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It’s party conference time, and as is customary the debates have begun about the internal mechanisms of each of the parties. The Liberal Democrats have questioned the leadership and direction of Charles Kennedy’s tenure. The Conservatives are not just discussing their leadership race but have also discussed how they are going to discuss their leadership. No wonder they call this the silly season.

The most important debate without doubt, is the ongoing one within the Labour Party, or more accurately within the New Labour Party? Labour having secured its third consecutive term of governance is looking to cement control and pave the way for a smooth succession once Tony Blair abdicates.

There are however, as Neal Lawson outlined in the pages of The Guardian, more ideological decisions that cannot be ignored. The festering divisions within the Labour Party will over the course of this government be squared. No longer can the Socialists and Blairites be reconciled; no longer can the ideological schism be papered over in the spirit of ‘unity’. Labour must decide who it is, where it wants to be, and more importantly how it plans to get there.

As Lawson argues:

New Labour has refused to create a progressive electorate in the image of left values. Ten years on it still panders to the Daily Mail and Rupert Murdoch. Enlightened neo-liberalism is as good as it gets for neo-Labour. Now is never a good time for them to be progressive because they never want to be. Every measured word Brown now utters is not to win the leadership (that’s in the bag), but the next election. Briefing to the right in the Sunday papers and talking left to the Labour conference on Monday is a worrying sign that the Labour tent will never be strong enough to resist the political winds.

When we assess a political dynasty we look to irreversible reforms that will shape the future. What long-term legacy can New Labour point to? Thatcherism fundamentally changed British Politics. Thatcher began the dissolution of council housing with the Housing Act of 1980 (Right to Buy), which meant that more working class people were buying their own homes. Home ownership created a society where individuals have assets, which ultimately contributed to our high-debt society; families are now increasingly subjective to market conditions as they now have a stake in the economy.

In practice ‘Right to Buy’ created a generation of Economic Conservatives.

Gordon Brown, the likely successor to Blair, is undoubtedly an advocate of Thatcher’s ownership society. Speaking from a central London nursery in April of this year Brown explained the ideological foundations of his Child Trust Fund initiative:
But the new frontier for children is about more than income and a wider range of services; it is about insisting that in future not just some but all people have assets too.

With an initial investment of £250 per child and £500 for poorer children the child trust fund will ensure in time that at 18 every single teenager and not just the richest will have their own fund to invest as they choose in their future.

This rather perverse brew of government provided capital to be invested into the market is endemic of Blair’s take on Third Way politics, which looks to marry social provision and fiscal conservatism. The Third Way is the consensus politics of management not philosophical leadership; this leaves New Labour without a utopian dream. While Ordoliberalism is the most effective economic model in providing economic growth while maintaining or improving social stability, it lacks a clear tendency to indoctrinate the electorate.

This inability to create a generation fuelled by ideology is why ultimately the Clinton era (another Third Way administration) failed the Democrats, when Clinton’s two terms were up the electorate had little ideological reason to remain with Al Gore. When the great communicator Blair steps down why should the country rally to Brown’s cause? In management politics – devoid of ideals – it’s not parties that win elections, but Leaders. The dour Scot may well find himself up against a charismatic leader such as Ken Clarke; whom will the voters warm to? There is no doubt that without an ideological belief in their government voters are more likely to be whimsical during elections.

Either New Labour must define itself – inevitably shedding obdurate socialists – or shift decidedly back to the left.

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The major problem with the Social Market Economy is that it’s invariably Socialists, who see the centrist compromise as a clear path to electoral success, who adopt it. When Tony Blair bewitched Labour with the chance of success, they sold out their commitment to collectivism for a taste of power. Those Socialists remain in the party, frustrated by the lack of progress in addressing the inequalities of the Thatcher government, their dissent growing louder at every annual conference.

This contract was a two-way compromise; Blair had to ensure that the left of the party was placated; after all he needed the Labour Party as much as they needed him.

The Third Way followers needed a vehicle to gain power, and the post-Kinnock Labour Party – having been devastated by the death of new leader John Smith – was rudderless and had failed to deliver an election win for two decades. The marriage of mutual necessity was consummated in 1997 when the first of New Labours landslides promised a brighter future for Britain to the chorus of D:Reams Things Can Only Get Better.

As the years of sound economic growth, and slow progress in reconciling the inequalities left by the neo-liberal excesses of the eighties passed, the realities of government began to toll. Old Labour backbenchers began to question the pace of reform and the lack of delivery in remedying the vast disparities in wealth. They revolted against market led initiatives in the NHS and state infrastructure, which they saw as selling-out. Blair’s huge majority looked more and more precarious with every contentious parliamentary vote, he was losing the heart of the Party.

