Fraudulent Activity

The measures the government took to protect employment, wages and businesses during 2020 and 2021 were a success. Unemployment was kept relatively low, the furlough scheme (together with the Universal Credit uplift) kept a lid on poverty, while the rate of business failure dropped. This last was partly due to the normal process of Companies House dissolution being in abeyance during the middle of 2020, but even after the catch-up in September, the cumulative number for the year was lower than in 2018 and 2019, though there was a subsequent above-trend increase in 2021. The closure of businesses on a scale not seen since the early 1980s did not transpire, though this may simply reflect the existing high number of zombie firms in the economy due to low interest rates since 2008. Perhaps surprisingly, business formation numbers were higher in 2020 than 2019, at 781k versus 691k. This was partly due to the creation of more online retail businesses prompted by the change in consumption habits during lockdown, but it also reflected a measure of fraud as fictitious companies were formed to take advantage of the pandemic financial support schemes. 

It now transpires that £5.8 billion of the £81.2 billion spent across those schemes has been lost to fraud and error, with £4.3 billion of that already written off. Though the government's own statement on the matter doesn't mention it, preferring to focus on the Coronavirus Job Retention Scheme (CJRS) and the Self-Employment Income Support Scheme (SEISS), the bulk of this relates to the Bounce Back Loan Scheme (BBLS), which accounted for £47 billion of the total spend and was managed by the Department for Business, Energy & Industrial Strategy (BEIS). The Public Accounts Committee anticipated in December 2020 that a third to a half of this would become bad loans (i.e. not repaid due to insolvency) and flagged the government's apparent difficulties in identifying, let alone stopping, fraud on top of this. It looks like the final fraud rate will be about 10% of the spend, which is remarkably high. The resignation this week of a junior minister in the Lords has brought the BBLS back to prominence, though the media seemed as interested in what this said about the Prime Minister's weakening grip as the ethics of British business.

Could this level of fraud have been avoided? While there has been stinging criticism of the attitude of the Treasury and the competence of the Department of Work and Pensions (DWP) and BEIS, the counter-argument has been that this was an emergency and not worrying too much about fraud was the correct policy in the circumstances, given that the alternative might have caused significantly greater unemployment, business failure and financial distress. However, this instrumental argument distracts from a more fundamental question, which is whether it made sense to approach the problem the way the government did. For example, the BBLS was designed to facilitate bank lending at commercial rates to SMEs by providing a state guarantee for the loans. Once in place, the banks had no interest in checking for fraud, whether the government wanted them to or not, as they weren't exposed to any losses. In effect, the state went with the grain of the banking sector's preferences and habits, providing what amounted to an advance bailout for bad loans.

Similarly, the CJRS scheme assumed that the state could most appropriately support wages during furlough by allowing employers to claim the cost back, rather than making use of an existing mechanism (PAYE) to calculate wages and pay employees directly, which if nothing else would have lessened the "red tape" burden on businesses. It is hard to avoid the conclusion that the government preferred this approach because it maintained power relations between employer and employee. For example, now that employers have started to demand that employees return to the office, despite continuing risks of infection in sometimes substandard working environments, employees have little leverage. This doesn't mean that direct payments would have preserved working-from-home for longer but that employees might have been more emboldened to ask for improvements in conditions as a quid pro quo for a return. That power relations were an important consideration is evident from the relaxed attitude towards corporate employment fraud compared to the more stringent policing of benefit fraud.

In the years leading up to the pandemic, benefit fraud and error was running at about £4 billion a year. The majority of this was for benefits not related to work, such as housing benefit, personal independence payments and pensions. Universal Credit (UC) has a systemic vulnerability to fraud (or honest error) because claimaints can increase their work hours, or otherwise change their circumstances, without this being correctly adjusted for. As UC has been rolled out, and as many more people have claimed during the pandemic because they didn't qualify for the furlough or self-employed schemes, the rate of fraud and error has shot up to 14.5% of expenditure. If nothing else, this highlights what an inefficient system UC actually is, as much as how easy it is to defraud it. The furlough scheme was also open to abuse by employers - e.g claiming for workers who had already quit their jobs, or adding friends and family as spurious employees - while the self-employed scheme was vulnerable to people who had already chosen to stop working, or had shifted to employment and were now on furlough, claiming for extra months of income. 

