The Labour Party under Ed Miliband: Trying but failing to renew social democracy

The Labour Party under Ed Miliband

The Labour Party under Ed Miliband

Trying but failing to renew social democracy

Eunice Goes

Manchester University Press

Copyright © Eunice Goes 2016

The right of Eunice Goes to be identified as the author of this work has been asserted by her in accordance with the Copyright, Designs, and Patents Act 1988.

Published by Manchester University Press

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www.manchesteruniversitypress.co.uk

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A catalogue record for this book is available from the British Library

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ISBN 978 0 7190 9070 7 hardback

ISBN 978 1 7849 9423 5 paperback

First published 2016

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Typeset by Out of House Publishing

To Inês

and

Philippe

Contents

Acknowledgements

List of abbreviations

Introduction: context and some theoretical considerations

1 Social democracy at a time of crisis

2 The road to somewhere

3 Labour and the economy: reforming capitalism

4 Labour and equality I: minding the gap

5 Labour and equality II: power to the people

6 Labour and the politics of belonging: One Nation

Conclusion: trying but failing to renew social democracy

Bibliography

Index

Acknowledgements

I have accumulated a great number of debts while writing this book. First, I would like to thank my editor, Tony Mason, for believing in this project and for his encouraging support throughout the process of researching and writing this book.

I am also indebted to people who took time off from their very busy schedules to talk to me about the Labour Party under Ed Miliband. I am particularly grateful to Jon Cruddas, Stewart Wood, Marc Stears, John Denham, Peter Hain, Patrick Diamond, Rafael Behr, Mark Ferguson, and Barry Sheerman, who were extremely generous with their time. Thanks to their insights I gained a better understanding of what Ed Miliband tried to achieve as Labour leader, but also of the obstacles he encountered. Obviously I am fully responsible for any lacunae or mistakes.

I owe a big thanks to Michele Cohen, Judi Atkins, Steven Fielding, Philippe Marlière, and an anonymous reviewer for reading and commenting on earlier drafts of some of the chapters of this book. I would like to thank the librarians at Richmond University who helped me to find relevant material for this book, and the editorial and production teams at Manchester University Press for their work in bringing the book through to publication. I am also grateful for the encouragement and support I received from Luke Martell, James Connelly, Charles Grant, and Anthony Barnett.

Last but not least, I would like to thank my partner Philippe for his loving and practical support and infinite patience, and my daughter Inês, whose sunny disposition helped me to keep things in perspective.

Abbreviations

Introduction

Context and some theoretical considerations

I stand before you, clear in my task: to once again make Labour a force that takes on established thinking, doesn’t succumb to it, speaks for the majority and shapes the centre ground of politics.

Ed Miliband¹

When Ed Miliband became leader of the Labour Party in the autumn of 2010 he promised to turn a page on New Labour. For him, the global financial and economic crisis had shown the limits of New Labour, in particular the party’s ‘naïve’ embrace of lightly regulated capitalism, globalisation, flexible labour markets, and its acceptance of rising social inequalities.² Miliband’s epiphany seems to have been inspired by what political scientists call ‘critical junctures’ or ‘external shocks’; that is, periods in history when crises open ‘windows of opportunity’ for change to occur. When those moments arrive, political actors look for new ideas and solutions to address new policy problems that can no longer be addressed by old recipes.³

The global financial crisis that started in the United States in 2007 as a credit crunch raised fundamental questions about the ideational paradigm – neoliberalism – that had become the governing economic and political philosophy of centre-right but also of centre-left political parties since the 1980s in Europe and North America. Many of its axioms and assumptions were challenged by the events that unfolded in Wall Street and that soon spread to Europe.

