New Labour, Old Labour

Tomorrow is the 25th anniversary of Labour's general election victory in 1997. It's also the start of the final week of campaigning ahead of the local elections on the 5th of May, which represent the first real test of the party's readiness to become the next government. With the self-congratulation of the political centre over the re-election of Emmanuel Macron still ringing in our ears, today is a good moment to consider the history and legacy of the New Labour project. Keir Starmer is clearly only a weak copy of Tony Blair: comfortable with the authoritarian and technocratic approach to government but hopelessly inadequate in terms of the ability to enthuse or inspire. In contrast, Macron has proven himself to be the real heir to Blair, not least in his ability to serially win despite being despised by a majority of the population. Other obvious parallels are the unapologetic shift to the centre-right and the suspicion that the electoral vehicle will not survive the end of its leader's time in office. But just as the parallels with France can be overdone, not least by Blairites indirectly criticising Starmer, so the comparison of the current and former Labour leaders can ignore the wider historical context.

An example of this can be found in the latest rueful memoir by Neal Lawson, the Director of the centre-left think-tank Compass, which appears in Prospect. His analysis captures the received wisdom of the New Labour years: that the win-at-all-costs strategy led to political compromises that undermined the possibility of truly radical change. As he puts it, "New Labour tried running up the down escalator of neoliberalism. They were at best naive about a project designed not just to privilege capital over labour, but to extinguish even the thought of mild social democracy. In so doing, it chose a path that was always doomed to fail." Lawson is typical of many centre-left commentators in characterising New Labour as a "formidable political project" and yet also strangely naive and guileless, which would be a startling paradox if true. The error here is in tying the "project" too closely to the personality of the leader, and in giving that individual the benefit of the doubt in terms of motivation. My own view is that Blair was the most cynical politician ever to inhabit Number 10. The current occupant doesn't come close. In other words, he knew perfectly well what he was doing. There was no naivety.

Another apparent paradox in the historiography of New Labour is the idea that it was at once a watershed, representing a clean break not only in Labour's history but in the wider political culture, and yet also the culmination of a long, patient rebuild of the party after the 1979 loss. Was it revolution or evolution? Was Blair sui generis or was he simply continuity Kinnockism? Lawson attempts to answer this by placing the project in the context of a challenging socioeconomic environment: "New Labour was a clever defensive move in the face of hostile tectonic structural shifts: from Keynesianism to free markets, from the nation state to the global economy, from the working class to individualised consumers, from muscular unions to rampant corporate power, and from the Cold War to American domination." The problem with this interpretation is that it treats 1979 as another watershed, which obscures just how much of the New Labour project was foreshadowed while Tony Blair was still at school.

The decisive break with Keynesianism occured in 1970 with the Nixon Shock, which marked the end of the Bretton Woods system and was a genuine watershed in postwar history. In the UK, the writing had been on the wall throughout Labour's time in office between 1964 and 1970, with periodic bouts of austerity and the growing media discourse around "welfare cheats". The social reforms of the period, championed by Roy Jenkins as Home Secretary, look in retrospect like the emergence of the neoliberal subject rather than the highwatermark of social democracy. Globalisation didn't happen overnight, but nor did it only start in the 1970s. The General Agreement on Tariffs and Trade began in 1948. The consumer society was already well-established by the 1960s, while the "muscular unions" of popular mythology reflected a steady erosion of the power of organised labour, not its supremacy. Industrial action in the period was overwhelmingly defensive in the face of inflation and closures. Strikes were a symptom of the breakdown of the social compact, not class war.

As for the shift "from the Cold War to American domination", New Labour reflected the persistence of older thinking rather than the acknowledgment of a new reality. In claiming that "Blair signed the nation up to the ultimate hubris of remaking the Middle East in the mould of the Washington consensus", Lawson ignores that remaking the Middle East was a long-established British habit that was not interrupted by the start of the Cold War, hence the Suez debacle. The 1983 invasion of Grenada, together with the ongoing Soviet-Afghan War, made it clear that we were already living in a unipolar world well before the fall of the Berlin Wall. Insofar as New Labour reflected the zeitgeist of the late-90s and the millennium, it was in the general air of surrender and acceptance. As Blair famously said in his 2005 conference speech, "I hear people say we have to stop and debate globalisation. You might as well debate whether autumn should follow summer." New Labour was the product of vast social and economic changes that had been underway since the end of World War Two. It wasn't an agent of change but a symptom, and that is why it managed to achieve so little of lasting value during its time in power.