It's interesting to speculate how this would have been handled if we'd had a Universal Basic Income (UBI) system in place. This would have covered everyone (so no spurious employees), could have paid direct (so no payroll fraud), and could have smoothly compensated when paid employment income stopped (as it would be automatically reported via PAYE). But one of the reasons why we don't have UBI is that it provides workers with leverage: the ability to turn down crap jobs, to refuse intolerable or worsening conditions, and to vary hours to accommodate social responsibilities (such as isolation when infected or care-giving to others). As such, it is the antithesis of the government's preferred approach with its focus on maintaining the power of capital over labour. The importance of that dynamic is all-too evident in the government's insistence that employees should return to the office or factory as soon as possible. This wasn't simply in support of the narrow financial interests of commercial landlords and city centre retailers. It was a wider insistence on the restoration of the power relationship.

It wouldn't be fair to say that the government has turned a blind eye to corporate fraud in respect of the pandemic support schemes. It does expect to recoup £1.5 billion of the lost money, after all. However, it doesn't appear to have pursued it as vigorously as it has previously pursued benefit claim fraud (and overpayment errors), despite plenty of warnings over the last two years. This limited diligence stands in marked contrast to the government's much more tolerant, even lackadaisical, attitude towards the money lost via public sector outsourcing during the pandemic, most famously the VIP lane for PPE and other supplies contracts and the £37 billion test and trace programme. Of course, no one is suggesting that the likes of Deloitte and Serco have been guilty of fraud (though that word is not inappropriate in its non-criminal sense when applied to Dido Harding). This looting of the public treasury is all above board: exorbitant payment in return for ineffective or substandard services. And in overseeing this waste, the government is merely continuing the established practice of the state.

The common thread in all these phenomena is the determination of a Conservative government to defend and conserve existing power relations, from the control of employers over workers' incomes to the parasitic symbiosis of consultancies and the public sector. The talk of the Tories rediscovering the developmental state, just like the claims that Labour's current leadership is well to the left historically on economic policy and employment rights, mistakes the rhetoric intended to substitute for a discredited neoliberalism for a radical agenda. The reality is an absolute determination, across both parties, to preserve the structural asymmetry that has been established between capital and labour since the early-80s. We are witnessing two types of fraudulent activity: the opportunism of a capitalist class that sees profit in the pandemic and a political class guilty of hypocrisy and deceit. The charges laid against the Prime Minister do not provide a lighting rod for a cleansing jolt to the system but merely a distraction from the continuing institutional rot. A rot that put him into Number 10 in the first place.

Rearranging the Deckchairs

Newspapers that were at the forefront of the moral panic over populism and its supposed erosion of democracy have also been at the forefront of the criticism of Boris Johnson as an out-of-touch and amoral elitist, thereby employing a classic populist trope. "One rule for them and another rule for us" is far more of a populist slogan than the Corbyn-era "For the many not the few" (which was actually an example of New Labour pabulum), though it's worth noting that it's arguing for the consistent application of the law, regardless of how bad that law might be, not for the primacy of the interests of the majority. Another paradox of the moment is that the clamour for Boris Johnson to be sacked from his job and shunned by polite society is a textbook example of that rare phenomenon, the cancellation. Of course, he isn't going to disappear from view any more than Kathleen Stock has. Equally ironic is that a man who made his name as a journalist by misrepresenting the EU and judging others harshly has been reduced to insisting that he has been misrepresented and was ignorant of the crimes he has been accused of.

We are in an period of politics in which the substance of policy has been marginalised in favour of personality, and no personality is more artificial and dominant than that of the Prime Minister. Johnson's ascent and decline is a classic morality tale, but he also serves as a common reference against which every other politician can define themselves. Thus "Starmer is the anti-Johnson", an entirely meaningless phrase in terms of policy. The Conservative's general election victory in 2019 owed much to the idea that Johnson was atypical, that he was running against the wider establishment (and not just the stubborn remainers who had thwarted the people's will in Parliament and the courts since 2017). The sight of Christian Wakeford crossing the floor this week will have done little to dissuade voters from thinking of MPs as venal careerists with flexible principles, a view that has been commonplace since the 2009 expenses scandal and which has been reinforced recently (and not just for those on the left) by both the factional behaviour of Starmer's Labour Party and the evolving scandals over the VIP lane for Tory friends and family. The disillusion with Johnson stems from the recognition that he is cut from the same cloth and has no intention of cleaning the Augean stables of Westminster.

