The lesson for Labour in the social fund fiasco

Stuart Weir (Cambridge, Democratic Audit): Gordon Brown may have rediscovered Keynes and his nerve, but the politics of his government remain rooted in what has always been old-fashioned as well as neo-liberal about New Labour.  There is a tendency in commentary to attribute this to Lord Mandelson’s re-birth; he may or may not be the Darth Vader of old – let’s wait and see –  and some have seen a turning towards what we can loosely call “the public”, but he clearly reinforces Brown’s own impatience with anything that stands in the way of “growth”.

There is also a pervasive sense that the government has lost the traditional values that Blair used always to assert remained at the heart of New Labour – by which I mean a sense of communion with “ordinary people”, and especially the working and workless poor.  Brown’s abolition of the 10p tax rate shook many people’s belief in his government’s commitment to social justice and it has clearly not been restored, despite his insistence that his bold economic response to recession is designed to protect ordinary people’s lives and jobs.   

The controversy over the plan to charge interest on social fund loans reveals starkly just how far Labour has strayed from its old value base. Mrs Thatcher created the social fund in the 1980s as an alternative to the discretionary grants for which claimants in especial need were eligible. It was a mean money-saving device that saved marginal amounts of money at the expense of the poorest people in our society. To charge interest on these loans now would probably never have been politically possible.  But the fact that it was even being considered by civil servants and ministers is shocking enough. For Brown and Mandelson, it ought to be even more shocking, and salutary, to accept that most people seem to believe that the government may have gone ahead with it in the midst of a recession.   

Yet at the same time there are signs as politics is being shaken up that the generally old left in the parliamentary party and the rump of party members outside is being revived in progressive as well as traditional directions.  Take for example the incipient rebellion over the third runway at Heathrow that envisages a cross-party alliance in the Commons which may inflict a principled defeat of the government; and another possibly over the proposal to sell off the royal mail that looks also to inject new life into the Post Office.  There is here some sort of fusion between the party’s old belief in the public sphere, a rejection of divisive private solutions, and a new concern for the environment that could reinvigorate the party on which Brown and Mandelson must ultimately rely.  If only the party could also firmly grasp the democratic renewal that Brown falsely promised in 2007 and reject the data-base state and the anti-terrorism politics of fear..