Friday, 15 December 1995


New Statesman & Society leader, 15 December 1995

Throughout the European Union, politicians have lost any sense of vision for the continent – and in Britain, as the election approaches, it's even worse

After six months in which Europe has taken a back seat in British politics, this week's European summit has refocused attention on the future of the continent. For a month or so, the leading figures from the major political parties have been making keynote speeches about qualified majority voting, enlargement and the European Parliament. Meanwhile, the TV current affairs industry and the quality newspaper pundits have been working overtime to find Euro-rebels and Euro-splits.

It should surprise no one, however, that nothing new has emerged from all this. The parties' official positions and disagreements on Europe are well-rehearsed, and the supposed main talking-point of the summit, the 1996 Intergovernmental Conference (IGC) on European union, has long been destined to be a damp squib.

Of course, back in 1991, when the Maastricht treaty was negotiated, it looked as if the 1996 IGC might be something rather more important, a real battle between out-and-out European federalists and the rest over the very principles of the EU. Then, however, came the popular backlash against the whole European project in the Danish and French Maastricht referenda, and after that the collapse of the exchange rate mechanism (which was supposed to be the midwife of monetary union).

Subsequently, just about every government in Europe got cold feet. Neither the politics nor the economics of closer European integration seemed quite the priority after 1992. It became increasingly clear that only Germany, the Benelux countries and France were on track for EMU before the end of the century, with the rest either failing to meet the economic convergence criteria laid down by the Maastricht treaty (Italy, Spain, Greece, Portugal, Ireland) or else unable politically to embrace the idea (Britain, Denmark). Meanwhile, the Euro-Keynesian dream of European Commission President Jacques Delors – in which an expanded EU budget com-pensated for the effects of EMU and gave a boost to growth on top of that – was scuppered by British intransigence. Long-promised reforms of the Common Agricultural Policy, the EU's biggest redistributive existing programme, got stuck in the mud of procedure.

As for the democratisation of the EU's political structures, well, all that really happened was that ancient national prejudices found new confidence. Britain and France were able to block serious consideration of Germany's plans for the expansion of the European Parliament's powers to make accountable the secretive intergovernmental and appointed elements of the EU set-up.

Which, roughly, is where we are now – with the addition of German jitters about giving up the Deutschmark, a serious French crisis that could force Paris to give up on meeting the Maastricht criteria for EMU, and a lot of hot air about enlargement eastwards (which should be a strictly long-term project). The next IGC will see very little constructive on the long-overdue democratic reform of the EU's political structures that it was supposed to address. So, except on EMU, which will inevitably be the subject of protracted argument, this week's summit is a photo-opportunity and little else.

The faltering pace of European integration has had a marked effect on British politics: both major parties have adopted significantly more sceptical rhetoric on Europe in the past three years. It has been most noticable on the part of the Tories, whose Europhobes appear to have won the battle for the party's ideological soul (even if their representatives have been marginalised in the cabinet). But Labour, too, has taken a step away from its Euro-enthusiasm of the early 19905 since Robin Cook became shadow foreign secretary. Labour's "yes, but" and the Tories "no, but" have a lot in common: "perhaps" to EM U, a vague commitment to E U enlargement, no to big increases in the European Parliament's powers. All that is between them is the social chapter and disagreement on the extension of qualified majority voting in the Council of Ministers.

This is perhaps understandable in the light of the internal politics of the two parties and the scepticism clear in the opinion polls. (The latter is a particular problem for the Tories because of Sir James Goldsmith's promised intervention in the next election.) But it also has a detrimental effect on the European debate in British politics. Labour's sceptical turn means that the left's case for much closer European integration is now rarely made. What Europe desperately needs is a counter-cyclical and redistributive EU economic policy, based on a massively increased EU budget, and, to control it, a giant increase in the powers of the European Parliament. But it will never get it unless someone starts trying to persuade the public of its merits.

Friday, 8 December 1995


New Statesman & Society leader, 8 December 1995

The crisis in France marks the beginning of what promises to be a protracted battle over the future of western Europe's welfare systems

A re-run of May 1968 it is not. Despite the superfi­cial similarities – an unpopular right-wing gov­ernment, students and workers on the streets of Paris, the riot police wading in with truncheons and tear-gas – the current crisis in France is not a case of history repeating itself.

May 1968 was a revolt against the tedium and powerlessness of life in a bureaucratic welfare-capitalist con­sumer society in which steady growth and full employ­ment were taken for granted. December 1995 is a revolt against a government's plans to remove substantial parts of the welfare safety net from a society that has long seen steady growth and full employment as things of the past. 

But if that makes the current crisis rather less exciting for left- wingers brought up on 1968’s dreams of a self-managed socialist revolution, it is in many ways just as profound. The level of public spending on welfare in west European societies is the single biggest issue those societies face today, and the events of the past fortnight have brought it into sharp relief. The government of Prime Minister Alain Juppe says that France must reduce its generous welfare provision if it is to compete in the modern global economy: there is no alternative to the rigours of the marketplace. The unions say that they have paid for their benefits through taxation and don't want to give them up. As NSS goes to press, the chances of compromise seem remote.

What gives the crisis its particular edge is that the gov­ernment has been hoist with its own petard – or rather one it was happy to inherit from the previous socialist administration. For all Juppe's talk, international com­petitiveness isn't all that his austerity programme is about: he wants to cut welfare spending because, accord­ing to the Maastricht treaty, he needs to reduce the public debt if France is to participate in European monetary union.

But the reason that the public debt is so great is that growth is so low and unemployment so high – and the most important reason for this is that the franc has been overvalued as a result of a policy of pegging its value to that of the Deutschmark, the purpose of which is of course to ensure that France is able to participate in Euro­pean monetary union in 1999.

The stakes are thus extremely high. If Juppe gives in to the strikers and demonstrators and withdraws his austerity programme, his political career will be over and President Jacques Chirac's room for manoeuvre in his remaining six years in the Elysee palace will be severely constrained. More important, if the Juppe plan is killed off, France will be unable to meet the Maastricht treaty criteria on public debt until well into the next century – and the money markets will almost certainly force a devaluation of the franc into the bargain. Given that the Germans don't see any point in EMU unless France is involved – they only agreed to it because Francois Mitter­rand insisted on it as the price for political union – that would almost certainly destroy the prospects for EMU before the millennium.

It is not necessary to be a Eurosceptic to consider that this might not be quite the disaster that some commenta­tors think it would be. The timetable for monetary union envisaged in the Maastricht treaty was always ambitious, and the treaty always involved serious pain for all the larger economies locked into it apart from Germany.

Many on the left who backed Maastricht in 1992, including NSS, argued that the deflationary effects of the process envisaged by the treaty – caused by budget deficit cutting and over-valued currencies – necessitated serious compensatory measures organised through the EU if it was not all to end in tears. But, thanks largely to the most Eurosceptic government of all, our own, the best chance of such measures, the Euro-Keynesianism outlined by Jacques Delors as president of the European Commission, was scuppered last year. Since then, even the Europhile left has started to have doubts about the conditions and timetable laid down by Maastricht. A vic­tory for the strikers and demonstrators would, at the very least, force a welcome rethink about how we secure mon­etary union.

What it would not do, however, is end the argument about how much western Europe can afford to spend the welfare state if it is to compete internationally. Like the French strikers, NSS has always been sceptical of the idea that a welfare state largely funded through income and consumer taxation is such a disincentive to invest­ment that it must be constantly pared back. We can spend, in short, if we tax. But defending this view is likely to get increasingly difficult in years to come. The French crisis is just the beginning of a protracted struggle over the very nature of the society in which we live.

Friday, 1 December 1995


New Statesman & Society leader, 1 December 1995

It is by no means clear that the agreement on Bosnia signed last week in Dayton, Ohio, is 'more just than continuing the war'

The Bosnia peace agreement initialled by the pres¬idents of Bosnia, Croatia and Serbia last week in Dayton, Ohio, after three weeks of gruelling secret negotiations, is a shabby compromise.

On that, just about every impartial observer is agreed. It is all too easy to see that the ten articles, 11 annexes and 102 maps agreed in Dayton, which will form the basis of a treaty to be signed later this month, do not constitute a just peace. But is it, as Bosnian president Alija Izetbegovic claimed, "more just than continuing the war"? Is it true, as he put it, that "a better peace could not have been obtained"?

Looking on the bright side, it at least means that people are not killing one another – and that, after three-and-a-half years of the bloodiest war on European soil in half-a-century, is a start. The Dayton agreement keeps Bosnia as a single state, with the same internationally recognised borders as when the war began in 1992. Bosnia will have a single capital, Sarajevo, and a central government with a parliament, a supreme court and a national bank. All those found guilty of war crimes by the UN tribunal will be barred from office, including the president of the Bosnian Serb breakaway republic, Radovan Karadzic, and its senior military man, Ratko Mladic. And all those who have been forced to leave their homes during the war will have the right to reclaim them or get compensation. All of which is fine on paper. In reality, of course, no one believes that the right to return or compensation for the victims of "ethnic cleansing" will mean anything at all in practice; nor does anyone seriously think that Karadzic and Mladic will be effectively removed from political influence, let alone brought to justice. The likelihood that the political institutions agreed in Dayton will ever work is slim indeed.

And that is the bright side. Other elements of the Day¬ton deal are lousy even on paper. By dividing Bosnia into two "entities", with a Bosnian-Croat federation control¬ling 51 per cent of the land area, including Sarajevo, and a Serb republic the rest, Dayton effectively sanctions the Serb land-grab that began the war and the Serbs' subsequent murderous "ethnic cleansing". The idea that people of all religions and none can live together in a cosmopolitan, multicultural Bosnian society – for years the rallying cry of the Bosnian government in its struggle against the Serb aggression – has been buried, just as it would have been buried by the previous (unsuccessful) plans for an ethnically divided Bosnia put forward by David Owen and Cyrus Vance in 1993 and the Contact Group in 1994.

