AGAINST EUROSCEPTICISM

Review of Changing States by Glyn Ford, Glenys Kinnock and Arlene McCarthy (eds) (Mandarin, £7.99), Tribune, 8 November 1996

Labour’s MEPs don’t get the attention they deserve. The European Parliament has long since ceased to be a mere talking shop: it now has considerable powers to influence decisions that affect us all. And Labour plays a major role in every aspect of its business. The party is the largest single national group in the Party of European Socialists, itself the parliament’s biggest party, and Labour MEPs hold a string of key positions.

Yet the European Parliament goes largely unreported by the British media, which still consider, entirely wrongly, that political life begins and ends in Westminster and that Europe is essentially a matter of foreign policy. In the Labour Party, MEPs are too often viewed, equally wrongly, as second-rate politicians with the cushiest jobs going.

This collection of essays by a group of 14 members of the European Parliamentary Labour Party should go some way towards changing all this. Between them, the authors, all from the pro-European (but not-quite-federalist) mainstream of the EPLP, cover just about every aspect of European Union politics, from economic and monetary union to consumer protection. No one who reads this book from cover to cover will come away doubting that the EU has to be at the centre of Labour’s political concerns.

All the contributions are intelligent, well-written and easy to understand – itself uncommon in writing about European politics – and the book sends a clear message to Labour’s leaders in Westminster as it prepares for power: flirt with Euroscepticism at your peril. It will not be easy in the heat of an election campaign for Labour to remain essentially pro-European. With Sir James Goldsmith threatening them from the right, the Tories are setting themselves up to run a vicious xenophobic anti-European campaign, and they will be given strong backing by much of the press. The temptation for Labour to respond by adopting a much more Eurosceptic line than it has taken for the past decade, particularly on the single currency, will be great.

That, however, would be a major mistake. As several of the authors argue, the EU needs to be reformed and democratised, and there are undoubted risks in economic and monetary union. But the risks that would be involved in Britain turning its back on Europe are greater. A “positive, proactive approach to Europe”, in the words of Glyn Ford’s excellent introductory essay, is the only option that makes sense. And, as Alan Donnelly and David Martin make clear in their respective contributions, that includes engaging actively in the negotiations leading up to the single currency and backing a massive increase in the powers of the European Parliament.

BATTLES TO COME

Red Pepper, November 1996

Labour's conference last month was an even easier ride for Tony Blair than last year's. But, says Paul Anderson, the unity on show might not last much beyond the general election

Like it or loathe it, Labour is more united today than at any time in living memory. Last month's party conference in Blackpool was all smiles and standing ovations. Not one vote went against Tony Blair – even after Barbara Castle's impassioned call for the basic state pension to be linked again to earnings not prices.

But the party is united for one purpose only: winning the next election. After that, it is unlikely that Labour’s unity will survive long. New Labour is a fragile coalition, and a Labour government will have its work cut out to keep it together. Even now, it’s easy to predict what will stimulate Labour opposition to prime minister Blair – at least some of which will give strength to the pro-European green libertarian left.

Europe The most contentious decision Labour will have to make in office is whether to join the single European currency in 1999. Labour is divided on European monetary union, but unlike the Tories, not on straightforward left-right lines.

The official position is that Labour is in favour of EMU in principle, but against joining unless there is “real economic convergence”. Not only should inflation and government borrowing be low all round – as the Maastricht treaty dictates – unemployment should be low and growth high. This line will probably see Labour through to the election, although it is anathema to the party’s hard-line nationalist Eurosceptics (some hard left, some right-wing Keynesian devaluationists) who are against a single currency in principle.

Once Labour comes to power, however, “the fireworks could start almost at once”, as one centre-left MP put it in Blackpool. A decision on participation in EMU from the outset will have to be made soon after the election, and the best guess is that membership will be on offer only on the terms laid down by Maastricht (albeit flexibly interpreted). It’s most likely that Labour will have to decide whether to join without “real economic convergence” – and that means an unenviable choice. Joining EMU will be a disaster if the convergence criteria turn out to be so tough that they crash the economy. But staying out will be bad news if it means British exclusion from a continental European boom or an EMU-wide job-creation programme.

Unsurprisingly, Labour is divided right to the top on what to do. Gordon Brown apparently wants to take a deep breath and jump in the deep end – but Robin Cook would rather stand on the side and see whether the water is as cold as it looks. Blair is in two minds, but inclined to follow Cook. According to insiders, a majority of the shadow cabinet is wary of EMU, but the balance in a real cabinet will tilt in favour if Blair promotes some of the younger modernisers now in junior front-bench posts. Whatever the leadership decides, at least a significant minority of MPs will disagree, as will a fair number of MEPs, key advisers and trade unions. A referendum on EMU, touted as a way out of Labour’s dilemma, would exacerbate its divisions more spectacularly even than the 1975 Common Market membership referendum.

On the non-xenophobe left, there’s a real argument going on, between EMU sceptics, who would like a renegotiation of the Maastricht conditions (Unison, the TGWU, Tribune, Roger Berry, Peter Hain, Alan Simpson, Jonathan Michie), and EMU enthusiasts, who argue for signing up and then pressing for compensatory measures to cope with the resulting austerity (the GMB, the TUC, Denis MacShane, most of the European Parliamentary Labour Party, John Palmer, Stuart Holland).

This one will run and run – but if Labour signs up for EMU, the protagonists will almost certainly come together behind a Europe-wide employment programme like that being promoted by Labour MEP Ken Coates, which is backed by an impressive coalition of socialists and greens throughout the continent.

Public spending One of the arguments advanced by opponents of participation in EMU is that it requires draconian cuts in public spending; even pro-EMU Labour politicians concede that it means fiscal discipline. But it’s quite possible that a Labour government will decide to squeeze expenditure – except on education, on which Labour is committed to spend – even if it stays out of EMU.

Having made so much of the Tories’ lies about tax, Gordon Brown cannot easily raise income tax or VAT if he needs to reduce public sector borrowing, as he will have to if it overshoots the government’s estimates (as seems likely). There are other options for raising revenue – such as windfall taxes and green taxes – and, in the medium term, growth might ease Brown’s problems. If, however, he decides he has to cut spending (for example to curb inflation), there will be howls of protest from the PLP left, from the constituencies, from the public sector unions and from Labour local government.

Even a refusal to increase public spending beyond the minimal promises in Labour’s manifesto document will be unpopular. Local authorities have high expectations of a Labour government. And the public sector unions are in no mood to be told that big pay rises are out of the question. They will be especially angry if a nugatory minimum wage eventually emerges from the government.

Relations with the unions It’s at this point that big union trouble could start for Blair, and the he knows it. Measures that give substance to the slogans of “social partnership” and “stakeholding” will go down well with the unions – but they might still insist on exerting their influence inside the Labour Party. Because they still dominate Labour’s conference and National Executive Committee, they have the power to make the party ungovernable if they fall out with the government.

Labour’s general secretary, Tom Sawyer, is looking at ways that party structures could be reformed to minimise the damage if the unions get awkward; and if that doesn’t work, there’s the option, floated by junior employment spokesman Stephen Byers during TUC week, that the leadership could cut the party adrift from the unions. As the furore that followed Byers’ remarks shows, that would start a bloody battle that the leadership could well lose.

All the same, it’s not just the modernisers in the New Labour camp that reckon a divorce might not be a disaster. The unions increasingly feel that money they spend on Labour could be better used. Few union leaders are likely to join Arthur Scargill’s Socialist Labour Party, but the TGWU, MSF and Unison – at very least – are already thinking seriously about life without. Using all their political funds on their own campaigning is looking more and more attractive.

Welfare reform There have been tastes of the potential for welfare policy to generate Labour dissent in recent months – not just the conference row over the proposals from Barbara Castle and welfare expert Peter Townsend on pensions, but also the less-public spats over Gordon Brown’s plans to drop universal child benefit for 16- to 18-year-olds and to retain the Job Seekers’ Allowance.

How much of a hot potato welfare will be in government is unclear, however. If Labour’s welfare-to-work programme really does reduce the dole queues, there will be few complaints; but if benefits are cut – or if Labour embraces some of the wilder privatisation schemes being hatched by Frank Field and others – there will be mayhem, and not just from the parliamentary left and the unions.

The network of left-leaning academic and pressure group welfare experts is out of the New Labour loop: the Castle-Townsend collaboration on pensions could be a portent of trouble to come from politicians acting in league with the Child Poverty Action Group, Shelter and others. There’s also growing interest across the political spectrum in the (originally radical left) idea of a basic income, which will find increasing purchase if a Labour government fails the poor.

Scotland On Blair’s insistence, Labour is now promising referendums on devolution for Scotland and Wales in the first year of a Labour government. And the Scottish one, considered a sell-out on Home Rule by many Scottish Labourites and ridiculed by nationalists, is set to be a particular problem.

The Scots will decide whether they want a Scottish parliament and whether it should have tax-raising powers. If the result is “yes-yes”, Labour will be laughing. ”Yes-no”, the next most likely result, will spark apoplexy not just in the Scottish Labour Party but among everyone – from the Scottish TUC and the Lib Dems to the churches and the Greens – who backed the Scottish Constitutional Convention agreement on self-government for Scotland.

Electoral reform Labour is committed to holding a referendum on electoral reform for the Commons – and, if it’s ditched, the party’s electoral reform lobby will be livid. There is also potential for conflict over the wording of the referendum and in the referendum campaign itself, in which senior Labour figures will back different systems.

Once again, Robin Cook is a key player (he is the most senior enthusiast for the German additional member system of proportional representation), and once again there is not a simple left-right divide. Although MPs tend to be sceptical about anything that might threaten their hold on their seats, several, many on the left, are enthusiasts for PR (Ken Livingstone, Clare Short, Richard Burden), and their numbers will swell after the election. They have backing from younger party activists and some unions – as well as from non-party pressure groups such as Charter 88. Cross-party alliances will be key, particularly when it comes to deciding on the particular electoral system the PR lobby supports if the referendum goes ahead.