What was notable in Wakeford's decision to cross directly over to Labour is that he didn't choose the more ideologically proximate Liberal Democrats. I don't think this suggests that Labour has moved to the right of Ed Davey's merry band. A little discussed feature of the political moment is that all three parties have shifted rightwards over the last two years, despite the talk of a revived social democratic state that the pandemic has given rise to, and despite the evidence that the country had been moving leftwards since 2015 on issues such as inequality, public services and nationalisation. The simpler explanation is that Wakeford reasonably calculates that his chances of remaining an MP, with all the benefits that entails (his Wikipedia entry does rather highlight his interest in remuneration), will improve if he stands as a Labour candidate. That outcome is by no means certain and his defection also carries strategic risks for Labour well beyond Bury South. To understand why, we need to look at the general election results in the constituency.

Between 2017 & 2019 the Tories added only 432 votes to their total, winning by a margin of 402. Labour lost Bury South because its vote dropped by almost a fifth from 27,165 to 22,034, though this was still slightly more than the 21,272 votes that it got in 2015. Since 1997, when the previously marginal seat flipped from blue to red, the Tory vote had been eroded first by the Liberal Democrats up until 2010 and then by UKIP in 2015. Labour's success in 2017 owed a lot to it eroding that UKIP vote through its jobs-first Brexit stance. But many of those voters then turned to the Tories when Labour's commitment to getting Brexit done was called into question by the People's Vote campaign. 2019 saw the Conservative Party maximise its share of the non-Labour vote while Labour was hit by abstentions. The latter's chances of retaking the seat at the next election will depend on both attracting back those who abstained (which may have been about antisemitism as much as Brexit, in a seat with a large Jewish population) and on the Liberal Democrats reviving to erode the Tory share of the anti-Labour vote. The seat was probably in the bag already, but that might not be the case now.

While winning over a careerist Tory MP is not the same as winning over the electorate, it does send a message that centre-right voters will not feel out of place supporting a Starmer-led Labour Party, a message reinforced by Rachel Reeve's most recent paeans to business, fiscal rectitude and the expulsion of anybody suspected of socialism from the Labour Party. The problem, which the psephology of Bury South highlights, is that Labour's real challenge is not winning over the infamous "lifelong Labour voters" who defected to the Tories in 2019 (many of whom probably only voted Labour once, many years ago), but persuading the genuinely regular Labour voters who abstained at the last election because of the party's position on Brexit, or because of doubts about Corbyn, to turn out. For many of them, Labour welcoming an unrepentant Tory MP, who has willingly supported all of the illiberal and anti-working class legislation of this government, is probably a turn-off, and that may offset the positives of the party accepting Brexit.

A small portion of the anti-Labour vote in 2019 went to the former Labour MP, Ivan Lewis, who stood as an independent. He had been suspended by the party in late-2017 after sexual misconduct allegations and then resigned a year later citing his somewhat convenient concerns over antisemitism (the misconduct allegation then being voided). After first registering as a candidate, he then backed out of the 2019 contest, concerned that he might split the anti-Labour vote, but did so too late to have his name removed from the ballot. It's impossible to know how the 1,366 votes in his favour might have affected the result had his name been absent, but his willingness during the election campaign to publicly urge a vote for the Tories to keep Corbyn out of Downing Street suggests an ironic continuity in treachery and self-interest between Bury South's recent MPs. The point is not that Lewis's intervention was decisive in 2019 but that he gave the electors of Bury South another reason to believe that who they vote for is irrelevant: the same bastards get in regardless of party affiliation. 

There is a fundamental divide in political science between those who see changes in vote shares as the product of mobilisation and/or demotivation on the one hand, and those who see it in terms of public choice theory - i.e. retail politics in the frame of economic utility - on the other. This is obviously an ideologically charged division, but it also reflects a divide over political strategy that is as much about the strengths and weaknesses of the party infrastructure as it is about ideological preferences. For example, whether you've got the ground troops to mobilise lukewarm supporters or whether a reliance on focus groups leads you to target specific demographics with tailored offers. The question for Labour is whether it should be looking to a combined strategy that seeks to mobilise its own supporters and demotivate Conservative voters (i.e. prompt their abstention), or whether it should be looking to make a more persuasive offer to those who voted Conservative in 2019 (e.g. "swing" them over by appeals to patriotism and responsible spending). As things stand, Labour appears to be committed to the latter, but how does that sit with the recruitment of a sitting Tory MP?