To make matters even worse, the way the country will now be divided blatantly favours the Serbs. The only minor concessions they have had to make of territory they held on 12 October, when the ceasefire began, is a small area in and around Sarajevo and the corridor from Sarajevo to Goradze – surely the most modest possible price to pay for their vicious ethnic cleansing in eastern Bosnia.

In northern Bosnia, the maps actually give them back some ofthe territory they had lost to this summer's offensive by Bosnian government and Croatian forces. The Dayton deal takes absolutely no account ofthe fact that, when the ceasefire began, the Serbs were facing a rout in northern Bosnia, with the surrender of their real capital, Banja Luka, weeks if not days away if the fighting had continued. In Dayton, the Serbs achieved by negotiation what they could not have managed by force of arms, the maintenance of their control of territories west of the Brcko corridor. Despite their now-official pariah status, Mladic and Karadzic have grounds to be pleased.

So too has president Franjo Tudjman of Croatia, who in Dayton secured agreement from the Serbs to return Eastern Slavonia – after this year's military successes in Western Slavonia, the only part of Croatia under Serb control. The Croats have also acquired, in the Bosnian-Croat federation, a dependent buffer state between themselves and Serbia.

The losers, as ever, are those Bosnians (mostly, but by no means all, Muslim) who have supported the struggle of the Sarajevo government to maintain a multicultural, tolerant society against the ethnic cleansers. They feel, with reason, that the Americans pulled the rug from under them just as they were beginning to win. Contrary to Izetbegovic's claims, even if the Dayton deal was all that was on the table for negotiation, it is not clear that the peace it has created is more just than a continuation of war. It is no wonder that there was no celebration in Sarajevo at the news ofthe peace agreement – and it will be no wonder if the Dayton agreement breaks down sooner rather than later because of its injustice to the Bosnian cause.


New Statesman & Society, 1 December 1995

The budget was not quite the cynical attempt to buy the next election for the Tories that everyone expected, writes Paul Anderson. But wait for next year's effort

It was not what had been expected. The backbench Tories and the Tory press had assumed that the income tax cuts would be enough to make an early 1996 general election at least an option; Labour had done the same.

Just a week ago, Gordon Brown was talking about tax cuts of "even 3p, 4p, 5p in the pound" as the sort of outrageously irresponsible election-priming package that Chancellor of the Exchequer Kenneth Clarke would pull out of his battered briefcase on Tuesday; the Tories were looking to precisely the same level of hand-out to get the feel-good factor going.

Instead, it was a damp squib: a penny off the headline basic income-tax rate, 15p on fags, some incentives for savers and a load of dull technical stuff that has little or no popular appeal. The consensus in Westminster is that it means a 1997 general election, almost certainly in May or early June, after next year's income-tax cuts have found their way into pay packets at the beginning of the 1997-98 finan¬cial year.

Labour feels rather pleased that it doesn't have to gear up at once for an elec¬tion campaign; the Tories, for all Michael Heseltine's attempts to talk the tax cuts up as "£9 a week for the average family", are torn between despondency at the fail¬ure of the Chancellor to play his trump card and a sense of relief that the day of reckoning has been postponed. With the exception of the ever-supine Express, the best that the Tory press had to say for it was the Telegraph's sniffy "quite good economics and quite good politics". As far as the Sun was concerned, Clarke "blew a golden opportunity to revive the Tories when he cut income tax by just a miserly 1p". The most important political event of this parliament has turned out to be, well, rather less important than next year's version of the same.

So what was he up to? Clarke is not stupid. He knew that everyone on Fleet Street was expecting at least 2p off the basic rate for Wednesday morning's front pages, and that plenty of MPs on both sides of the House were of similar mind. But he also knew that the markets were expecting a gesture of responsibility – a continued campaign to reduce public borrowing – and that public opinion has turned against tax-cutting in favour of maintenance, if not improve¬ment, of public services.

Most important of all, he knew that his party is so far behind in the opinion polls that an early election would be suicidal. The answer? Try to give everyone a little in the short term, but reserve options after that.

Which is precisely what he has done. The tax-cuts are certainly there, if not quite on the scale expected. There are four crucially important measures – a reduction in the basic rate from 25p to 24p, increases in tax allowances, an extension in the scope of the 20p band of income tax and a reduction in tax on income from interest on savings – the cost of which adds up to around £4 billion next year. The various other tax cuts and increases cancel one another out. In the context of Clarke's stated intentions of getting the basic rate down to 20p and abolishing inheritance and capital gains taxation, the package acts as a tempting hint of what is to come in the 1996 budget, even if it doesn't add up to very much on its own.

But then the £4 billion giveaway is itself cancelled out by cuts in public spending. No matter that some of the spending cuts are achieved by sleight of accounting hand, many are real, includ¬ing those in defence (end of the cold war), civil service bureaucracy (cheap computers) and social security (meanness to the poorest). More important, however, the scale of the public spending cuts in some departments is enough to maintain or increase expenditure in others – at least on paper: more for education, more for the health service, more for the police. The detailed tables in the Financial Statement and Budget Report, the "Red Book", show that the headline increases hide cuts on previous projections in some areas in the longer term, and there are some vicious cuts of which Clarke seems proud, notably the reduction in housing benefit entitlements for the under- 25s. But the political message that the Tories care about the welfare state is convincing enough.

In his presentation of the slicing of the public spending cake – and indeed in the manner of his tax-cutting, which is broadly progressive in its impact – Clarke has stolen a march on Labour's claims that the Tories have lurched to the right since John Redwood's challenge to John Major's leadership this summer. This was a One Nation budget speech, and the more honest Labour observers admitted their surprise at the substance as well as the rhetoric: they had been reck¬oning on a much more brutal "slash-and-burn" assault on spending.

Just as important, the package was carefully designed to please the markets with its prudence. Of course, the figures for public sector borrowing are embarrassingly wide of the mark set down this time last year, the result, according to Clarke, of slower domestic growth than expected caused largely by a downturn in Britain's main foreign markets, which led to a shortfall in government receipts.

All the same, the projection remains that public borrowing is on a steady downward course. Even if Clarke's figures rest on an over-optimistic assump¬tion of growth in 1996-97, the neutrality of his budget – the balance between tax and spending changes – is enough to show the markets that he means business about reducing the PSBR in the medium term. With low interest rates to compensate for his tight fiscal stance (and a little luck with international conditions) it is just possible that he could pull off his trick and give himself space for further tax-cuts next year.

But will it work? There's no doubt that Clarke has adopted a very risky strategy politically, effectively putting a wager on the current stagnation of the British economy being temporary. If he is right, he will have plenty of room for man¬oeuvre next year. But if he is wrong, he could face political disaster. Forget about a full-blown recession: all it would take to make a real mess of his PSBR figures would be for growth to continue as it has in the past six months. If that happens, in November 1996 the Chancellor will have to choose between pleasing the markets (with austerity) and pleasing the voters (whether through tax-cuts or public spending) – unless he can persuade the markets that Britain is facing a dire reces¬sion that necessitates a temporary relax¬ation of fiscal policy.

In the meantime, he is hoping that monetary policy, in the form of low inter¬est rates, will give the economy the vigor¬ous boost it needs to reach his optimistic targets for growth. If the budget was a damp squib, it still leaves Clarke with the initiative. He is in for a nervous 18 months.

Labour breathed a sigh of relief at the budget: Clarke didn't impose a windfall tax on utilities
And so, in the end, Kenneth Clarke decided not to pinch all of Labour' s clothes. Most important of all, he was scathing in his budget speech about the windfall tax on utilities' "excess profits" that shadow chancellor Gordon Brown has promised to pay for Labour's flagship emergency employment programme. "A windfall tax would damage investment and threaten the quality of customer service," intoned the Chancellor. "It is an illusion that a windfall tax is paid by the company. lt is paid by the shareholders, including many small shareholders and pension funds. And it would mean higher future prices for customers. The whole point of privatisation is to benefit customers, not the exchequer. I do not intend to introduce such a tax."
Labour's big fear, given everything that the party had invested in the windfall tax, had been that Clarke would adopt a version of it and watch laughing as Labour cast around desperately for some populist alternative means of funding its programme. The signs of relief when he attacked the windfall tax were visible on the faces of the opposition front bench.
Of course, Labour still has a problem. With the opinion polls in their current state, it would be a big surprise if the public utilities don't make sure that they have nothing like "excess profits" in 1995-96 or 1996-97 as the general election approaches. By their nature, windfall taxes rely on an element of surprise if they are to work: by the time a Labour government comes in, it is likely that the utilities will be virtuously ploughing back their profits into investment.
At least, though, that gives Labour a year, not five minutes, to think up some alternative to the windfall tax, and the windfall tax still has enough life in it to last at least for the duration of the debate on the budget. Labour's other great worry had been that Clarke's tax cuts would be of a magnitude or nature that would make it very difficult for Labour to accept them. In fact, they were nothing of the kind. Blair immediately announced that Labour would not be voting against the tax cuts in his response to the budget speech, and he is unlikely to face a giant backbench revolt for saying it. The way the chancellor has cut income tax, reducing the basic rate, extending the lower rate and putting up allowances is, fort he most part, progressive, and the modesty of the cuts mean it is easy enough for Labour to live with.
Which leaves Labour with only minor problems arising from the budget-unless, of course, Clarke's package has an unexpectedly miraculous effect on the Tories' standing in the opinion polls. lt will be easy enough for the opposition to welcome those elements of the budget that are in line with its thinking – the increases in spending on education, the health service and the police, the measures to help the elderly who need care, the extra taxes on tobacco, or the green-tinged taxes on landfill and on petrol – while denouncing the whole as unimaginative and inadequate, particularly on unemployment and industry, and attacking the Tories for putting up taxes in the past three years.
For the first time since John Smith's pre-election shadow budget of 1992, Labour is helped by thefact that it now has a reasonably worked-out set of proposals of its own. It's not just the windfall tax, designed in Brown's words "to unlock a new solution to long-term and youth unemployment" by providing extra cash for training. Nor is it Labour's alternative tax-cutting strategy, outlined by the shadow chancellor last month, according to which Labour would aim at "a starting rate of income tax of 15p or preferably 1Op" and "cut VAT on fuel to 5 per cent", rather than trying to reduce the basic rate of income to 20p and abolish capital gains and inheritance taxation as the Tories want.
Labour can also legitimately point to its plans for tax-breaks and development agencies to encourage investment, as laid out in its "Budget for Britain" a month ago, its long-standing scheme for releasing receipts from council house sales for new building and its ambitious policies (albeit not yet fully formed)for partnerships between public and private sectors in developing the infrastructure (including a controversial deal with British Telecom under which BT would cable Britain's schools for free in return for being allowed into the lucrative cable market).
Of course, all these measures have their critics. Andrew Dilnot, director of the Institute for Fiscal Studies, described Brown's 1Op income tax proposal as "a con", and the Economist denounced his plans for investment tax breaks as "a gimmick". Others say that, even leaving the BT deal aside, private-public partnerships could well be less of a panacea than Labour thinks and that the release of capital receipts will not have the effect Labour claims.
But Labour's plans are credible enough to impress much of the City, significant parts of industry and many pundits. Whether they work the same magic on the voters, of course, remains to be seen.