The significance of this crisis – which was not just economic, but was also political, social, and ideational – cannot be overstated. The neoliberal assumptions about the rationality of economic agents, about the self-regulating attributes of free markets, about the ability of the market to produce economic growth that would trickledown across society, could not explain the bankruptcy of major financial institutions and the near collapse of the global economy. Even the defenders of the system were utterly confused with the sequence of events that led to the collapse of Lehman Brothers and to the bailout of financial institutions that were seen as the foundations of financialised capitalism. The former president of the Federal Reserve, Alan Greenspan, reflected this mindset when he told the American Congress that the ‘whole intellectual edifice … collapsed’.⁴

Greenspan was not the only one to be confused with the events of 2007–08. Uncertainty was the prevailing sentiment during those turbulent two years. Newspapers like the Financial Times tried to make sense of what happened with a series of articles on the ‘crisis of capitalism’. Popular culture also contributed to this debate with theatre productions, films, and novels. David Hare’s The Power of Yes, Lucy Prebble’s Enron, John Lanchester’s Capital, Oliver Stone’s Wall Street: Money Never Sleeps, and Laura Wade’s Posh sought to explain the culture that led economic actors to engage in such risky behaviour.

Across the United States and Europe, millions of protesters, inspired by the Occupy movement, debated alternatives to capitalism. On the left, socialists and social democrats felt (to paraphrase President Obama’s former chief-of-staff Rahm Emanuel) that this crisis of capitalism should ‘not go to waste’.⁵ In other words, the massive bailouts to the banks, coordinated at the international level and with the blessing of institutions like the International Monetary Fund (IMF) and the European Union (EU), led some social democrats to believe that they had been right all the time about the instability of capitalism and that a ‘social democratic moment’ was within their grasp. But in the corridors of power, policy-makers acted with the hesitancy of individuals who were not sure about how to respond to events of such magnitude. The easy reflex was to rely on the solutions and policy instruments they knew. And that is roughly what they did.

Miliband and the global financial crisis

If caution prevailed in the corridors of power, the mood was somewhat different within the Labour Party, and in particular in Ed Miliband’s close-knit circle of advisers, experts, and supporters. In the early days of his leadership, the pervasive feeling within Miliband’s circle was that Labour should use the opportunity to develop a social democratic response to the big policy puzzles created by the global financial crisis. Indeed, Miliband and his team of advisers spoke openly about ‘re-imagining social democracy’.

The idea of transformative change, but also the sense of possibility, was at the heart of Miliband’s bid for Labour’s leadership. His promise of change was informed by a critique of neoliberalism (and obviously of New Labour’s legacy) but also by a reappraisal of social democratic values and solutions. Miliband’s reasoning was simple enough to understand. For him it was clear that the global financial crisis had exposed the limits and flaws of neoliberalism and of New Labour’s economic paradigm. The belief in unregulated markets had sown the seeds of the financial crisis and created great disparities of wealth in Britain. It had also created a dysfunctional economy that was over-reliant on the financial services industry and suffered from serious productivity problems as a result. From Miliband’s perspective, that economy was also inefficient at distributing the rewards of economic growth.

This book seeks to examine whether the Labour leader was able to use the global financial crisis as a trigger to change the prevailing neoliberal paradigm in Britain. Does Miliband’s blueprint represent a successful attempt to renew social democracy, or does it represent a capitulation to the austerity paradigm? What were the factors that contributed to either of these outcomes? By offering answers to these questions, this study will shed some light on some of the causes of Labour’s catastrophic defeat at the 2015 general election.

This study argues that under Ed Miliband the Labour Party has sought to re-imagine social democracy by rejecting the main tenets of New Labour, but was only marginally successful in this enterprise. In contrast with New Labour, the Labour Party under Ed Miliband has adopted a critical approach to capitalism, it has placed egalitarian concerns at the centre-stage of its programme, and has developed a new approach to the State that sought to empower individuals. However, the departure from New Labour was not as dramatic as Miliband promised. He faced substantial ideational, institutional, and political constraints that led to the watering down of his initial thinking and plans. His critique of unregulated capitalism was not matched by policy proposals that would reform capitalism along social democratic lines.⁶ Surely, he proposed policies that were presented as solutions (or as beginnings of solutions) to those specific policy puzzles, but their scope was far less ambitious than the rhetoric suggested. Likewise, his concern with rising inequalities and low pay was not matched with robust policy commitments. His pledge to address the crisis of capitalism and the problems of the unresponsive State with a commitment to democratic renewal was timid at best. Last, his attempt to address popular concerns with immigration and the politics of belonging were too nuanced and timid to gain any traction with voters. In short, the blueprint Miliband presented to voters on 7 May lacked clarity, definition, and a unifying message. This lack of definition and clarity was one of the reasons why Milibandism was so overwhelmingly rejected by voters.