Civil liberties With Jack Straw as shadow home secretary, Labour has relentlessly asserted its enthusiasm for getting tough on crime, playing down civil libertarian themes. In opposition, internal Labour criticism has been muted – largely because Straw has not come up with concrete proposals that are particularly authoritarian even though his rhetoric has often echoed Michael Howard’s.

The tests here will come in office: in the scope of the Freedom of Information legislation Labour has promised, in the content of its Bill of Rights, in its replacements for Tory laws restricting asylum rights, immigration and freedom of assembly. There is a strong civil libertarian movement outside party politics, part of it long-established and single-issue (Liberty, Amnesty International), part of it new and as involved in questions of social justice and environmentalism (The Big Issue magazine, the new squatting movement, the campaigns against the Criminal Justice Act and road-building).

It would be rash to predict a flowering of a radical new left after Tony Blair makes it to Number Ten. But the pond life is stirring. And it will certainly be more exciting than Blackpool last month.

WHAT'S NEW ABOUT BLAIR

Review of The Blair Agenda by Mark Perryman (ed) (Lawrence and Wishart, £9.99), Tribune, 4 October 1996

After the closure of the Communist Party magazine Marxism Today in late 1991, its marketing manager, Mark Perryman, was at a loose end. So, with a handful of north London buddies, he set up a discussion group, Signs of the Times, to keep exploring some of the ideas about “New Times” that had been central to the magazine’s thinking in its final years.

Ever since, a shifting group of people, some but by no means all ex-CPers, have met for two series of seminars every year. The group has heard from speakers from a wide range of backgrounds: old Marxism Today stalwarts, writers on cultural studies, right-wing libertarian activists, feminist columnists.

 This collection of essays is based on papers given to last autumn’s seminars, and it’s a typically mixed bag. The best two pieces are by Andrew Gamble, professor of politics at Sheffield University, who contributes a typically pithy analysis of the legacy of Thatcherism, and Kevin Davey, a regular on Tribune’s reviews pages, who writes with great insight on the likely tensions inside the Labour Party if Tony Blair wins the next election.

I also liked the contributions by Helen Wilkinson, project director at the think tank Demos, on Blair as the first “post-1960s, post-Beatles, party leader”, and Gerry Hassan, on the impact of Scottish devolution.

But too many of the contributors exaggerate the novelty of the Blair “project”, and there are too many occasions on which authors lapse into pretentious gobbledygook, with buzz-words taking the place of clear thinking – an all-too-common trait of Marxism Today, as I remember. Perryman’s introduction is a case in point. Try as I might, I can’t find much meaning in his claim that “Tony Blair remains the supreme arbiter of the fluid of British politics” or his talk of “the millennial terrain on which Tony Blair and his colleagues will be tip-toeing as they ponder over their red boxes in Whitehall”. Which is a pity, because much that Perryman says is really quite sensible.

One final gripe: again like Marxism Today, the book is peculiarly parochial in its focus. It desperately needs more on the international context of New Labour, particularly on the impact of Bill Clinton’s “New Democrats” and on how other west European social democratic parties have adapted to globalisation and the end of the Keynesian era. Britain might be a peculiar little country, but it has rather more in common with abroad than you’d think from The Blair Agenda.

LABOUR'S LONG REVOLUTION

Review of  Labour Lives by Andy  McSmith (Verso, £16) and What Needs to Change by Giles Radice (ed) (Harper Collins, £9.99), Tribune, 13 September 1996

Andy McSmith, Observer political correspondent, biographer of John Smith  and one-time Walworth Road press officer, has written a timely book, using the format of Lytton Strachey’s Eminent Victorians, on seven people he sees as figures whose stories epitomise the life and times of the Labour Party in the past decade or so.

It’s not a collection of biographies of the shadow cabinet or even of the most powerful figures in “New Labour”.  Tony Blair, Peter Mandelson, Clare Short and David Blunkett are four of the seven, but the others are Neil Kinnock, Ted Grant (the leader of Militant) and the late Jim Murray, a working-class Tyneside socialist and engineering union activist whose main claim to fame in the world of high Labour politics is as the man who swung the block vote of the Amalgamated Union of Engineering Workers behind mandatory reselection of Labour MPs back in 1979.

Of course, it’s possible to quibble with McSmith’s choice of characters. Some will undoubtedly bemoan the absence of various obvious high-profile movers and shakers: Gordon Brown, John Edmonds, Roy Hattersley, Ken Livingstone, Margaret Beckett or whoever. My own feeling, however, is that he has erred on the side of the predictable. The best piece in the book by a long chalk is that on Murray; the least gripping are those on Kinnock, Blair and Mandelson, where McSmith covers a lot of familiar ground.

But this is a small point. McSmith has an extraordinary  feel for the subtleties of Labour politics, and he manages to write about them without ever getting bogged down in tedious minutiae. Throughout, his fondness for the people and causes of “Old Labour” is apparent – but, for all his antipathy to the culture of glitz and spin that characterises the party under Blair,  he stops well short of sentimentalism for the good old days when Labour appeared incapable of ever winning an election again. All in all, it’s an excellent read, the most insightful book yet published on Labour’s cultural revolution since the 1983 general election.

By contrast, What Needs to Change, now published in paperback, is a disappointment. A collection of essays edited by Giles Radice with an introduction by Blair, it has its moments – indeed, just about every contribution is competently argued if not stylishly written – but never quite catches fire. The problem is that almost all its authors, from Patricia Hewitt on the family through Frank Field on the welfare state to David Marquand on community and the left, are summarising arguments  that they have made more forcefully elsewhere.

If in the past couple of years you’ve been reading the thoughts of the best-known figures of the British centre-left intelligentsia in the papers, What Needs to Change will have few surprises for you. If, on the other hand, you’ve just returned to Britain after a long spell away without even the Guardian Weekly, you’ll be able to catch up with the minimum of inconvenience. For me, the only intriguing thing about this plodding collection is that the one truly iconoclastic piece – by Geoff Mulgan on reinventing democracy – is by the contributor closest to Blair.  Weird.

LOOKING BACKWARDS

Review of Political Economy and the Labour Party by Noel Thompson (UCL Press, £12.99) and A Short History of the Labour Party by Henry Pelling and Alastair J Reid (Macmillan, £9.99), Tribune, 18 August 1996

Forget the policy shifts that “New Labour” has made in the past couple of years under Tony Blair: as Noel Thompson’s timely historical survey of Labour’s thinking about economics makes clear, the defining moment in the party’s recent recasting of its identity happened nearly a decade ago. After the 1987 general election, under Neil Kinnock’s leadership, Labour ditched the Keynesian approach to management of overall demand in the economy that had dominated its thinking about the economy for more than 50 years.

Ever since, Labour has held fast to what its proponents call “supply-side socialism”. Put crudely, the big idea is that the ability of any medium-sized nation state to manage demand has been dramatically curtailed by the globalisation of the economy. The best any British government can do is to secure low inflation and exchange-rate stability – the preconditions for steady growth – and make the economy more internationally competitive by encouraging long-term investment and by improving education and training. Measures to expand demand have to be internationally coordinated to have any chance of success. Full employment can remain a goal, but only insofar as pursuing it does no threaten the counter-inflationary strategy.

Thompson has serious doubts about New Labour’s “quest for the Holy Grail of international competitiveness”, finding it at best soulless and uninspiring and at worst a capitulation to free-market liberalism: he is much more sympathetic to early-1980s radical-democratic variants of the left-Keynesian Alternative Economic Strategy. (The AES, which proposed reflation, import controls and widespread nationalisation,  dominated Labour thinking throughout the 1970s and early 1980s. It did not, however, have much influence on the practice of the 1974-79 Labour government,  which in its austerity programme from 1976 in many ways prefigured Thatcherism. )

But this is a scholarly history of ideas, not a polemical work, and Thompson is consistently fair even when he is dealing with authors with whom he disagrees. His expositions of the ideas of the key figures, from H.M. Hyndman and William Morris to Neil Kinnock and Gordon Brown, are exemplary in their clarity, and his bibliography is excellent. Thompson is particularly strong on Labour’s thinking in the 40 years after 1945.

The book could have done with more on the “Eurokeynesian” ideas developed by Stuart Holland and others in the past decade – the period that, perhaps unsurprisingly, Thompson deals with most sketchily. More generally, there are a few places where it is weak on political context, exaggerating the importance of some marginal figures and downplaying the significance of major ones – but that is a function of its genre. Political Economy and the Labour Party is more specialist than the nearest thing it has to a precursor, Geoffrey Foote’s  The Political Thought of the Labour Party, published way back in 1985, but it is also more thorough and much more up-to-date. It deserves a wide readership.

A Short History of the Labour Party has already had just that: the first edition of Henry Pelling’s book was published in 1961, and this is the 11th edition, with the updated sections (taking the story up to the abandonment of Clause Four) written jointly by Pelling and fellow Cambridge don Alastair Reid. It certainly gives the bare bones of Labour’s history, but its prose is wooden and its analysis banal (and unerringly sympathetic to the Labour right). Worse, its end-of-chapter guides to further reading are skimpy, dull and often outdated. Strictly for those with no prior knowledge, to be taken with a large dose of salt.

CAN THE TORIES RECOVER?

New Statesman & Society, leader 19 April 1996

The miserable failure of the Conservative candidate in last week's by-election suggests that they are doomed to lose the next general election

Voters' behaviour in by-elections is notoriously untrustworthy as a means for predicting what they do in a subsequent general election. Every single one of the seven seats the Tories lost in by-elections between 1987 and 1992 returned to the fold at the 1992 general election. Only a fool would claim that, next spring or perhaps this autumn, Staffordshire South East (or rather the Tamworth constituency that will encompass all but 5,500 of its voters) couldn't go the way that Vale of Glamorgan, Mid-Staffordshire, Monmouth and Langbaurgh went four years ago.

But it would be equally foolish to deny the significance of Labour's victory last week. The Staffordshire South East campaign began in circumstances as favourable as they could have been for John Major's administration. The economy was on the up at last, the government had survived the Scott report on arms sales to Iraq, and the backbench Tory rebellion over Europe appeared to be over. In Jimmy James, the Conservatives had the best by-election candidate they had fielded for ages – and the seat seemed pretty safe, with a majority of more than 7,100 over Labour.