Friday, 24 November 1995


New Statesman & Society, 24 November 1995

Labour's love affair with the Australian Labor Party isn't its first infatuation since it lost the 1979 general election. Paul Anderson looks at the other models Labour has admired in recent years

Australia, it seems, is the flavour of the mid-1990s for the British Labour Party. Labour leader Tony Blair is a good mate of Australian Labor Prime Minister Paul Keating. Blair's deputy, John Prescott, has just been on a fact-finding mission Down Under. It is reported that other Labour frontbenchers have been told to make their way there to find out how gov¬erning is done.

And, of course, it makes a certain amount of sense. British Labour's leadership is short on experience of govern¬ment, and Australia is closer to Britain in terms of political culture than anywhere else that currently has a left-of-centre administration. Observing the Australian Labor Party is probably as good a way as any of finding out about what it's like to be in power.

But at least a word of caution is in order. As John Pilger has argued in his New Statesman & Society columns over the years, the ALP is deeply unattractive in many ways. The last thing Labour needs to emulate is the obsequious attitude of the ALP governments to Rupert Murdoch, Kerry Packer and Alan Bond.

There's also a more general point – that Labour has a history of viewing left-of-centre governments abroad through rose-tinted spectacles. Over the past 16 years, Labour has latched on to a string of different models in the hope that they might provide the magic formula for elec¬tion victory – and each has turned out to be less useful than Labour thought in the first flush of enthusiasm. Labour has cer¬tainly got some learning to do – but it's mostly learning from others' mistakes.


The British left has always had a soft spot for France – but there was little in the way of electoral politics to inspire Labour between 1945 and 10 May 1981, when Francois Mitterrand won the presidency of the Fifth Republic at his third attempt.

Mitterrand's success and the subsequent landslide victory of his Socialist Party (PS) in June 1981's elections to the National Assembly came as a pleasant diversion for Labour, which at the time was tearing itself apart in the wake of the defection of the Social Democratic Party. Mitterrand's economic programme-widespread nationalisation, vigorous reflation, workers' control of industry and big increases in welfare benefits and pensions-was similar to the Alternative Economic Strategy that Labour had embraced after its 1979 election defeat, and many Labour intellectuals believed that the French socialists would be able to disprove in practice Margaret Thatcher's dictum that "there is no alternative" to monetarist austerity. Almost as important given the concerns of the time, Mitterrand had declared for denuclearisation of central Europe and included four communist ministers in his first government-leading many left-wingers this side of the Channel to expect that France would at least act as a force for disarmament and east-west detente.

In fact, the new French government soon proved as vigorous in its pursuit of the cold war as any other in the west. Almost immediately after his election, Mitterrand gave strong backing to Nato's plans to station Cruise and Pershing II missiles in western Europe, and his government continued to modernise France's own nuclear weapons. Anti-nuclear opinion in the Labour Party – in the driving seat in the early 1980s – had turned against Mitterrand long before the sinking of the Greenpeace ship Rainbow Warrior by French agents in 1985.

On the economic front, British left disillusionment set in in 1982-83, when Mitterrand was forced, by a mixture of inflation and an unsustainable trade deficit, to perform a series of humiliating U-turns. From spring 1983, he presided over a fiscal and monetary regime in many respects more austere than Thatcher's. The failure of the PS's initial economic strategy did much to persuade Labour's policy-makers thata "go-it-alone" Keynesian reflationary programme was no longer feasible for a medium-sized nation state-but the only Labour people who saw the post-austerity PS governments of 1983-86 and 1988-93 as any kind of model for Labour were admirers of their enthusiasm for European economic and monetary union. Now the PS is out of power, with little prospect of returning in the near future, it has few friends left over here.


The Swedish Social Democrats have been feted by various Labour admirers here since the 1930s, when, having adopted a radical proto-Keynesian economic policy, they began an uninterrupted period in office that lasted until 1976. But it was during the 1980s, from their victory under Olof Palme in the 1982 general election to their defeat under Ingvar Carlsson in 1991, that their popularity with Labour reached its peak.

One reason was British left-wingers' admiration for the Swedes' neutrality – but more important by far was the economy. As Britain was experiencing the ravages of unemployment and theory government's cuts in spending on the welfare state, Sweden under the Social Democrats was enjoying full employment and the most generous welfare provision in the world.

The Swedes seemed to have succeeded in developing a "third road" model of economic management that avoided both the inflationary dangers of traditional Keynesianism and the mass unemployment of deflationary neo-liberalism. Things began to go wrong in the late 1980s, when inflation started to rise and the economy began to experience balance-of-payments difficulties. The Social Democrats responded with an austerity programme, unemployment increased and their popularity slumped. In 1991, they suffered their worst electoral defeat in more than 60 years.

Although they were returned in the next general election in 1994 – free-market conservatism proved anathema to the electorate – by then Labour had decided that it could not afford to place itself in the high-tax, high-spending camp. The Swedish Social Democrats are likely to be important allies for a Labour government in the European Union. But they are just a little too traditionalist for Tony Blair.


Labour's enthusiasm for Bill Clinton before and immediately after his 1992 election campaign knew no bounds. Labour had just lost a fourth general election in a row, and Clinton's success was widely acclaimed in the Labour Party – and not just by the right.

Although it is the enthusiasm of Labour "modernisers" that is best remembered now, Clinton's insistence during the campaign on the priority of his economic policy message – encapsulated in the famous slogan that dominated his campaign war-room, "It's the economy, stupid" – was embraced by many on the left. ItwasBill Morris, general secretary of the Transport and General Workers Union, who declared of Clinton at a big conference on "Clintonomics" organised by his union and the Guardian in January 1993: "To say that we have nothing to learn is just arrogant nonsense."

Nevertheless, it was undoubtedly the Labour right that bought the whole Clinton package. Probably the most significant purchaser wasTony Blair, whose actions and rhetoric ever since have echoed Clinton's in 1992. As shadow home secretary, he emphasised how tough Labour was on crime just as Clinton had emphasised his own anti-crime credentials (although Blair did not go to the lengths of having anyone executed to prove his seriousness). More important, as Labour leader he has wooed middle-class voters by constantly stressing the extent to which Labour has changed into "new Labour", returning to values that it abandoned in the 1960s and 1970s – exactly as Clinton talked about being a "New Democrat". On a more mundane level, the next general election campaign will be fought by Labour very much on the lines Clinton fought in 1992, with a highly centralised command structure and what Labour media adviser Philip Gould called "speed of response and rebuttal" at the heart of the party's efforts. Labour will soon be moving its key election campaigners into a new hi-tech campaign war-room in MillbankTower.

For all this, there are few senior Labour figures these days who are keen to praise the US president in public. Despite the admiration that Labour politicians and advisers had for his campaign, his record in office has been something of an embarrassment, particularly since the Republican landslide in last year's Congressional elections and Clinton's subsequent desperate lurch to the right in preparation for next year's presidential election.


The Australian Labor Party has been in power uninterruptedly since 1983 and has won four successive general elections-but it's only really in the past few months that Labour in Britain has started to enthuse in public.

Australian Labor's biggest fan here is Tony Blair. The Blair family lived in Australia briefly when hewasa small child, and he counts many Australians among his closest friends. In 1982, the young Blair visited Australia, and delivered a lecture on the British Labour Party in which he argued thatthe party had to accept the mixed economy: according to John Rentoul, "It is possible to trace the death of Clause Fourto Perth, Western Australia, in 1982."Duringthat visit, Blair also met many senior Australian Labor figures, including Bob Hawke, who was soon to seize the leadership of the party; he met Paul Keating, the current leaderand prime minister, on his next visit (with Gordon Brown) in 1990.

But it is only since Blair's most recent trip to Australia this summer, when he stayed with Keating before addressinga conference of Rupert Murdoch's News Corporation, that British Labour has really started to makeafuss aboutthe lessons it can learn from its sister-party Down Under. Labour deputy leader John Prescott made a highly publicised fact-finding tripto Australia last month-and Rotherham MP Denis MacShane enthused in the Guardian about the "compelling model” of the Australian Labor government.