When Blair aligned himself with Bush’s Republican Party, in the hope of maintaining the Special Relationship that he had fostered during the Clinton era, Blair lost many of the modernisers that had supported his reforms. In spite of deep misgivings within his party Blair also followed Bush into Iraq, further marginalising not just MP’s, but grass-roots Labour supporters. Membership since 1997 has slumped to 200,000 (from a peak in 1951 of a million); the financial implications of this demise in support, and the migration of funds from the trade unions, have meant the revenue needed to support a C21th political party is simply not in place. New Labour has increasingly had to cosy up to corporate donors for sustenance, which has further marginalised support.

The debate within the Fabian Society – the intellectual power behind the democratic Labour movement - is one of dismay: -

“If that decline were to continue unabated, the last party member would be turning out the lights by around 2010.”

[…]

Fabian General Secretary Sunder Katwala and Research Director Richard Brooks blamed a “mutual distrust” between party leaders and activists.

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So in which direction should the Labour Party take? Should they return to their historical position as the home of British Socialism, or continue the path of centrist modernisation?

The problem with this third-term Blair government is that it has been bitten by reality and the grand promises of 1997 are destined to be unfulfilled. Two decades of Conservative rule had left the public services horrendously under-funded, with a culture of obstinacy. Even with a Labour government in power the public sectors were never going to welcome the business world concept of performance measurement, intrinsic to the ‘accountable’ politics of the Third Way. The adage “what gets measured, gets done” did not placate the heavily unionised teachers who felt their profession undermined by league tables. Blairism was starting to grate with the unions.

Tangibility is vitally important in instigating change. Changes – however incremental – must be monitored to ensure goals are reached. Modern business techniques are built on the concept of measure, report, review, and react; this enables change to be implemented via an adaptable organic process. This proven technique comes unstuck in the world of politics, as its greatest asset becomes its great liability. The problem with targets (the foundation of performance management) is that they can be missed.

Politics is characterised by grandiose promises and the subsequent avoidance of accountability. When performance is measured in tangible terms, the public and more perilously the media can hold politicians accountable. When you promise to eradicate poverty and improve literacy you can’t hide when your own statistics point to failure. If only Labour had suffered a more competent opposition they could have been ridiculed and discredited on their record of delivery.

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So where does this leave New Labour? Should they sate the hunger of their leftist backbenchers and return to their roots, if they do they must relinquish the centre ground, allowing other parties political oxygen. Liberal urbanites will undoubtedly flock to the Liberal Democrats, unable to accept the social excesses of a traditional Labour government, yet equally turned off by the party of Thatcher. Those who remain, those whose priorities begin and end with mortgages, children, and holidays in the sun, will return to the Conservatives.

Labour must rediscover the Third Way ideology that propelled them to power in 1997. It must dislocate itself from the discredited Blair, whose war in Iraq has damaged both the party and our international reputation. While Blairism should be embraced, Blair himself should be put out to pasture. Blair’s time is gone; Labour must make a clean break.

There is no doubt that Brown is surrounding himself with talented individuals. Ed Balls and Ed Milliband look set for key roles. Blair has surrounded himself with compliant apparatchiks, and has become disconnected from reality. Brown must engage with the public, he must reconnect. If he does not reconnect he will lose the next election.

Of course by severing its socialist links the party will suffer a further decline in membership, and some of the more determinedly leftwing MP’s may leave. But this is the difficult choice ahead, and one that cannot be avoided any longer. It must move forward not back, it must be a party for the twenty-first century not the twentieth.

Furthermore the Third Way acolytes must find their Utopia, and define who they are. Merely occupying the centre will not be enough; they must claim it for good. Only a future where the benefits of the market are enjoyed, but its inevitable inequalities are addressed, can be a real progressive future. Ordoliberalism is the only choice for developed western democracies, and if Labour does not remain the Third Way party of Britain then another party will adopt it and sail to power. A Brown government needs bright, energetic, and adaptable ministers who can achieve targets and deliver change. No more spin and excuses, Labour needs to start delivering or the electorate will give up on the Third Way for good, returning to the economic instability of the diametrically opposed ideologies of market fundamentalism and socialism.

So while the other political parties are having a dialogue with themselves, New Labour must have a dialogue with the British People and define the Ordoliberal Utopia of market-led efficiency and social responsibility, a Utopia of respect, tolerance, modernity, and progress.

Can you see the future?

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