Lawson's belief that New Labour was a missed opportunity leads him to imagine a counterfactual: "It could have invested in alternative media to wean itself and the nation off Murdoch. It could have helped resource the unions to grow again and rebalance the dominance of corporate power. It could have democratised, rather than commercialised, some of the public sector. It could have given back real power and money to councils. It could have grown the Labour Party to become a force for good in communities and not just a leader’s fan club." Any one of these on its own is implausible, but in combination the impression is one of outright delusion. The reason why Blair didn't challenge Murdoch wasn't fear but because they largely saw eye-to-eye. New Labour sought to diminish the unions as independent entities, reforming them as the allies of both the state and capital. It had no interest in democratising public services for the very reason that this would have hindered greater commercialisation. And it certainly had no wish to restore councils as democratic bodies with significant power, as its preference for technocratic mayors and depoliticised managerialism made all too clear.

The idea of re-establishing Labour as a social movement drifts perilously close to Corbynism, and thus highlights just how much the contemporary Labour Party is engaged in a project to reanimate only the worst aspects of the New Labour years, shorn even of the role as a "leader's fan club", while refashioning the party apparatus as a cartel. Since becoming leader, Keir Starmer has been criticised from all directions for his lack of policy substance and his determination to attack the Conservative government almost exclusively on the grounds of incompetence and sleaze, while reassuring business and other vested interests that a future Labour government will change very little. While it is true, as commentators like James Meadway never tire of emphasising, that the party's programme is far more "leftwing" than it is given credit for, this simply reflects the structural changes since 2008 and the current global consensus. Labour has yet to take a bold policy decision outside of ostracising its previous leader. While Starmer's Blairite critics chafe at what they see as his lack of vigour, the "radical centre" has all but evaporated, which should be the chief lesson drawn from the trajectory of Emmanuel Macron.

Though Lawson has a blindspot for the roots of New Labour in the 60s and 70s, he is in no doubt that its baleful legacy will live on: "The Iraq War broke the moral soul of Labour and corroded people’s belief in politics and democracy, helping pave the way for the rampant populism of today. Boris Johnson’s “Partygate” scandal is a disgrace but it has nothing on the degradation of democracy that was the Iraq War." While Iraq was a notable low-point in the governance of this country, Labour was re-elected in 2005. If our democracy was degraded, it was in the low turnout of the elections from 2001 onwards. And that disengagement was clearly the result of a wider corrosion than just the Iraq War. New Labour ultimately failed because it never offered a real alternative to the Tories - just more competent management and fewer sex scandals. That's not necessarily a bad pitch, but it hardly justified the messianic zeal of the true believers. Today's Labour leadership believes that the modesty of its pitch and lack of zeal are virtues and that voters have tired of Boris Johnson and adventurism. Its template isn't New Labour and Tony Blair so much as Old Labour and Hugh Gaitskell.

How To Stop Fascism

The first round of the French Presidential election witnessed a close shave for Emmanuel Macron when Jean-Luc Mélenchon came within 1.2% of beating Marine Le Pen to second place. Though he increased his vote to 28%, from the 24% he scored in the first round in 2017, Macron has clearly not endeared himself to the French public after five years in the Élysée, though he has consolidated his support among centre-right voters, thereby contributing to the decline of Les Republicains and Valérie Pécresse's abysmal 5%. He is unquestionably the President of the rich now. The French political terrain has been fragmented on both flanks for the last decade. Macron's calculation was that a centrist offering both modernisation and a reassuring nationalism would always make the Presidential runoff. His hope, so far fulfilled, was that the second slot would be taken by the far-right, allowing the second round to centre on the defence of republican values and a weak progressivism that would herd leftwing voters into his camp, much as it has done since Jacques Chirac first managed the trick in 2002 (that many on the left remain bitter about the consequences of this is a factor now). 

The danger, narrowly averted this time, was that a fragmented right might let the radical left in, obliging Macron to appeal beyond the centre-right to Le Pen's voters in a runoff against Mélenchon. That Zemmour proved a damp squib was very much to Macron's advantage, even if it has meant the further normalisation of Le Pen as a viable contender on the right. The counterfactual of a left versus centre runoff would have relocated the political discourse, but it would also have legitimised the left, and while Macron has been happy to make gestures towards the far right on Islam and policing, he has been obdurate in refusing to make any concessions to the left on his core neoliberal programme, allowing Le Pen to expand her offer to issues of social protection, such as the cost-of-living crisis. While the far right is presented as a danger to the republic, the left is simply dismissed as illegitimate and its voters, at best, as deluded fools. The corollary of this is the barely concealed contempt in the demand that leftwing voters now rally to the republic and support the incumbent.