As regular readers of NSS will know from John Pilger's recent columns, Labour's admiration for Australian Labor is anything but uncontroversial. Hawke and Keating (who ousted Hawke in 1991) have certainly proved adept at winning elections, and there are undoubtedly elements of their approach from which Labour can learn positive lessons, such as the accords with the trade unions that have kept industrial relations remarkably sweet. But the ALP's record of providing giant tax breaks and other advantages to big business (particularly giant media corporations) is not the sort of thingthat plays well with British Labour-and the ALP's election-winning streak will come to an end in next spring's general election unless the party recovers from its current low popularity ratings.


The German Social Democrats have not won a general election since 1980, and have been out of government since 1983. But that didn't stop Labour from thinking that the SPD was the answer to its dreams between 1987 and 1992.

One reason was foreign policy, at which the SPD was considered, with some justification, to be expert. Labour leader Neil Kinnock had come to the conclusion after his 1987 general election defeat that unilateral nuclear disarmament was a millstone round Labour's neck-and was insistent that the party should adopt a defence policy that would not leave it isolated in Europe. Labour's stance on Europe also needed to be beefed up: although the promise of withdrawal from the EC had been dropped before 1987, ithad not been properly replaced.

The West German Social Democrats appeared to be the ideal partners with whom to develop a new foreign policy. They seemed a good bet to win the next general election in West Germany, due in 1990, which, because of West Germany's economic and political dominance of western Europe, would have made them the most powerful left-of-centre party on the continent. The SPD also had an impressive group of foreign affairs specialists who were more than happy to help Labour sort itself out. The two parties' leaders had a string of high-level meetings at which they coordinated efforts on the future of Europe and defence and disarmament policy.

Relations between the two parties remain good – but they are nothing like as close these days, largely because the SPD has rather turned its back on the outside world since German unification in 1990.The party lost both the 1990 and 1994 general elections, and since then has been locked in internal dissent as its opinion-poll ratings have slumped. All the same, the SPD remains, with Labour, the European centre- left party with the best prospect of winning a national election in a large EU country – which means that Tony Blair will be keen to keep things sweet.


The victory of David Lange's New Zealand Labour Party in 1984 was a cause for celebration on the British Labour left, which was still reeling after the party's disastrous 1983 general election result. Lange was committed to a radical anti-nuclear policy, which included a refusal to allow American nuclear-armed ships to use New Zealand ports. Although New Zealand was a minor player in the cold war, with no nuclear weapons stationed permanently on its soil, Labour's victorywasseen by many in its British sister-party as heartening proof that a firm stance against nuclear weapons need not prove electorally damaging.

The problem was that the anti-nuclear policy was just about all that the New Zealand Labour Party stood for that any self-respecting British leftist could possibly stomach. Lange's government, with finance minister Roger Douglas playing a crucial role, set about privatising the country's public sector, dismantling its welfare state and opening the economy to market forces with a gusto that matched Margaret Thatcher's. "Rogernomics" so disillusioned the Labour left that in 1989 it split to form New Labour, the electorate revolted, and in 1990 the conservative National Party was returned to power in a landslide.

The strength of popular support for Labour's anti-nuclear stance was such that the National government kept it – but by then no one in the British Labour Party could give a damn. These days, the only reason anyone on the British left mentions New Zealand is that it is a model for electoral reformers, having decided to abandon first-past-the-post and adopt a mixed-member system of proportional representation in a referendum in 1992.


There are several examples of left-of-centre parties abroad for which Labour has had only brief or intermittent affections. The party has never really felt at ease with the Mediterranean socialists of Spain, ltaly and Greece, all of whom have been in power for most of the past 16years (although the Italian Socialist Party was effectively destroyed by corruption scandals in the early 1990s), largely because their economic liberalism is, even now, out of keeping with mainstream Labour thinking. Nevertheless, the governments of Felipe Gonzalez' Spanish Socialist Workers' Party (PSOE) and Andreas Papandreou's Pan-Hellenic Socialist Movement (PASOK) both had their admirers in their first years in office, largely because their foreign policy rhetoric was in tune with Labour's at the time.

Relations have been much closer with the social democratic parties of the smaller northern European countries, particularly the Dutch Labour Party and the Norwegian Labour Party, although neither could really be said to have been a model for British Labour.

Far more important was the enthusiasm of many in Britain (particularly among the European Parliamentary Labour Party) for former French finance ministerJacques Delors as President of the European Commission, in which capacity he produced a plan for economic regeneration in late 1993 that many Labour intellectuals hoped would be the first step on the road to a Europe-wide Keynesian programme of job creation. The plan was effectively killed off last year by the British Tories, and little has been heard of the possibilities of Euro-Keynesianism since Delors' retirement.

Outside western Europe, Labour has had few dalliances. Plenty of Labour people thought that Nicaragua under the Sandinistas was a good thing, but very few believed that Labour had very much to learn directly from Managua – and much the same goes for Mikhail Gorbachev's Soviet Union and Nelson Mandela's South Africa. Israel's stock was low in Labour circles until the 1993 Oslo declaration, and even under the current Labour government has nothing like the status that it had in the 1940sand 1950s.

Which leaves nothing apart from a handful of admiring gestures towards the tiger economies of South-East Asia-although so far not even the boldest Labour moderniser says publicly that Britain should emulate them. Perhaps that's what comes after Labour wins an election...


New Statesman & Society leader, 24 November 1995

If Princess Diana's interview has damaged the monarchy, that can be no bad thing. The lot of them are an affront to democracy

For the benefit of anyone who has been in a coma for the past few days: Princess Di did commit adultery with James Hewitt, doesn't think she's going to be Queen and has a capacity for pitying herself in public unmatched outside Hollywood.

Those are the highlights from Monday's much-hyped Panorama interview with the Princess of Wales, viewed by some 20 million people worldwide. There's little point in adding to the mountains of vacuous commentary on the supposed constitutional implications of Diana's bizarre broadcast: there are none, or at least none directly. If she and Prince Charles don't divorce, she'll still be Queen even if she has affairs with the entire England rugby team; and her children will be next in line for the throne, whatever happens to the royal marriage.

What we saw was, nevertheless, a fascinating spectacle – a poor little rich girl whingeing about how she has been hard done-by. Diana's claim that she accepted half the blame but no more for the break-up of her marriage was just one ploy in many to gain sympathy: in reality, she sees herself as the perpetual victim. Nothing is her fault. She has been hounded by the media, betrayed by Charles, plotted against by his office. Yet she doesn't want to get out of the public gaze: she thinks that she deserves a role – presumably paid for by the taxpayer – swanning around the world and hanging around hos¬pices for the terminally ill and consoling "drug addicts, alcoholics, battered this, battered that". And she won't take the initiative in getting divorced. Even her extra-marital affairs seem to have just happened to her.

Yes, Diana is an icon, but not because she is a strong, independent-minded woman as she claims to be: rather, she epitomises the narcissism and refusal to take responsibility for one's actions that is endemic in western consumer societies.

Not that the rest of the royals deserve any personal sympathy either. From what has emerged in the past few years, the Windsors appear to be some of the most spiteful and insensitive human beings imaginable.

Despite the claims of Charles' allies to the contrary, the farce that has surrounded the breakdown of his marriage has been down to him as much as to Diana. If she was responsible for Andrew Morton's book of her life, it was he who first admitted to adultery, with Camilla Parker-Bowles, in a television interview with Jonathan Dimbleby – a revelation that showed him to be a pious hypocrite. The other younger adults in the family (except Princess Anne) appear to be at best buffoons. If the Queen died tomorrow, it would be difficult to find a credible monarch to replace her. If Princes William and Harry turn out like their relatives, things will get even worse.

Which is where constitutional questions do come in, albeit tangentially. For what Diana said to Panorama has undoubtedly added to the damage done to the popular standing of the monarchy in recent years. And, although in theory the popularity of the monarchy is not a constitutional question, in practice it becomes so as it declines.

Put bluntly, if the reputation of the British royals continues to slump, it will not be long before Britain as a polity will have to confront the question of whether or not it needs or wants a monarchy. So far, the monarchy has been able to cope with growing public disillusionment by way of minor reforms of its privileges: the Queen's agreement to pay tax, or her decision to open Buckingham Palace to the public.

Further moves in the same direction, such as a radical reduction in spending on the civil list, are the least we can expect in the next few years. For their own survival, it might be enough for the Windsors to turn themselves into a Scandinavian-style monarchy, all bicycles, proper jobs and modest houses. But there comes a point at which this is not enough – when the issue becomes not the royal family's dissoluteness or its cost to the taxpayer, but whether the hereditary principle has any role at all to play in the government and politics of a democracy.
That point could be closer than most commentators think.

If Labour wins the next election, the politics of the hereditary principle will move centre-stage as soon as Labour publishes its plans to abolish hereditary peerages. So too will the position of the royal prerogative when Labour's bill of rights emerges. Of course, Labour has no intention of putting reform of the monarchy – let alone its abolition – anywhere near the political agenda, but it increasingly looks as if, in the long run, it won't have any option but to do so. As far as NSS is concerned, that is no bad thing. The day that we are rid of the anti-democratic absurdity of monarchy cannot come soon enough. And if Diana's performance this week helps bring on that day, it will have done endless good – however unpleasant the personality she revealed.

Friday, 17 November 1995


New Statesman & Society leader, 17 November 1995

The Queen's Speech was a damp squib – so now all the Tories' hopes rest on Kenneth Clarke's budget

This week's Queen's Speech has been attacked by Labour for containing nothing at all relevant to the problems confronting Britain, and rightly so. With a handful of somewhat banal exceptions – such as the long-overdue rationalisation of divorce law and the belated bill on the Channel tunnel rail link – the sole purpose of the legislation that the government plans to introduce in the final full session of this parliament is to embarrass New Labour.

