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The Liberal Democrats and the Blair project

Ending the role of the Labour Party as the political voice of the trade unions was one strand of the ‘Blair project’ to re-shape British politics. But of what the related aim, to end the ‘old class-based divisions’ between the Liberals and the Labour Party? ALISTAIR TICE looks at the state of the Liberal Democrats.

CHARLES KENNEDY WAS elected leader of the Liberal Democrats, replacing Paddy Ashdown, in August 1999. With an image as a popular and jovial lightweight, keen on the good life and appearing on TV quiz shows but not taking politics too seriously, he was dubbed ‘Inaction Man’. For most of the last three years he’s done little to dispel that taunt, being hardly visible except as Blair’s poodle in parliament.

Is this all about to change? Kennedy was a guest speaker at the TUC conference, the first time a non-Labour party political leader has addressed it. And at their own party conference, the Lib-Dems decided on a new policy shift to woo Tory voters. Does this signal the end of the Lib/Lab project? Can the Lib-Dems replace the Conservatives as the second party and main opposition to New Labour?

The rise of the working-class based Labour Party in the early 1900s led to the decline of the Liberals and their demise as one of the original two main capitalist parties. In the post second world war period, the Liberals have remained the ‘third party’, occasionally scoring spectacular parliamentary by-election victories or making sweeping council election gains, acting as a safe repository of protest votes against incumbent Tory and Labour governments. Because they have not been in office, the Liberals have enjoyed the luxury of opposition and so appeared untarnished by the sleaze and corruption associated with the other two main parties. Their claims not to be in the pockets of big business or the trade unions also adds to the perception of ‘independence’ from vested interests.

Since Labour’s 1990s conversion into an openly capitalist party, the Lib-Dems have been seen by many as more radical or even left-wing. In a Guardian/ICM opinion poll in January, 22% saw the Lib-Dems as a left-wing party, compared with only 30% who still saw Labour as left of centre. Even George Monbiot, one of the leading spokespersons of the anti-capitalist movement, has reflected these illusions. Arguing correctly that the trade unions should stop funding New Labour, he wrote, "it doesn’t really matter which of Britain’s small progressive parties – the Greens, the Socialist Alliance, the SNP, Plaid Cymru, even the Liberal Democrats – they [the trade unions] choose to support instead. What counts is that there is an effective radical opposition". (The Guardian, 19 February)

To socialists it really does matter. Instead of giving credence to the idea that the Lib-Dems are progressive or radical (let alone giving them workers’ money!), we have to be clear that they are another capitalist party that are opposed to the interests of the working-class.

The Lib-Dems in power

THIS ARGUMENT HAS become easier to prove in recent years as the Lib-Dems have taken control of more local councils, especially in the big northern cities of Liverpool and Sheffield.

In Liverpool from 1980-83, the Liberal-dominated coalition with the Tories was one of the first in the country to plan privatisation of local services. Strikes and the victory of the Militant-led district Labour Party in 1983 stopped the privatisation and redundancies, and began a four-year struggle of Liverpool city council to create jobs and build homes against the opposition of the Thatcher government (Militant was the forerunner of the Socialist Party). The hated Tories were wiped out in Liverpool so the Liberals became the right-wing anti-Militant party. But the city council had mass support for its policies and could not be defeated electorally. It took a combination of back-stabbing by Neil Kinnock, the then Labour Party leader, and the Tory courts, to remove ‘the 47’ socialist councillors.

Whilst a second team of Labour councillors were re-elected, Kinnock’s purge ensured the council was increasingly right-wing Labour. Disillusionment with the policies pursued by Labour’s right-wing led to the Liberals becoming the largest party in the 1990s and taking overall control in 1998. In power again the Lib-Dems have carried out mass privatisation of council housing and services. In a £300 million deal with Jarvis (of Potters Bar rail disaster infamy) to build and manage schools and ancillary services, the Lib-Dem council boasts the biggest public private partnership in the country. In fact they claim to have run out of local services to privatise so are offering their ‘expertise’ to other local authorities!

In Sheffield, after 75 years of Labour rule, the Lib-Dems took over the council in 1999. Beginning in the early 1990s with Focus pavement politics in the middle-class areas, the Lib-Dems moved on to consciously exploit working-class disillusionment with years of Labour council cuts and redundancies. They voted against Labour cuts and the privatisation of housing benefit services, and portrayed themselves as a ‘radical working-class alternative’ (in the words of Peter Moore, former Sheffield Lib-Dem leader).

But once in power they went ‘privatisation mad’. Sports, leisure, elderly peoples homes, refuse and incineration were all sold off and over 60,000 council houses were to be privatised. Consequently, they were kicked out after only three years in office. It is quite ironic that Sheffield Labour had to run a ‘Sheffield Not For sale’ campaign in the 2000 elections to oppose the Lib-Dems who were energetically carrying out Labour government policies!

