. But even if that is possible – the good society we want to see created requires a movement and support within civil society.

In revealing the rotten state at the heart of the New Labour project McBride lets us see what the alternative is. A party that believes in a better world and has the confidence and maturity to understand it can only be built through the democratic engagement of others.