Some people have interpreted the Wakeford defection as another tactical blunder by Keir Starmer, not least because it has stymied the Tory rebellion against Johnson and turned an issue of personal probity into a partisan contest, but I think it was probably the only realistic option given Starmer's electoral strategy. Labour has clearly been cultivating Wakeford for some time, so there is no reason to believe this was a spur of the moment decision. He wasn't going to cross the floor unless he was assured of a welcome and, presumably, a guarantee that he will be the parliamentary candidate at the next election. What Starmer didn't want was for Wakeford to sit as an independent. While this would have kept the focus on Johnson and might have encouraged more Conservative backbenchers to resign the whip, it could quickly have escalated into the demand for a new centre-right party formation along the lines of Change UK (Anna Soubry would have been all over the media). As Starmer is clearly aiming to colonise that same territory, this would have been self-defeating. Far better to absorb Wakeford into the Labour fold, even if it does let Johnson off the hook for now. 

The strategic risk for Labour is that the Wakeford defection doesn't just wind-up the left, which for many in the party leadership is a positive, but also demotivates those more ideologically diverse Labour supporters who sat out 2019. At some point, Labour needs to meaningfully distinguish itself from the Tories. That means adopting policies that Christian Wakeford would in the past have dismissed as madness. Either he is on an intellectual journey that will see him repudiate at least some of his past beliefs, or he has been assured that Labour actually overlaps significantly with the bulk of the parliamentary Conservative Party and isn't going to frighten the horses. His claim that he was elected "as a moderate and a centrist" suggests the latter. This is not only demotivating for left-leaning voters who want Labour to stand for something more inspirational than "Under new management". It won't energise those congenital Labour supporters who genuinely would never consider voting for a Tory. And, perhaps most damaging in the long term, it reinforces popular cynicism about electoral politics. 

Club Rules

No lives would have been saved if the notorious (actually, probably quite boring) Downing Street parties never took place, so to explicitly link the coincidental deaths of Covid-19 sufferers is just shroud-waving, particularly when you consider the excess deaths resulting from the delays in imposing lockdown or those who have died while on ever-lengthening NHS waiting lists. While the scandals over the award of PPE contracts and the test and trace programme have received some scrutiny, a decade of NHS underfunding is treated as mere background noise and the incompetence of the pandemic's management is marginalised in favour of the forensic media interrogation of white wine and Twiglets. In truth, disgust at naff parties in Number 10 is little different to outrage over BBC presenters not wearing poppies for a month before Remembrance Sunday, hence the emblematic importance of the lonely, grieving Queen. It is performative respect more concerned with tone (the wrong type of jacket at the Cenotaph, the frivolity of BYOB) than honouring the dead.

One of the more amusing sub-plots of "partygate" is that the poppy-loving press knew all about it from the off but have only now chosen to reveal the facts. Their reluctance hitherto owes a lot to their own compromised positions, notably James Slack, the current Deputy Editor of The Sun whose leaving party as Downing Street Director of Communications is now in the frame, but it also says something about the milieu. The anthropological insight this has given into the politico-media class - and the wider business elite, for that matter - is that they consider gardens behind Georgian buildings in central London as an extension of the workplace and the presence of alcohol and canapés as unremarkable. That Dominic Cummings chose to deliver the explanation for his Barnard Castle trip in the Downing Street rose garden wasn't an eccentric choice on his part, or ironic prefiguring for a later dramatisation starring Benedict Cumberbatch, but the answer to the question, "Where's the biggest usable space we've got to house the media for this?" 

One reason why it has taken so long for these revelations to come out, despite the plethora of witnesses, is that all those present or adjacent, including every lobby journalist, understand that the British establishment still conducts much of its business in private members clubs where drink is routinely served. While the popular image of clubland is of a stuffy Pall Mall establishment populated by the ancient and indolent, somewhere between and Around the World in Eighty Days and Yes Minister, the reality is a modern, elite environment integral to the commercial and political life of the capital that stretches from Marylebone to Shoreditch. The point is not merely that business and booze easily mix in this world, or that the norm of exclusivity encourages a belief that public rules do not apply, but that membership of the milieu entails a solidarity and omerta about relationships and behaviour. What's interesting is that the current revelations have taken on their own dynamic, moving from the sins of dispensable junior advisers and below the salt figures like Shaun Bailey to serious players like Slack. There's a point at which the pressure on Johnson could become dangerous for the press itself, and we may already have reached it.

