General Election 2017 - Labour Manifesto: Stepping up the role of the public sector

Labour's manifesto, For The Many, Not The Few, proposes a major rethink of the role of the public sector.

At the core of Labour's 2017 manifesto is the role of the public sector. It has a place at the centre of all the party's ideas on how to rebalance Britain's economy.

Labour has promised to be "radical and responsible", to end the years of austerity but to do it "within our means", to address a "growing sense of anxiety and frustration. For the Labour leadership, as represented in this manifesto, that means rethinking the government's approach to public and private, and to restore the public element.

That puts Labour in stark contrast with the Conservatives, and fundamentally questions the government's approach - that would strip away the public in favour of the private. As Labour announced its plans in parts over the past couple of years, there was a surge of criticism for the idea of any policy that would see more public spending. The austerity thinking that public debt, government debt, is a burden that must be lessened has been wielded against Labour at every turn.

There remains a strong current, despite the slow discrediting of austerity economics, that clings to a fawning infatuation with the idea that public debt, not underinvestment, will blight the future and that the market is the great innovator. But, as the economist Mariana Mazzucato has argued, this is at best a half-truth.

In reality, public sector plays the role of innovator and risk taker, not just shaping markets but opening them. Meanwhile, private actors are aggressively risk averse, even stifling innovation, all while opportunistically exploiting the publicly-funded advances - taking the credit and returning little of the wealth created.

A New Public Role

This Labour manifesto seizes upon that idea: an innovative public sector that can take the initiative and intervene, without overbearing state management, to invest and promote growth and support innovation in the name of the common good.

It proposes a National Transformation Fund, for instance, that will invest £250 billion over ten years in improving the country's infrastructure, aimed at promoting and speeding along future economic growth. It pledges improvements to transport links, for renewable and low carbon energy, and an industrial strategy that invests in creating and enabling a high-skill economy.

And, of course, there are the pledges to 'renationalise' energy, rail and water. Having come upon this word, a moment needs to be taken to reiterate something. The word 'renationalise' has been used for Labour's plans, but isn't entirely accurate. The Left (as a positive) and the Right (as a negative) have both used the word, but to be clear: Labour's plans don't propose costly industry takeovers by the state.

Remember: state-ownership is just one form of public-ownership, but it is not the only form. There are municipal, community and co-operative models that are also public options that do not require or propose centralised state management - whether you think that would be a good thing or too overbearing and inefficient.

As for the cost of 'renationalisation'? Well, a rail franchise will lapse at no cost and new public rail and energy companies, while requiring startup, would have the capacity to be self-supporting. In short, 'nationalisation' is a crudely charged word that hides a lot of potential nuance.

In Labour's actual manifesto, the focus is on democratic ownership of the economy. For instance, the party propose a "right to own" policy that makes "employees the buyer of first refusal". So when the party says it wants publicly-owned regional water companies, there is scope to think co-operative and community, rather than state.

As for rail returning to public ownership: it's already publicly-owned. It's just franchised out in pieces for companies to turn a profit from it. Returning these franchises on expiry is not a major outlay, though it could take time, and they could become self-supporting, employee-run services rather than being state-run.

Likewise, the party's plan for public energy is much smaller in scale than the 'renationalised' headlines suggest. Rather than wholesale takeovers, Labour have announced their intention to set up local, decentralised, publicly-owned energy companies to compete with the big energy corporations and lower prices.

The new role for the public sector doesn't end there. The party propose a National Investment Bank, that will work with private investors, to make £250 billion available to lend to "small business, co-operatives and innovative projects" across Britain - offering "patient, long-term finance to R&D-intensive investments".

The NIB's work in getting credit flowing again may be assisted by breaking up the publicly-owned RBS into a series of smaller, "local public banks" - pending a consultation on the proposal.

In housing, there is a public role too. Half of the one million new homes that Labour are promising will be housing association and council homes for affordable rents, promises the manifesto - with higher standards being set for the quality of homes.

The clear purpose behind this is to restore a sense of social security and of communities owned by the people who live in them.

