Labour can now seize its moment
Britain is experiencing a once-in-a-generation political sea change, and the Tories know it only too well
Jim Callaghan would have had some sympathy for Theresa May. Back in 1979 when Margaret Thatcher was on the brink of power, the Labour prime minister summed up what it was like to feel authority slipping away. “There are times, perhaps once every 30 years, when there is a sea change in politics,” Callaghan said. “It then does not matter what you say or what you do. There is a shift in what the public wants and what it approves of.”
This was not the parallel with the late 1970s that the Conservatives were hoping the public would recognise. Indeed, all the old favourite tunes were sung lustily at their conference: runaway inflation, overmighty union barons, the run on the pound, the bailout from the International Monetary Fund and of course the Winter of Discontent. Speaker after speaker warned voters of what would await them should they be daft enough to elect Jeremy Corbyn as prime minister.
Much to the horror of Tory ministers, as they sought to conjure up memories of a dystopian 1970s, however, Corbyn seems to better articulate the new mood than they do. The attacks on Labour, coupled with the cherrypicking of some of the opposition’s policies – from building more council houses to a cap on energy prices – were a compliment to Corbyn, who is taken far more seriously by the Tories than he was before the general election. In Brighton, the mood was upbeat. By contrast, the Conservatives in Manchester acted as if they had lost. Which, in an important sense, they have.
The free-market thinktank Legatum published the result of a poll testing public attitudes, and was horrified to find that voters – including Conservative supporters – strongly support nationalisation of rail, water, electricity and gas. When the preferred adjectives to describe capitalism are “greedy”, “selfish” and “corrupt”, it is easy to see why Legatum concludes that the capitalist brand is in crisis. Against that backdrop, branding Corbyn a 1970s Marxist throwback or banging on about his support for Venezuela is not going to cut it.
Historically, there is nothing surprising about the current discontent. There have been three colossal economic shocks in the past 100 years, and each has led to a political shift. Postwar welfare states in the UK and elsewhere were the result of the Great Depression. The privatisation and liberalisation agenda of the new right emerged from the wreckage of social democracy, overwhelmed by inflation in the mid-1970s. Then in 2008 global capitalism had its near-death experience, and only survived because governments used taxpayers’ money to bail out the banks. The failings of a model built around deregulation, debt and a shift in economic power from labour to capital were brutally exposed.
The final piece of the jigsaw was provided by Brexit. Had the vote gone the other way in June 2016, Cameron would still be prime minister, the Conservative party would have remained united and the fundamental weaknesses of the UK economy could have been papered over for a little longer. As it is, the referendum vote has done Labour an enormous political favour by unleashing resentment at a rigged economic system.
Brexit will also mean facing up to the long-term problems of the economy: a chronic balance-of-payments deficit, the concentration of growth in one corner of the country, the dearth of investment and a growing productivity gap with other developed countries.
There are parallels with the events of 25 years ago, when Britain crashed out of the exchange rate mechanism on Black Wednesday. The ill-fated experiment lasted only two years and resulted in a scramble to fill the policy vacuum. Filling the current vacuum is not going to be easy because the financial crisis and Brexit have shattered the assumptions on which UK economic management was based: that free markets always deliver, and that Britain’s future was as part of the EU. Both left and right face the challenge of how to fill the void.
Labour’s response to Black Wednesday was to move to the right under Tony Blair, symbolically ditching nationalisation and accepting the disciplines of the global market. Corbyn has moved to the left, confident that this is a once-in-a-generation moment when the country is ready for radical ideas. The Tories, judging by the way they are behaving, think he is on to something.