While Macron is still odds-on to win the second round vote, the result will likely see Le Pen score over 40%, perhaps even over 45%, certainly well over the 35% she got in 2017. Macron's belief, presumably, is that he can hang on to the centre-right voters he has won from Les Republicains while simultaneously expecting the broad left, from the Parti Socialiste through La France Insoumise to the PCF, to dutifully turn out in his favour. But this is not a coherent political bloc, which emphasises once more that the political centre in France is less than a third of an electorate otherwise divided between left and right. During his tenure in office, Macron has failed to build an effective coalition, partly because of his own "Jupiterian" arrogance and personalism, but largely because the electorate remains divided across a broad spectrum. The continuing fragmentation on both the left and right is evidence of real variety and dissensus, not just the egotism of small party leaders in an electoral system that encourages small parties. But that said, there was undoubtedly an opportunity to create a new political formation five years ago.

The unpopularity of Hollande in 2017 and the centre-right's move to a more conservative line under Francois Fillon created the space for an emergent centrist bloc that combined both left and right. While essentially pushing a neoliberal programme of institutional reforms and a commitment to Europe, Macron was able to appeal to a general progressivism centred on modernisation and individual rights. But that was then. As Stefano Palombarini puts it, "The situation is very different today, even if the hard core of Macron’s programme, i.e. neoliberal reform, has not changed. Now Macron is openly addressing himself to a right-wing bloc: the progressive side of his programme has been buried beneath the police violence he has systematically supported and the liberticidal laws he has pushed through. The project of a bourgeois bloc was thus an illusion, which vanished very rapidly." 

In its place, we see a now-dominant right that is fragmented into three blocs. First, you have Macron's absorption of the traditional conservative centre-right (his strong support among older voters being a clear indication of this). Second, in place of the illusion of social advance that he promoted in 2017 you now have a fear of downward mobility (always fuel for Fascism) among the middle class and "respectable" working class, who are attracted by Le Pen's focus on social justice and economic security. Third, her shift away from vocal Islamophobia has been enabled by the coalescing of a more extreme right under Zemmour. Macron's achievement has been to integrate the Rassemblement National into the mainstream of the conservative right and to legitimise a more moderate Islamophobia as a dimension of "Republican values". The result, as Palombarini notes, is that "If there is still a pseudo-republican barrage in France, it is now against the anti-neoliberal left", hence the strong focus of the media in the first round on blackballing Mélenchon as much as Zemmour.

The media focus on the risk of Mélenchon's supporters abstaining in the second round reveals anxiety, and yet it hasn't led to any softening towards the left. Interestingly, it is this aspect of the campaign - that the centre might be defeated by the far-right due to the indifference of the left - that has been most remarked upon in the UK, more so than Le Pen's absorption into the mainstream and her shift to social and economic issues. Of course, there is no great mystery as to why this has such resonance here. Starmer's treatment of the left has been even more brutal than Macron's while his supporters' insistence than any electoral failure will be the left's fault has been even more strident. According to Ian Dunt, a Le Pen victory would be entirely the fault of the left: "Through a form of sustained political infantilism, it has left the battlefield." The charge of immaturity is a longstanding liberal trope, and Dunt isn't imaginative enough to move beyond it: "Sometimes you have to pick between options which you do not like on the basis that one is worse than the other. That’s a calculation even a child could make. But we live in an age of emotional tribal political divides in which black-and-white thought processes replace compromise and reason .. Infantilism and puritanism have turned whole sections of the French left into de-facto collaborators with fascism." 

There's obviously a lot of projection going on behind the hyperbole, both in the sense that Dunt's track record is littered with infantile judgements and tantrums and in the sense that the collaborators with Fascism are invariably from the centre-right of the political spectrum. Dunt's pragmatic argument, insofar as he's actually making one, is lesser-evilism: "There used to be an alliance against the far-right. Not so long ago, people of integrity and decency understood that you put aside your differences when it came to fighting fascism. No matter how much you disliked the centrist or centre-right candidate, you would proudly support them if the alternative was someone who posed a threat to freedom and equality." The problem, as his assumption that the lesser evil is always the centre indicates, is that this never benefits the left. Dunt was notably loud in his denuciations of the choice on offer in December 2019 and certainly didn't advocate that the political centre should hold its nose and vote for a Labour Party led by Jeremy Corbyn in order to avoid the hard Brexit promised by Boris Johnson and the Conservatives. His vision of "compromise and reason" was a hung parliament in which the Liberal Democrats would hold the balance of power and immediately call a second referendum. Nothing infantile there.

