Tuesday, 13 December 2011

Black Labour?

The somewhat Gothic-sounding "Black Labour" appears to be the latest colour-based movement in British politics, following the Red Tories and Blue Labour.

The movement, insofar as it is a movement, has been launched by a document published by the think-tank Policy Network, accompanied by various other initiatives, including an article in the Guardian.  Its authors are Graeme Cooke, a former Labour policy wonk, Adam Lent, who was the TUC's chief economist, Anthony Painter, a journalist, and Hopi Sen, a former Labour spin doctor.

Black Labour is essentially about promoting fiscal conservatism within a progressive political setting as a means of restoring Labour's reputation, shredded by the recession, for economic competence:
There is nothing right wing about fiscal conservatism. It simply means that those from whom the state borrows can have absolute confidence that it will meet its obligations to repay, come what may. This means adopting an approach which is careful, risk averse, and cautious....

Nor does fiscal conservatism mean failing to respond to an economic crisis. As we on the centre-left are not naïve enough to think markets are perfectly stable phenomena, we recognise the state will, on occasion, be required to step in to prevent collapse....

But being in a position to respond to a crisis requires preparation, usually by avoiding deficits in the good times....  [E]ffective Keynesianism requires fiscal conservatism.
The authors are not advocating the right-wing desideratum of a small state: fiscal conservatism doesn't mean limiting government spending to an arbitrary percentage of GDP.  What it does mean, however, is accepting the principle that the country has to pay for what it spends, and that there will be less money around in future because of falling tax revenues and an ageing population.  The authors go further and note that progressive politics is not simply about public spending: it is about "[s]tructural or institutional reforms, which affect the causes of inequality and injustice".

Much of this is inoffensive stuff, and difficult to argue with.  As Ed Miliband hinted in his conference speech, any future Labour government will inherit the same straitened economic circumstances that are currently strangling George Osborne, and it will have to accept and prepare for the fact that the public spending strategy of the 2001-2006 period cannot be repeated.  On the level of principle, there is no necessary conflict between maintaining budgetary discpline and implementing socially progressive policies.  It has been pointed out that the iconic socialist Attlee government of 1945-1951 ran fiscally conservative policies in the aftermath of a world war that all but bankrupted the country (as, more recently, did the liberal Clinton administration in the US).

The main problem with Black Labour is that it is what Francis Maude calls a policy flavour rather than a concrete programme.  It is highly lacking in specificity.  Sen has candidly admitted this, as has Lent.  True, there are some specific suggestions in the paper.  The authors propose burying Gordon Brown's budgetary rules, and suggest that "one option might be a commitment to deliver a surplus on the public finances towards the end of a concrete timescale such as the lifetime of a single parliament".  But these tentative suggestions are few and far between.  Passages like the following are highly vague and non-specific:
Labour should be shaping this debate by developing detailed policies on how ideas such as a state investment bank, innovation-focused public procurement, reformed taxation, stronger consumer rights, and greater competition can be used to give the UK’s most innovative entrepreneurs real support while also improving pay and social mobility....

Underlying this is the recognition that welfare mechanisms are never preferable to a genuinely productive and balanced economy that raise the living standards of those on low and middle incomes. In the coming decade, the extra resources New Labour found to compensate for market-based inequality won’t be available. So deeper and more ambitious reforms must be confronted to ensure the economy works for working people.
Black Labour has already started attracting criticism.  Inevitably, it has been seen as a rearguard action by New Labour against the Miliband dispensation, though this has been firmly denied.  A piece on Liberal Conspiracy identifies four weaknesses in the project.  An article on Labour List has argued, with much justice, that fiscal conservatism is a red herring because the current state of the public finances is largely attributable to the recession rather than to indiscipline on the part of Gordon Brown's spending policies.

I wonder where this new movement will go.  It's not clear whether Blue Labour has a long-term future, though David Lammy's new book has been described by the FT as the movement's "first proper manifesto".  And who talks about Phillip Blond now?  It will be interesting to see if the Black Labour chaps are still around in 6 months' time.