This brief Liberal experience in Sheffield shows that without any ideological alternative, even when the Lib-Dems pose to the left of New Labour, they end up carrying out the same policies. It also shows how opportunist their councillors and MPs are as well when it comes to getting their noses near the trough.

Whilst nationally the Lib-Dems can still largely avoid that stigma, it is significant that in this year’s local elections in May, overall the Lib-Dems got their highest share of the poll for nine years but their vote fell by 5.5% in the councils they control.

‘The Full Monty’

CHARLES KENNEDY WAS elected Lib-Dem leader committed to continuing Paddy Ashdown’s policy of co-operating with Labour (‘constructive opposition’ they liked to call it). Ashdown had abandoned his previous policy of ‘equidistance’ between the two main parties in May 1995 by ruling out any post-election deal or support for the Tories. This was due to the collapse in support for the crisis- and sleaze-ridden John Major government, and the election of Tony Blair as Labour Party leader in July 1994, after the death of John Smith.

There had already been Lib/Lab co-operation in a number of shire county councils after the 1993 elections. But it was Blair’s election as Labour leader and the acceleration of the process of transforming New Labour into an openly capitalist party under the guise of the so-called Third Way, that persuaded Ashdown. Not only did Ashdown feel ideologically close to the Blairites but he could also see the prospect of proportional representation (a long-held Liberal policy that would electorally favour them) and a way of getting into power.

The central idea of Blair’s Third Way is to re-establish the Liberal/Labour coalition which preceded the formation of the Labour Party. Having long since rejected socialism and the working-class base of the Labour Party, Blair declared, "the ideological differences between me and many of the Liberal Democrats are pretty small". As Philip Gould, his favourite advisor and pollster, wrote in his book, The Unfinished Revolution, "the better course would be for liberalism and labourism to unite".

Whilst Ashdown faced opposition from Lib-Dems in northern cities who were attacking Labour-run town halls, he was urged on to closer links by the ‘Gang of Four’ (Shirley Williams, Roy Jenkins, Bill Rogers and David Owen), the original leaders of the Social Democratic Party (SDP), a right-wing split off from the Labour Party in 1981 which later merged with the Liberals to form the Liberal-Democrats in 1988.

The first formal arrangement came in October 1996 when joint talks on constitutional reform were agreed. But more secret talks were held, some of which were later revealed by Ashdown in his Diaries published after he resigned as party leader. According to him, even after Labour won a landslide election victory in June 1997, Blair offered to replace two of his cabinet ministers with Lib-Dems to form a coalition. Ashdown kept records of this Downing Street meeting in a code which apparently referred to Blair as OMF (Our Mutual Friend) and the coalition plan as TFM (The Full Monty).

Blair, who had kept his own cabinet in the dark about his plans, eventually backed away from the deal because of his fears of a cabinet split. In any case a coalition was unnecessary from Blair’s point of view. He had a huge majority – much better to keep the Lib-Dems as a reserve weapon for later: "to overcome short-run unpopularity and to govern in the national interest" to ensure a further term of office, as argued by Peter Mandelson and Roger Liddle in their book, The Blair Revolution.

Instead, Ashdown and other senior Lib-Dems were invited to join a cabinet committee on constitutional affairs, dubbed ‘Paddy’s Pact’, whose remit was later extended to cover welfare reform, education, health and the single European currency. Also the Jenkins Commission on Electoral Reform was established which in October 1998 proposed the alternative vote top-up system of proportional representation for parliamentary elections – a method particularly recommended by the Gang of Four member, Roy Jenkins, because it ‘strengthened the centre ground’. Blair and Ashdown declared their intention of ending the ‘destructive tribalism’ of British politics.

But in December 1998 Peter Mandelson, the chief architect of the Third Way project, was forced to resign from the cabinet as details leaked out of his ‘unorthodox’ financial dealings with the businessman and former cabinet colleague, Geoffrey Robinson. This effectively put on hold further moves towards coalition as critics in both parties increased their opposition.

In turn this led to Ashdown’s resignation as party leader, announced in January 1999, to take effect after elections in the summer. Ashdown had grown frustrated by the increasing opposition in his own party to his pro-Labour policy, and at the same time the slow progress towards implementing proportional representation which Blair wouldn’t commit to for the next general election. In addition, he had not been rewarded with the cabinet post he had been promised by Blair in their secret dealings.

Ironically, as Ashdown resigned, the Lib-Dems signed up for a coalition with Labour in Scotland after the Scottish parliament elections of May 1999 gave Labour most seats but not overall control. The idea of such a coalition had apparently been discussed as far back as 1995 at a meeting held in West Hampstead, "lubricated by some of Lord Irvine’s excellent claret" according to Peter Mandelson’s biographer. Later a similar coalition was arranged in the Welsh assembly. In both cases, the Lib-Dems’ policies went out of the window to get into power.