In other words, it appeared that the by-election offered Major a good chance to demonstrate that the tide had turned for his party and that Labour's popularity had passed its peak. If Labour failed to win, it would hardly be a disaster on the scale of Bermondsey in 1983 or Greenwich in 1987, but a Tory victory would do untold damage to Labour morale. Even a narrow Labour victory could be portrayed as proof that the party could not win the next election, much as happened with the Langbaurgh by-election in 1992.

That nothing of the sort happened has a little to do with the Tories' bad luck: the mad cow crisis blew up just as the campaign got into gear, and it did immense harm in what is still a farming constituency. It's also a tribute to an effective Labour campaign to get local council leader Brian Jenkins elected. But the scale of his victory – he took 60 per cent of the vote and a 13,762 majority over James – suggests something more profound at work.

Given the state of the economy, the affluence of the constituency, the quality of the candidate and all the rest, the Tories should at least have made a close fight of it. Their failure suggests an unprecedented level of disillusionment with the government among the voters – and it is difficult to imagine how the Conservatives can possibly counter it. Even if they manage to hang on until next spring before calling an election – for which they will need a combination of cooperation from the Ulster unionists and an absence of defections and deaths among their own MPs – and then pull off a 1992-style scare on Labour's tax plans, it's hard to imagine them being returned to office.

For Labour, the message from Staffordshire South East is as optimistic as it is pessimistic for the Tories. The result shows that the party can now win in Middle England even when the economy is going the Conservatives' way. For a change, the opinion polls seem to be an accurate reflection of people's voting intentions. If it keeps up the momentum, Labour could be looking at a Commons majority of 1945 proportions after the next general election. Tony Blair had good reason to look as pleased as he did when he gave his news conference outside the White House after hearing the result.

Of course, Labour cannot afford to be complacent, as Blair never ceases to remind us. But the big question in British politics is increasingly not whether Labour will win but what it will do once it has won. Up to now, Labour has preferred to be vague about its intentions on most things: indeed, it is only on certain constitutional reform issues that its detailed plans have been made public (although the broad outline of Labour policy is clear enough in several other areas) . But with the imminence of the general election, it is going to have to get specific sooner rather than later. If it does so without either alienating its traditional supporters or scaring off the middle-class voters who backed it in Staffordshire South East last week, Tony Blair will have pulled off a political trick that none of his predecessors since Harold Wilson has managed to master.

TAKING LIBERTIES

New Statesman & Society, 12 April 1996

Last week's Labour back-bench revolt on new police powers to combat terrorism worked a treat, writes Paul Anderson

For anyone who thought that new Labour wasn't vulnerable to back-bench revolt, last week must have been a salutary experience.

On the Monday, Home Secretary Michael Howard announced a surprise bill of new police powers as an extension of the Prevention of Terrorism Act. His shadow, Jack Straw, after a briefing by the security service, agreed that Labour would not oppose it. On the Tuesday, the measures were rushed through the Commons. The cursory debate was remarkable only for Straw's miserable performance and for the barracking he got from his own backbenchers. Thirty Labour MPs, rather than abstaining, rebelled against their whips and voted in opposition to the government's guillotine motion to speed passage of the bill (see below), a figure that would have been larger had many MPs not already left Westminster for the Easter break before Howard's announcement.

Plenty more abstained ashamedly or toed the line only after several drinks as the sitting wore on until the small hours of Wednesday. And at the weekend, after a deserved rubbishing not just from civil libertarians but from the columnists in the quality press who are normally most sympathetic to new Labour, Straw sheepishly made it known that a Labour government would abandon the most controversial part of the PTA, the provisions for "exclusion orders" to prevent "suspected terrorists" from travelling from Northern Ireland to the rest of the UK.

It wasn't quite a U-turn. But the backbench revolt, aided by some acerbic press comment (a Martin Kettle column in the Guardian hit home particularly hard), had at least managed to push Straw into making an unambiguously civil libertarian policy promise in public for the first time since he was given his job. This week, libertarian Labour MPs sounded unusually chirpy. "Straw got a nice fright," said one of the many who felt like rebelling last week but didn't have the bottle. "He'll think twice before doing anything quite so stupid again."

It would be wrong to claim that the revolt says too much about Labour MPs' capacity for bloody-minded independence: by the end of the night it had dwindled to 12 on the third reading of Howard's bill, all but three of them the usual suspects from the hard-left Campaign Group. By comparison with the May 1993 rebellion against ratification of the Maastricht treaty, when 68 Labour MPs defied the whips to vote against rather than abstain, it was small beer. Nor do last week's events prove that libertarians hold sway on the Labour back benches: the number of dissidents even on the guillotine motion was smaller than the number of Labour MPs (39) who voted against a homosexual age of consent of 16 two years ago. It is notable, too, that last month, when the PTA proper came up for its annual renewal and Straw backed abstention rather than Labour's traditional opposition, there were only 23 rebels – and that was arguably a much more important policy shift than last week's little kow-tow to the Tories.

The rebellion is nevertheless significant. Considering how close a general election might be, and how tough Labour's parliamentary discipline has been of late as a consequence, it was big and just a little reckless, particularly given the widespread suspicion on the opposition benches that Howard had introduced the bill mainly to sow dissent in Labour's ranks – but it worked all the same. That will undoubtedly give heart to any MP worried about the powerlessness of the humble backbencher under a Labour government.

More important, the back-bench revulsion at the Labour leadership's backing for Howard's illiberal reinforcement of police powers is a welcome signal – at last – that there are limits to at least some Labour MPs' tolerance of the authoritarian populism on law and order that has come to characterise Labour's approach to home affairs in recent years.

Tony Blair's period as shadow home secretary, best remembered for his coining the phrase "tough on crime, tough on the causes of crime", marked the start of the process with Labour's stupid and unprincipled abstention on the Criminal Justice Bill. Since Straw took over in 1994, we've had in rapid succession the slapping down of Clare Short for suggesting that it might be legitimate to discuss legalisation of cannabis, the hysterical anti-drugs sloganeering of the Littleborough and Saddleworth by-election campaign, Straw's own ill-advised remarks last year on "squeegee merchants, winos and addicts" and Labour's distinctly half-hearted opposition to the Asylum and Immigration Bill.

What is surprising is that it has taken quite so long for a significant minority to say "enough". But it's better late than never.

WHAT THE NEW POWERS MEAN

The Prevention of Terrorism (Additional Powers) Act, which sped through parliament and acquired royal assent last week, is the fourth major revision of the original 1974 Prevention of Terrorism Act (PTA). On each of the previous three occasions – 1976, 1984 and 1989-the powers contained within the act were significantly expanded and strengthened, and the most recent offering is no exception.

The new powers agreed by parliament will need to be renewed on an annual basis in the same way as the previous version of the PTA, which was given its latest 12-month extension just last month.

The PTA contains a wide range of provisions, which can be divided into a number of distinct headings: arrest, search and detention; "exclusion orders"; banning of organisations; port and airport control; and withholding of information from the police about terrorism. Of the five measures in the new act, three provide the police with new search powers.

First, on the authority of a police officer of ACPO rank (the Association of Chief Police Officers represents chief and assistant chief constables), the police may stop and search any pedestrian within a given area over a specified period (maximum 28 days). Similar provisions already exist in the 1994 Criminal Justice Act for vehicles, their passengers and any objects carried by pedestrians: the new measure extends them to pedestrians themselves. It is apparently designed to allow searches for small incendiary devices which may be carried by terrorists in their pockets-but civil libertarians fear that the "stop-and-search" powers mark a return to the old "sus" laws and are likely to be abused.

Second, the police may obtain granted search warrants to cover several non-residential premises. Any such warrant must be executed in full within 24 hours and cannot be used to search a home. According to the Home Office, the intention is that they be used "when police have intelligence warning of a general threat" so that, for example, several streets of buildings may be searched after a bomb warning that does not give the device's precise location.

The third measure is intended to rectify an apparent deficiency in the law: unaccompanied goods entering into the country may now be searched at ports and airports without permission.

The other two measures contained in the additional powers legislation allow the police absolute control over pedestrian and vehicle movements within a certain area. An officer of superintendent rank or above may cordon off a specified area of any size for a "limited period" (again, up to a maximum of 28 days), while an ACPO rank officer may prevent parking and remove vehicles underthe same terms. The police decision must be ratified by the Home Secretary within 48 hours.

The purpose is to give the police instant power to clear an area, although it is less than obvious how they were previously lacking in this respect. A police spokesman said: "There is no intention to designate areas unless there is good intelligence or a reasonable suspicion that a terrorist act is imminent or to prevent one taking place."

The timing of the introduction of the new act was determined largely by political factors, although Home Secretary Michael • Howard has insisted that "the police have asked me for these extra powers now, both to protect the public and to help them prevent further terrorist outrages". Whether the new measures will have any effect at all on the incidence of terrorism is a moot point, however: perhaps the most telling criticism of the PTA is that, in more than 20 years, it has failed utterly to prevent terrorism-and the new act is unlikely to change that. (Patrick Fitzgerald)


THE REBELS

The following Labour MPs voted with the Liberal Democrats and various small-party MPs against the government's guillotine motion on the Prevention of Terrorism (Additional Powers) Bill last week: Diane Abbott (Hackney North);Tony Banks (Newham NW); Harry Barnes (Derbyshire NE); Tony Benn (Chesterfield); Andrew Bennett (Denton and Reddish); Richard Burden (Birmingham Northfield); Dennis Canavan (Falkirk W); Ann Clwyd (Cynon Valley); Harry Cohen (Leyton); Robin Corbett (Birmingham Erdington); Jeremy Corbyn (Islington North);Terry Davis (Birmingham Hodge Hill); Neil Gerrard (Walthamstow); Norman Godman(Greenock); Bernie Grant (Tottenham); Lynne Jones (Birmingham Selly Oak);Terry Lewis (Worsley); Ken Livingstone (Brent E); Eddie Loyden (Liverpool Garston); Andrew Mackinlay (Thurrock); Kevin McNamara (Hull N); Max Madden (Bradford W); Alice Mahon (Halifax); Jim Marshall (Leicester S); Bill Michie (Sheffield Heeley); Peter Pike (Burnley); Brian Sedgemore (Hackney S); Dennis Skinner (Bolsover); Rob Wareing (Liverpool W Derby); Audrey Wise (Preston).