That is why a rethought public role goes hand-in-hand with promises of new rights and protections for renters, a National Education Service that brings childcare, comprehensive education and free higher and further education under one coordinated heading, putting more funding into social care, and taking steps to protect workers by tackling insecure and precarious jobs.

It also chimes well with the proposal to make active use of the national and local spending on procurement of services from the private sector. That means using a bill amounting to £200 billion a year to promote, and invest in, good jobs based in local economies at businesses run to high standards.

A £10 living wage, four more bank holidays, increased paid paternity leave and more secure contracts at work, indicate an intention to create a less precarious everyday environment. While funding ten thousand more police officers and strengthening laws around domestic violence and violence against women and girls, demands that these rebuild communities be safe spaces.

There is even a nod to restoring some judicial oversight to investigatory powers - though the word 'surveillance' does not appear - to ensure than individual rights and civil liberties are not weakened.

And the NHS, Labour's crown jewel, will also see a large injection of new money. The party's plan involves additional funding of more than £30 billion into the service "over the next Parliament", with the NHS also benefiting from the National Transformation Fund to make much needed upgrades to buildings and equipment.

To put Labour's ideas into action will require funding. Te main source for Labour promises will be a tax rise for only the top five percent of earners, all earning over £80,000. There will be higher corporation tax, with small businesses protected by a lower rates and less frequent paperwork.

In all these measures are estimated to raise the extra £50 billion the party needs for it's policies - though the IFS stresses that some of that is conditional on somewhat unpredictable factors.

There is one glaring ommission: the absence of a pledge to end the Tory working age benefit freeze, which has led to deep cuts with further restrictions to come. With the deep impact that welfare cuts have already made it is a remarkable gap.

At the manifesto launch, ITV's Robert Peston raised this point. He asked Jeremy Corbyn why, when there is clear evidence of the coming impact, that ending the welfare freeze isn't mentioned. It isn't in the manifesto, but Corbyn responded that there will be a review of the situation and there will be no benefits freeze. But the lack of costing here is notable.

There are provisions, though, to repeal cuts to the Employment and Support Allowance (ESA), implement the court decision on Personal Independence Payments (PIPs) to protect those with mental health conditions, scrap the Bedroom Tax, scrap the sanctions regime and restore housing benefit for young people.

The Co-operative Party

And let's not forget that Labour is part of a century-long electoral pact with the Co-operative Party, with whom it stands joint candidates. Running and sitting as Labour and Co-operative Party, or Labour Co-op for short, the alliance has had and continues to have a number of well known MPs, such as Ed Balls, Gareth Thomas and Stella Creasy.

In addition to the Labour manifesto that these candidates will be judged against, the Co-op Party has also published its own priorities. These include expanded detail on both employees and consumers having a place in the shake-up of boardrooms, more localism and public services and utilities that are tied closer to their communities.

But there is very much something for the co-operative movement in the Labour manifesto. Along with backing for more democratic public ownership, there is a commitment to doubling the size of the co-operative sector with targeted investment - matching a Co-op Party aim.

In fact, there is a strong sense of the co-operative movement and of co-operative influence running right through the Labour Manifesto proposals. Everywhere the new role for the public sector come appended with 'local', 'regional' and 'democratic'.

Progressive Alliance

This election will not be, however, be a straight contest between the Conservatives and Labour. So the question is, what crossover is there between Labour and the other progressive parties on policy?

Well, there are plenty of crossovers, though cooperation at the party level will be unlikely. The leadership has made it's position clear and that sticks to Labour's longstanding attitude that it alone is the progressive party of Britain and everyone should rally to its standard.

There are, of course, also issues of disunity behind the scenes within the Labour Party itself - never mind between parties. There are many an "independent-minded" Labour MP who in 2017 are standing virtually as independents, disavowing Corbyn, and they look like they may finally be ready to split away - perhaps even to form a new party.

On one level, it might actually be a breath of fresh air, perhaps even making it easier for the two groups to work together in a more amicable fashion. But Labour's relationship with the Co-op Party and with trade unions could make a split a bit messy. And the party's legacy is something over which fights have been bitter.

