This is What a Labour Government Does

Ahead of the Chancellor of the Exchequer's Spring Statement there has been much gloomy reporting of dismay and disappointment among Labour MPs. The prospect of further austerity, on top of the deeply-unpopular cuts to disabled benefits that were recently announced, adding to the lingering angst occasioned by the earlier cut to the Winter Fuel Allowance and the decision not to lift the two-child cap on benefits, have resulted in many nameless backbenchers claiming, in time-honoured fashion, that this wasn't what they came into politics to do. You could cynically dismiss this as bleating by people who have no intention of staging an effective Commons rebellion, but the reluctance to put their name to these quotes rather blunts the purpose. As a result, you find yourself concluding that they are probably sincere and really never imagined this outcome. Given the long history of Labour governments enforcing Treasury orthodoxy from 1929 onwards, and the tendency to cheesepare benefits, from the prescription charges introduced in 1949 to the public expenditure cuts of 1975, this attitude is historically illiterate but it is psychologically plausible.

Diane Abbott, who is happy to be named, has insisted that cutting the benefits and services of the most vulnerable is "not a Labour thing to do", but that is clearly a critique of the right - i.e. a belief that they have overstepped the traditional bounds of what the party is all about - rather than a considered assessment of the history of Labour governments. Again, it makes psychological sense to assume that the party has been hijacked by neoliberal entryists, much as it was in the 1990s, but this presumes some social democratic golden age when Labour governments didn't cut benefits or kowtowed to the Treasury. The reality is that Labour has been schizophrenic in office, giving with one hand and taking away with the other (the increase to Universal Credit at the same time that PIP eligibility is cut is typical behaviour). And what determines the relative degrees of generosity and parsimony is invariably the Treasury View, aka the "fiscal rules". Indeed, as the Truss/Kwarteng interlude showed, it is Labour that has always been most rigidly observant of those economic pieties. 

A Conservative government can always get away with bending, or ignoring, the rules more than a Labour government ever could. This is because the financial markets and the media know that the party serves the interests of capital and accumulated wealth: the risks of a Tory administration are wholly to do with competence. While Labour in practice serves the same interests, it retains a reputation for profligacy that is at odds with its history. Not only was Labour the original party of austerity after World War Two, but it has frequently found itself clearing up after Tory indulgence (e.g. the Barber Boom of the early-1970s) and has had the bad luck of being in office when global crises have hit (the ongoing effects of the Oil Shock of 1973, the banking crash of 2008). The lingering suspicion that Labour is overly-sympathetic to the poor (and thus naive to boot) is not justified by the record, but it remains a central trope of British politics because its purpose is to discipline government and ensure that MPs understand whose interests they must serve.

If backbench MPs come across as ingenuous fools, the liberal press are even worse. The hints that a Starmer-led government would reveal itself to be more generous once in office were always incredible, ignoring not only Labour's history but flatly refusing to acknowledge that the makeup of the parliamentary party had changed after 2019, with fewer battlers for society's underdogs and many more representatives of the managerial class that prospered under neoliberalism and that spent decades overseeing cuts in local government. The hopes invested in the new intake of MPs, notably the former think-tankers like Torsten Bell who built a reputation criticising the false economies of austerity, have been dashed. The PLP is now dominated by the same unimaginative technocracy that dominated under Blair and Brown and, like the Bourbons, appears to have learnt nothing during its exile from power while nursing grudges against the left. 

The solution to the government's poor poll ratings, we are told, is "re-education", first of MPs and then more widely of the electorate. But this is doomed to fail. Not only is the language patronising and tone-deaf (imagine the uproar if someone on the left had used that term), it is based on an attempt to big-up what are actually modest achievements. Thus we are told that "nationalising the railways, imposing a windfall tax on oil and gas, and VAT on private schools" chime with Labour values, ignoring that the railway rolling stock will remain in private hands, that the windfall tax was contingent and will eventually be reversed, and that VAT on private schools is a poor substitute for a wealth tax. Insofar as these reflect Labour values, those values appear to be exaggeration, opportunism and distraction. The tone of querulous stupidity was perfectly captured in this comment: "While officials do not deny deep cuts are ahead – with some departments facing reductions of as much as 7% over the next four years – they say it is happening at half the pace as under George Osborne."

Perhaps the most gob-smacking comment in the article by Pippa Crerar, Downing Street's preferred stenographer, was this: "Morgan McSweeney, Starmer’s chief of staff, is said to believe that when push comes to shove, Labour’s core vote will come back to the party to keep the Tories, or even Nigel Farage, out. While some may simply choose not to vote, the polling indicates a majority would return to the fold." This is little more than whistling to keep your spirits up. The key point that the media routinely ignores about the 2024 general election is that Labour won a large majority on only 34% of the vote because the right was split. It's actual vote count was half a million fewer than in 2019. Voters have been deserting the party for years now and they don't appear to be jumping ship. Turnout was dramatically down, highlighting the growing sense of public disillusion with all parties. As Frances Ryan put it elsewhere in the Guardian: "There is a feeling that, if this is life under the “good guys”, there really is no hope that anything will get better. Politicians, it turns out, really are all the same."