Politics and ideas

This book focuses on the ideas that have informed and shaped Ed Miliband’s agenda of renewal of the Labour Party⁷ since 2010 and until the run-up to the 2015 general election, and it seeks to contribute to scholarship on the political thought of the Labour Party. As such, it will look at ideas as agents of political change, and assumes, following Sheri Berman, that ‘the development of parties cannot be understood without a focus on ideology’ because the organisations, political strategies, and electoral coalitions of political parties are shaped ‘by the ideological projects they champion’.⁸

Asserting the crucial importance of ideas does not mean that ideas alone can explain the behaviour of a political party, or that ideas are the sole ‘triggers’ for political change, but rather that ideas offer political actors ‘interpretative frameworks’ that help them understand how the world works and develop blueprints that address particular problems.⁹ This is particularly true in moments of crisis and institutional change. As Mark Blyth put it, in these circumstances, ideas enable actors ‘to reduce uncertainty, redefine their interests, and contest and replace institutions’.¹⁰ Ideas can also be ‘facilitators of radical change and a pre-requisite of it’.¹¹

But if ideas can be agents of change they do not operate on their own. When developing a political agenda, political actors can be constrained by a variety of factors. One powerful constraint can be the dominant ideas of the time. As Richard Heffernan argued, it is within the prevailing orthodoxy that ‘political attitudes are forged’.¹² In other words, ‘prevailing orthodoxies’ set the parameters of political debate and often limit the number of options that can be considered plausible and viable. Political actors, no matter how authoritative and prescient, can only do so much.

Other constraints can be institutional arrangements, financial and fiscal constraints, public opinion, electoral considerations, and not forgetting Harold Macmillan’s famous ‘events’. It follows from here that political actors rarely if ever adopt ideas without transforming them and adapting them to the particular contextual circumstances in which they operate, and to the aims they seek to achieve. In the case of political parties, the process of developing a programme of government is heavily constrained by electoral considerations – that is, by power-seeking calculations. These electoral considerations impose on political parties the need to develop an electorally enticing or at the very least a credible programme of government that has the potential to result in an electoral victory.

Having in mind these considerations about ideas, interests, and institutions this book will map out the ideas – old and new – that were debated, adopted, and adapted by the Labour Party under Ed Miliband. In the process, it will explain how the interaction among ideas, institutional, political, and contextual factors informed the development of the Labour Party’s electoral blueprint.

The power of ideas

As a book that focuses on the role of ideas in the life of a political party, it will borrow liberally – as encouraged by Kathleen Thelen¹³ – from the literature on discursive and historical institutionalisms. Both ‘new instutionalisms’ emphasise the role of ideas in politics but they place different emphasis on their importance. Whereas discursive institutionalists see ideas as agents and stress their transformative role, historical institutionalists emphasise the role of structures as facilitators or as constraints to their success. Discursive institutionalists also see institutions as simultaneously ‘constraining structures and enabling constructs of meaning’¹⁴ but they pay far less attention to those institutions than historical institutionalists. I will now explain how I will use both approaches.

Like historical institutionalism, discursive institutionalism looks at ideas as agents of change but it is perhaps better placed to explain that process. Indeed, discursive institutionalism allows us to identify and to map what Alan Finlayson aptly defined as ‘political thinking in the wild’; that is, the way whereby political actors participate in the interpretation but also in the development of political ideologies.¹⁵ As a methodological tool, discursive institutionalism enables us to look at an often neglected facet of politics. By mapping out the ideas that inform and shape a political project we are able to look at politicians as ‘thinking’ beings and not just as strategic actors. That is, by mapping out ideas we are in a better position to understand how political actors think about and approach policy problems, how they develop proposals, and how they justify them to voters.