So what is driving the media campaign? On BBC Newsnight on Wednesday, Jacob Rees-Mogg incidentally remarked that wine (no doubt a decent claret) was routinely available in the office when he worked in the City in the early 90s. This was accurate, albeit for a minority (partners, not employees), but what he didn't say is that the wider clampdown on drinking (and smoking) that started in the 1980s was not a self-denying ordinance by business leaders won over to sobriety. As drinking during the day was ruthlessley extirpated on the factory shop-floor and in open-plan offices as part of the neoliberal workplace regime (long hours, self-discipline, continuous improvement), it moved off-site for the executive class. Like so much else, it was outsourced. It reflected a persistent hierarchy but one that was now no longer bound by the physical limits that characterised industry before the 1980s, when you wouldn't find bottles of light ale in the staff canteen but there might be a drinks cabinet in the Managing Director's office (and you knew you had achieved class promotion when you got the key to the executive washroom). The implicit defence of this hierarchy provides a clue into the thinking of Rees-Mogg and his ilk.

The demand by Tory MPs that Johnson apologise for the latest party revelations springs from both fears of a bad press among conservative voters, particularly in Red Wall seats, and a desire to do away with the remaining pandemic restrictions. The subtext is: "These rules are too confusing and cause too many edge case breaches, so let's just bin the lot". The motivation is not some fear of the growth in the state's authoritarian power, certainly not among MPs who have voted for the current Police, Crime, Sentencing and Courts Bill. Rather it arises from a sense of privilege: that people like them should not be inconvenienced by public policy. There are no genuine libertarians in the Conservative parliamentary party. Indeed, you can't find any among the soi disant libertarians of the US, who originated much of the Tories' rhetoric on freedom. There the term is only employed because "liberal" is coded pro-black and pro-poor. In reality, the British and American right are classical liberals, though owing more to Locke than Mill. Their fundamental proposition is that liberty is the right of the propertied and that the unpropertied are not deserving of liberty. In this there is full agreement between Johnson and his backbenchers.

A good example of this mindset was provided by Nigel Farage's recent fawning over Novak Djokovic, the tennis player barred entry to Australia for not being vaccinated. To accuse Farage of hypocrisy is to believe that he has always been motivated by nothing more than racism. The apparent irony of his defence of the free movement of an Eastern European should put paid to that. In reality, what Farage is defending is the free movement of the rich and powerful. UKIP may have appealed to popular bigotry, but it never intended to implement a policy of "send them back", which is why Farage was never sympathetic to the BNP (even if he carefully avoided criticising their voters) and why he regularly clashed with UKIP's xenophobic true believers. The aim was always to use popular dissent to push the Conservative Party further to the right on a range of issues beyond the EU and immigration. In this context, Farage's criticism of pandemic measures is not simple opportunism but a logical continuation of his campaign against regulation and public spending.

The calls for Johnson to resign for "breaking the rules" are misguided, even if they play well with popular opinion. The Prime Minister's career has been built on shamelessly insisting that the rules don't apply to him. This is why he can insist on re-negotiating agreements that he previously signed with the EU, and why the belief that his lies and inconsistencies are going to "finally catch up with him" is probably premature. But there's also a structural dimension to this. If you're lower down on the social scale, you don't get to resign if you break the rules, you're summarily sacked. Likewise, the higher up you are the more egregious your behaviour has to be before a resignation becomes inevitable, such as bugging the campaign headquarters of an opposition party or seizing the Suez Canal on a pretext. Were Johnson to resign as Prime Minister over his attendance at a sedate garden party that makes the Spectator's annual bash look like a bacchanalian orgy, or because he failed to stop the kids sneaking in alcohol and breaking a swing when he was away from the house, it would be the most ridiculous outcome in political history. That said, such a bathetic result would not be out of character for either Johnson or the Conservative Party.

Stuck in a Loop

The rise of Labour in the opinion polls and the decline of the Conservatives has been the key political development of recent months, greeted with excitement by the centre, foreboding on the right and not a little irritation on the left. In fact, the underlying trend since the 2019 general election has been a steady decline in support for the Tories, with occasional pandemic-related bumps, and a corresponding if muted oscillation in support for Labour. The recent polling leads for the latter have tended to be modest, with support rarely exceeding 40%, while the slump for the former seems to have been arrested in the most recent data as the issue of sleaze has gradually given way to a renewed focus on the management of the pandemic. What this suggests is that there hasn't been a sea-change in public attitudes, but there has been a not unusual mid-term decline for the governing party. This has in turn led to the usual feverish speculation of a Conservative Party leadership challenge, but a new face is unlikely to be introduced until shortly before the next general election, both to avoid being tainted by association with the travails of the coming year and to gain the full benefit of the boundary changes due next year. Mid-2023, in anticipation of a spring 2024 election, remains the most likely window.