It's hard to imagine that by 2029 backbench MPs and the press won't have come to the reluctant conclusion that cutting benefits is actually what Labour governments do. And as there really isn't much difference between Labour and the Tories on fiscal policy, surely a coalition to thwart Reform is the progressive option if the electorate is split three ways (the Observer leader practically writes itself). As the end of this parliament approaches, there will no doubt be many backbenchers suggesting that now is time for the government to splash the cash, and just as many insisting that Labour cannot risk its new-found reputation for fiscal rectitude. Both views presume an understanding of the "political business cycle" as the alternation of parsimony and generosity around elections, ignoring the actual history of the term as the strategic deployment of anxiety over deficits to restrain stimulus. That historic meaning has disappeared from view not because it is out-of-date but because it has become hegemonic: the common sense of our politico-media caste and the final triumph of Treasury Brain.

The Human Condition

The UK's welfare system is not "broken", as some Labour MPs have claimed. If it were, then you would expect it to be failing across the board in its core purpose, which is to stop people dying from hunger and neglect. At the margin there is certainly unneccesary suffering, often the result of prior attempts at the "reform" of conditionality and procedure, but that is a different matter, specifically a matter of efficiency. In terms of effectiveness, the system is robust and does what it is meant to do. The pragmatic discussion on welfare centres on the level of benefits, and sure enough the government's mooted plans for welfare reform have, beyond the rhetoric about "moral duty", boiled down to the question of real-term cuts. But the wider framing is of existential crisis, and that cannot be explained away as either the result of systemic failure or the product of waste, which is both a chronic issue (there will always be some fraud and error at the margin) and relatively small. There is plenty to criticise in the design and operation of the welfare system, but nobody can seriously claim that it fails to do the job given it by Parliament. So why do politicians, and Labour's backbench Get Britain Working Group in particular, think that the system is broken? The argument, outlined in a letter to Liz Kendall, the Secretary of State for Work and Pensions, stands on three claims. 

The first is the idea that "Britain faces a crisis of economic inactivity". Despite the passing reference to NEETs, the letter focuses on the fact that employment levels among disabled people are 30% lower than among the non-disabled. You might pause at this point and wonder if that is actually a problem. Surely levels are always going to be lower: many disabled people simply cannot work. Even if you accept that the gap might be reduced by 10%, you will then wonder just how many extra workers this would produce. A little under a quarter of the working-age population have a disability of some sort, and most of them already work. A 10% change in employment levels would thus equate to roughly a 2.5% increase in the working population. That's not to be sniffed at, though as we're talking about marginal labour it is likely that the consequent output gain would not be proportionate. In other words, a 10% improvement in employment levels among the disabled might increase GDP by only 1% or less. But given that growth is the chief goal of this government, that would still be a welcome contribution.

The second claim of the GBWG is that "The economic cost of this is staggering". Leaving aside the hyperbole, this is also questionable. Not only would any increase in GDP be marginal, but there are good reasons to suspect that the types of jobs that would be created will be at the bottom end of the pay-scale and that a rapid increase in available labour would, as a simple matter of supply and demand, have a dampening effect on pay growth. In other words, getting more disabled people into work is not, whatever its other benefits, going to raise aggregate skill levels or productivity and thus long-term pay rates. The final claim is that "the current system often acts as a barrier against finding work." Expanding on this, the GBWG insist that "Rather than empowering individuals, it traps them in precarity". This is an odd claim because insofar as the welfare system makes claimants lives precarious it is through conditionality and sanctions, including the threat of benefits clawback should they secure temporary work. In other words, the system is not preventing them finding casual employment, but it can penalise them when they do. The broader problem that paid work may lead to a negligible increase in income is an issue of low pay, not high benefits.

The letter talks of the security and dignity of employment but ignores that these ideals have been steadily eroded under neoliberalism to the point where they have been replaced by their opposites, rebadged as the ideal of "flexibility" and the "hack" of eating a cheese sandwich at your desk as you work through your lunch-hour. Precarity has become pervasive among lower income workers because of zero-hour contracts and the need to take multiple jobs to make ends meet, not because more disabled people are on benefits. It also ignores that chivvying the disabled into low-paid work is unlikely to increase their sense of security and doesn't look very dignified from any angle. If the letter was a transparent attempt to encourage backbench support for the government's plans to tighten the rules on eligibility for disabled benefits, in particular for the young with mental health issues (the solipsistic "snowflake" has leapfrogged the shameless skiver on the media's list of public enemies), the rumoured real terms cut in PIP looks like a dead cat that will now be consigned to the bin as a quid pro quo for allowing that tightening to proceed. 