According to Vivien A. Schmidt, this is so because discursive institutionalism sees political action as ‘the process in which agents create and maintain institutions by using … their background ideational abilities’ and ‘foreground discursive abilities, through which agents may change (or maintain) their institutions’.¹⁶ As a result, discursive institutionalism sees institutional change as ‘dynamic and explainable across time through agents’ ideas and discourse, rather than largely static because of path-dependent and unexplainable moments’.¹⁷

The mapping of ideas – in particular of conflicting ideas – also sheds light on the distribution of power within political institutions. Stronger or more persuasive actors often present the winning arguments. In short, political change has the potential to occur as a result of a congenial ideational process. More importantly, the mapping out of ideational processes enable us to answer a few ‘why’ questions about the choices made by political actors.

Because discursive institutionalism emphasises the communicative and/or discursive processes whereby ideas are discussed, adopted, and adapted, discursive institutionalists prefer to talk about ‘discourse’ instead of ideas.¹⁸ Schmidt argues that ‘by using the term discourse, we can simultaneously indicate the ideas represented in the discourse … and the interactive processes by which ideas are conveyed’.¹⁹ In particular, it enables us to understand the process whereby ideas evolve ‘from thought to word to deed’.²⁰

Schmidt’s approach involves the tracing of different steps. First, it involves the use of a concept of discourse that includes not only what is said (ideas) but also the context of where, when, how, and why it was said. Second, Schmidt’s approach categorises ideas by degree of generality – policies, programmes, and philosophies – and type of content (cognitive or normative). While cognitive ideas provide recipes and guidelines for political action as well as justifications, normative ideas attach values to political action and legitimise the policies of a political programme. Third, she makes a distinction between two main types of discourse: coordinative, which is among political actors – and the communicative discourse, which is between political actors and the public.²¹

Alan Finlayson rightly pointed out a missing element in Schmidt’s analytical framework. Whilst she stressed the role of experts and political actors in ideational processes she overlooked what Finlayson identified as the intermediate public sphere, which is located between the ‘coordinative’ and ‘communicative’ discourses. This public sphere joins formal expertise with political activists, party supporters, and interested citizens.²² Finlayson’s intermediate public sphere is an important addition to Schmidt’s analytical framework; however, it creates too stark a distinction between the coordinative discourse and the public sphere. The links between the two, in particular in ideational processes that occur in political parties, is more fluid than Finlayson implies. The process of developing a political programme in the coordinative sphere often puts the policy expert, the political activist, and the elected representative together in the same seminar room. Thus, the output of these interactions is a joint effort.

The production of different types of discourses and ideas is carried out by a variety of actors: first, the epistemic community of experts, public intellectuals, and party intellectuals who prioritise issues and policy puzzles, provide cause–effect analysis and theories to policy puzzles, and in some instances can offer solutions;²³ second, political actors who include party leaders and other elected politicians, political advisers, activists, and influential media commentators; and third, the audience, who are the target of the communicative action of political actors. The process of mapping out this ideational activity involves, as Finlayson suggested, the examination ‘of how they do or do not connect with each other, and how they cohere as part of an evolving yet traditional ideology’.²⁴

By applying this analytical framework, discursive institutionalism enables us to identify and create a map of the political ideas that shaped a political programme, to ascertain whether the programme as a whole has some intellectual and ideological coherence, and to identify which goals it seeks to achieve. However, it does not offer sufficiently solid hermeneutical tools to evaluate whether and why the ideas in question succeeded or failed at provoking change. Schmidt seemed to be aware of this weakness. She argued that ideas need to be plausible, pertinent, and accepted by relevant actors; however, these elements seldom enter into her analysis.²⁵ And yet, considerations about power and administrative arrangements, as well as considerations about the ability of political actors to build coalitions of support for their ideas, are crucial to explain how they can be agents of political change.