This scolding of the left is also prominent in the US. In a long piece for The New York Review of Books, decrying the decline of the centre-left in France and its lack of imagination in the face of threats from the far-right, James McAuley dismisses Mélenchon because "he has advocated Russophile positions in the past and, most recently, a withdrawal from NATO, which he has called a “useless organization.”" What he ignores is the French context. First, how the tradition of cultural anti-Americanism produces both the superficial Russophilia of a Metro station named Stalingrad as well as protests against McDonalds. Second, that scepticism about NATO has long been mainstream in France, shared by Charles De Gaulle as much as Georges Marchais. As ever, the lessons being drawn from the French left are really about domestic politics, in this case the lack of focus and plain wrongheadedness of the socialist left, a point that Noah Smith makes explicit. The left will never be respectable enough for the neoliberal centre, and every concession that they might have a point about inequality or public investment will be relentlessly undermined by an insistence that their worldview is warped and they are naive and irresponsible. This is an argument increasingly being made by the centre-left as well, witness the likes of Paul Mason berating the left for its geopolitical naivety and insisting that it must ally with the centre to stop Fascism.

The chief lesson of the first round of the French Presidential election is that while Macron has made inroads on the right, he has signally failed to absorb the left, even in its currently fragmented state, meaning that his political project remains no closer to true hegemony than it was in 2017 when La République En Marche scored only 28% in the first round of the Legislative Assembly elections on the back of his Presidential victory. The runoff nature of the French electoral system benefits the centrist candidate, but it doesn't actually create a sustainable political bloc that commands a popular majority, only a temporary alliance at the ballot box. His hope is that this alliance will persist through to the second round vote, after which he will no doubt continue to cultivate conservative support while turning his back on the political left, on organised labour, and on any social activism that fails to respect his interpretation of republican virtue. If he fails in his objective, it will be the left that will be blamed, not Macron himself or the many conservatives who voted for Le Pen. In the UK and US, this will be held up as evidence that defeating the left is the objectively necessary first step towards defeating Fascism.

Live at the Colosseum

According to Elon Musk, "Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy." Musk is as vague about these principles as he is about his plans to buy Twitter, though as a free-speech "absolutist" he is presumably against lifetime bans of the sort handed out to Donald Trump, if not against blocking people who annoy him. He also doesn't interrogate what free speech means in the context of a democracy where voice reflects wealth and power, perhaps because he cannot see his own privilege. Musk's use of the town square metaphor reflects his status as a public figure who has little trouble being heard above the hubbub of the crowd. But there is another metaphor that has been widely deployed by Twitter's critics, one that sees the platform as a zero-sum combat zone. As Renée DiResta put it in the Atlantic, "Twitter serves less as a town square than as a gladiatorial arena." This doesn't make much sense as a metaphor. A Twitter ratio in which a bluetick is widely derided as a fool is not like two men fighting to the death. But the image of the bloody ampitheatre, rather than the boisterous market square, does tell us something about the liberal commentariat. 

There was a good example of this a couple of weeks ago when the Guardian ran a comment piece by Moya Lothian-McLean decrying the malign influence of Twitter's "gladiatorial arena" (natch). Her specific charge, borrowing from Julia Bell's Radical Attention, is that the platform's divisiveness and promotion of rage is not only distracting but debilitating: that "Consensus politics, or even any kind of politics, becomes impossible, because we are too outraged to actually think". The claim that politics has become more fractious and antagonistic is a commonplace in the liberal media, along with the belief that democracy is being eroded by populism, but actual evidence for this is lacking. In fact, political consensus has steadily increased since the 1980s, with the result that there is often little of substance to choose between the main political parties. This is not simply the product of neoliberal hegemony or the self-replicating nature of modern cartel parties. It reflects a steady shift of the political centre to the right, the defining characteristics of which have been the defence of property and the absorption of Islamophobia into mainstream discourse (consider the current French Presidential campaign).