However - all of the factionalism aside - on housing, on tax, on welfare and healthcare, there are plenty of crossovers and a lot of compatibility to be found between the Left and Centre parties.

For housing, their is a common consensus that Britain needs more homes that are more affordable, and that renters need far more protection and longer term contracts. Both Liberals and Greens match Labour in these ambitions.

As for public utilities, even the Liberal Democrats - seen by some on the Left as too far to the economic Right - maintain a strong vein of support for co-operatives and democratic ownership.

Local, community-owned utilities are no hard Left socialist experiment (as the Right would demonise it). They're a tried and tested system, with broad progressive support and proof of results.

And on health and social care there is broad support both for reversing Tory cuts and for taxation to pay for increased spending - which includes restoring dignity in welfare for people with disabilities and difficulties both physical and mental.

For a grassroots progressive alliance to work, voters need to be able to find common cause across party lines. Labour's pitch is clearly anti-austerity, clearly wishes to restore the public sector, and clearly wants the rich to pay a fair share.

Whether you like Jeremy Corbyn or not, there are plenty of reasons in this manifesto for progressives to vote Labour. But perhaps of more importance, there is plenty to make voting tactically for Labour more than palatable.

References

'For the many, not the few: The Labour Party Manifesto 2017 - A manifesto for a better, fairer Britain'; from the Labour Party; as of 16 May 2017.

'General election 2017: Corbyn launches Labour manifesto'; on the BBC; 16 May 2017.

Mariana Mazzucato's 'Let's rethink the idea of the state: it must be a catalyst for big, bold ideas'; in The Guardian; 15 December 2013.

'General election 2017: Labour pledges to build 1m new homes'; on the BBC; 27 April 2017.

Shehab Khan's 'Labour to pledge an additional £37 billion of funding for the NHS: Jeremy Corbyn is hoping to improve A&E performances and take one million patients off NHS waiting lists'; in The Independent; 15 May 2017.

'General election: Labour's '£7.4bn a year extra for NHS''; on the BBC; 15 May 2017.

Jessica Elgot & Peter Walker's 'Labour looks at new tax bracket for those earning £80k-£150k: Shadow chancellor says highest increases would be for top 1%, and only top 5% of earners would face rise'; in The Guardian; 7 May 2017.

'Labour manifesto: Extra £48.6bn in tax revenue to fund pledges'; on the BBC; 16 May 2017.

Stuart Adam, Andrew Hood, Robert Joyce & David Phillips' 'Labour’s proposed income tax rises for high-income individuals'; from the Institute for Fiscal Studies (IFS); 16 May 2017.

Robert Peston's 'Will Labour end the benefits freeze? Corbyn says yes - and no'; on ITV; 16 May 2017.

'A Co-operative Plan for a Britain Where Power and Wealth are Shared: The Co-operative Party’s policy platform for the 2017 General Election'; from the Co-operative Party; as of 16 May 2017.

Paul Mason's 'It’s now clear what Corbynism represents – so what does the centre do next? Labour’s new manifesto is popular on the doorsteps and in the polls, and may accelerate the creation of a new party and new alliances'; in The Guardian; 15 May 2017.

'General Election 2017 - Housing: There is a progressive consensus that Britain needs more homes and more protection for renters'; in The Alternative; 15 May 2017.

Rail chaos opens discussion of alternatives: Mutuals and co-ops offer community a stake, instead of rentiers who extract local wealth and without Whitehall centralisation

Photograph: Brighton Station from Pixabay (License) (Cropped)

One of the big issues in the past few weeks has been the Southern Railways shambles, that has again exposed deep problems with the British system of rail franchises - at least three rail franchises face major strike action in the coming weeks (Topham, 2016; Topham, 2016{2}).

The franchise system has faced plenty of criticism. At the core is that a rail franchise is little more than permission to set up a toll booth and start extracting rent, squeezed out with higher prices, cuts to staff and services, and limiting expensive maintenance (Chakraborrty, 2016; Woodman, 2012; Milne, 2012).