The following Labour MPs voted against the third reading of the bill: Harry Barnes; Tony Benn; Andrew Bennett; Bernie Grant; Ken Livingstone; Kevin McNamara; Max Madden; Bill Michie; Brian Sedgemore; Dennis Skinner. Jeremy Corbyn and Dennis Canavan were tellers.

MR BLAIR GOES TO WASHINGTON

New Statesman & Society, leader 12 April 1996

The Labour leader's warm reception in the United States does not mean that the "special relationship" is due for a revival

This week, for the first time since Labour left government in 1979, a Labour leader is making an official visit to the United States in the expectation that it will be a rip-roaring success. Tony Blair has been preceded across the Atlantic by the sort of press coverage that politicians dream about – and the political class in Washington is dying to meet him.

Despite the Tories' crude attempts to smear him for "un-American activities", Blair can be sure that there will be no repeat of Neil Kinnock's humiliation in 1987. Then, the Labour leader, still an enthusiast for unilateral nuclear disarmament, was given a frosty 2o-minute audience by Ronald Reagan, who also famously mistook Denis Healey for the British ambassador. Blair, by contrast, can expect a warm reception from Bill Clinton.

The two men share the conviction that they have rescued political parties that appeared to have gone into terminal decline (although Blair has yet to win power) – and Clinton sees Blair as something of a political protégé who has taken up many of his own themes, particularly on crime, tax and economic policy. The defence and security policy stances that caused Reagan to shun Kinnock nine years ago are now ancient history. These days, Labour is an impeccably Atlanticist party, its antipathy to nuclear weapons and its criticisms of Nato and US foreign policy long forgotten. Clinton even shares Blair's antipathy to John Major: he has not forgiven the Tories for backing George Bush in 1992 and helping the Republicans dig for dirt on his days as a student in Oxford.

All of which makes for a good photo-opportunity for both men – but what does the razzmattazz mean in the long term? It certainly makes it difficult for the Tories to claim in the run-up to the election that Labour is somehow disloyal to the Atlantic alliance (which, as we all know, has preserved the peace for nearly 50 years). And it probably presages warmer relations between Britain and the US if Clinton is re-elected and Blair makes it to Number Ten.

But that's about it. What it doesn 't mean is that a return to the "special relationship" between Britain and America is on the cards, at least as the "special relationship" has normally been construed. Of course, Britain and the US will continue to share the English language, and the cross-fertilisation of cultures that has marked the past 200 years will go on as before (with America inevitably having far more influence here than Britain has there). Britain will be reliant on the US to remain a nuclear weapons power, just as it has been since the early 1960s; and the links between the two countries' intelligence services will still be close. As long as Britain stays a permanent member of the United Nations Security Council and retains substantial military capabilities, it will be a key ally of the world's only superpower.

But none of this is particularly "special". The fact is that, with the end of the cold war, Britain's role as America's favoured partner in western Europe no longer makes much sense to US policy-makers. During the cold war, the French were too independent for Washington's liking and the Germans too prone to neutralism. Britain, by contrast, under both Tory and Labour governments, could be relied upon to back the US on every key policy decision. When the Americans said "Jump!", we jumped, in other words, and in return felt mightily pleased to be patted on the head.

Today, however, the value of such unquestioning loyalty is much reduced – and, with Tory Britain a bit-player in the process of European integration and Germany increasingly dominant in Europe both economically and politically, Washington has looked more and more to Bonn as its most important European ally. That is unlikely to change even if Labour wins.

The upshot, as Blair himself has recognised, is that the best way for Britain to develop its relations with the US is as part of Europe. Crucial as the Atlantic alliance is, it is with the countries the other side of the Channel and the North Sea that a Labour government will have to work most closely. However much the photographs of this week's trip remind everyone of the young Harold Wilson's visit to see the young John Kennedy in 1963, the world today is a very different place – like it or not.

BLAIR'S PLEBISCITE

New Statesman & Society, 5 April 1996

Tony Blair's plans to put an early draft of Labour's manifesto to a vote of party members has been welcomed by the media – although not by the trade unions. But what does it actually mean? Paul Anderson investigates

Tony Blair's announcement last week that his party's National I Executive Committee had agreed to put an early version of the Labour manifesto to a vote of all individual party members came as a complete surprise to just about everyone – including, apparently, most of the people who were at the NEC meeting just before Blair's press conference.

Trade union members of the NEC say that they thought the Labour leader had agreed to tone down his proposal for a referendum of individual members, replacing it with a plan to invite party members "to pledge support" for Labour's programme. And they were not pleased when Blair announced to the television cameras that the plebiscite would go ahead. "I've never known the NEC to be so furious," said one. "The trade union group is apoplectic."

The apoplexy is unlikely to last too long, however. It's mainly the result of union resentment at yet again being outmanoeuvred, not just by Blair himself but by his spin-doctors, who managed to give the impression that the referendum marked a definitive downgrading of the unions' role in Labour politics. That resentment is real enough, and will eventually rebound on the Labour leader – but on the substantive question of the plebiscite the dust is likely to settle sooner rather than later. Although the vote is undoubtedly intended to give the public the impression that Labour has utterly transformed its policy-making procedures, in fact its direct effects are marginal.

For a start, it will make no difference to the method the party uses to draw up the first draft of the manifesto: a committee under the firm control of the party leadership, but with serious input from the unions, will distil and refine various policy documents that have been produced by the party's National Policy Forum, endorsed by the NEC and (in most cases) passed by the annual conference. The policy forum, the NEC and the conference all give the unions key roles, most notably the conference, in which they still command 50 per cent of votes.

Nor will the referendum on the draft manifesto materially affect the role of the conference: the document – after modifications to take account of "consultations" with members over the summer – will be voted upon in Blackpool this autumn just like any other policy paper from the NEC, before it is put to the membership.

What's more, after the vote of all members, the draft programme will be subject to change by the party leadership to take account of changing circumstances (in particular, on taxation and public spending, on which shadow chancellor Gordon Brown will not pronounce – assuming John Major does not decide to go early to the polls – until after this autumn's budget). In the last instance, it can be given a final tweaking at the "Clause Five" meeting of the shadow cabinet and NEC (so-called because of the section of the party constitution that defines its role) on the eve of the election campaign proper.

On the face of it, in other words, there's no arguing with Robin Cook's claim in an interview with GMTV's Sunday Programme last weekend that "this document will go through the full party procedures". Those procedures are of course somewhat unfamiliar because the National Policy Forum has been going only since the last general election – but last week's announcement changes them only at the edges.

Nevertheless, the plebiscite decision is significant – partly because of what it says about Blair's fear of losing the party's support when in government, and partly because of what it might presage in Labour's internal politics.

Like many of his political generation, the Labour leader is haunted by the revolt of the constituency left in the late 19705 and early 19805, which he believes has kept his party out of government ever since. And the reason for that revolt, he thinks, was that the governments of Harold Wilson and James Callaghan lost touch with the party, allowing the left free rein with its rhetoric of "betrayal". The idea of the referendum is that it will tie the party – in parliament and outside – into support for a minimalist, responsible programme, and that as a consequence the cries of betrayal two or three years into a Labour government will have no purchase.

But will it work? There's no doubt that a vote of all individual members will give the manifesto a legitimacy within the party that it has not enjoyed before – which will make it difficult for anyone to complain because a Blair government hasn't done what it never promised to do in the first place. That, however, wasn't actually the problem that did so much damage to the 1970s Labour governments: rather, it was that – under duress – they really did renege on promises that Labour had made to the electorate in 1974. If a Blair government fails to do what it says it will do – which is not impossible, however minimal the programme – the fact that the promises have been explicitly endorsed by the party membership will be a liability, not a strength. Moreover, there will be plenty that the manifesto will not cover or will fudge. Whether or not it is backed by the membership, it will not be the last word on European monetary union, for example, nor will it guarantee the party's support for a Blair government's handling of, say, a sterling crisis in 2001.

All the same, Blair's initiative might presage a shift in Labour's political culture that would have major implications. Although the use of a referendum to rubber-stamp the manifesto will have little impact in itself on Labour's policy-making process, and is unlikely to do much to stem party criticism of a Labour government, there's no doubt that habitual use of plebiscites would radically change the balance of power inside the Labour Party. If the Labour leadership decided, as a matter of course, to appeal on matters of controversy directly to individual members over the heads of the representatives of the party's various parts in the NEC and at conference, the power of both NEC and conference would be seriously reduced vis a vis the leadership, much as regular use of referenda in a country's politics reduces the power of the legislature over the executive.

That would be a real blow to the unions, and it's not surprising that their NEC members are keen to emphasise that, whatever else, the manifesto poll should not be seen as a precedent. The GMB's decision to ballot all its members on the manifesto, but to deduct the £250,000 it will cost from funds that would otherwise go to the Labour Party, is the sort of support for Blair's initiative that a rope gives a hanged man.

How far the power of the ordinary membership would be enhanced by the regular use of internal party referenda is a moot point. If only the party leadership could choose what went to a vote of all members, plebiscites would empower the grass-roots not a jot – whereas if ordinary members could choose (for example, if a certain percentage of them signed a petition demanding a poll on a particular issue), referenda could make Labour an unprecedentedly democratic party. Something says that it's the first of these models that Blair has in mind.

CALLING THE EUROSCEPTICS' BLUFF

New Statesman & Society, leader 5 April 1996

John Major and Kenneth Clarke have stolen a march on the Tory anti-Europeans with their deal on a referendum on the single European currency. Now the ball is in Labour's court

You've got to hand it to Kenneth Clarke. Last week, he appeared to be heading for the back benches in protest at John Major's insistence on committing the Tories to a referendum on joining a single European currency. Now, after this Tuesday's deal with Major on the terms for such a referendum, he looks by far the most effective political operator in the cabinet.