 Whether Tony Blair and friends will be embarrassed is another matter entirely. They certainly shouldn't be too worried by most of the promised legislation. Extending the "right-to-buy" for housing-association tenants, for example, is almost laughable as a keynote housing policy – not so much because it is wrong in principle (it isn't, necessarily) but because it so completely fails to grasp the mood of the times.

In the wake of the housing market slump, few housing-association tenants want to buy. Most feel rather pleased that they have managed to avoid the fate of their owner-occupier friends. And extending housing-association tenants' right-to-buy does little to encourage construction of more homes, which, as everyone knows, is the only way to tackle homelessness.

Similarly, the Tories' mean-spirited measures to make life even more difficult for immigrants and asylum-seekers should cause Labour few problems, just as long as it sticks to principled opposition. The same goes for the proposed criminal justice legislation to limit the access of the defence in trials to prosecution documents, and indeed for the plan to give a new anti-crime role to Ml5 – which is far less accountable than the police to democratically elected politicians. It's not "soft on crime" to believe that defendants in trials should know the case against them or to think that action against international organised crime should not be handed over to the security service. And it should not be beyond the capacity of Labour's front bench to denounce the Tories' proposals on immigrants and asylum-seekers for making scapegoats of some of the most vulnerable people in our society.

Education is more of a danger for Labour, although only on grant-maintained schools (and the difficulty there is less that Labour policy is a problem in itself than that the policy seems to be at odds with Tony Blair's choice for his own son). The Tories' nursery-education voucher scheme looks like what it is, a cheapskate attempt to buy off discontent at Britain's miserable education provision for the under-fives, and Labour should have no difficulty showing that its alternative, expanding state nursery provision, is infinitely preferable.

Which leaves only the proposals to ease restrictions on media ownership, where the Tories hope that Labour will be torn between its distrust of media barons and its desire not to offend them in the run-up to the election. This is probably the most dangerous of all the 15 bills for Labour, simply because its own policy is at such an embryonic stage – but predictions of a revolt of left-wingers accusing the party leadership of selling out to Murdoch could easily prove to be Tory wishful thinking.

 If New Labour has a single defining characteristic, it is that it is desperate to win, and a little hard swallowing over media regulation isn't difficult to do. As an indication of what to expect, look at the response – or rather the lack of one – to Tony Blair's speech to the Confederation of British Industry.

Even five years ago, his explicit embrace of "caring capitalism" would have unleashed a storm of protest from Labour's left. This week, there wasn't a squeak, not even about Blair's apparent backtracking on implementation of the social chapter and the minimum wage. What Tony says, goes – even if what he says is that Labour has embraced the values and practices of continental Christian Democracy.

So does that mean that the Tories might as well aban¬don hope of doing Labour serious damage? Not quite. There is still Kenneth Clarke's budget later this month –  and after that perhaps another one in a year. Clarke does not have a great deal of room for manoeuvre, but he has enough to make significant tax cuts, probably to be phased in over a couple of years. Then, the Tories hope, he will be able to challenge Labour to say whether it would reverse his tax cuts. If Labour says yes, it's damned again as the high-tax party, and if it says no, it has to accept his cuts in expenditure too.

It is a pretty crude game – and it's immensely dull to watch. But that doesn't mean it won't work, particularly after people start to see the extra money in their wage packets and salary cheques next spring. Even if the Queen's Speech was a damp squib, the Tories still have enough dry powder at least to give Labour a fright.

Friday, 3 November 1995


New Statesman & Society, 3 November 1995

In the week of the first anniversary of the Criminal Justice Act, the silencing of Clare Short on cannabis shows that it is not just the Tories who have an authoritarian tendency. Paul Anderson and Steve Platt look at the continuing assault on our civil liberties

“We have had telephones tapped, mail inter­cepted and the citi­zens' privacy invaded by vetters and compilers of files. We have had official secrets privily leaked to right-wing columnists by persons in high pub­lic office or in the armed services, and we have seen no trace of even-handedness in the application of justice. We have had several persons (in Newcastle, Liverpool, Southall and Glasgow) who appear to have died at the hands of the police, and others who have been severely injured, and we have had neither prosecutions nor public inquiry . . . The state of the nation is no longer in question. That has already been decided, although it may never be clear by whom or how. The nation is to be a property managed by the state. And the state is to be a station of Nato, a station with a blue light over the door and sirens moaning in every street."

So wrote the late E P Thompson in a cel­ebrated extended essay, "The State of the Nation", published first as a series in New Society in late 1979 and the next year whole in his best-selling collection Writ­ing by Candlelight. In the introduction to the book, Thompson said that the pes­simism of "The State of the Nation" was "excessive", but there can be no doubt that he was expressing the feelings of most civil libertarians at the time.

The cold war had entered a distinctly chillier and more dangerous phase. As Thompson wrote his polemic, Nato was putting the finishing touches to its announcement of the deployment of cruise and Pershing 11 missiles in Europe and the Soviet leadership was preparing to invade Afghanistan  – and Britain had just elected a party to government that, for all its rhetorical anti-statism, was more authoritarian in intent than any that had taken office since the early 19th century. Margaret Thatcher had come to power on a promise of ending Britain's crisis of "ungovernability", by cracking down on union militancy, subversion and immigration. Now, as her govern­ment announced a massive injection of money into the police, it appeared that the shift to authoritarianism was for real.

Worse, there didn't seem to be a viable alternative. Labour had been in power for the five years before Thatcher's election, and had itself presided over an erosion of civil liberties unprecedented in modern peacetime. There had been a string of high-profile political trials – of young Irish men and women accused of plant­ing bombs in Birmingham and Guild-ford, of pacifists for alleged incitement to disaffection of troops sent to Northern Ireland, of radical journalists for reveal­ing official secrets, of anarchists for sup­posedly conspiring "with persons unknown" to cause explosions. Labour had introduced the draconian Prevention of Terrorism Act to deal with insurgency in Northern Ireland and had accepted the previous Tory government's abandon­ment of jury trial for terrorism cases in the province. The "public order" role of the police had been massively expanded, without any improvement of police accountability. As Thompson put it: "The injury to liberty, the corruption, and the law-and-order cant has come from an all-party 'consensus'."

Much that has subsequently hap­pened, from the raft of legislation against trade unionism to last year's Criminal Justice Act and the current plans for fur­ther curbs on the rights of asylum-seek­ers, bears out the concerns that Thomp­son articulated. But there was one very important change for the better that nei­ther he nor anyone else writing about civil liberties at the time predicted: the Labour Party renounced its practice in govern­ment in the 19705 and rediscovered the libertarianism that had moved it when Roy Jenkins was Harold Wilson's home secretary in the 1960s.

This was partly because of the election of Michael Foot, a veteran civil libertar­ian, as Labour leader. But more impor­tant by far was the revulsion among Labour's grassroots at the authoritarianism of their party in government. Long  after Foot had gone, and long after the other totems of party members' antipathy to the 1974-79 Labour government had been discarded  – the Alternative Eco­nomic Strategy, unilateral nuclear disar­mament, withdrawal from Europe  –  Labour remained an unmistakably civil-libertarian party. By 1992, it was commit­ted to a Bill of Rights, a Freedom of Infor­mation Act and a "positive framework" for workers' and trade union rights.

Not that it made a lot of difference to the Tories. Since 1979, they have consis­tently strengthened the surveillance-and-control institutions of the state, introduc­ing along the way a vast amount of legislation restricting civil liberties. Police pow­ers and resources have increased inex­orably, and the police have adopted an ever more military approach to their pub­lic order functions. Despite the end of the cold war and a series of scandals, the secu­rity services have escaped both severe budget cuts or effective scrutiny. The prison population has gone up and up, with the exception of a brief period fol­lowing the Strangeways riot, and now stands at an all-time high of 52,000.

A procession of legislation (see over) has restricted the collective and individ­ual rights of workers; other laws have withdrawn rights from refugees, immi­grants and asylum-seekers. Last year's Criminal Justice Act effectively put an end to freedom of assembly, severely cur­tailed freedom of movement, put limits on the right to jury trial and undermined the right of people under arrest to remain silent. Already tough laws on official secrecy have been made even tougher  –  and curtailments of liberties introduced as part of the struggle against Northern Ireland terrorism remain in place. Almost unnoticed, Europe-wide security and surveillance institutions account­able to no one have mushroomed and acquired wide-ranging powers.

Of course, we are not yet living in a police state or anything like one  – and in some areas there have been small gains for civil libertarians: the reduction of the age of consent for homosexual men from 21 to 18, data protection legislation, video recordings of police interrogations and so forth. But when it comes to civil liber­ties, the overall balance sheet of 16 years of "the free economy and the strong state", as Andrew Gamble described the Tories' ideological recipe, is negative. If E P Thompson's 1979 nightmare has not come to pass, his warnings about the state's encroachments on the freedoms essential for any genuinely democratic polity are as apposite as ever. Certainly one would not expect Labour to be relax­ing its civil-libertarian stance.

Yet that seems to be precisely what it has been doing recently. It's not that it has officially given up on civil liberties. The formal policies remain much as they were in the run-up to the 1992 general election. But there has been a big change in the way that policies are presented.

Ever since Tony Blair became shadow
home secretary in 1992, the emphasis of Labour's home affairs team has been on how tough the party is on crime. Civil lib­erties have been consciously downplayed.

Thus, last year Labour decided to abstain on the third reading of the Crimi­nal Justice Bill rather than oppose it – a decision justified by Blair on the grounds that, although the bill contained much that Labour disliked and would repeal in office, the party didn't want to scupper some of the provisions of which it approved (such as the reduction in the homosexual age of consent). Thus, too, the bizarre outburst by Blair's successor as shadow home secretary, Jack Straw, this summer, when he called for a clamp-down on graffiti artists, "winos and addicts", aggressive beggars and wind­screen "squeegee merchants". Ditto this week's rush to disown Clare Short's broadcast remarks to the effect that it is at least worth considering the possibility of decriminalising cannabis.