Solutions to what are natural monopolies is not a simple matter. As a result much was made of Jeremy Corbyn's 2015 leadership election promise to renationalise the railways (Mason, 2016) - a brave decision for a party all too easily beaten over the head as centralising, bureaucratic, exorbitant spenders with a disdain for free enterprise (Kellner, 2014).

The latest round of railway chaos put Corbyn's policy of renationalisation on the table for a Readers' debate in The Guardian yesterday (Marsh & Walsh, 2016). The nature of the discussion was interesting to watch.

There was positivity towards renationalisation to be found, with some pointing to the more than a few good examples of public run transport services around Europe. In Paris, or in Germany, there are well maintained railways that are run for considerably lower fares than in the UK (Williams, 2015).

However, it was particularly interesting to see the perception that the only options being offered came in the form of a polarised dynamic, limited to either privatisation under greedy rentiers or nationalisation under inflexible Whitehall bureaucrats.

In fact commenters even went beyond that to observe that the railways in Britain are actually both and neither. That the railways are a kind of national-corporate cartel, with infrastructure nationalised while profit-making services were privatised - even more confusingly, often into the hands of state-owned companies from other countries.

What was clear in people's thoughts was that by some means the running of the rails needs to be decentralised, either with more lines or with more options. That no one interest should be given too much leverage, whether trade unions or rentier investors. And that responsibility for the rails should not be separated from the train services.

That combination, of well run public service and the need for decentralisation, in fact plays into the actual substance of Corbyn's policy, which was for public though not necessarily state railways (Connor, 2015). What Corbyn actually called for was to mutualise the railways as worker-consumer coops.

In mutualism, there is a path that has cut across progressive party lines. From Labour, and obviously the Co-operative Party, to the Liberal Democrats, the idea of workers taking a greater stake has a deep history. Whether as worker-management co-operation, workers on boards, or share-ownership schemes, at least a low level version of mutualism has long been proposed by those on all sides. But the present crisis in Britain's services calls for a deeper commitment.

There is much that mutualism can offer, even within the slow to change framework of capitalism. Autonomy, not least, for people to exercise power over their own working lives. And equity, a meaningful stake in the product of their own work. Between the two, you have a model that challenges both the lopsided struggle between workers and management that often leads to exploitation, on the one hand, and the extraction of wealth, on the other.

Fear of alienation by bureaucratic centralism is understandable in the running of essential services, from housing to energy and transport. But so is the pain caused by exploitative, extractive rentiers, and it has been clearly stated. Too much is taken out of communities, extracted as profit by rentiers (Milne, 2014) - who use wealth to step in and set up toll booths on essential local services. Little is ever fed back into the communities from which these private taxes are levied.

Mutualism and cooperation present an alternative. Working examples are already out there, tying the product of a community's resources to those communities, serving the common good without overbearing central control. But they need support to break through public-private corporatism and that means government to rethink how it intervenes - to be smarter and willing to decentralise.

Corbyn has brought idealism to the campaign, but needs to show how public ownership can further the pursuit of a just, inclusive and power-devolving society

Jeremy Corbyn MP speaks at anti-drones rally in 2013. Photograph: By stopwar.org.uk (license)(cropped)

Jeremy Corbyn's entry has electrified the Labour leadership contest (Eno, 2015). With people beginning to ask 'what happens if Jeremy Corbyn wins?', it might be a good time to look at what it is for which Corbyn is actually campaigning (Bush, 2015).

Jeremy Corbyn was originally ushered into the Labour leadership campaign as the alternative candidate (BBC, 2015). His job was to open up the debate Leftwards, to ensure that all voices were heard and that the 'electable' candidates had to work hard for the position.

Yet the campaign has been turned on its head by his entry. Endorsements from the trade unions and a popular anti-austerity following have put Corbyn in a strong position. It is now a very ready possibility that he could, in fact, win the leadership election.