Starmer's "private address" to MPs, which has been helpfully released to the press, echoed the letter in imagining a frustrated population of disabled people held back from fulfilling employment by a perverse welfare system: "Addressing a meeting of the parliamentary Labour party in Westminster, Starmer said the current system was “discouraging people from working ... And if you want to work, the government should support you, not stop you”." Continuing in this vein, "Starmer said the government would promise to “make work pay” for those who could work", which studiously ignores that we have had working tax credits for a quarter of a century because for too many people work simply does not pay. If his address had included a commitment to significantly raise the national minimum wage (arguably a smarter "tax" on employers than increasing NICs) then it would have been more coherent.

The idea that the state somehow discourages work is obviously absurd, but it's of a part with Starmer's more general claim that government is the problem. This doesn't mean he has taken a libertarian turn (the chat about "Project Chainsaw" is little more than a cruel joke by Morgan McSweeney), rather he is insisting that government must be more determined and effective at driving neoliberal restructuring, hence the related decision to further centralise power by abolishing NHS England. Undoing the Lansley reforms makes sense, but we shouldn't imagine that this dirigiste turn heralds the dismantling of the internal market, less reliance on outsourcing to the private healthcare sector, or a major programme of investment to address the physical decay of the last 15 years. Starmer's attempt to present himself as the Great Emancipator of the Civil Service, unshackling the talent, is simultaneously undermined by his naive belief that AI can do much of the work. What this confusion highlights is that he remains a process guy, not a people guy, something that should give the swooning fans of his shuttle diplomacy pause for thought.

There is a general confusion in the Labour Party these days over its purpose and this is reflected in the understanding of work. Some see Labour as the party of work, in the sense of a managerial class seeking to optimise labour as a factor of production (the Fabian legacy congruent with neoliberalism). Others see Labour (still) as the party of workers (or at least "working people") and thus a class formation. This isn't a simple right-versus-left dichotomy as many on the party right, particularly those formed in the trade union movement, still see Labour as the workers' party. Likewise, some on the left, influenced by the tradition of social liberalism, have seen work in terms of self-actualisation rather than collective progress. It's perhaps worth pausing at this point and considering a distinction made by Hannah Arendt in The Human Condition between "animal laborans" (engaged in the brute struggle to secure shelter and food) and "homo faber" (making the world in the form of useful goods). She also included a third category, political activity or "action". In its classical origins, this was limited to the elite, but by 1958, when the book was published in an era of material plenty and high employment, there was a recognition that civic society was expanding through greater democratisation to include groups hitherto marginalised, such as the working class, women and ethnic minorities.

Arendt's progressive hierarchy was typical of postwar thinking, though it should be noted she was warning of its problems: the trivialisation of life as necessity recedes and the subsititution of action by consumption. In the optimistic telling, technology and superior management would gradually do away with the necessity of animal laborans (like AI will do away with civil servants) but it would also allow homo faber to progress to a more active civic life. What has happened since is a collapse of the boundaries between the three conditions. The hard division between venal business and the elite practice of politics, first established in the Greek city states of the Classical era, has evaporated as politics has adopted the theory and manner of business. But just as significantly the neoliberal era has seen the boundary between necessity and productivity erode. In the early industrial era, as analysed by Marx and others, necessity was reduced to the mimimum needed to keep workers alive while maximising production. The reaction to that inhumanity (the Polanyian counter-movement) led to the creation of a clear boundary between necessity and productivity: the Factory Acts, the 8-hour day, public services beyond the mere reproduction of labour. Necessity became a social concern.

What we have seen since the 1970s is an attempt to make necessity once more the responsibility of the individual, most obviously (in the UK at least) in the context of shelter. The rhetorical division of society into strivers and shirkers is not about the creation of a new class consciousness among the former but instead the atomisation of society into individuals whose own efforts constantly determine their categorisation. Labour's plans for the disabled are consistent with this, an initiative that will ignore individual circumstance (critics loudly citing specific cases of potential injustice are wasting their breath) while simultaneously denying the individual identification with anything other than the nebulous "working people" beloved of Starmer's speechwriters. Though the positive language of "security, dignity and agency" remains, it is clear that work is seen less as a route to self-actualisation than as an obligatory contribution to the economy. We have a moral duty not to treat people instrumentally, but that clearly isn't a guiding principle at the DWP, while the very name of the Get Britain Working Group of MPs subsumes the interests of both the individual and the working class in the greater glory of national GDP.

In Arendt's day it was still possible to imagine the civic sphere in the idealistic terms that would have been familiar to Pericles, despite the jarring reality (McCarthyism, venality, jobbery). No longer. Politics today is performed by managerialist drones like Wes Streeting and Liz Kendall, who celebrate their lack of idealism as maturity, while the real power in the land, the nexus of private wealth and corporate influence, avoids the public square. The postwar dream of welfare as the auxiliary support for homo faber, banishing necessity and encouraging civic participation, has given way to a revival of the Victorian principle of "less eligibility", but this time without the commitment to at least provide animal laborans with the shelter of the poor house.