As the Tories drive a knife deep into the welfare state, nostalgia for Labour’s years in office may well grow as memories fade.
Guardian columnist Polly Toynbee and her co-author David Walker in their new book, The Verdict: Did Labour Change Britain? argue that Labour was essentially a progressive government, though one that made regrettable mistakes.
Their central claim is that “Labour bequeathed a public realm that shone”.
Toynbee and Walker trumpet the increased spending on education and health in particular, arguing these were the result of a government committed to “equality and fairness”.
Many people will struggle to recognise this picture of Labour’s 13 years in office.
Under Labour the welfare state and public services were not a curb on the brutal competitive reality of the market. Instead the market was driven much further into public services than anything Margaret Thatcher achieved.
Labour introduced targets into schools and hospitals, set up academy schools outside of local authority control, and the NHS is now honeycombed with private companies.
Much of the extra money Labour claimed was spent on the NHS was in fact sucked up by the profits of these parasites on the public sector, such as with private PFI buildings.
And spending on health and education was not driven by “fairness”, whatever the rhetoric, but by an attempt to improve the productivity of the workforce to make it more profitable.
This calculation—how to boost business’s profitability—lay at the heart of Labour’s years in office. It was not a “failing” by a government that lacked the guts to stand up to business, as Toynbee presents it. It was its driving purpose.
The cornerstone of Labour’s politics—which Toynbee shares—is the belief that the state can be a vehicle for progressive social change within capitalism, limiting the system’s worst excesses.
Accepting the framework of capitalism has always meant Labour seeks to grant reforms that don’t tread too much on the toes of the bosses.
Previous Labour governments before Tony Blair at least attempted to challenge the bankers, before retreating as the City created financial crises and the bosses threatened investment strikes.
New Labour broke with this tradition by simply surrendering in advance.
Toynbee and Walker admit that Labour struck a bargain with big business and the bankers. “Labour’s adulation of the City was extraordinary,” the authors sigh.
Behind this pact with the devil lay the calculation that allowing business to grow and make profits would generate taxes to fund the welfare state. Toynbee thinks Labour’s mistake was that it failed to raise taxes to fully pay for its expanded spending.
She explains this as a result of “cowardice”. Labour thought higher taxes would be unpopular.
But it wasn’t most voters who didn’t want higher taxes on the rich—it was the bosses.
Failure to see all this, and to try and paint New Labour in the colours of Old Labour, leads to despair and pessimism.
After all, if you think Labour did a lot right, then how do you explain its defeat in the 2010 election?
You end up, as Toynbee and Walker do, blaming the public for being ungrateful, and saying the right wing press reflects the country’s bigotry and hostility to the left.
But the reason Labour lost four million votes between 1997 and 2005 (almost 2.8 million even before Iraq) wasn’t because of exaggerated or unrealistic hopes, but because it continued the pro-market policies of the Tories.
And it was Labour’s failures that opened the door to increased scapegoating of migrants—which Toynbee doesn’t like, though she is occasionally ambivalent when talking about “socially disruptive mass migration”.
Yet the real problem was that the Labour Party’s longest ever period in office resulted not in a lessening of inequality in British society—but in the widening of the gap between rich and poor.
As Toynbee and Walker lament, “Labour did not try to break the hold of the few on power, money and status.”
To imagine New Labour’s project was any different is to remain captive to an illusion.