[A-List] UK state: New Labour succession battle

["Michael Keaney" <michael.keaney@xxxxxx>]

Holding my nose as I forward you this latest farrago courtesy of John Birt's
chum, Ms Toynbee, the choice of topic is very instructive about the clarity
of thought among those who are now prepared to contemplate Tony's departure.
His succession poses a problem for the state, which must find a safe pair of
hands able to carry the party with it. Peter Hain was the first senior New
Labour politician to break the taboo over speaking out on progressive
taxation and redistribution, much to Tony and Gordon's collective distaste.
Now here comes Polly with a stern message, and one which interestingly
chimes with the essence of Hain's earlier outburst.

-----

Be brave. The only fix for poverty is to tax the rich

Labour must build on its success, and aim for radical redistribution

Polly Toynbee
Wednesday February 4, 2004
The Guardian

How much has Labour made its own weather? Has it changed the climate of
British opinion, the way Margaret Thatcher hauled the country rightwards?
Maybe not on law and order, but Labour has stamped its imprint on social
justice. Labour language is now common parlance among Tories extraordinarily
eager to talk about poverty and how to tackle it: not long ago they denied
its very existence. The terms of political engagement between the parties
are now drawn up firmly on Labour turf.

Yesterday the Joseph Rowntree Foundation, celebrating its centenary as the
great funder of poverty research, gathered a powerful array of politicians,
academics and civil servants to discuss a strategy for the next 20 years.
Five thinktanks covering the political spectrum made their proposals.

But David Willetts, shadow work and pensions secretary, was the man to
watch. See how far his party has travelled since the time of Tory hegemony.
Listen to the careful emollience and the surprising promises he (nearly)
made. Naturally Rowntree, ever-optimistic despite a century of toiling in
the weary groves of social deprivation, was eager to draw out every sign of
a growing consensus between the parties. And there was certainly a new unity
in tone of voice (though it didn't take a hall full of poverty professionals
to decode the vital differences in substance).

Start by remembering Mrs Thatcher's no-such-thing-as-society days, winning
votes with rowdy rants on welfare scroungers. The millions of unemployed of
the 1980s were layabouts. The widening gap between rich and poor didn't
matter because wealth trickled down. Redistribution was the politics of
envy. Attacks rained down on single mothers getting pregnant to jump the
housing list. Indeed, single parents were the cause of all social evil.
Anything paid to this poorest group risked encouraging a stampede to join
them in their enviable economic status.

The feckless poor were castigated with greater fervour at every party
conference, to roars of Tory rank-and-file approval. Everyone (Labour too)
thought the votes were in being nasty.

Now compare this: John Major's unpleasant little dictum is reversed in the
title of the contribution chosen by Policy Exchange, the Tory thinktank:
"Condemning a little less and understanding a little more". Its important
statement is this: "Inequality does matter". Relative poverty measures are
the right approach, and the existing poverty measure is accepted. It even
says that 60 per cent of the poor cannot work, so they should get higher
benefits.

The authors even want a much more generous social fund, that doesn't run out
of cash, to give cheap loans to all the low paid so they can escape the loan
sharks. David Willetts now says being poor means not having enough money: he
worries about the take-up of the government's tax credits. He worries a lot.

So afterwards I asked him if the Tories would need to have a poverty target
of their own at the next election. Yes, he said; the party would need a
target to prove it was just as sincere about social justice. So the long
ideological battle has been won: the Tories admit that it does matter how
wide the gap is between top and bottom.

That was unthinkable seven years ago when Peter Lilley cut lone-parent
benefits as a tormenting elephant trap, to test whether Labour would really
keep to every jot and tittle of Tory spending and cutting plans. Labour did.
It shadowed the Tories every step of the way. On social policy, the boot is
on the other foot: Labour are the masters now.

So what can the Tories say to the mighty programme for universal children's
centres for under-fives now being drawn up as Labour's manifesto
centrepiece? I asked a leading Tory shadow cabinet member: "Yes, it's a good
idea, tackling poverty at its source. We know it's the early years that
count - but isn't there some Tory way to do it? Private sector or voluntary
groups or something?" The answer is: no, there isn't. This is very
expensive, even with parents contributing according to means. But once
middle England voters understand it means affordable childcare for every
family, as well as saving poor children from failure, the Tories will have
to go along with it too.

This is about winning elections, but wolves rarely change their spots, never
mind the sheep's clothing. Willetts, Yeo, Curry, Ancram and others present
the party's softer face, but the fangs are there, if well hidden. Willetts
does a noted comic turn reeling off the complexities of Gordon Brown's
devilish clever schemes. His sallies against the New Deals imply every
Labour programme failed. (Finding defects in benefit regimes is disarmingly
easy, since every system has its perverse incentives and awkward poverty
traps but, as Frank Field found, it is much easier to critique than to
construct something better.)

In a clever and teasing reversal, Willetts has made the Tories the
universalists now: he makes the attractive Beveridge appeal to promise the
same universal benefits to all classes and incomes. His pledge to raise the
basic state pension is seductive, cutting the "complicated" tax credits the
poor dears don't understand. It sounds magnificent: didn't Barbara Castle
demand it for years? But the net effect is to shift tax credits from poorer
pensioners to give richer pensioners a bigger non-means-tested state
pension. That's good electioneering, as better-off pensioners vote Tory,
while poor families don't vote at all. It leaves Labour as the party of the
hated means test, because it's the fairest way to get large sums to the
neediest. A Tory promise of high universal benefits for all sounds nice, but
underneath it's nasty.

Labour watches the Tories cross-dressing in caring, sharing clothes with
some pleasure, since it rubs salt into the Tories' deepest dilemma. Do they
go for tax-cut bribes - or for shadowing Labour? If their polling tells them
they must sound as if they really care about social justice, then they can't
offer tax cuts as well.

But before gloating at their discomfort, the government has its own
manifesto dilemma. Rowntree's bleak estimate is this: if Labour really wants
to abolish child poverty by 2020, it will have to redirect money from rich
to poor radically. The income of the bottom 10% will have to rise at three
times the rate that it rises for the top 60% of the population for the next
two decades. Is that politically saleable? It would take a lot more taxing
the rich and a much higher minimum wage. The wind may have changed in
Labour's favour, but no one has begun to prepare voters yet for
redistribution on that scale.

It can be done: the Nordic countries prove it. Has Labour the nerve to make
the case and make it happen? At least Tory rhetoric suggests that the social
justice argument has shifted leftwards.