Of course, there are electoral reasons for the shift of emphasis. There are far more voters who are worried about street crime and burglaries than are concerned about developments in public-order policing, or even qualifications to the right to silence – and all the opinion poll evidence in the late 1980s and early 1990s suggested that a substantial section of the population reckoned that Labour was "soft on crime". In these circumstances, it's hardly surprising that Blair decided to toughen up the party's image.

The worry, however, is that the shift in emphasis from civil liberties to crime is not simply a matter of choosing the part of the Labour home affairs menu that best stimulates the public's taste-buds, but is rather a reflection of a deeper change in the way that the upper echelons of the Labour Party are thinking about the world. An indication that this is the case is the growing enthusiasm among senior Labour politicians – most notably Blair himself  – for the communitarianism extolled by Amitai Etzioni and others in the US, with its emphasis on "responsibilities as well as rights".

It's easy enough to see why Blair and others are impressed by Etzioni and friends. The rhetoric of communitarianism was undoubtedly useful to Bill Clin­ton in his 1992 election campaign, and there are many parallels between Clin­ton's predicament in the run-up to 1992 and Blair's today. Like the Democrats, Labour has suffered as the credibility of big-government welfare Keynesianism has been destroyed – partly through the sheer unpopularity of high (or, indeed, any) taxes, partly through the intellectual and political ascendancy of the new right, partly through the process of economic globalisation. Like the Democrats, Labour has been effectively attacked by conservatives for tolerating family break­down, antisocial behaviour and criminal­ity. The rhetoric of responsibility and community has an obvious appeal to cen­tre-left politicians anywhere in the indus­trialised world who doubt their ability to generate full employment or sustain the welfare state – and who desperately need a pitch that addresses popular anxieties about drugs, violence and social disorder.

But there are also big differences between the US and Britain. In the US, rights are written into the constitution. Here, there is no written constitution. This means that many of the things the communitarians identify as symptoms of the imbalance of rights and duties in American life – from the legally encour­aged gun culture to the use of the consti­tution to prevent effective police action against organised crime – are not prob­lems here. It also means that the commu­nitarians take for granted all of the advan­tages of American political culture, in particular the guarantees of freedom of expression and relative openness of gov­ernment, that Britain does not enjoy. Even if the communitarians are right in the US – and plenty of civil-libertarians argue that their ideas and practice are unacceptable – their prescriptions are not necessarily applicable here.

To be fair, there is no sign yet that Labour has swallowed communitarian-ism whole. Blair has declared himself a communitarian, and Straw has enthused about "an approach that puts the stress equally on rights and duties". But both deny that they have any enthusiasm for some of the more contentious ideas to come out of American communitarian circles (let alone for the death penalty, used so cynically by Clinton in his election campaign). At this year's Labour conference, some of the shadow cabinet members closest to Blair appeared on civil-libertarian fringe platforms, and Straw has commissioned Liberty (for­merly the National Council for Civil Lib­erties) to come up with ideas for no-cost civil liberties measures that could be imple­mented early in a Labour government.

If he's not simply trying to keep Liberty busy to shut it up, that process, together with Labour's existing commitments, should yield a radical reform package. The problem, put simply, is that civil libertari-anism now seems so low on Labour's list of priorities that it would not surprise anyone if the reform package never saw the light of day. That's certainly how it looks to the ravers, the travellers, the squatters and the protesters targeted by the Criminal Justice Act – even if there isn't anyone of the stature of E P Thomp­son around these days to express their fears in print.

The Criminal Justice and Public Order Act is a year old today (3 November). Over the past 12 months, according to a new report by Liberty*, the act's "aggravated trespass" provisions against forms of peaceful protest have resulted in the arrest of 86 environmental and anti-nuclear protesters, 107 anti-roads protesters and 153 hunt saboteurs. There have been 93 reported evictions of travellers under the parts of the act that created new legal powers against those who lead a mobile lifestyle. Smaller numbers of arrests have occurred under the provisions against "trespassory assembly", raves and squatting. And, of course, the threat of the act has been used on many more occasions in pursuit of a nationwide clampdown on diversity and dissent. 
 This summer, for example, saw one of the most highly coordinated national police operations to prevent a peaceful protest since the miners' strike. The weekend of 7 July saw police forces throughout southern and central England mobilised in a series of raids, roadblocks, searches and seizures to halt the" Mother", a planned massive free-festival protest against the Criminal Justice Act.
 At 6.30 that Friday morning, following an extensive surveillance and intelligence operation, officers from the Metropolitan and Hampshire police battered down the door of United Systems of Sound activist, Debbie Staunton. The same day, Michelle Poole, of the Advance Party campaign group, returned home to find officers from three different police forces bagging up her possessions, even seizing the pictures from her  wall. She told Squall magazine: "They made no secret that they' d been watching us for days; they were even boasting about the transcripts of my telephone calls that they'd taped."
 At one of the planned venues for the event, police used section 64 of the act to seize £9,000 worth of equipment belonging to the Black Moon Sound System from Derby-despite the fact that it had not even been used. Roadblocks set up exclusion zones around potential sites, and sections 63 (giving the police powers to direct people to leave land) and 70 ("trespassory assembly") of the act were deployed against the people who turned up.
 Michelle Poole and Debbie Staunton have since been charged with "conspiracy to commit a public nuisance". Although a series of smaller parties still took place at various venues overthatweekend, the police operation succeeded in its main intent-to prevent the large-scale protest festival that had been planned.
 Police use of the act has been less effective, though, in obtaining convictions. The first trial of someone charged with trespassory assembly-"King Arthur Uther Pendragon", who was arrested with 27 other people at Stonehenge on 20 June  – was thrown out by Salisbury magistrates in September. And although a subsequent case relating to an earlier "prohibited assembly" at Stonehenge resulted in two convictions, those convicted have pledged to take their case to the European Court of Human Rights. Among the 346 cases of people arrested for aggravated trespass monitored by Liberty, more than half have had the charges against them dropped. Only 12 hunt saboteurs – out of l53 charged – have so far been convicted. Similarly low conviction rates are expected in the other categories. The first Criminal Justice Act case against squatters also collapsed in Bristol last month. 
Police use of the act has been patchy. While Kent police have arrested 62 anti-roads protesters atthe Thanet Way site, for example, the Metropolitan and Lancashire Police, who policed the M11 and M65 protests, have not used the aggravated trespass provisions. Some police forces even seem to have decided not to use the act at all, arguing, as Liberty put it, that "the law is too impractical to enforce, or thatthey have insufficient manpowerto implement it".
 Nonetheless, in many areas the police appear to have taken it upon themselves to interpret the new law as outlawing all forms of protest that take place without their consent. Liberty cites examples of a man being arrested for aggravated trespass while he was on a public road and of a Dover residentwho was arrested for wearing a "Ban Live Exports" T-shirt "outside the designated protest area". Other arrests have included 15 Greenpeace activists at Sellafield, 19 protesters against an opencast mine in Leeds, and nine people protesting against the felling of trees originally planted at Petersfield cemetery as a permanent memorial for Canadian second world war servicemen.
 Those who are charged often find that the new police powers to impose bail conditions are more onerous than the laws they are accused of offending against. Increasingly, the police are imposing conditions that amount to prohibitions on people being involved in further protests. In January, a Glasgow man was jailed for refusing the bail condition "not to approach, obstruct or interfere with any Wimpey construction site". He told Liberty: "Conditions were ridiculously vague. I could be arrested for walking out of my house in the direction of the site." A woman in Kent, meanwhile, was instructed "not to go within half a mile" of a road construction site-even though she lived closer to the site than that.
 The anti-roads campaign group, Road Alert, has said that "the effect of the bail conditions has been to totally immobilise some of our protests". But Liberty points out that roads protests are as prevalent as a year ago and arguably more organised. People who have fallen foul of the new law in different ways, moreover, have discovered a common cause as they find their activities outlawed. Far from clamping down on peaceful protest, the legislation has contributed to an upsurge in involvement. "Thousands of people who have never protested about anything before in their lives were outraged by petty legal restrictions and heavy-handed policing because they had previously believed that the right to protest was part of their heritage, "says Liberty. "Instead, they discovered that it's something they' re only allowed to do on certain days of the week, at the right time, in the designated area, in the approved manner, with advance notice, when they haven't got a court case pending."
 And support for peaceful protest is growing, in parallel with the increasingdisenchantment with traditional vehicles for political action. ADaily Telegraph/Gallup poll in June showed that 68 per cent of the public believe that there are times when protesters are justified in breaking the law-prompting a thunderous response from the Telegraph leader-writer: "Middle England needs the Riot Act read to it. The belief that it is sometimes right to break the law as a protest has spread from the traditionally more anarchic classes – students, trades unionists, unilateralists – to embrace all sections of opinion, including those who used to know better. "
 Every cloud has a silver lining. The Criminal Justice Act may not have been all bad, after all.

Friday, 6 October 1995


New Statesman & Society, 6 October 1995

Paul Anderson dips his toes into the murky waters surrounding the Liz Davies affair, and searches for his socks in the waters off Brighton beach

Brighton beach opposite the Grand Hotel, 2.45 Monday morning – and the editor has just thrown my socks into the sea.

It's probably my own fault. I've torn up his resignation letter and we've been arguing the toss about Liz Davies. He wants to paint "LIZ DAVIES IS INNOCENT" on every railway bridge in London and dig up cricket pitches. I reckon that no one will get the joke. And anyway, I say, Liz's other half, the journalist Mike Marqusee, wouldn't have anything to do with it.

Although a Yank, he's mad about cricket, the nearest thing we've got to the great C L R James and the official New Statesman & Society correspondent for next year's cricket World Cup. He even told me before Labour conference voted not to back his partner that, as far as he was concerned, the best thing about moving to Leeds was the cricket ground at Headingley.