This year is likely to be grim for the Tories for a number of reasons. Inflation will almost certainly exceed pay rises and the hike in National Insurance contributions and energy bills in April will hit many people hard, which will probably be reflected in the council elections in May. Gloom on the household front will be exacerbated if interest rates rise as well. While the pandemic could dissipate and possibly even reach an identifiable "end" during the year, this is unlikely to provide a bounce for the government in the way the vaccine programme in 2021 did. Despite these headwinds for the Tories, there is little evidence that Labour is about to sustainably breach the ceiling of around 38% in the polls, despite another round of hopeful press pieces that Keir Starmer was finally going to energise the nation this week (the sense of anticlimax was, once more, palpable). The problem is that Labour doesn't appear to be addressing most voters, preferring to focus on a narrow demographic motivated by flags and vapid slogans, but even Starmer doesn't appear to have much confidence in the latter (the painful brain-fart during his post-speech Q&A was emblematic) while his closest allies are becoming increasingly concerned by the lack of definition.

The obvious flaw in a strategy based on winning back the "Red Wall" is that it would simply return Labour to the position it occupied in 2010 and 2015. At best, a hung parliament, at worst a narrow Conservative majority. The 2017 result was a better indicator of what Labour can feasibly achieve: losing only 6 of its leave-leaning seats in the North and Midlands to the Tories and gaining 30 spread across the country, against the background of a significantly increased national vote, particularly among the young and working-age. But that result seems unlikely with a current leadership and programme geared to the status quo and a patriotic, security-oriented pitch designed to appeal to property owners and the elderly. One explanation for this approach is that a hung parliament is the strategic goal. Broadly, the idea is that Labour re-establishes its hegemony across former industrial towns while retaining the big cities (even on a depressed, in both senses, vote), while the Liberal Democrats make in-roads into rural and exurban Conservative-held seats. The problem is that while informal electoral pacts can work in by-elections, they are a non-starter in general elections (Labour supporters aren't going to be motivated by the prospect of Ed Davey becoming a minister), despite the loud urgings of centrist media. 

That media chaff isn't simply the persistence of the government of national unity nonsense that was in vogue in 2019. It also reflects how much the political centre genuinely admired the coalition government of 2010-15. While much of the country struggled under the impact of austerity, and specific minorities found themselves targeted by cruel policies such as the hostile environment, the pundit class and the social interests it represents were perfectly happy, and not simply because the coalition agreement sidelined the prospect of a referendum on EU membership. Property values were preserved, the burden of debt payments fell on the poorest, and liberal gestures like equal marriage flattered the actual metropolitan elite. It is in this context that we should consider epiphenomena like Gina Miller's True and Fair Party. This isn't simply a home for militant remainers, as the focus on financial and government virtue indicates, but nor is it likely to bother the scorers come election time. It is a media confection by which liberal Tory dissatisfaction with the government can be channelled.

Assuming Labour is pursuing an updated version of the 35% strategy of the Miliband era, it will depend on the Liberal Democrats eating into Conservative support nationwide, which would explain the party's pusillanimous attitude in North Shropshire. The Liberal Democrats have increased support over recent months but, by-elections notwithstanding, this appears to be mainly at the expense of the Greens. The loss in support for the Conservatives appears to have benefited both Labour and Reform (formerly the Brexit Party) as well, though this appears to be down to much the same group of fickle voters (hardly suprising given the increasing similarity between the rhetoric of the two parties). In other words, Labour appears to be picking up some Tory protest votes at the margin but doesn't appear to be winning over liberal conservatives in significant numbers. Of course, this is fine if the plan is to win back the Red Wall seats on a combination of patriotism, managerial competence and the preservation of the status quo for retirees, while looking to the Liberal Democrats to erode the Tories elsewhere.