Historical institutionalism helps to bridge this gap because it offers an explanation of the process of ideas-induced political change or stasis. For instance, Margaret Weir argued that in order for ideas to be agents of change, (a) they need to be available, (b) administrative and institutional arrangements should facilitate the diffusion of those ideas, and (c) relevant actors or coalitions of support must have a role in either endorsing or rejecting those ideas.²⁶ A neater formula is proposed by Peter A. Hall. Indeed, Hall argued that ideas can explain processes of political change. As he put it, ideas ‘can alter the composition of other elements in the political sphere, like a catalyst or binding agent that allows existing ingredients to combine in new ways’.²⁷ Hall also argued that some of the effects of ideas are unintended, as ‘new ideas have the capacity to change the very perceptions of those who wield them as well as the world itself in ways that their advocates often do not fully anticipate or desire’.²⁸

However, the power of ideas is not merely conditional on their innate qualities. As he argued, there are at least three external circumstances that can affect the power of an idea. The first is related to their ability to persuade. The ideas in question need to offer a plausible response to a current policy puzzle. For political parties this is a particularly important, if not difficult, condition, as they have to persuade voters of the appropriateness of their ideas in order to win power.

But persuasiveness is not merely dependent on the intellectual coherence of an idea or on its technical viability. Indeed, there are coherent and viable ideas that are difficult to explain. Hence, in Hall’s model, ideas also need to be comprehensible, and that comprehension is reliant on individuals’ ‘stock of knowledge that is generally conditioned by prior historical experience’.²⁹ Putting it differently, in order to be persuasive ideas need to resonate with people’s cause–effect understanding of policy problems and to a certain extent with their worldviews.

Finally, in order to influence policy, ‘an idea must come to the attention of those who make policy, generally with a favourable endorsement from the relevant authorities’.³⁰ The endorsement of new ideas that can potentially result in the movement from one paradigm to another will depend, according to Hall, ‘not only on the arguments of competing factions, but on their positional advantages within a broader institutional framework, on the ancillary resources they can command in the relevant conflicts, and on exogenous factors affecting the power of one set of actors to impose its paradigm over others’.³¹

There are other external circumstances or conditions that limit the ability of political actors to adopt new ideas. Political actors, and in this case party leaders, are also constrained by the traditions, the rhetorical styles, and the rituals and values of the institutions they represent. From here it follows, as suggested by Finlayson, that political actors need to formulate ideas and policy proposals that are congruent with the ideological tradition of their parties.³² The reason is simple. If parties leapfrog ideologically, they can lose the trust of voters.³³

This being said, political parties as carriers (though they are also interpreters and makers) of ideologies can be – and indeed are – selective in the use of their party’s ideology and traditions. This is so because ideologies are flexible and sufficiently ambiguous to allow for these movements. To use Michael Freeden’s fitting expression, ideologies can be ‘trimmed to fit within an institutional framework’.³⁴ As historical organisations, political parties use their ideological repertoire to respond to particular contexts. In so doing, they reveal interesting aspects of their thought processes but also of their programmatic aims. For example, New Labour used the traditions of ethical socialism to articulate a new role for the State that dovetailed with the requirements of the neoliberal economy, whilst the Labour Party under Ed Miliband used the traditions of guild socialism, mutualism, and the New Left to articulate a critique of unregulated capitalism and of the unresponsive State.

Mapping the development of Miliband’s agenda

Interweaving Schmidt’s discursive institutionalism with Weir’s and Hall’s analytical frameworks to determine whether ideas have succeeded at provoking change, this book will look at the discursive activities centred around the leader of the Labour Party and around the party’s frontbench team. The purpose of the exercise is to map out the ideational processes that led to the development of the political agenda of the Labour Party under Ed Miliband from (and following Schmidt) ‘thought, to word, to deed’. This will involve, in a first stage, the mapping of coordinative discourse that takes place in the policy and public sphere, and, in a second stage, it will examine the party’s communicative discourse targeted at the public.