Attempts to draw dividing lines between the parties tend to reveal that fundamental consensus rather than a gaping divide over political principle. For example, the British government's scheme to process asylum-seekers in Rwanda is intended to pick a fight with "lefty lawyers", but while the Labour Party has loudly denounced Priti Patel's plan as unworkable and extravagantly costly it has otherwise accepted that offshore processing is legitimate. This should hardly surprise us, given that the idea was first considered by David Blunkett as Home Secretary back in 2003. One of the reasons why Labour's attacks on the Conservative government have been weak is that on matters of substance they haven't offered any real alternatives beyond amelioration. Even in areas where they should be able to highlight clear policy differences, such as on climate change, they have been tentative and hesistant, or even  bluntly reactionary as in the demand for injunctions against protestors. Keir Starmer's pitch is that he would be a more competent manager than Boris Johnson, hence the repeated use of the phrase "Get a grip". The problem with our politics is not a lack of consensus.

Lothian-McLean's case against Twitter isn't particularly coherent. She starts by saying that "It silos people off into echo chambers in which their interaction with like-minded individuals can vastly change their perception of reality (For instance, at the 2019 election I truly thought Labour had a chance.)" But she then tells us that "Extensive research shows that disagreement – even the well-evidenced, politely delivered kind – does very little to change someone’s opinion". You could reconcile these two claims by assuming that Twitter simply reinforces predispositions (the classic interpretation of how propaganda works), but then "vastly change" is obviously hyperbole. There's also an inherent contradition in the idea that Twitter creates both echo chambers, in which everyone agrees, and gladiatorial contests, in which everyone very loudly disagrees. Thinking Labour had a chance in 2019 was perfectly reasonable - it did have a chance - but to suggest that Twitter obscured the probability only makes sense if you went through the campaign without being exposed to either FBPE propaganda on the need to vote Liberal Democract or the extensive cast list of right-wing Labour types gagging for defeat. 

Most of these critiques of social media end up being about behaviour, with a strong whiff of sanctimony on the part of individuals granted the privilege of a newspaper column. According to Lothian-McLean, "Dissent on Twitter is rarely ever expressed politely: it is gladiatorial. Twitter communities often show up to back their chosen fighter, furthering the sense of “us” v “them”". But impolite partisanship isn't peculiar to social media: it is the very essence of newspaper comment, after all. The difference between Twitter and a newspaper is simply one of access. The reason why the bird site is so popular with the politico-media caste is precisely that it amplifies their own behaviour: trenchant opinions, contempt, bullying etc. But it doesn't create this, any more than the penny post created the intemperate letter to the editor. One thing Twitter has allowed journalists to do is to offshore their self-disgust: "When I am on Twitter, I find myself hating everything and everyone – especially myself – wasting their lives arguing about nothing. I lose my ability to empathise, to see humanity beyond the avatars. Never am I more disconnected than when I am plugged in."

This reluctance to address the nature of the wider media, and in particular the press, is pathological. Consider this: "Existing in a state of constant fury on Twitter doesn’t equate to full-blown extremism. But the obsessive, feverish, zero-sum nature of Twitter discourse certainly contributes to an environment that breeds, at best, suspicion and hostility to opposing worldviews and, at worst, festering radicalisation. Transphobia is an obvious example; Twitter has seen the spread of anti-trans views beyond the confines of niche forums to become a moral panic." But the current prominence of transphobia has little to do with social media and everything to do with the traditional media, particularly broadsheet newspapers that have sought to demonise trans rights activists as a moral threat and part of a wider "wokery" that imperils national identity. Kathleen Stock did not achieve prominence through Twitter - she was promoted by the Times and the BBC - and "niche forum" isn't exactly an accurate description of Mumsnet. 

Despite insisting that consensus politics is made impossible by Twitter, Lothian-McLean has to concede that the evidence doesn't support such a pessimistic view: "The thing is, the extreme division that characterises Twitter is not widespread in society at large. Research by King’s College London’s (KCL) Policy Institute in 2019 found that while people had become more polarised based on their political identities, for example Brexiters and remainers, differences in opinion on specific policies, such as immigration, were in fact starting to converge." We are living in a age of grudging consensus and are consequently ever more determined to argue that other people are wrong. This might lead you to wonder whether these "political identities" have been deliberately accentuated to give the impression of difference. Indeed, perhaps the defining characteristics of Twitter aren't the trolling and the pile-ons but the declarative bio and flag-adorned names. Are we really arguing passionately, or are we simply performing identity? 

