Corbyn Labour
14 March 2019
14 March 2019,
 Off

It will probably be looked back on as one of the paradoxes of the Corbyn era that, in 2017, a leader who lacked a majority among Labour MPs and on the party’s national executive committee was nevertheless allowed to have the manifesto he wanted.

When all sections of the party gathered to discuss Labour’s election platform on May 11, 2017, a draft of it had already been leaked and most national newspapers were in overdrive attacking its plans to bring water, rail and parts of energy into public ownership.

In characterising it as “dragging Britain back to the 1970s”, the media was misreading the electorate. Opinion polls had consistently shown strong support for public ownership, and many voters did not see the pre-Thatcher 1970s as the dark ages.

But that was not the view of those Labour MPs who believed governments should leave markets largely to their own devices. When Chris Leslie served briefly as shadow chancellor in 2015, he said Labour had failed to win that year’s election because Ed Miliband’s manifesto suggested the party was “pining” to nationalise “the commanding heights of the economy”.

So why the silence in 2017? The conclusion many of us reached at the time was that MPs opposed to Corbyn had decided to let him hang himself on his own policies. They assumed there would be a repeat of 1983 – when Labour’s manifesto was dubbed the longest suicide note in history – and that a cataclysmic election defeat would force Corbyn to resign.

That, of course, did not happen. On the contrary, the manifesto was widely viewed as the star of a campaign that delivered the biggest advance in Labour’s share of the vote since 1945. Such was its popularity, very few people in the party have, until now, challenged any of the policies in it.

But it was always obvious that the internal opposition to Corbyn over the last year or so was underpinned by a largely unstated policy agenda. And we can now see what that looks like, courtesy of Chuka Umunna.

In sharing his thoughts in a 50-page prospectus last week, the spokesperson for the Independent Group has given us a clearer picture of ‘centrism’ for the 21st century.

The headline grabbers were a proposal to introduce national service to give young people “a taste of the forces” and a claim that scrapping tuition fees would be a waste of money. Umunna estimates the latter would cost £11 billion a year, but he has no qualms about the affordability of spending an extra £18 billion to take military spending to 25% higher than the NATO target and 40% higher than its present level.

However, the differences between Umunna and Labour go beyond spending priorities. In discussing the economy, the prospectus takes aim at the 2017 manifesto’s plans to bring some of the services sold off during and since the Thatcher era back into public ownership.

It claims this “old school renationalisation” would for water alone cost £60 billion, a figure that must be random because Labour says compensation would be subject to consultation and decided by Parliament.

So, what does Umunna offer an electorate he admits is dissatisfied with privatised services? The answer appears to be a magic wand: he says a progressive government would legislate to force companies to give public benefit precedence over profit making. This would, he insists, “achieve the goal of public purpose without costing the public purse a penny”.

If this was being proposed a left-wing Labour activist, I would say it sounds like a revival of Militant’s nationalisation without compensation. Coming from Umunna, it is a sorry piece of spin. He knows the owners of capital aren’t going to forego their profits in a fit of altruism, and his idea of ‘force’ won’t include anything that risks their hostility.

His policy fails the basic test that, when something seems too good to be true, it probably is.

This is not to say that the idea of ‘public benefit companies’ is itself to be dismissed. Indeed, Glas Cymru, which operates Welsh Water, is similar in being a company limited by guarantee that has no shareholders and recycles its profit into investment.

But Glas Cymru’s history illustrates the absurdity of Umunna’s claim you can do this at nil cost. In 2001, it had to buy the assets of Welsh Water from Western Power Distribution, a US owned electricity company, by raising £1.9 billion through a bond issue – which is exactly the fund-raising method proposed by Labour.

Glas Cymru is not ideal – its self-perpetuating board membership and high levels of executive pay are at odds with Labour policy – but it scores consistently well on customer satisfaction and keeps price rises below inflation. It has also paid out £180m in customer dividends since 2001, in marked contrast to the huge sums going to shareholders of utilities in the private sector.

To my knowledge, no one in the Labour leadership has ever argued that undoing the damage inflicted by decades of privatisation would be easy or achieved without one-off capital costs. But we have to start somewhere – and soon – because our public services have been treated as cash cows by the private sector for too long and are stumbling from one crisis to another.

Labour’s manifesto argued that democratic ownership structures would help our economy deliver for the many and lead to a fairer distribution of wealth. Over the last two years, we have seen inequality increase and the failings of privatisation intensify – spectacularly in the case of Carillion.

If Umunna’s prospectus leads – at last – to some serious discussion about policy, including inside the party with Tom Watson’s Future Britain Group, my view is: bring it on.

Steve Howell

Steve is a former Corbyn adviser and author of Game Changer: Eight Weeks That Transformed British Politics.

 

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