22 November 2019

Is the British state capable of Labour’s ‘Real Change’?


There’s a lot for voters to like in Labour’s new manifesto, and it will probably further boost their image after the party’s leader, Jeremy Corbyn, fought the Prime Minister to a draw in their televised debate.

Public services are creaking after nearly a decade of austerity. This manifesto commits to returning much of the funding that has been lost. British capitalism, that strange blend of offshore financing and deindustrialisation, could literally profit from a more purposeful direction, boosting capital investment and rebuilding some of the country’s chronically underperforming infrastructure. Labour promises to do just that.

Britain feels demoralised, atomised and divided – especially between the generations. Labour has answers here too. More rights for private renters, which will help to move intergenerational transfers back towards the young. Better animal welfare. More participation and flexibility at work. Even more free-to-air sport. So far, so good.

But there is one glaring problem with all this, and it concerns the capacity of the British state.

It will not have escaped your notice that the state has struggled with the demands of preparing for Brexit – a crisis that has not gone away, despite Labour’s promises of a renegotiation and subsequent referendum. The command and control required for that would likely soak up any Labour government’s energies for most of 2020.

It is also clear that one of the costs of Labour governing as a minority (the most likely way they would get into power) will probably be another referendum on Scottish independence. This would be an existential threat to the United Kingdom that would divert any government’s limited attention further. Delivering Labour’s agenda on top of those two running emergencies is likely to prove bracing, to say the least.

Labour’s new radicalism brings with it two very dangerous rhetorical positions. The first is dismissing detail as of no account, as Corbyn’s answers to point-by-point questioning demonstrated at Labour’s manifesto launch. The second is a disavowal of the energies and costs of governing – as if civil servants, councillors, lawyers, economists, contractors engineers and builders have infinite time and attention just to pour out Labour’s priorities.

These two objections have proved hard to hear amid the white noise of an election campaign, but they should be deadly to Labour’s credibility. Take my own field of Higher Education. Yes, Labour can abolish fees, but what then do they do with the cost inflation that a demographic bulge and higher demand – not to say accelerating costs – will likely cause?

Put a cap on numbers reflecting the current spread of places and you risk bulging out the entry in the ‘elite’ Russell Group, potentially creating mass teaching institutions where governments want research powerhouses. But move the places ‘down’ the existing hierarchy and there is a danger of bankrupting some big-name institutions. No answers are ever offered to these absolutely critical questions.

Detail matters. On what basis is the new nationalised energy and power sector to work? Here a myriad of new ideas about local and regional generation seem to have been ignored in favour of an old-fashioned regional structure that will please nobody. How will a not-for-profit water sector hope to meet the infrastructure challenges of a drier and much more populous Britain in the mid-century? Incoming Labour Ministers might get a nasty surprise when they look at the cost pressures there. Costing the end of in-work poverty at £8.4bn seems like a gross underestimate, while the ‘National Education Service’ and ‘National Care Service’ are just some promises with a ‘National’ badge on them.

Worse than this dearth of real plans is Labour’s second main problem: a lack of realism, a failing that afflicts the Conservatives just as much, if not more so. The key point here is that the British state has indeed been hollowed out at its core, as Labour correctly divines. But they cannot simply perform electric shock therapy on it, or attempt an emergency reconstruction in flight, while it struggles to deal with multiple transformations all at once.

Most Whitehall departments have seen middling and senior staff leave in their droves over the last few years, and some are struggling to fulfil core functions such as target monitoring and day-to-day management. To ask the Department for Education to create a single legal order for all schools, reintegrate Academies and Free Schools and lead a renaissance of Local Education Authorities is as absurd as asking the Department for Transport to take over micromanaging of the Train Operating Companies. This is a programme for two or three Parliaments, at least – not for one.

Even more worryingly, the construction industry is not ready to absorb Labour’s capital plans – £250bn over ten years in the Green Transformation Fund, and £150bn in five years for the Social Transformation Fund.

The construction industry is overheated, lacking labour and facing a dwindling, ageing workforce: as The Economist’s Duncan Weldon has pointed out, wage inflation in construction is running at 6%, as against 3.6% in the economy as a whole. A big uplift in council house building (100,000 more a year), expanding HS2 to Scotland, insulating all new and then existing homes: just some of the plans that will at one and the same time be very hard to assemble and to staff.

Labour is possessed of a strong analysis: the British state is too weak. But its remedies take no account of its own argument. If it is too weak, it is hardly likely to get up off its sick bed and put things right immediately. That will take time – perhaps a long time. Strangely for a party led by 1970s radicals, it is not Marxist enough. It has no analysis of the state, only conspiracies about the wealthy and blame for the powerful.

The Leninists in the Opposition Leader’s office have not absorbed the lessons of state capitalism deeply enough: structural transformation requires the state to be rewired first. Nor have they really learned from the hard constraints that can force Left governments to change tack: Greece’s Syriza government was forced to turn back in 2015, just as Mitterrand was as President of France in 1983. Labour is overpromising with every breath in its body. A good deal of what it is advocating will likely never happen. The populists and demagogues that then appear may be even more unpleasant than those we face now.

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Glen O’Hara is Professor of Modern and Contemporary History at Oxford Brookes University. He is the author of a number of books including 'From Dreams to Disillusionment: Economic and Social Planning in 1960s Britain' (2007) and 'The Politics of Water in Post-War Britain' (2017).