* * *

Well, there's an element of truth in all that: the editor did throw my socks into the sea. We were doing a little late-night paddling after the Labour conference New Statesman reception, at which he was expected, according to press reports, to announce his resignation.

It's the sort of thing you feel like after a stressful evening explaining to all and sundry that you haven't a clue who started the rumour that some sort of Blairite consortium was about to buy NSS and that the price was the editor's head.

As I said to Anita Roddick, as he said to Roy Hattersley, as we both said to the man from the Indian High Commission who had been reading the Statesman since he was five – honestly, there is no resignation letter. And we really didn't argue about Liz Davies, although what Mike said about Leeds is absolutely true, and I actually think the joke is rather a good one.

* * *

As for Laurie Taylor, he hasn't resigned or been fired either. He is in Bogota, and I'm doing his slot just this once. The editor, the staff and the board of the Statesman and Nation Publishing Company have full confidence in him.

Got that? I hope so. Laurie is finding out about cocaine in South America and writing about it in the Evening Standard, the paper that first suggested someone was keen to turn NSS into a tool of the Labour leader's office – a story, inciden¬tally, that Tony Blair's aides say they are as clueless about as anyone at the Statesman.

"Look," one told me this week, "we're talking about trying to run the country. We don't care what you publish." That's just a slight overstatement, but it has to be said that Blair's regime is far less uptight about the left press than Neil Kinnock's used to be, even if the Blairistas are somewhat touchier than their predecessors when John Smith was leader.

* * *

The memory of Kinnock that will remain with me forever is from just after I became editor of the Labour weekly Tribune in 1991, when he granted an audience in his office to the paper's board to talk about "the future".

The meeting consisted of a 45-minute monologue from the Labour leader, in which he used the fruitiest language to denounce Tribune's treachery, fully two years before, in running a campaign against his plan to ditch unilateral nuclear disarmament. We didn't get a word in.

Blair is a very different animal. He might be extraordinarily sensitive to criticism, and there's no doubt that his advisers have a knack for no-holds-barred denunciation when it suits them. But in the experience of NSS, he has been co-operative in the extreme, writing pieces and agreeing to be interviewed whenever we've asked. And it's actually quite easy to deal with the spin-doctors: any journo worth his or her salt simply gives them what Ernest Bevin memorably described as "a complete ignoral". The only people who are scared of Peter Mandelson are those who allow themselves to be cowed.

* * *

But back to cocaine. In the late 1980s, when it was the fashionable drug of the successful and the ambitious, you didn't have to go to Bogota to find about it: you could do your research on the fringes of any of the major party political conferences.

The Tories were the real coke-heads – they had the money – but there was also a select group of Labour enthusiasts, most of them thrusting young Kinnockite modernisers from the Labour Coordinating Committee who were apparatchiks at Labour headquarters or researchers for Labour frontbenchers. Don't get me wrong: we had some good times together.

The problem is that, these days, particularly after Labour's attempt to label Lib-Dem Chris Davies in the Lit-tleborough and Saddleworth by-election as "soft on taxes and high on drugs", no one associated with the LCC would admit even to having inhaled smoke from a spliff while at university. The party is over, and the Clintonisation of Labour is complete – but how times change.

* * *

In similar vein, I'm amazed at some of the people who have decided to speak out against Liz Davies-in particular my old col¬league and friend Phil Kelly, who was editor of Tribune before me, when I was the paper's reviews editor.

Back then, he was a great defender of the idea that constituency Labour parties should be allowed to choose whomsoever they wanted as their parliamentary candidates, no matter how daft their political views: it was a matter of democratic rights.

Almost alone on the soft left, he also opposed the Labour leadership's decision in 1990 to proscribe the barmy Trotskyist group Socialist Organiser and then ran a campaign in Tribune to get the ban reversed.

The whole thing was a bit of a farce, not least because it was based on the argument that they were in contravention of party rules but were too small to be worth bothering with – not really a principled position, as the comrades from Socialist Organiser reminded me at great length on several subsequent occasions.

But if my memory serves me correctly, Phil did speak at an SO rally on the fringe of the 1990 Labour conference in Blackpool. Now he is chair of education on Isling¬ton council, and he is one of three Isling¬ton councillors who wrote to the Labour Party saying that Davies should not be endorsed as a parliamentary candidate because she had incited the public to vio¬lence at a 1994 council meeting (Davies denies the charge and is suing). Lovers of irony will note that one of the main reasons the Labour NEC decided not to endorse her was her membership of the editorial board of Labour Briefing magazine – which is out of order, they say, at least partly because of Briefing's association with Socialist Organiser. A further irony, unrelated to the ins and outs of Islington politics, is that Briefing was on the verge of folding just before the Davies row broke out. Now, the comrades are more upbeat than for years.

* * *

Enough, however, of bloody politics. The most important thing about party conferences is that you get sick of them after a very short while. And I was heartily sick of Labour's, long before Tony Blair delivered his keynote speech. I need a decent night's sleep, an alcohol-free week of healthy eating, and a break from bores telling me what they think about the Statesman. And if anyone finds my socks, please dry them and post to the address on page 46. They're black Marks & Spencer cotton ones, size 9-11. Utterly unmistakable.

Friday, 22 September 1995


New Statesman & Society, 22 September 1995

Peter Hain has written a book outlining his libertarian left alternative to the political strategy favoured by the modernisers now running the Labour Party. He tells Paul Anderson why he has done it

“To be blunt about it," says Peter Hain, "the left has I become a bit of a joke in the Labour Party. It's not that its goals aren't admirable. And it's not that the left doesn't strike a chord with many party members. But it is riddled with divisions. It's got no clear strategy. It's hanging on to the past the whole time rather than trying to set the agenda. As long as it goes on in that way, it won't have any influence."

Hain, the Labour MP for Neath since 1991, is no stranger to controversy: indeed, he thrives on it. Once, in the early 1970s, the most public face of the cam­paign against sporting links with his native South Africa, he is now the most vocal backbencher on Labour's soft left. He has a book out this week, and he is using the occasion to make his point as emphatically as he can. It's not just the failures of the left that get his back up. The argument of the book, Ayes to the Left – the first big state­ment of the Labour soft left's position since Bryan Gould's A Future for Social­ism in 1989 – is, as he puts it, that "the problems now facing Britain are such that more radical solutions are required than it may seem Labour is offering at the present time".

In other words, if the old left is too reac­tive and backward-looking, the Labour modernisers who now run the party are too conservative and cautious. "I don't mean that there should be a hidden agenda that should be wheeled out once we get into office," says Hain. "But it's incumbent on us on the left to come up with a serious approach to policy-making and party strategy. The left has always been fond of slogans, and that's always frustrated me. I felt I needed to try to put down an alternative view. The left has suf­fered now for at least ten years a massive crisis of confidence both in Britain and everywhere else."

Ayes to the Left is nothing if not serious. Hain is relentless in articulating what he calls his "libertarian socialist" critique of the caution of the Labour establishment and the fantasies of the traditional left.He's anti-Maastricht, arguing that full employment is the key goal of economic policy. And he's a committed constitu­tional reformer, uncompromisingly decentralist and in favour of changing the electoral system (although he's against proportional representation, preferring the "alternative vote" system used in Aus­tralia). His deep-rooted libertarianism – which he shares with others on the Labour soft left who were, like him, Young Liberals in the 19705, among them fellow MPs Richard Burden and Roger Berry – is qualified only by his advocacy of compulsory voting.

It's the sort of mix that one might expect from 1960s-generation social democrat politician in continental Europe (apart, that is, from the ultra-scepticism on European monetary union). But it's almost shockingly frank in Britain. Here, the 68ers who have gone into Labour politics have mostly overcompensated for their youthful exu­berance. Although Hain long ago swapped the loon pants for the suit, he is still prepared to disturb the peace.

He is, unsurprisingly, concerned about the line Labour has taken on law and order, although he is restrained in his criticism. "What the leadership is try­ing to do is to say: 'Let's take the issue of crime seriously,'" he says. "I don't think that Labour or the left has done that in the past: Tony Blair and Jack Straw are absolutely correct to make that their pitch. But I do worry about gimmicks. A slide into authoritarian populism would be self-defeating. Clearing every 'squeegee merchant' off the traffic lights is not going to do anything about the crime wave that has engulfed us under the Tories."

On Europe he is more forthright in his scepticism about monetary union – the cause of a celebrated bust-up between himself and shadow chancellor Gordon Brown in 1992-93, which ended in Hain being removed by Brown's followers from the secretaryship of the Tribune group of Labour MPs." I think we should renegotiate Maastricht," he says now. "Monetary union on the basis of Maas­tricht would require Europe to implode economically. We're either talking about a totally different sort of Europe or mone­tary union should be put on the back-burner."

Not that he is a Little Englander, he insists: the task is democratisation of the institutions of the European Union. "I'm in the unusual position of having voted yes in the 1975 referendum and no to the Maastricht treaty." Nor is he a straight-down-the-line critic of Labour's official policy: "I'm very encouraged by Robin Cook's stance: he's developing a much more distinctive and radical position that's pro-Europe and anti-monetarist." All the same, "The closer we get to the election and the more the Tories play the patriotic Westminster versus Brussels card, the more our agenda is going to have to come into play. If our position as a party is to be seen as a bunch of Europhiles almost uncritically accepting everything that comes from Brussels, we're going to be swept aside by the Tories' populism."