Although Clarke has conceded that the Tories should promise to hold a single currency referendum in certain circumstances, he and Major have contrived to ensure that those circumstances will be as favourable as possible to securing the result both want: popular endorsement of monetary union once the government decides that the conditions are right. The Eurosceptics' bluff has been called.

The deal is that the Tories will go into the next election promising a referendum, but only if the government has decided to join a single currency during its next term and parliament has legislated accordingly. Collective cabinet responsibility will be maintained, which means that cabinet opponents of joining will have to resign if they want to campaign for a "no" vote. It's a set-up even more likely to produce a large "yes" majority than the arrangements for Labour's 1975 referendum on continued membership of the EEC.

Of course, as Labour has said, all this has more to do with papering over Tory cracks than with laying down a credible policy on monetary union – but it would be foolish for Labour not to take it seriously. At the very least, it means that the Conservatives will go into the election temporarily united on Europe. More important, it could be an effective vote-winner. For the first time in years, Labour is now on the defensive on Europe.

So what should Labour do? For a start, match the Tories' promise of a referendum on joining a single currency. Labour has been playing with the idea for the best part of 18 months, and both Tony Blair and shadow foreign secretary Robin Cook have made it clear that a Labour government will hold a single currency referendum if the electorate is not faced with a clear choice in a general election among parties holding different views on the issue. It is now time to endorse a referendum without this qualification. Even if there is a growing sense in Labour circles that Britain will not have to decide on whether to join a single currency during the next five or six years – with some senior figures now reckoning that a single currency is not feasible for 20 years or more, if at all – it would be a mistake to allow the Tories to steal a march on the party on such an easy populist issue.

This said, there are real questions about what sort of referendum Labour should advocate. The party's Europhobes – who still haven't quite died out – would like to hold the vote before any negotiations start, but that's hardly a serious option because it would run directly counter to party policy of agreeing to a single currency in principle, but making sure the conditions for it are right.

A thornier question is whether cabinet collective responsibility should be upheld during a referendum campaign that takes place after negotiations have been successfully concluded. There's no problem in theory with allowing cabinet members to do what they want. That, after all, was what happened in 1975. But Tony Blair is all too aware of the damage done by the deep Labour divisions over Europe that the 1975 campaign opened up – and which will almost certainly dictate that Labour adopts an arrangement similar to that embraced by the Tories, with the cabinet bound to arguing for a "yes" vote.

If the conditions for monetary union are right, that will be no problem. But what are the "right" conditions? Labour has made much of the importance of "real economic convergence" on top of the criteria for inflation, government debt and public-sector borrowing laid down in the Maastricht treaty – which is enough to keep all but the Europhobes happy in the run-up to the election. It has not, however, defined what it means by "real economic convergence" – and that means there is plenty of room for fierce internal Labour disagreements once the party comes to power. As with the Tories, a referendum is useful for Labour, but by no means a panacea.

John Major and Kenneth Clarke have stolen a march on the Tory anti-Europeans with their deal on a referendum on a single European currency. Now the ball is in Labour's court

KILLED BY MAD COW DISEASE

New Statesman & Society, leader 29 March 1996

The BSE scandal is the final nail in the coffin for the Tory government

Forget arms-to-Iraq, cash-for-questions, homes-for-votes in Westminster, or any of the other scandals that various pundits have claimed would mark the beginning of the end for John Major's shabby administration – mad cow disease trumps them all. The official admission last week that there might, just might, be a connection between bovine spongiform encephalopathy in cattle and one variant of Creutzfeldt Jakob disease in humans – BSE and CJD – has had a far more dramatic impact in undermining public faith in the government than anything else it has done.

Everywhere, people are asking the same questions. If some respected scientists have been saying for several years that there might be some connection between eating B S E-infected beef and contracting CJD, a fatal neurological illness, why on earth did ministers and their advisers ignore them, claiming beef was entirely safe? Why was the programme for eliminating BSE pursued so half-heartedly? And how many of us are going to die horrible lingering deaths because we took the government's advice seriously?

Health Secretary Stephen Dorrell's explanation, that the government was only doing what the scientists on the Spongiform Encephalopathy Advisory Committee (Seac) suggested it should do, is not good enough. The committee's membership was chosen by the Ministry of Agriculture, Fisheries and Food and initially failed to include any public health experts (their appointment last December almost certainly precipitated this month's warnings over BSE) and was consistently laggard in acknowledging mounting evidence that there is indeed a link. Maff in turn has, until last week, been equally sluggish in implementing Seac's recommendations.

Even if, like Lord Justice Scott in his report on arms-to-Iraq, we assume that ministers have acted at all times "honestly and in good faith", the government deserves to be condemned for its absurdly Panglossian optimism, for its rank incompetence and for its extraordinary procrastination. But that is the bare minimum of which it can justifiably be accused. All the evidence points to the conclusion that ministers have not been acting from the purest of motives, but have been pawns throughout of the powerful agribusiness lobby. The most convincing explanation of their behaviour is that, from the first appearance of BSE, they have been less concerned with public health than with maintaining the profitability of Britain's pampered beef farmers and of the food processing industry. It is no accident, as the Marxists used to say, that there are nearly 40 Tory MPs with direct interests in farming.

Now, however, the deranged cattle have come home to the cowshed. The past week has seen a collapse in demand for British beef worse than the government's worst nightmares. Sales of beef in butchers' shops and supermarkets have slumped, and beef prices at every level are tumbling. McDonald's and the other big hamburger chains have announced that they will no longer be using British beef, and the export market has vanished, as first Europe and then the rest of the world have put up the shutters. Thousands of workers look set to lose their jobs.

All this is the government's fault. It is fatuous for John Major to blame Labour "scare-mongering" for the panic that has swept Britain in the past week: people would have been scared whatever the opposition had said, for the simple (and very good) reason that CJD is a frightening disease with no known cure. And now the government must pay the price.

In cash terms, that will be at very least between £400 million and £700 million a year for five years in compensation to farmers – the estimated cost of the (wholly inadequate) compulsory slaughter scheme favoured by the National Farmers' Union, under which only older dairy cows would be destroyed – and could be as much as £20 billion if every single one of the 11 million cattle in Britain is killed. Politically, the price is likely to be that Major will have to kiss goodbye to any hope of winning the next general election. Whether that means a new government that will tackle the agribusiness lobby head-on, however, is another matter entirely.

WHERE ARE THE BRAINS BEHIND TONY BLAIR?

New Statesman & Society, 15 March 1996

The Labour leader has decided that he needs a dialogue with the centre-left intelligentsia. It could be a tricky business, writes Paul Anderson

The participants in last month's private meeting at King's College, London, between Labour leader Tony Blair and what the Guardian described as "80 intellectuals and businessmen" are not keen to talk about it – at least on the record.

"It was done on the basis that we wouldn't be identified," says one abruptly. "All I'll reveal," says another, "is that the people named by the Guardian were all there." So Stuart Hall, Anthony Barnett, John Gray, Geoff Mulgan, Andrew Adonis and Vernon Bogdanor are all considered worthy of the Labour leader's attention – but there are no surprises there. "It would be fair to say that Blair did most of the talking," says yet another. "He said he wanted a dialogue about ideas. I think that's a good sign. But I really can't say any more."

Big deal, you might think. But the secrecy speaks volumes, even though the participants won't. The official explanation is that Blair didn't want to burden the invitees with the tag of being tame party stooges, which is fair enough. There was also, no doubt, a certain wariness in the Labour leader's office about the mischief the Tory press would make of the event –  although in fact the only hostile mention that has appeared since news of it broke last week is one sarcastic diary paragraph in the Sunday Times. It was headlined "Blair says goodbye dearies, hello drearies", an allusion to his alleged preference for boring academics, rather than the literati and glitterati cultivated by Neil Kinnock.

But the low-key approach also reflects Blair's worries about the lukewarm reception new Labour has been getting from the intelligentsia. It's easy to see why he's concerned. After nearly 17 years of uninterrupted Conservative rule, his party is so far ahead in the opinion polls that just about everyone thinks it will form the next government. Since his election as Labour leader in 1994, he has consistently stressed the importance of "new ideas" to his political project – and he has made an extraordinary number of speeches outlining his thinking. New members have flocked to Labour. Blair believes, with some justification, that the impending end of a political era should be generating excitement among intellectuals – just as it did in Britain in the run-up to Harold Wilson's first general election victory in 1964 or in France before Francois Mitterrand became president in 1981.

In fact, there has been little sign of any such thing. The depoliticisation of the intelligentsia that was the most marked trait of British intellectual life in the 1980s has not been reversed. Little of the left-leaning intelligentsia has survived the wreckage of its projects since the late 1970s: the scrapyard contains not just the social democratic corporatism of the Wilson-Callaghan era and the "actually existing socialism" of the Soviet bloc, but also the left-wing Keynesianism of the Alternative Economic Strategy, the "57 varieties" of Trotskyism and neo-Leninism, quasi-syndicalist "class politics" and all but the most supple libertarian leftism of the 1968 generation. Feminism is no longer the sole prerogative of the left; environmentalism never has been. Postmodernists of various hues have long replaced Marx and Gramsci as undergraduate fashion accessories.

Except when it comes to the constitutional questions raised so effectively by Charter 88 and others, those one-time left intellectuals who have not simply given up politics are, for the most part, engaged only peripherally: the dominant mood is one of pessimism about the powerlessness of political action in the face of a triumphant global capitalism. Worse, there is no influx of enthusiastic young people, keen to seize the initiative from the sad old fifty-somethings who are still hanging on in there banging away, to the left intellectual milieu. With the partial exception of the peace and environmentalist movements, the "new social movements" of the past two decades have done little to rejuvenate or enlarge the left intelligentsia.

It's true that the surprise success story in British publishing in the past year has been Guardian economics editor Will Hutton's elegant statement of the case for Germanic corporatism and radical constitutional reform, The State We're In. For the first time since 1980, when Edward Thompson and others launched the movement against the stationing of American cruise missiles in Britain with Protest and Survive, a serious forward-looking political book has been riding high in the bestseller lists for several months. Blair himself has embraced the idea of "stakeholding" that is central to Hutton's argument, although he has steered clear of his detailed poliq prescriptions.