It's worth noting that the 35% strategy came in for a lot of criticism from the Blairites, primarily because it didn't focus enough on economic "credibility" - i.e. being pro-business and comfortable with fiscal austerity. What's changed is not simply that the impeccably Blairite Rachel Reeves is now Shadow Chancellor but that the terms of the economic argument have shifted considerably since 2015. This is due to a combination of factors: the realisation that Brexit would carry an economic cost, the foregrounding of inequality and under-investment in 2017, and the "levelling-up" rhetoric of 2019 combined with the forced state intervention of the pandemic. The personalisation of the government's economic tension between Johnson's largesse and Sunak's frugality reflects this underlying shift. There is now a widespread appetite for public investment, not just to repair the welfare state after more than a decade of austerity but to address the opportunities and threats of both Brexit and climate change. And, significantly, there is a recognition that this will require greater taxation of wealth.

Some commentators, like James Meadway, have rightly noted that Labour's current economic plans are leftwing relative to its post-1980s history, but this tends to elide the very clear message by Starmer and Reeves that what they envisage is investment in support of private capital, with nationalisation off the table and the labour market once more a site of discipline and virtue. The idea that they might piggy-back on the shift in mood to deliver a more egalitarian outcome strikes me as wishful-thinking. For all the gestures towards "radical insourcing", this is a very pro-private sector leadership. On taxation, there are vague promises of "wealth taxes" and more substantive promises to reduce the burden on the "hard-working", but implicit in this is the traditional idea that private sector growth will expand fiscal revenues enough to both fund better public services and keep employment taxes in check. How this is to be squared with the extraordinary demands of climate change, and the equally extraordinary losses arising from Brexit, isn't fully explained and I'd be surprised if there was any more clarity this side of the next general election.

Commentators sympathetic to Starmer have emphasised the radicalism of the commitment to fighting climate change and the promise of improved employment rights, but again these appear radical relative to Labour's recent history rather than to the government's programme. While the Tories are never going to enhance worker's rights at the expense of employers, their levelling-up rhetoric and demand to cut taxes on workers will muddy the waters (much as "fuck business" successfully did), while Labour's plans owe a lot to the green paper produced by Andy McDonald, who subsequently resigned from the shadow cabinet when Starmer refused to back his calls for a £15 minimum wage and statutory sick pay. In other words, there isn't as clear a gap between the parties as many suppose and good reason to believe that Starmer and Reeves's pro-business approach will narrow it further. Likewise, the £28 billion annual spend on the climate crisis looks superficially impressive, but the substance is likely to be closer to the Private Finance Initiative than the more transformative Green New Deal touted by Rebecca Long-Bailey. 

We're at a point in the electoral cycle when Labour should be launching some signature policies that clearly differentiate it from the Tories, but instead it is still offering underwhelming tweaks such as a cut in the 5% VAT charged on domestic fuel bills, which the government might end up adopting anyway. Climate measures have the potential to both draw a dividing line and exacerbate splits in the Tory ranks, but an overly-zealous approach would risk alienating British capital. That Ed Miliband has been slapped down on nationalisation and had responsibility for business removed from his brief shows which way the wind is blowing. With Starmer missing his latest opportunity to positively define Labour, the predictable result has been the liberal media's return to sleaze this week, revisiting stories about the Prime Minister's refurbishment of Number 10 and crony access to the contracting fast-lane in 2020. The sense of deja vu that surrounds Labour is not simply the result of the rehabilitation of the Blairites. It reflects Starmer's inabilty to break out of the loop of his "under new management" phase. It's hard to see 2022 bringing anything other than more of the same, which means the speculation over the next Conservative Party leader may soon give way to speculation about a Labour leadership challenge.

We Are the Masters Now

The British honours system is a corrupt farce, but it serves to indicate who the establishment values, and also who it thinks that the public should admire. The New Year's list has provided a predictable mix of undistinguished entertainers, City financiers, obscure civil servants and military brass, but the award that has proved the most divisive - and therefore the most interesting - is the knighthood for Tony Blair. This is a routine award for former Prime Ministers, and will almost certainly be upgraded to a peerage in time, but it has proved contentious because Blair has so far refused to quit the public stage. He remains a political actor, albeit one unconstrained by an electoral mandate, and he also remains unrepentant over his record and in particular the disaster of Iraq. This tweet caught my eye because of the "You shag one sheep ..." joke angle, but it also occured to me that it neatly encapsulates the problem with Blair: that Iraq has come to dominate our judgement to such an extent that it either obscures his true role in British history or it leads his defenders to downplay the severity of that particular "bad decision" and its ramifications.