There is much more in Hain's book to cause argument in Labour circles – not least his call for an incomes policy (he believes that Labour's minimum wage promise needs one if a Labour govern­ment is not to be swamped by pay demands to maintain differentials). But will it make any difference? Has Hain, a mere backbencher, any real chance of influencing Labour policy? He is certainly not without supporters. Hain did well last year, on his first attempt, to get nearly 30,000 votes in the one-member-one-vote election to the constituency section of Labour's National Executive Committee, but he fell far short of being elected. This year, with an extra woman guaranteed a place in the constituency section, he has at best an outside chance of getting on to his party's governing body.

This said, the NEC is not as all-impor­tant as it was, and in any case there are alternatives for anyone involved in the messy business of jockeying for influ­ence in the Labour Party. Hain has sev­eral key roles. He is the chair of the board of the Tribune newspaper, still a major player in the internal Labour game, which in the past couple of years has taken a distinct turn to the left – although more in the direction of the old left around the Campaign Group than towards Hain – and he is a mover and shaker in the small world of Labour fac­tional politics, both in parliament and outside. In the mid-1980s, he was heavily involved in the Labour Coordinating Committee, now uncritically Blairite but then the focus of the soft left that took issue with both Neil Kinnock's leader­ship and the unreconstructed Bennites; and since becoming an MP in 1991, he has attempted tirelessly to bridge the now-ancient division between the soft-left Tribune Group and the hard-left Campaign Group in the Parliamentary Labour Party.

The results are visible, but only just. In the wake of being deposed as secretary of the Tribune group in 1993 – a post he had held for just 18 months – Hain quit Tri­bune along with a couple of dozen other left Tribunite MPs. They are now the core of an informal network, What's Left, which involves some 40 MPs (including a couple of members of the shadow cabi­net and four or five members of the Cam­paign Group) in fortnightly discussions. It also has a small nationwide activists' organisation, which has its autumn con­ference this weekend in Leeds.

Hain has deliberately taken a back seat in What's Left, but he's optimistic about what it might achieve. "I probably do more speaking to local parties than any other backbench MP," he says. "I put the sort of left perspective that's in the book all the time – and it gets a very enthusias­tic response. I also think there's a lot of support in the PLP. The What's Left net­work in parliament is beginning to coa­lesce into something quite solid, and I would expect that to continue in the com­ing year. I suspect that in government it would become far more significant."

That hardly amounts to a gauntlet thrown by the left to Tony Blair. But it is a significant straw in the wind. Hain and his group are not a 1990s version of the Bevanites in the early 19503 – but they're the nearest thing we're likely to see. Come a Blair government, they might just be very important indeed.

Friday, 8 September 1995


New Statesman & Society, 8 September 1995

Paul Anderson looks at the politics behind this week's launch of a£4-an-hour minimum wage campaign by two of Britain's biggest unions

The minimum wage is still going to be the big controversy of next week's TUC Congress: the left-leaning firefighters' and build­ing workers' unions saw to that during the summer by ensuring that motions demanding a statutory minimum wage of half male median earnings appeared on the conference agenda, against the wishes of the powers-that-be in the TUC. But those who were looking forward to seeing blood on the carpet in Brighton are likely to be just a little disappointed. The unions have spent more than a year wrangling with each other and with the Labour Party over Tony Blair's unwilling­ness to put a figure on its promised statu­tory minimum wage – and at times, despite the best efforts of TUC general secretary John Monks to calm tempers, the wrangling has seemed set to turn into a proper brawl.

In the past couple of months, however, much ofthe spirit has gone out of the argument as Blair has made it clear that he will not budge, whatever the unions decide at the TUC and however the vote goes at Labour conference next month. The three big unions whose members have most to gain from a minimum wage – the GMB, the Transport and Gen­eral Workers' Union and Unison, the public sector union –may well back the formula of half male median earnings at both conferences. (This was the basis for Labour's promised minimum wage in 1992, and it currently yields a figure of £4.15 an hour or £5.50 an hour, depend­ing on the statistical assumptions.) But they have accepted that there isn't a lot of point in resolution-mongering or bloody confrontation with Blair.

Instead, they are shifting their efforts towards attempting to tap what they believe is widespread public support for the idea that £4 an hour is the minimum anyone ought to be paid, in the hope that this can be used to press a Labour govern­ment to write the figure into its legisla­tion. This week, both TGWU and GMB launched campaigns for a £4 an hour minimum, which their respective gen­eral secretaries, Bill Morris and John Edmonds, made clear they saw as a target in pay negotiations as much as a figure for a statutory minimum under a Labour government." If we are going to fight, bet­ter to target the bad employers now," said Edmonds at Sunday's photo-opportun­ity when four outsize £1 coins were delivered to the offices of the Confedera­tion of British Industry; the TGWU's blunt slogan is "£4 now!".

It remains to be seen how effective the TGWU and GMB campaigns will be. The two unions are running their efforts separately—there was a race to be first to launch this week—which might be less sensible than working together. On the other hand, there's no doubt that the demand for £4 an hour strikes a real chord with the more than 3.7 million workers (three-quarters of them women, two-thirds of them part-timers and half of them both) who earn less. If nothing else, the campaigns should do some good for both unions' recruitment among this lowest-paid quarter of the workforce.

What, though, of the effect on Labour? Blair told the BBC's Frost on Sunday pro­gramme at the weekend that he would not be pushed into setting a figure before the election – and there's no reason to doubt him.

Labour has slipped craftily into the position of putting off, until after the elec­tion, setting a figure for the promised statutory minimum wage. Until this summer, the line was merely that it was ridiculous to name a figure so long before a general election. Then, in June, shadow employment spokesperson Harriet Harman declared that, instead of setting a minimum wage according to a formula just related to average earnings, the better way to do it was "to have a Low Pay Com­mission, involving unions and employ­ers, which takes account of the employ­ment situation and the distribution of income in the workforce and then arrives at a consensus about it... That's not something you can do in opposition, you have to do it in government".

The reasons for the change are simple enough to understand. Labour is both genuinely unsure about the precise impact on unemployment of a minimum wage set at any particular level and – more important – afraid of Tory and employer propaganda exaggerating it, even if the party went for a figure of around £3.50, as recommended by the Commission on Social Justice, rather than the £4 level that is wanted by the unions (see below).

But it's equally easy to see why the unions are worried by Labour's failure to get specific. A statutory minimum wage has not been a favourite of the British trade union movement for very long.

Until the early 1980s, although it was supported by the National Union of Pub­lic Employees (now part of Unison), a bloc of left-wing unions led by the TGWU, and right-wing unions led by the engineers' and electricians' unions, pre­vented its even being discussed seriously in Labour Party circles, on the grounds that it would undermine free collective bargaining.

By the mid-1980s, however, the wan­ing of the general unions' power in wage bargaining had forced both the General and Municipal Workers Union (the pre­decessor of the GMB) and the TGWU into the NUPE camp – and their com­mitment to a minimum wage was rein­forced by the abolition of the Wages Councils in 1993 The fear of the unions representing the low-paid is that, if Labour is not now prepared to be specific before the election, there is a real danger that in office it will set the minimum so low it affects hardly anyone.

How well-founded is that fear? Not at all, says the Labour leadership – but in government, with Labour faced not only with employer resistance but with the prospect of a bigger public sector wage bill, the story could be very different.

The Tories' claims about the number of jobs that would be lost as a result of a statutory national minimum wage are dubious
The big question about introduction of a minimum wage is simple. Would it lead to a significant rise in unemployment? And the answer is, to say the least, contested.
For the Tories, who think Britain must compete with the third world on labour costs, it is obvious that a statutory minimum would cost jobs and damage Britain's international economic competiveness. lt was they who in 1993 abolished all but one of the 24 Wages Councils that at the time of abolition set minimum wages for some 2.5 million workers, nearly two-thirds of them women. In the run-up to the 1992 general election, the Tories consistently claimed that if Labour's proposals for a £3.40-an-hour minimum were put into effect, up to 2 million jobs would be lost-some 1.25 million at once as employers of low-paid workers went out of business or shed labour, and the rest as differentials were restored for other workers. In the longer run, the Tory argument goes, a statutory minimum wage would also scare off investment and hinder job creation.
It's not just Labour and the trade unions who think that the Tories'  figures are bunk. No independent macro-economic modeller who has fed into a computer a national minimum wage set at half median male earnings (the formula used by Labour in 1992 to arrive at £3.40 an hour, which yields anything between £3.60 and £4.15 now, depending on statistical assumptions) has estimated the number of lost jobs at more than 500,000 in total. Most have come up with a figure of well under 250,000, and some have suggested that the immediate effect of a half median minimum, by stimulating consumption among the poorest, would be to increase employment.
The truth, of course, is that no one can really know what the effect of minimum wage legislation would be. It's easy enough to predict that a minimum set at £1 an hour would have almost no employment effect or that a £10 minimum would send both unemployment and inflation spiralling.
But at the £3-£4 level that can realistically be expected from an incoming Labour government (the Commission on Social Justice recommended £3.50), the results would depend on factors that can only be guessed at by the econometricists. How effectively would the minimum be enforced? How would firms respond? What would happen to differentials? How would the tax and benefits systems be changed (if at all) as the minimum wage increases the tax take and decreases the sums spent on social security for the low paid?
To make matters worse, there's little that can be concluded from comparisons with other countries. Many other industrialised countries have a statutory minimum wage or legally binding minima agreed by collective bargaining on a sector-by-sector basis – but there is no consistent pattern among them in terms of rates, of either unemployment or employment creation. Even detailed studies of the effects of minimum wages in other countries are inconclusive. Both in France and in the United States, there has been more than a decade of controversy over the employment effects of statutory minima on teenage employment, with some authorities claiming to find evidence that it has been adversely affected and others saying that there is none.
In the end, the best guess is that a statutory minimum wage set at between £3 and £4 would have some direct negative effect on employment – but one much smaller than the Tories claim and one that would be compensated for by its impact on demand. Whether that best guess is enough to withstand the heat of an election campaign is, however, another question.