It's also true that Blair is not short of supporters in senior editorial position; on the quality newspapers. The Independent is the most pro-Blair daily (his fans include columnist Andrew Marr, political editor Donald Macintyre and political correspondent John Rentoul, the author of a sympathetic biography of the Labour leader), and he has plenty of admirers both on the Guardian (notably, political correspondent Patrick Wintour) and on the Observer, at least as long as Andrew Jaspan remains editor – which might not be for very long.

But one best-selling centre-left book and a gaggle of broadsheet journalists hardly constitute a wave of intellectual enthusiasm for new Labour. The most important point about the success of The State We're In is precisely that it was wholly unexpected, and the Blairites and the newspapers are, for the most part fans of the man rather than his programme. Even the Independent's enthusiasm has been noticeably muted since last autumn, when its management dumped Ian Hargreaves as editor and former Marxism Today editor Martin Jacques as his deputy; while Guardian editor Alan Rusbridger has maintained; fiercely independent line, on occasion running stories deeply embarrassing to the Labour leadership. The Financial Times is as sympathetic as any international journal of record can be; the Independent on Sunday no more reliable than the Guardian; the Times even worse; and the Sunday Times largely hostile, despite the recent return of Robert Harris (a close chum of Peter Mandelson) as a columnist. That leaves the two Telegraph titles, both wildly Tory, and the weeklies. The Economist, under the influence of its political editor, David Lipsey (an aide to the last Labour government), is sympathetic but critical, as is NSS; Tribune and the Spectator are vitriolically antipathetic.

Blair's problem is simple: if there's anything that approaches a consensus among Britain's centre-left intellectuals, it is that a Labour government would mean a welcome change of personnel but that, certain constitutional reforms apart, it wouldn't be able to do very much that is radically different from the Tories under John Major and Kenneth Clarke.

There are, of course, important dissidents from this view – and they number more than Peter Mandelson and Roger Liddle, whose much-hyped The Blair Revolution was published earlier this month. The most significant is a group of writers who see constitutional reform as the key to all sorts of other changes: eloquent examples include Will Hutton, Charter 88 founder Anthony Barnett, Labour MP Tony Wright and former Liberal Democrat adviser David Marquand. But it's remarkable how small this group is, and even within it there are big frustrations with the way new Labour has played its cards, particularly over Freedom of Information legislation and the promised referendum on electoral reform, neither of which are now considered immediate priorities for a Labour government.

It's also notable who doesn't feature in this circle. Stuart Hall, during the 1980s (through his pieces in Marxism Today) the most influential proponent of the idea that Labour's class-based political culture had lost touch with the real world and needed to be radically transformed, has written witheringly of the absence of big ideas in the Blair "project" (although he welcomed Blair's reduction of the role of the trade unions in Labour's organisation and his removal of the commitment to common ownership in Clause Four of the party constitution).

Anthony Giddens, probably the second most influential left-of-centre "moderniser" social theorist in recent years, has been equally critical, as have the intellectuals around New Left Review, which has made a particular point in recent years of engaging critically with western European social democracy.

Blair gets upset by the charge that new Labour lacks intellectual beef, but he shouldn't be too surprised by it. Labour has consciously opted for a responsible, minimalist programme. The intention is worthy – to avoid scaring off affluent middle-class voters while preventing trade unionists and Labour Party members from building up unrealistic expectations of a Labour government – but the side-effect is that there isn't too much for intellectuals to get worked up about.

Of course, there is plenty of Labour policy-wonking going on, particularly on the welfare state, and a key role here is played by the Institute for Public Policy Research, the independent-but-Labour-leaning think-tank created when Neil Kinnock was Labour leader. The IPPR oversaw the work of the Commission on Social Justice, set up by Blair's predecessor John Smith to examine the future of welfare, and it publishes New Economy, a quarterly edited by former Labour economic policy adviser Dan Corry that is the closest Labour gets to a forum for public debate on economic policy.

But the IPPR's work does not really amount to a ferment of ideas, and there's not a lot that is useful to Labour coming out of the other think-tanks. The most important exception is Demos. Set up by another former Marxism Today stalwart, Geoff Mulgan, once an adviser to Gordon Brown, Demos has been responsible for the only significant import of recent years in the field of political ideas, the communitarianism of the American polemicist and activist Amitai Etzioni. Etzioni's emphasis on responsibilities as well as rights chimes with the austere Christian socialism of Blair and shadow home secretary Jack Straw, and the Labour leader has declared himself a communitarian.

Communitarianism has articulate advocates in John Gray, the Oxford political philosopher who was a key thinker of the new right in the early 19808, and Observer columnist Melanie Phillips – but the wider left intelligentsia is suspicious of what it sees as the conservatism, or even authoritarianism, of communitarian prescriptions for dealing with family breakdown and crime. Whatever else left intellectuals might have abandoned since the 1960s, they remain as strongly committed as ever to social liberalism, if not libertarianism. And that almost inevitably means that most of them will keep a respectable distance from new Labour, no matter how much Blair urges them into the fold.

SOME REVOLUTION

New Statesman & Society, leader 8 March 1996

Labour's modernisers are going to have to do a lot better than Peter Mandelson if they are ever to convert the left intelligentsia to their cause

Labour used to have intellectuals: now it has Peter Mandelson. Because of the influence he has in his party's upper echelons – as great as that once enjoyed by Sidney Webb. G D H Cole, Hugh Dalton Harold Laski or Anthony Crosland, if rather different in nature – the publication this week of his new book, The Blair Revolution, co-written with ex-SDPer Roger Liddle, is a politically significant event. But the book itself is a disappointment.

There's little in it by way of prescriptions that is not already Labour policy – apart, that is, from the bizarre plan to lend young couples £5,000 as a deposit for a mortgage if they get married. One can just see the happy couples laughing all the way from the bank to the divorce lawyer. Moreover, for the most part, it takes the most conservative interpretation of what Labour policy would mean in practice. Although there's much of sense in it, it does not offer a "radical, exciting vision", as its jacket blurb promises. Rather, The Blair Revolution is an exercise in trying to make "safety first" sound daring. Labour's modernisers will have to do a lot better if they are ever to fulfil their dream of dominating not just their party's machine, but Britain's political culture.

Nowhere is the caution more apparent than in The Blair Revolution's sections on constitutional reform. In the week of shadow foreign secretary Robin Cook's triumphant performance in the Scott debate, it is notable that Mandelson and Liddle do not even press the case for a comprehensive Freedom of Information Act, which until recently Labour was promising to pass in its first year of government.

Instead, they back "a public right to know, underwritten by legislation, unless there is a clear stated reason why something cannot be disclosed on grounds of national security, personal confidentiality or strict commercial confidence". Documents made public should not "include private office working papers and advice to ministers from senior officials", disclosure of which "would fatally prejudice the political independence of the senior civil service". Such a mandarin's charter could not have been bettered by Sir Humphrey Appleby himself. lt would not help a bit in exposing a future government that operated an arms sales policy of the kind revealed by Scott. The House of Lords gets similarly soft treatment.

Mandelson and Liddle back Labour's plans to remove voting rights from hereditary peers, but are circumspect about what happens after that. "In the long run," they write, "it maybe that the second chamber needs to be made more representative – perhaps there could be a directly-elected element with an avowedly regional flavour." Wow. On electoral reform, they are sceptical about the need for change, but back the alternative vote – a system that would do nothing to ensure the representation in parliament of minority opinions – as the best option if a change has to be made. Labour's promised referendum on electoral systems doesn't get a look in.

So one could go on through the sections of the book on economic policy, Europe, the future of the welfare state or reforming the machinery of government. Everywhere, the message is the same. New Labour really is a different party from old Labour, it really wants change, it really is radical – but it won't do anything to frighten the horses.

And to think that the modernisers wonder why what there is of an intellectual left in Britain hasn't rallied enthusiastically to their cause. The reason is not that there is some diehard old-left clique yearning for the good old days of the 19703 and desperately hanging on to its positions of influence at the Guardian, at the BBC, in the universities and even, God forbid, here at NSS. It's that the modernisers' "project", as they like to call it, isn't particularly inspiring to anyone with a penchant for radicalism, at least as it has so far been spelled out.

Caution is caution, however it is packaged. And although there are undoubtedly grounds for it in Labour's case in the run-up to the election – the voters are worried by the prospect of change, and it would be foolish for the party to promise more than it can actually deliver – it can never send the mind or the pulse racing. That might come if there were some grand overall long-term strategy – precisely what the modernisers have yet to elaborate.

Until they do so, and do so convincingly, the majority of the intellectual left will maintain its scepticism about the "project" – as indeed it should. Intellectual political cultures are not like parties: they cannot be captured by skilful manoeuvring and they cannot be disciplined into subservience. It's the quality of argument that counts – and, so far, the modernisers have not come up with the goods.

SOCIAL DEMOCRACY IN CRISIS?

Leader, New Statesman & Society, 1 March 1996

Last weekend's defeats of social democratic governments in Australia and Spain will embarrass new Labour. But it's the Tories who should be really worried

It is hardly surprising that the British Tories have seized upon last weekend's election defeats for the Australian Labor Party and the Spanish Socialist Workers' Party (PSOE). Australia and Spain were the two biggest countries in the world with social democratic governments (assuming, that is, that you don't count Bill Clinton or Japan's bizarre coalition as social democratic). And the fact that both will now be gov­erned by the right is undoubtedly embarrassing for new Labour in Britain.

Most obviously, Australia has been something of a model for Tony Blair and his colleagues. He went there twice last year, got on famously with Australian Labor prime minister Paul Keating and praised Australian Labor for creating "a fair society and a prosperous econ­omy". Other senior Labour figures  – notably Gordon Brown, John Prescott and Chris Smith – have also made the trip down under to study welfare reform, economic policy and the business of government.

Labour in Britain has been less than enamoured of the corporatist accords with the trade unions that have been a hallmark of the Australian Labor regime since 1983 – and Blair's slapping down of Welsh spokesperson Ron Davies for saying that the Prince of Wales was unfit to be king shows that there is no room in new Labour for Keat­ing's vigorous republicanism.