The judgement of history is already in and it pretty much echoes Margaret Thatcher's claim that Blair, and New Labour more generally, was her greatest achievement, a bon mot that prompted him to frankly admit that he built upon her legacy (while still implausibly claiming to be "of the left"). In other words, he consolidated the systematic gains that she made for capital and was happy to continue her policy of restraining organised labour. That he ameliorated many of her government's most socially-regressive policies, for example introducing the minimum wage and investing in the NHS and education, isn't in doubt, but it's also indisputable that the secular trends of growing inequality, household indebtedness and precarious employment that started under the Conservatives continued throughout the New Labour years. Perhaps the most striking example of Blair's curation of Thatcher's legacy was in housing: the failure to stop council house sales, the under-investment in new social provision, and the determination to keep private asset prices appreciating beyond inflation. 

This means that future historians are likely to frame Blair's time in Number 10 in terms of continuity rather than change, despite the hyperactive commitment to social regulation and league tables (in many cases a distraction from actual change). It was a filling-out and entrenchment of the neoliberal state after the decimation of British industry and the introduction of new public management to public services in the 1980s and early 1990s. Historians will also note that the failures of New Labour were often the result of Thatcher-era time-bombs that Blair chose not to defuse, notably City deregulation, NHS marketisation and the Private Finance Initiative. While some cast Iraq as an unforced error, it can be argued that this was also a legacy of the Thatcher years, specifically her decision to cleave unconditionally to the US after the Falklands War and the invasion of Grenada (which she had privately opposed). Even the triumph of the Good Friday Agreement was the product of the spadework laid by John Major. Again, more continuity than change.

The one area where Blair sought to diverge from Thatcher (or at least her views in later years) was over the European Union, but he was never prepared to risk real political capital in doing so, hence monetary union bit the dust while the Human Rights Act, which incorporated the European Convention on Human Rights into UK law, was sold as "taking back control". Europe is emblematic of the many opportunities that Blair passed up. Had he decided to proselytise for closer integration, rather than marginalising the issue to avoid antagonising the eurosceptic press, he might plausibly have shifted the dial in public support sufficiently to have produced a different outcome in 2016. Even if you think that counterfactual unlikely, there is no question that Blair did not make the most of the decade-long window of opportunity after 1997 to detoxify the Maastricht Treaty. Likewise, his half-hearted approach to devolution both fuelled the independence movements in Scotland and Wales and gave rise to resentment in England, which was probably another element in the 2016 mix.

Iraq didn't just reveal the UK to be a paper tiger in geopolitical and military terms. The debacle of Suez in 1956 had already done that, and the "close run thing" of the Falklands War confirmed it, despite the revived jingoism. Its more profound effect was to confirm the popular suspicion that the government was not merely economical with the actualité, but that it thought nothing of deliberately lying to get its way and regarded the public as gullible fools. Together with the decline in political engagement that New Labour oversaw, and the evidence of the incompetence and venality of the financial sector in 2008, this produced an abiding cynicism about the political class and the wider establishment that first bubbled to the surface with the 2009 expenses scandal and would eventually inform the 2016 EU referendum. While Peter Mandelson and Alistair Campbell have provided caricatures of New Labour's corruption, they are just the supporting cast. Despite the best efforts of friendly journalists, the popular impression of Blair is that he is a narcissist, possibly a sociopath, who thinks honesty is for little people. In other words, he is an aristo and was long before a title was ever considered.

The clues for this were evident as soon as he took office. Blair single-handedly headed-off the republican upsurge after the death of the Princess of Wales in 1997, and has been more than happy to associate with members of the Windsor clan even since. For all his claims to youthful dynamism and progress, he has consistently been a staunch defender of the British establishment, something that has become ever more obvious since he left office to become a freelance defender of establishments from the West Bank to Kazakhstan. That the Queen feels a degree of gratitude towards Blair is made clear by his knighthood being in the Order of the Garter, which is nominally in her exclusive gift rather than an appointment sanctioned by the current Prime Minister. We can dismiss the more lurid conspiracy theories about Blair going out to bat for Prince Andrew. This is clearly an acknowledgment of his work in preserving the firm, not a quid pro quo for services rendered to an individual. At a time when Labour is currently led by a knight of the realm dedicated to extirpating the left, the message is clear: the establishment no longer fears the judgement of the people.