BEYOND A JOKE

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.

THE LEAST WE DESERVE

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.

A CASE OF £4 AND BUST?

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.

THE BENEFITS OF SUMMER MADNESS

New Statesman & Society leader, 1 September 1995

Labour seems to have learned the lessons of its Littleborough and Saddleworth by-election campaign: that no-holds-barred populism cannot work

After what seems in every newspaper office to have been an eternity of desperate scrabbling for decent domestic political stories, the silly season is at last drawing to a close.

The senior politicians and spin-doctors are trickling back from the Dordogne and Tuscany and starting their preparations for the conference season; the so-called B-teams that have been holding the fort over the summer are packing their bags for what they reckon are well-deserved belated rests.

A little later than most years – because the TUC has at long last been persuaded not to hold its Congress during the school holidays – normal political life is resuming again.

Unusually, however, it is resuming in circumstances significantly different from those before the break – particularly for the opposition parties. It's too early to tell whether there has been any movement in public opinion in the past few weeks: the first polls to be taken since the controversy in the Labour Party that dominated the news in the middle of August and the hoo-hah over water shortages, are published at the end of this week.

But there has been a perceptible change in the relationship between Labour and the Lib Dems. Just about the last significant event in British politics before most of the leading players went off with their buckets and spades was the by-election in Littleborough and Saddleworth, won by the Lib Dems from Labour after an unusually bitter campaign.

The consensus among the commentators the day after the count was that everyone had grounds to be well pleased: the Lib Dems, most obviously, because they had gained one of their main target seats from the Tories; Labour because it had come from distant third in 1992 to a close second; and the Tories because they had not done quite as disastrously as they had feared.

Within a couple of weeks, however, Littleborough and Saddleworth had started to look less of a success for Labour, as a wave of criticism of the party's campaign tactics in the by-election swept through the ranks. That criticism – most eloquently expressed by Richard Burden, the MP for Birmingham Northfield, in these pages three weeks ago – was widely reported, often in a ludicrously sensationalist manner. But its significance has been missed.

Put fairly simply, Labour ran the Littleborough and Saddleworth campaign as a dry run for the general election –much as it used the 1991 Monmouth by-election to try out themes that dominated its efforts in the 1992 general election. Resources and people were poured in, the tactics meticulously planned.

But whereas in Monmouth the all-out campaign focused on the Tory threat to the health service, in Littleborough and Saddleworth Labour spared no effort in pillorying the Lib Dem candidate for his "soft" line on drugs, raves and immigration and his enthusiasm for raising taxes.

The outrage that this generated throughout the party has been a major shock to party strategists, who have long worked on the assumption that the party is so desperate to win the next election that it will put up with anything to get Tony Blair into Number Ten. For all the wounded expressions and claims that the dirtiness of the Littlebor-ough and Saddleworth campaign has been exaggerated, the Labour leadership now knows that it cannot rely on the acquiescence of a large section of the party if it decides to base the next general election campaign on no-holds-barred populism, attacking the Lib Dems from the authoritarian right.

That is all to the good. So, too, is the first practical expression of this knowledge, the announcement by shadow home secretary Jack Straw in the Guardian last week that Labour's commitment to a referendum on the electoral system for the House of Commons will not, after all, be dropped by the party.

That commitment is the single most important sym¬bol not just of Labour's belief in a radical programme of constitutional reform, but also of its openness to the pos¬sibility of working with the Liberal Democrats in government. As NSS argued two weeks ago, its abandonment – as urged by Labour's numbskull tribalist tendency – would have been a disaster for Tony Blair's credibility as a democratic reformer and, particularly after Littleborough and Saddleworth, a fatal blow to the prospects for Lib-Lab co-operation either before or after the general election.

Unsurprisingly, the Lib Dems – who this week launched an economic policy that to all intents and pur¬poses is the same as Labour's – are pleased as punch with the referendum pledge. So too is NSS. That little spell of "summer madness", as John Prescott called it, seems to have knocked some sense into Labour heads.