Nevertheless, British Labour has been inspired by the way Keating and his predecessor Bob Hawke managed to combine liberal economic policies with maintenance of the welfare state. British Labour's policies for getting single parents off welfare benefits and into the labour market owe much to Australian Labor's Jobs Enterprise Training Scheme (JETS), and Blair and his colleagues are looking closely at Australian approaches to pension provision and infrastructural investment. Keating's defeat, in economically favourable conditions, is a defeat for the nearest thing existing anywhere else in the world to what Labour wants here.

Spain has been less of a model for Labour in Britain – which is not altogether surprising, and not just because most Labour politicians' Spanish is a little ropey. At least for its first decade in office after 1982, the overwhelming priorities of Felipe Gonzalez's PSOE administration – the entrenchment of democracy in a country that had only recently emerged from fascism, the reform and modernisation of its creaking corporatist economy, and the integration of Spain into Europe politically, economi­cally and culturally – found few echoes in the concerns of Labour in Britain.

Nevertheless, until last weekend Spain was the last socialist government in a "big five" European Union country. Barring victories for the centre-left in Italy's forthcoming general election or (improbably) the Ger­man Social Democrats in an early poll, his defeat means that an incoming Labour government in Britain in the next year or so will have social democratic allies only among smaller EU governments.

Yet it would be foolish to take this argument too far. A major factor in Labor's defeat in Australia was voters' growing dislike of Keating's personal style, and the PSOE was at least in part the victim of widespread revul­sion at its corruption. Both Australian and Spanish gov­ernments were beaten not so much because of their com­mitment to social democracy – which actually didn't amount to very much in either case – but because voters felt that they had run out of steam after long, uninter­rupted spells in office and that it was time for a change.

Seen in this light, the two election results should cause as much concern for the Tories as for Labour. Like Aus­tralian Labor and the PSOE, the British Conservatives have been in power for a long time – and voters are fed up with them. There is a stench of corruption about them at least as powerful as that surrounding the PSOE; and in John Major they have a leader at least as unpopular as Keating. Even though, like Australian Labor, they are approaching a general election with the economy com­ing good at just the right time, and even though, like the PSOE with Jose Maria Aznar's Popular Party (PP), they face an opposition that they have hitherto found easy to scaremonger about (although there's a difference between spreading fear about Labour's tax plans and frightening the voters with tales about the PP's murky origins in Francoite fascism), they look doomed. Last weekend's elections say more about the difficulties fac­ing tired incumbent governments than they do about social democracy.

A FAREWELL TO KEYNES?

New Statesman & Society, 23 February 1996

The free-market right has long dismissed the ideas of John Maynard Keynes as outmoded. Now much of the social-democratic left is doing the same. But has Keynesianism outlived its usefulness? Paul Anderson and Kevin Davey investigate

Sixty years ago this month, John Maynard Keynes published his magnum opus, The General Theory of Employment, Interest and Money, a book that even his detractors say revolutionised the way that the world thought about economics. Precisely what the legacy of that revolution comprises, however, is now seriously contested – and not just by the free-market right whose nostrums were Keynes' target.

There are still some who echo the accepted wisdom of left and right in the 19508 and 19605, that The General Theory provides nothing less than a working theoretical framework for the management of the economy to secure full employment. But today these enthusiasts are outnumbered by sceptics. Even in social democratic circles, where Keynes enjoyed unparalleled influence for nearly 40 years after his death in 1946, his star is on the wane. Of the few social democrats who still call themselves Keynesians, most are careful to distance themselves from what is popularly known as" Keynesianism" – and there are many on the left who now argue that Keynes' insights were specific to a time and a place long gone. For them, as for the new right, Keynes 'most enduring achievement is to have established the discipline of macro-economics and to have pioneered the techniques we use to measure the performance of national economies.

Who is right? It might appear a cop-out to say so, but there isn't an obvious answer. With Keynes, as with most other thinkers who have spawned an "ism", there are protracted arguments about the relationship between what the master said and meant and what his followers – particularly those who popularised and systematised his ideas – interpreted him as saying.

As usual, however, it is easiest to start with the "ism" – which in Keynes' case can be traced back to the transformation of the ideas of The General Theory into a neat (but somewhat crude) model of the way economies work by his disciples John Hicks and Alvin Hansen. What might be called the doctrine of Keynesianism used the Hicks-Hansen model to show that the state has the ability to secure full employment by borrowing to boost the overall level of demand in the economy. .

There is no doubt that Keynesianism in this sense had an enormous influence on economists. By the mid-1960s, it was dominant in just about every university economics faculty: even the arch-monetarist Milton Friedman declared in 1966: "We're all Keynesians now." The extent of its influence on government practice is, however, arguable. It used to be accepted wisdom that Keynesian demand management was responsible for the unprecedented long boom enjoyed by the western industrial economies in the 25 years after 1945. But in recent years, this idea has come increasingly under fire, as economic historians have demonstrated that even Britain and America, the two countries most directly influenced by Keynesianism, did not systematically run budget deficits to boost demand until the 1960s, while the two most successful economies during the long boom, Germany and Japan, were fiscally conservative. On this view, Keynesianism was not really applied until the end of the "golden age" was already in sight.

Nevertheless, there's a strong case that Keynesianism did play a major part in the boom. In the words of Keynes' biographer Robert Skidelsky: "The explicit or implicit commitment to avoid a collapse in demand – and just as important, the belief that Keynesian policy would work if required – may well have secured the expectations necessary to sustain the private investment boom for so long." Even if government policy wasn't particularly Keynesian, in other words, the postwar boom wouldn't have occurred had investors not believed that Keynesianism had smoothed out the business cycle.

By the mid-igyos, however, the golden age was-over – and with it the hegemony of Keynesianism among economists and policy-makers. By the mid-1980s, Keynesianism was everywhere in retreat and the free-market right triumphant.

So what went wrong? The problem both for the real world of economic policy-making and for Keynesianism as an ideology is easy enough to identify: the arrival of "stagflation", the coincidence of rising unemployment and rising inflation, in the late 1960s. But the causes of stagflation were hotly contested at the time and remain so today. The free-market monetarist right blamed Keynesianism, arguing that the assumption (not actually made by Keynes himself) that there was a simple trade-off between unemployment and inflation ceased to work as soon as people started taking inflation for granted. The constant boosting of demand simply fuelled inflation without having any effect on unemployment. Keynesians replied by blaming factors outside western policy-makers' control: the oil-price shock of 1973-74, the explosion of wage militancy throughout the industrialised world after 1968, and the collapse of the Bretton Woods system of managed exchange rates.

At first, governments tried to muddle through. Most tried to maintain demand while attempting to dampen inflation with incomes policies. When that didn't work, they allowed unemployment to rise to counter inflation. And when that in its turn proved painful, they allowed inflation to rise to counter unemployment.

By the mid-1970s, it had all spun out of control – and nowhere more so than here in Britain. Faced with rampant inflation, rising unemployment and a currency crisis, the Labour government went cap in hand to the International Monetary Fund for a loan – and the IMF insisted on swingeing spending cuts as a condition of lending the money. At the 1976 Labour conference, prime minister James Callaghan announced that the Keynesian era was over. "We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending," he said." I tell you in all candour that this option no longer exists and insofar as it ever did exist, it injected a higher dose of inflation and a higher level of unemployment. Unemployment is caused by pricing ourselves out of jobs quite simply and unequivocally."

The door back to the forgotten world of laissez-faire economics had been unlocked. In the next few years, every major industrialised country followed Britain's lead. The last country to attempt a Keynesian dash for growth, France under Francois Mitterrand's Socialist government in 1981-83, was forced into a humiliating U-turn by rising inflation and a balance of payments crisis. For the next decade, Keynesians were marginalised. Their theories were displaced by the market dogmas that Keynes thought he had disposed of, their old and apparently irrelevant tools of intervention – exchange controls, deficit financing – abandoned by governments unilaterally and through international treaties.

Keynesianism was, however, too deeply entrenched, and too productive, to disappear overnight. Indeed, it even remained an important feature of the avowedly anti-Keynesian governments of the 1980s. As in so many other ways, they said one thing and – when the occasion called for it – did another. By cutting personal taxation and increasing the budget deficit to finance military expenditure between 1983 and 1985, US president Ronald Reagan claimed to be providing supply-side incentives. In fact, he was clearly putting old-fashioned Keynesianism back into practice. In Britain, chancellor Nigel Lawson's boom of the late 1980s – the product of tax cuts, low interest rates and rising public expenditure – was a similar exercise in hypocrisy. Even today, major infrastructure projects (like road-building and the Eurofighter) bring unacknowledged but indisputably Keynesian benefits to an economy.

Keynesianism by stealth is not the only type to have survived the free-market counter-revolution. Keynesian true-believers – such as the Cambridge School in Britain – were quick to foresee the consequences of savage deflation. In 1980, for example, Wynne Godley predicted that the government's fiscal policies would produce three million unemployed within three years. He was ignored by the monetarists – but time proved him right. For a time, the majority of social democrats also kept the Keynesian faith. The Alternative Economic Strategy that dominated Labour thinking in the early 1980s was a strange hybrid of state socialism and Keynesianism, combining pre-Keynesian Labour emphases on the ownership, control and planning of industry with a commitment to reflation. Although such a perspective has long since been abandoned by the Labour leadership, its Keynesianism survives in the ideas of many dissidents in the party, from Peter Shore on the right to Roger Berry on the left.

Ever since the collapse of the French Keynesian experiment, however, there have been growing doubts among social democrats about the feasibility of "Keynesianism in one country" because of the increasing globalisation of the economy. No medium-sized nation-state, the argument goes, can possibly hope to counter the power of the markets. If Keynesianism, in the old sense of demand management to secure full employment, is ever to work, it will have to be at a regional or even global level. Such a point of view is certainly in keeping with the spirit of Keynes himself. An early exponent of the need for coordinated international economic policies, particularly on interest and exchange rates, he was one of the architects of the Bretton Woods system of managed exchange rates that lasted into the early 1970s.