Musk may be a vain fool and his vision of the public square heavily biased in favour of those with the loudest voices, but he does at least recognise that democracy is practised as discourse, even if he remains vague on the details. In contrast, the liberal commentariat's choice of the gladiatorial metaphor points to a rejection of discourse in favour of struggle, which is both a reductive view of democracy and a theory of politics as tactical advantage rather than strategic truth (i.e. my side must win not to achieve a particular goal but because my side must win). Ironically, the metaphor works better as a reflection of the opinion economy of the press and TV in which striking a pose is always more important than establishing truth and you are only one bad performance away from career death. Indeed, the idea of "cancellation", which exists more in the fearful minds of the commentariat than in reality, is perhaps just an expression of this existential anxiety: the ultimate thumbs down. What bothers newspaper columnists who've built a career on the bully-pulpit is not the viciousness of Twitter but the proximity of the crowd.

Benefits Street

Approximately 42% of the UK adult population (23 million out of 54 million) are in receipt of at least one state benefit. Of that number, a little over half (12.6 million) are pensioners, of whom 29% claim at least one additional benefit over-and-above the state pension. 40% of Universal Credit claimants are in at least part-time work. Across the UK, more than half of households are in receipt of one or more benefits in all regions bar London and the South East. While the composition of benefits has changed over time, e.g. the shift from unemployment to incapacity benefits in the 1980s and 90s, their incidence - i.e. who receives them - hasn't changed all that much. Demographic ageing has increased the number of pensioners as a proportion of the total, but among the working age population benefits remain concentrated among the poor (understandably enough) and the more deprived parts of the country. This has given rise to myths about inter-generational dependency, but the more accurate picture is of a national population that routinely moves between paid employment and welfare or that needs to claim benefits to augment low-paid work. 

The social history of the last century, from the Old Age Pensions Act of 1908, was marked by the steady expansion of welfare, not just in the broader sense of the provision of public goods such as healthcare, education and housing, but in the narrow sense of cash benefits. While the original pensions were non-contributory, it was the contributory principle that marked the ideological high-point of this expansion in the late-1940s with the reform of National Insurance. Thereafter, the growth of non-contributory schemes, such as National Assistance and Supplementary Benefit, would see the ideological frame of benefits shift towards questions of entitlement and abuse. The welfare reforms initiated by the Conservatives in the 1980s, and rebooted under New Labour after 1997, effectively conceded the end of the contributory principle as the central pillar of welfare, but instead of a frank acknowledgment that people should simply be given money to avoid destitution, in its place was substituted the moralising regime of workfare while welfare more broadly was subject to a culture of means-testing and bureaucratic hindrance.

The Covid-19 pandemic has led to many more people finding themselves in receipt of state handouts, such as the furlough scheme, but this probably hasn't changed the total number who will at some point in their life find themselves dependent on welfare payments, because that figure is already very high. What it has done is raise the question as to whether the state should simply respond to need. While there has been plenty of critical coverage of the government's poorly-managed and easily-defrauded business loan schemes, there has been little debate or media fuss about the deservedness of those in receipt of income support during lockdown. Similarly, it's clear that most people were sympathetic to the temporary Universal Credit uplift, and would support it being restored, not least because the proposed 3.1% uprating of benefits is clearly going to be inadequate in a year when inflation may touch 8%. The demand that the state protect consumers from high gas and electricity prices, particularly those already hovering above the poverty line and forced to make choices between heating and eating, is also close to universally popular.

This presents a challenge for a Conservative government committed to the free market. In a choice between direct market intervention and subventions, they will tend towards the latter for ideological reasons. Any gestures towards the former will be designed to maintain commerial relations, thus the proposed £200 discount on energy bills will be paid back through higher charges over the next five years, while the £150 council tax rebate is non-repayable. But this risks undermining another tenet of conservative philosophy, that people should not be dependent on state handouts, so those subventions must in turn be framed as exceptional and geared to virtuous behaviour, such as homeowning. The government's problem, which can also be seen in microcosm in its reaction to the P&O affair, is that the electorate supports direct market intervention, whether that be windfall profit levies or nationalisation of energy supply. It also believes that the government has a moral duty to protect the population from excessive price increases. This is a notable shift from previous decades when questions of morality focused on the legitimacy of benefit claimants.

