Mike Small reviews Robin Ramsay’s The Rise of New Labour (Pocket Essentials)

“I have taken from my party everything they thought they believed in. What keeps it together is success and power.” Tony Blair, as quoted by Andrew Rawnsley in Servants of the People

“The whole noble array of barristers, solicitors, accountants, surveyors, agents, and about ninety nine hundredths of the present distributors would be wholly useless in a properly organised society. They live upon the existing bourgeois system… They will disappear with the huckster arrangements on which they thrive.” British socialist H.M. Hyndman

How did we get from Hyndman to Blair, from the Independent Labour Party to the New Labour Project? As Christopher Harvie said recently: “there is a history”.

In The Rise of New Labour (Pocket Essentials) Robin Ramsay contends that there is an economic history too.

This is a study in how a group, every bit as entryist as the Militant Tendency, took over the Labour Party. In the space of ten years (1987-1997) they transformed it from ‘the People’s Party’ to a corporate cabal. Ramsay details the process, and its consequences:

“central to the change was abandoning the belief that the government should, or could, take action to control the financial sector in the interests of the rest of the economy”.

For all the paternalistic tinkering of fresh-faced liberals, this is New Labour’s legacy.

This book is a wonderful thing. It gently unveils the murky world of banking, corporate sleaze and the collapse of political opposition in Britain. It demystifies the ERM (Exchange Rate Mechanism) and throws light on the Iron Chancellor’s relationship to the City (supine). It tracks the decline of Labour values from Gordon Brown’s Where There Is Greed (1989), to Tony Blair’s Road to Damascus volte face on nuclear weapons in 1987, and John Smith’s prawn cocktail offensive on the City, through to today’s wholesale capitulation to transnational capital. Ramsay pulls few punches arguing that, stripped of the spin and the corporate videos, New Labour amounts to little more than “the last dribble of Thatcherism running down the leg of British politics”.

Ramsay systematically smashes the urban-myths that have somehow managed to lodge themselves in public consciousness as historical fact. First of these myths is that they (Labour) were responsible for the economic mismanagement of the 1970s, which they in fact inherited from Edward Heath’s misguided Euro-corporatism. Second is the idea that Labour, far from being unelectable in 1992 because they hadn’t “gone far enough”, got more votes, and lost, than they did in 2001, when they won with a landslide. In the bit in between Ramsay concentrates quite rightly on the bigger picture, namely the role of the SDP and the American tendency in Labour, the rise and rise of John Smith and Gordon Brown, and the changing attitudes to European finance.

If you think this sounds drier than a Treasury briefing, it’s not. Whilst his speculation about John Smith’s Bilderberg Group connections and SDP conspiracy theories are less than convincing, the central story of how core Tory economic values were absorbed by Labour’s senior players is a great read. According to Ramsay, in 1988 Labour Leader Neil Kinnock, Gordon Brown and John Smith had concluded that Labour should embrace UK membership of the Exchange Rate Mechanism as the first step towards an eventual single European currency. This is really the nub of Ramsay’s argument. Labour advocated ERM membership not for economic reasons, but because it would convince the City they were a trustworthy bunch. Ramsay again: “ERM membership would be a guarantee that there would be no more attempts to run an independent economic policy. By 1988 most of Labour’s leaders had concluded that the City of London was too powerful to challenge. This is the origin of New Labour.”

Indeed it is. Confirmation of this came when Bryan Gould got the bullet after his 1989 policy document Meet the Challenge, Make the Change outlined the essential conflict between the City and a manufacturing economy (the City serves transnational capital – manufacturing requires strategic planning, investment in people and a physical place). Gould rightly reckoned that joining the ERM would stymie any attempts to regulate the market, whilst John Smith and Gordon Brown sold it to the party on precisely the basis that it could do this.

Conventional wisdom has it that all of this was driven by a pragmatic “needs-must” agenda. Right-wingers harangued the Left for decades with the mantra “do you want to be out of power – forever marginalised – unable to affect change?” New Labour, according to the spin, is simply the inevitable outcome of modernisation. It isn’t political, it’s simply up to date. After ideology there is only efficiency, technology and good management, with a liberal sprinkling of squishy feel-good stuff mixed in – Blunkett’s dog, Mo’s wig, Two Jags punching folk (but in a bluff-Northern sort of way). New Labour just had to happen. Under Ramsay’s schema, little of this was necessary. Not only had Thatcher been the most unpopular Prime Minister in history in 1992, but the American model was an unlikely one to mimic.

But, in 1992 Labour lost (again) and the Clinton Democrats won with tactics of ‘triangulation’ (stealing all your oppositions policies). This, argues Ramsay, was the final impetus to push a beleaguered rightwards-moving socialdemocratic party towards being the neo-liberal free-market-oriented New Labour of Tony Blair. His argument has three strands, some more convincing than others. The first, unquestionable argument involves tracing the Atlanticist tradition in the Labour Party. Cold War US-UK relations (Ramsay’s real area of speciality) was dominated by efforts by the Americans to woo the Labour right. What started as anti-communist propaganda ended up in the SDP and New Labour projects. Both were crucially for NATO, Europe, and big business. Secondly Ramsay talks us through the arguments that much of what has been done in the name of pragmatist politics, has been completely unnecessary. Thirdly, Ramsay dissects the roles of the key players in the creation of the New Labour Project and, rightly, identifies Kinnock, Smith and Brown as being of more central importance than Blair and Mandelson. Whilst Kinnock ousted Militant, Smith introduced one member one vote and Brown delivered economic control to the City, it has been Blair who has really cemented relations with the global business, and it has been Blair and George Robertson who have secured our allegiance to the military order.