But there are major obstacles to the creation of the institutions necessary for regional Keynesian intervention, as Europe shows. European Commission president Jacques Delors' plans for a modest European Union programme of public works to compensate for the deflationary effects of the Maastricht treaty were killed by conservative opposition – and with the electoral prospects for social-democratic parties poor in every major EU country except Britain, it is unlikely that anything like them will be put into practice for the foreseeable future. To make matters worse, there's also the question of whether regional Keynesianism would work even if there were the political will for it at intergovernmental level. To Meghnad Desai, the pace and scope of globalisation are such that even regional attempts to manage demand are doomed, "What most people think of as Keynesian economics and Keynesian policy is dead," he says bluntly.

And indeed, if Keynesianism is about expansionist demand management, many of today's self-styled Keynesians don't really deserve the name. Will Hutton, for example, whose The State We 're In has been the best-selling book on economics in years, argues that Keynes has been traduced by his systematisers and popularisers: he was actually far more important as an advocate of reforms that would change the ways in which investors behave than as the father of high public spending demand management. Other "new Keynesians" are primarily interested in supply-side policies for the labour market, a topic on which Keynesianism had little to say at the height of its influence. This trend is reflected in mainstream social democratic politics, where the current emphasis is on curing unemployment through education and training rather than bv boosting demand.

For these economists and politicians, the legacy of Keynes has not been properly understood: "what most people think of as Keynesian economics" is not what Keynes meant at all. Robert Skidelsky agrees with them. He insists that, far from encouraging inflation, Keynes was implacablv opposed to it – and he was not averse to the idea of imposing old-fashioned austerity if it got out of control. The General Theory was not the theoretical licence to print money that 1960s-stvle Keynesianism claimed it was," he argues. Neither would Keynes himself have endorsed the massive extension of the role and powers of the state that has come to be associated with his ideas.

On this reading, Keynes is neither the hero whose brilliant reworking of economics saved capitalism from the business cycle, nor the villain whose ideas were responsible for the inflationary crisis of the 19708. Which is probably an accurate assessment – but hardly the stuff on which a revival of his influence will be made.

MISUNDERSTOOD OR OUTMODED?

"By bastardising Keynes into the simple advocacy of high government spending, both the right and the left secured important political objectives. The left was given the means to temper the Marxist/socialist tradition in British politics into a devotion to the idea of a high public spending social democracy, while the right translated Keynesianism straight into the tradition of paternalist intervention to preserve the status quo. It suited neither to interpret Keynesianism as it actually was: a demand for the state to change the behaviour of financiers and businessmen by prosecuting an active fiscal policy in tandem with an assault on the portfolio preferences of the financial institutions."

WILL HUTTON The Revolution That Never Was, 1986

"Keynes saved capitalism from its worst crisis; it survived and revived and now has seen him off...The Gadarene volatile behaviour of thousands of operators on stock markets around the world imposes a real time constraint on governments. This is a discipline that is hard to fight against. Global coordination of economic policies may work to regulate these markets and global Keynesianism may be possible in theory. But such scenarios require a lot of consensus and a strong regulatory authority which can punish free-riders. We are a long way from that, much as we may wish otherwise."

MEGHNAD DESAI What is Left of Keynes? 1994

"Keynesian policies come to us today wrapped up in a history of rising inflation, unsound public finance, expanding statism, collapsing corporatism, and general ungovernability, all of which have seemed inseparable fromthe Keynesian cure for the afflictions of industrial society. We do not want to traverse that path again. By the 1980s, Keynes, who was praised for having saved the world from Marxism, had joined Marx as the God that failed... If we are to draw a lesson from postwar historical experience, it is that Keynesianism works best as a discretionary resource in a rule-based framework which places strong constraints on the actions of governments and which promotes the well-being of peoples through the widest possible measures of free trade. Those who look for inspiration from Keynes today are more likely to be impressed by the care and thought which he gave to the design of the Bretton Woods system than with Keynesian prescriptions for the parochial diseases of individual economies."

ROBERT SKIDELSKY Keynes, 1998

LISTENING WITH ONE EAR: KEYNES AND THE LEFT IN HIS LIFETIME

The history of Keynes influence on the left during his lifetime and on the Labour Party in particular, is complex. It began with his assault on the Versailles treaty's insistence on punitive German reparations for war damage, The Economic Consequences of the Peace (1919). Keynes had resigned as a Treasury civil servant to write the pamphlet, which became a bestseller and according to his biographer Robert Skidelsky, made him “a hero of the left": "Henceforth the intelligentsia of the left always listened with one ear to what Keynes was saying."

But Keynes' critique of laissez-faire economic orthodoxy from the mid-1920s, starting with his polemic against returning to the gold standard, A Tract on Monetary Reform (1923) at first found few takers in the Labour Party (let alone to its left). One reason was that Keynes was distrusted as a prominent member of the Liberal Party: in the late 1920s, he was the brains behind David Lloyd George's radical Liberal programme for tackling unemployment, most famously spelt out in The Yellow Book: Britain's Industrial Future in 1928.

Political tribalism was by no means the whole story, however. On one hand, the Labour leadership was unstintingly orthodox in its economics. The dominant figure in Labour economic policy-making in the 1920s was Philip Snowden, the chancellor of the exchequer in Ramsay Macdonald's 1924 and 1929-31 Labour governments, a fierce proponent of free trade, low public spending and maintenance of the value of the currency. Keynes's ideas were anathema to him. On the other hand, most of Snowden's critics on the left took it as axiomatic that capitalism was on the verge of a fins-crisis and could not successfully be reformed. For them, Keynes’s alternative simply made no sense.

Not that Keynes thought much of Labour. Although he saw the potential for a Lib-Lab coalition, he disliked Labour's class politics – "the class war will find me on the side of the educated bourgeoisie – and he was dismissive of the left's anti-capitalism. “The Labour Party has got tied up with all sorts of encumbering and old-fashioned luggage," he wrote in 1927. "They respond to anti-communist rubbish with anti-capitalist rubbish. The consequence of all that is that, whether in or out of office, the business of orderly evolution seems likely to remain with the Liberal Party.”

For all this, Keynes had sympathy with some of the ideas of the Independent Labour Party, which had at least realised that unemployment could be reduced by increasing the overall level of demand in the economy (although its policy ideas were far-removed from Keynes's own). On the right of the Labour spectrum. Ernest Bevin, the general secretary of the Transport and General Workers Union, was close to Keynes on economic policy from the time of his warnings of the deflationary consequences of returning to the gold standard. And in Oswald Mosley, then a maverick Labour MP with a significant following on the left, Keynes had an articulate disciple who consistently advanced a programme of public works and monetary reform along the lines of Lloyd George’s proposals.

But Mosley flounced out of the Labour Party in early 1931, after the government rejected his pleas for protectionism and public spending to counter the effects of the slump that followed the 1929 Wall Street Crash. And the advice of Keynes and Bevin (who both sat on the Macmillan Committee on Finance and Industry set up by Snowden in 1929) was ignored by the government at every turn. In August 1931, Macdonald and Snowden infamously preferred to desert Labour to form a National government with the Tories and the laissez-faire wing of the Liberal Party, rather than deviate from plans for swingeing spending cuts, including reductions in unemployment benefit) as demanded by the bankers and the orthodox economists.

The general election that followed, which saw Labour reduced to 52 seats and the Lloyd George Liberals to four, was a sensational political victory for laissez-faire orthodoxy. But the debacle of 1931 also made Labour intellectuals much more receptive to Keynes as they struggled to understand what had gone wrong, and as he developed the over-arching economic theory that reached maturity in The General Theory of Employment, Interest and Money, published 60 years ago this month.

Well before The General Theory, Keynes’s polemical writings – he was a prolific contributor to newspapers and magazines, including the New Statesman, whose board he chaired after its merger with the Liberal Nation in 1931 – had had a profound effect on the "New Fabian" thinkers who were to play a key role in formulating the policies on which Labour won the 1945 election, among them G D H Cole, Hugh Dalton, Evan Durbin, Hugh Gaitskell and Douglas Jay. It was his magnum opus that realty made the difference, however. Cole described it in the New Statesman as the most important book on economics since Marx’s Capital: Jay embraced it enthusiastically in his widely read 1937 book, The Socialist Case.

Meanwhile, Keynes continued to contribute directly to Liberal thinking; and there were even some Tories who drew on his ideas (among them Harold Macmillan, whose The Middle Way was published in 1938). But it was in the United States, where President Franklin D Roosevelt's New Deal programme for economic recovery drew heavily on his thinking, that Keynes’s impact in the1930s was greatest. In Britain it took the 1939-45 war for his influence to become pervasive.

Brought back to the Treasury after publishing How to Pay for the War in 1940, he played a central part in British wartime finance. He negotiated the Lend-Lease scheme with the US that provided Winston Churchill's coalition government with arms after Britain’s money had run out, and in 1944 he was the chief British representative at the Bretton Woods conference that set up a managed postwar international currency system and brought about the World Bank and the International Monetary Fund.

After that, he negotiated the US loan that kept Britain afloat after the war had ended. Domestically Keynes played a significant role both in William Beveridge’s 1942 report that provided the blueprint for the postwar welfare state and in the 1944 White Paper on employment that famously accepted government responsibility for maintaining a high and stable level of employment. Earlier in 1944, someof Keynes's most enthusiastic followers, among them Joan Robinson and Nicholas Kaldor, had drafted Labour’s own, much more explicit, policy document committing the party to full employment.

What Keynes's influence on policy would have been had he lived longer has been the subject of much speculation. He was an adviser to the 1945 Labour government's first chancellor, Hugh Dalton, and, according to Dalton's biographer Ben Pimlott, his influence is discernable in Labour's first two budgets to the extent that Dalton "accepted that fiscal policy could be used without qualms as a long-run full-employment weapon".

Nevertheless, Dalton was by no means as enthusiastic a Keynesian as his successors. Keynes died of a heart attack in April 1946 at the age of 62 – before what can properly be termed the Keynesian era had really begun. (Paul Anderson)