The negative reaction to the Chancellor's recent budget statement has focused on the immediate increase in taxation (i.e. the previously-announced increase in the NIC rate), but what really distinguishes it is the disappearance of the activist government forced into existence by the pandemic. This is why the statement went down better with Tory backbenchers than the population at large. In terms of interest groups, Rishi Sunak's plan appears to be to get middle-earners back on board though the increase in the NI primary threshold and the cut in fuel duty, with his attention switching to pensioners next year when he presumably hopes to restore the triple-lock, ahead of a promised cut in income tax in 2024 just before the likely general election. What received less coverage were his announcements in respect of business, where increased reliefs on investment and the NI employment allowance for smaller firms were held up as steps towards addressing poor productivity growth, despite these being measures already tried on multiple occasions to little effect. In practice, these were simply reassurances that business is valued, which presumably is intended to head off any competition on that score from Labour's pro-capital turn.

Behind these short-terms tweaks and gestures lies a more significant secular change in the composition of welfare recipients since the 1970s. It's important at this juncture to understand that a welfare recipient is not just a benefit claimant. In a fiscal system centred on income and property taxes, any favoured group that receives a rebate or discount on their tax - for example, reliefs on investment or the employment allowance - is effectively a welfare recipient because they are being subsidised by other tax-payers. The term "corporate welfare" has gained currency over the last 50 years, but it might be better to speak of capital welfare given that one of the persistent features of the period has been lower rates of taxation on dividends and capital gains, which benefits the share-holding classes and homeowners. We can also see this capital welfare quite explicitly in housing benefit, where general tax revenues flow to landlords. Though claimants get the benefit of the housing, the property owner gets the benefit of the one cash welfare that has increased more steeply than incomes. 

This welfare is also extended to favoured groups in the form of employment income. The steady increase in the tax-free allowance on income tax and now national insurance, which higher earners receive the full benefit of, should really be seen as what the hardly-radical Fabian Society have taken to calling "shadow welfare". When these taxes foregone for individual income and housing (i.e. exemptions for CGT and VAT) are taken together at a national level, they amount to four-fifths of the total spending on social security and state pensions. The Fabians' Andrew Harrop correctly identifies what this startling fact points to: "The answer to the question ‘should the UK have a UBI?’ is that we already do, once tax-free allowances are taken into account. The ‘shadow welfare’ of tax-free allowances is a quasi-UBI, but one that excludes people who earn little or nothing: it is means-tested in reverse." But crucially, "When social security and ‘shadow welfare’ are looked at together we have a broadly flat-rate system, with middle and high income households being entitled to only slightly less than low-income households on average."

Where Harrop and the Fabians revert to type is in preserving the role of means-testing for all benefits beyond a "flat-rate universal allowance for each adult (evolving from today's tax-free allowances". In other words, they are arguing to formalise the current situation, in much the same way that they argue that national insurance should be merged with income tax and the myth that it is hypothecated for specific benefits or welfare services dispensed with. As ever with this argument, the unstated premise is that overall levels of taxation will not change, hence "While there is nothing wrong with the principle of universalism, it cannot be justified if it means resources are spread so thinly that those who rely only on state support must face extreme hardship". But this is a disingenuous argument given that the Fabians' own analysis shows that so much of "shadow welfare" is actually related to wealth, rather than income, such as capital gains, dividends and accumulated property. And if there is one stylised fact we know about fiscal policy during the neoliberal era, as detailed analyses by the like of Piketty et al have shown, it is that we have systematically under-taxed wealth.

Basic income is now clearly visible in the Overton Window of legitimate political discourse, but what matters in the UK context is less the idea than its reinterpretation within the history of welfare, hence the Fabians insistence that we have long had a de facto basic income that combines benefits for some and allowances for others. But the acknowledgment of this does not promise an end to the popular culture of beasting benefit claimants, simply because the discretionary benefits that the poor rely on will still be means-tested. In this regard, it's worth noting that the focus on benefit fraud long ago shifted from income to housing, hence the introduction of the "bedroom tax" a decade ago. Behind this is a wider defence of wealth and capital, hence the strong correlation in attitudes between support for the bedroom tax and opposition to inheritance tax. The framing of basic income as the logical evolution of a parsimonious dole merging with tax-free allowances is an essentially conservative reading. It not only occludes the role of wealth in the growing inequality of the last 45 years, it also closes down any discussion of UBI's emancipatory potential, and I suspect it is the latter that most attracts the Fabians.