While Ramsay is quite right to place Mandelson and Blair as relative late-comers in the NLP, to under-emphasise Blair’s role is a mistake. Sure, Blair is the culmination of an Anglo-American tradition and the forces that have propelled him forward, but the corporate schmoozing that has reached Majorite proportions under Blair is worth examination. It’s not that cash for questions has gone to cash for passports (Hinduja brothers) or that Labour has turned to less traditional sources of income, from the unions to the likes of Bernie Eccleston. What is more worrying and politically noteworthy is the path that has been worn between Monsanto and key corporate policy lobbyists and No 10. This and the privatisation platform is Blair’s real contribution to the new American agenda. Tom Nairn writes in After Britain “…the disposition of Margaret in 1990 consigned Britain to a sort of Hades, John Major’s nether kingdom of dinge, sleaze, rigor mortis constitutionalism, tread-water triumphalism and anti-European xenophobia”.

Now things are worst. With the shiny-happy people in charge, all is for the best in the best of all possible worlds. Fluidity and technological yes-yes and a sort of on-the-hoof constitutionalism have replaced Tory rigor mortis. But this can-do pragmatism is inspired by a belief in the global village that is cruelly naïve and as facile as Cook’s ethical foreign policy.

New Labour acolytes defend the regime arguing that others like Gordon Brown and formerly Clare Short were its conscience. Busying themselves to a sub-agenda understood by a select few with a knowing wink, they would have us believe that while the frontman Blair keeps the City on-side, others are free to do good-deeds elsewhere. So, whilst the world witnessed the largest scale of anti-capitalist protest in thirty years, what was this dynamic duo’s response? As Ramsay rightly points out, in “an absurd piece co-authored by Gordon Brown and Clare Short”,

“the IMF, the World Bank, the UN and the OECD have signed up to challenging 2015 targets: that poverty across the globe is cut by half; that every one of the 120 million children in the world currently denied primary education receive it; and that infant mortality is cut to one third of its present level.”

This global naivete abroad is backed up by monstrous gall at home:

“In the Spring of 1999 war conditions gave some renewed vitality to the Project, as they had done to Mrs Thatcher’s in 1982. New labour’s election broadcast had been entirely focused on his function as Great Leader, with a vox pop gallery of adulation accompanied by scenes of cheering crowds and admiring foreign statesmen. Although her rapport with Ronald Reagan had in some way prefigured Blair’s to Clinton, Mrs Thatcher never came near this level of straightforward star-worship. The suggestion was that Blair has become Leader of both the West and Europe, as well as reconciler of Ireland and liberator of Wales and Scotland.”

Capitalism functions best when there is a clear product to market, sold in the face of competition from rivals, and there reward from more investment is the inability to increase output thus boosting sales. Railtrack fits none of this model. Its raison d’etre is to provide “train paths” for the operators but these are in limited supply since much of the network is full and the cost of investment prohibitive. I tried recently to explain this at great length to a highly intelligent senior Government minister but he utterly failed to understand that Railtrack is different from CocaCola.”

With Consignia’s (sic) imminent privatisation about to prove as popular (and successful) as the Millennium Dome, and air-traffic control, the NHS and the Railways all being run-away success stories, where next for New Labour’s privatisation agenda? Who knows? Doubtless, still quavering from the folk-memory of Thatcherism everyone will rationalise it as “probably necessary” only to pretend they were totally against it when it turns out to be a complete disaster in a year’s time. There’s little to quibble with Ramsay’s account of the Rise of New Labour. Anyone who’s been paying attention will recollect his account as being on the button.

From Bernie Ecclestone, to the Hinduja brothers and Lakshmi Mittal, New Labour have perfected the art of corporate glad-handing. This institutionalised favouritism to the rich and powerful is only a glimpse of the new elite control that is the state and corporate sectors co-joined. There’s more than a whiff of irony in the fact that the New Labour Project, hailed as a salve to the wound of neoliberalism is being de-railed by the failure of the politics it was supposed to replace.

The gap between New Labour’s evangelical image and its role as pimp to multi-national business will become an unbridgeable chasm. As the MMR debate has shown, the sheen of glossy Millbank PR has been dulled by the now weekly ‘scandals’. And let’s not delude ourselves that this process has been quick or recent. As Nick Cohen wrote four years ago, when Enron sponsored the Labour Party Conference: “Their protestations of injured innocence grew louder on Thursday when, as we predicted, Peter Mandelson allowed the multinational accused of complicity with the beating and false imprisonment of Indian peasants to take over the Wessex Water monopoly in southern England.” Four years on, to paraphrase Malcolm X, chickens are coming home to roost.

If there’s a neat NLP symmetry that Enron owns Wessex Water while the Bank of America owns the Skye Bridge, it’s ironic that, while in Scotland we might have been given an opportunity for an alternative politics when Bambi’s Spin began running dry, we’re instead faced with the parochial insult that is Union Jack McConnell. McConnell’s involvement with Beattie Media seems to have been lost in the wind along with the idealism that formed the Labour Party in this same country 100 years ago. Ramsay’s account of the Rise of New Labour represents the most astute account of the collapse of democratic process in the UK thus far, though it’s only a pity it wasn’t backed by a larger publisher. As Parliamentary authority has been undermined by the new Presidential style, we have moved increasingly to a state of permanent McGovernment. The only thing that is as sure as the dead hand of business on the government’s policy agenda is the realisation that this cannot last. If Blair is right and “what keeps it together is success and power” then as soon as this success dissipates the whole facade of unity will come apart too, and “they will disappear with the huckster arrangements on which they thrive.”

Mike Small is a freelance journalist