That possibility has turned the race for the leadership into a showdown between Old Labour and New Labour, each with their own rival visions of the Left. Old Labour on the one side offering idealistic solutions, so acting as the national destination for those disenchanted with New Labour, on the other side, offering their pragmatic, 'modernising', solutions. (Jones, 2015)

The trouble is that neither side is being particularly radical. Corbyn's stances belong largely to the old Left, though hardly the hard Left (Krugman, 2015), and focus on a more structured and permanent society than the one that is unfolding at present (Harris, 2015) - that is: trade unions, nationalisation and a centralised state engaged in public spending and public ownership.

On the other side, fairly or unfairly, New Labour has been seen as a surrender to Centre-Right political thought. They are seen as a negative force that is too quick to shut down idealism (Watt, 2015; Watt, 2015{2}). They are, perhaps, too cosy with big business and too afraid of public opinion (Martin, 2015), to say anything distinct, other than to maintain a determination to make everything pass through a heavily centralised state.

But society is fragmenting. Democratic politics can seemingly no longer rely on mass support, marching under one big tent banner, that supports a singular centralised state, where power is wielded by the lofty party elite.

Historically, liberals and democrats stood, as progressives, opposed to the forces of conservatism that defended the traditional, elitist, order. Liberals stood in the name of the individual, democrats in the name of the people, or of the community.

As conservatism has, ironically perhaps, evolved in order to survive, it has taken on the cast offs from democrats and liberals as they have moved leftwards. From liberals it has embraced classical liberal laissez-faire economics. From democrats it has taken advantage of populism and nationalism.

All of these elements were once used as a means to rally people against the old elite. Themes that would as unifying rallying points, that could be used to transcend the particular concerns of particular individuals or communities.

But society has moved on once more. Rather than one community united by a singular narrative of economic class, there are dozens, hundreds, of communities with their own narratives - feminist, environmental, civil rights, trade unionist - who do not believe that their cause should be secondary.

Likewise individualism has moved forward. Individuals now support many causes, shifting between them or associated freely with several at once. There is a demand, not just for choice, but also for autonomy and the devolution and decentralisation of power.

These new, fragmented forms of democratic and liberal politics require new forms of solidarity - new ideas that the old approach of the mass party using the power of state to fend of the power of corporations and aristocrats is not set up to provide.

The big question facing Labour is how it can give a community response to a country that has seen community, in all of the traditional senses, collapse? Democracy and socialism speaks of people as fundamentally based on and in communities, based on the importance of ideas like your home town, your social class and your trade. But all of these are breaking down. Permanence is disappearing and with it the conventional anchors for these traditional communities.

How does a Labour party respond to social change that has so undone its means of rallying, organising and leading?

The starting point has be in addressing the fact that Labour's view, of the people as workers, with the state as their protector, redistributor and benefactor, seems to have broken down. That system needs to rebuilt on new themes.

That themes need to encompass Labour commitment to a democratic identity, a community focus and the pursuit of justice on these terms. But it also needs build in both the pursuit of progress and the allowance for alliances and fragmentation. Labour can be a coordinator, not just a director.

The radical new horizons on the Left for democratic socialists mean an inclusive attitudes towards the new and emerging political movements which have begun to get their days in the sun, at least in glimpses. From trade unions, to environmentalists, feminists and the civil rights advocates movement, there are numerous sectional interest groups, all pursuing their own agendas.

Yet unlike conservative sectionalism, it can't be about one group asserting its dominance over the others. Labour has to learn that progress will be, ultimately, about individuals and communities cooperating - breaking down the old powers and supporting the dispersal of it widely across society.

Jeremy Corbyn's campaign is already generating success (Milne, 2015), with Andy Burnham now openly advocating a gradual renationalisation of the railways (Perraudin, 2015). But it won't be enough to call upon the old centralising powers of party and state if they continue to alienate, suppress or exclude diverse movements.

More nuanced answers are needed to the complex issues of a contemporary society that is fragmented, becoming ever more temporary and fleeting. Calling upon the state, public ownership and trade unions to have a renewed role is not a bad thing. But people do need to know how those institutions can face the challenge of an ever more fragmented and decentralised society.

It is imperative that Corbyn's campaign addresses the matter of how he intends to turn these old Left mechanisms from yesterday into the inclusive, power-devolving, radical Left solutions of tomorrow.