The focus on the leader of the Labour Party reflects the fact that Labour is a highly centralised party. The leader and his group of advisers are in almost full control of the policy-making process. Party members, backbenchers, and activists have little influence over policy-making and have often complained about it. According to Richard Heffernan, ‘the last four Labour manifestos were written by – or for – the leader’s office with the Labour Party at large – its conference, national executive or National Policy Forum – merely consulted by being provided with a fait-accompli’.³⁵ Despite Miliband’s difficulties in imposing his authority and vision on the party, there is little evidence that he changed this modus operandi. Indeed, the drafting of Labour’s 2015 manifesto followed a similar pattern. The process of policy renewal was long, and involved a wide party consultation process, but the manifesto was drafted by Miliband’s team.

However, the predominance of the leader does not imply that he can impose his vision on the party. Not even the most authoritative and strong leader is able to do that. In the case of Ed Miliband, this book will show that he compromised his policy goals with the members of the party’s frontbench team and with powerful party factions in a number of areas in order to obtain their support. In some instances, the process of securing support for his ideas delayed the development of his programme. In others, it blurred the shape and contours of his agenda.

In order to explain how certain ideas shaped Miliband’s agenda from ‘thought to word to deed’, I will examine both the coordinative and communicative discourses deployed by the Labour Party leadership.³⁶ In other words, I will analyse how certain ideas arrived within Labour circles; how they were discussed and interpreted by Miliband and his advisers, public intellectuals associated with or close to the Labour Party, think-tank reports and researchers (mainly from the Institute for Public Policy Research (IPPR), the Resolution Foundation, the Policy Network, and the Fabian Society), party groupings, and some salient activists (such as Compass, LabourList, and Progress); how they were adopted and adapted by Ed Miliband and the shadow cabinet in their communications to the public; and finally how they were transformed into policy proposals. For that purpose I will analyse speeches and articles from politicians, think-tank reports, activists’ blogs, and publications, as well as some interviews that I conducted with members of Ed Miliband’s inner circle, Labour politicians and activists, and researchers from think-tanks close to the Labour Party.

It is important to bear in mind that this ideational activity did not happen in a vacuum. It reflected but was also conditioned by a particular political, ideological, and economic context. In addition, Labour’s ideational activity was also limited by electoral considerations and institutional constraints. Indeed, one important ideational constraint was the dominance of the austerity paradigm in British and European politics.³⁷ Though there is little evidence that austerity policies are successful at eliminating public deficits,³⁸ the neoliberal paradigm, which fathered the austerian response to the debt crisis, was dominant at the time when the Labour Party was developing its post-2010 programme of government. As will become clear in this book, this proved to be a major obstacle that severely hindered Miliband’s attempts to develop a credible programme of social democratic renewal. It turns out that other social democratic parties faced a very similar constraint.

The parties of the Coalition Government, influential commentators, international institutions like the EU and the IMF, and even important sections of the Labour Party fully subscribed to the idea that the public deficit was the most important economic problem facing Britain and that austerity was the most plausible response to it. The prevailing belief in austerity at this time had almost a coercive effect, in the sense that it became almost unchallengeable.³⁹ It also had, as Blyth argued, a persuasive simplicity that resonated with individuals’ experiences of domestic economy and public perceptions of how debt could be eliminated.⁴⁰

By contrast, Keynes’s ‘paradox of thrift’, which explained why austerity did not work,⁴¹ was difficult to grasp. It did not help that Conservative politicians and commentators used the language of domestic economy to discuss public finances. References to how the previous Labour Government had ‘maxed-up the nation’s credit card’ were never followed by the explanation that public finances cannot be compared to citizens’ personal balance sheets because the State has other resources. It also did not help that Labour did little to challenge this facile but misleading idea. Nor did it help that Labour’s response to the deficit was confused and intellectually incoherent as it simultaneously embraced ‘austerity lite’ whilst claiming that austerity did not work.

Some of Miliband’s proposals also lacked Hall’s ‘comprehensibleness’ – that is, they were not easy to grasp. Ideas such as pre-distribution, the relational State, liberal nationalism, or the entrepreneurial State galvanised Miliband’s highly intellectual inner circle of advisers and promoted a creative buzz in think-tanks and academic circles, but they were not easily translated into attractive and easily understood policy proposals on