Policy shifts

CHARLES KENNEDY NARROWLY defeated Simon Hughes, MP for Bermondsey, for the party leadership in August 1999 by 28,425 votes to 21,833. Hughes opposed closer co-operation with Labour and his 45% of the vote showed how much opposition to Ashdown’s policy had built up amongst Lib-Dem members. Many had come to regard New Labour as too right-wing and ‘illiberal’, especially on traditional Liberal issues such as civil liberties, human rights, the environment and education.

Kennedy rejected demands to move to the left of Labour with more redistributionist policies, claiming that such ‘tax and spend’ had made Labour un-electable in the 1980s. He continued ‘constructive opposition’ but without any new initiatives. In fact, as a political commentator wrote in The Independent newspaper, Kennedy was an opposition leader campaigning for the re-election of the government!

The June 2001 general election produced a re-run of the 1997 result with the Lib-Dems netting six more MPs with 18.3% share of the vote. Their 52 MPs (53 since last December’s defection of the Labour MP Paul Marsden in opposition to Blair’s war on Afghanistan) is the highest number since 1929. Most of them, however, are in traditional Tory areas. Seventeen of their 19 most vulnerable seats would be lost on a 5% swing to the Tories and 30 of their target seats are held by Tory MPs.

This electoral arithmetic has led to another shift in Lib-Dem positioning and policies. Having already rejected any move to the left of Labour, Kennedy and his supporters, led by the ‘Liberal Future’ organisation, are pushing a strategy of wooing Tory voters in marginal constituencies, with the aim of overtaking the Conservatives as the second party. A year ago, Kennedy suspended the joint cabinet committee after four years of co-operation with Labour and declared his intention of making the Lib-Dems the ‘effective opposition’.

Since then, there has been an internal debate around a policy review which was to culminate at this autumn’s conference. The thrust of this is away from higher taxes, and towards more acceptance of the market and private sector involvement in public services, under the guise of consumer choice and de-centralisation. So the ‘penny on tax for education’ is to be dropped. In fact Treasury spokesman Matthew Taylor has suggested "education could be funded locally to give greater powers to local communities. Why not link education authorities to their funding directly, replacing part of national income tax with a local income tax? This would set free local communities to prioritise local education". Superficially this sounds attractive but he then adds, "Money is not a solution in itself. Rather it is necessary to pay for the changes we want to make. High quality public services require investment, but they also require innovation – the right amount of money used in the smartest possible way". Very New Labour!

Similarly attacking the ‘Stalinist NHS’ as "one of the few remaining experiments in centralised socialist planning", one consultation document proposes devolvement of power to NHS regional executives, welcomes Private Finance Initiatives (PFIs) for "bringing more private sector management know-how into public service provision", and emphasises "consumer choice and variety for provision competition in standards". It says there is huge potential for ‘not-for-profit providers’ to take over schools and hospitals, suggesting housing associations as a model. These trusts could break up national pay structures and have more commercial freedom. Again this is going down a road New Labour is already travelling. Labour’s health secretary Alan Milburn has already planned ‘Third Way’ foundation hospitals which will have freedom to borrow, sell assets and increase private patients. The Lib-Dem’s decentralisation policies would also lead to the break-up and privatisation of public services.

This shift to the right has been opposed by some, notably Evan Harris MP, the Lib-Dem health spokesman who wrote a Guardian article (11 March) titled ‘Let’s be left wing and proud of it’. He asks, "is it really sensible to position ourselves between a rightward moving Labour Party and a Conservative Party on the extreme?" To try to woo Tory voters, that is exactly what the Lib-Dems will do.

Will this new strategy be successful? Can the Lib-Dems replace the Tories as the second party? The Tories have still not recovered from their 1997 election defeat, have another ineffective leader, and support the very policies of privatisation and war that are making New Labour so unpopular. Yet they retain a core vote, still polling over eight million votes in the 2001 general election, nearly twice as many as the Lib-Dems. Despite themselves, there could still be a Tory revival on the back of a deep economic crisis, accompanied by racist anti-asylum seeker and nationalist anti-euro policies.

Whilst for now formally breaking their Labour links, the Lib-Dems are in practice about to embrace New Labour policies even more, which has already lost them support in traditional Labour strongholds such as Sheffield. Consequently their rightward shift offers little to attract disillusioned Labour supporters, whilst their superficial radicalism on ‘liberal’ issues is still enough to repel most of the core Tory voters. That’s not to say that the Lib-Dems won’t have any spectacular by-election victories, especially as a protest against the Blair government, but overtaking the Tories still seems unlikely in the next period, unless the Tories themselves split.

So could the Liberal/Labour rapprochement strand of the ‘Blair project’ be resurrected? In the course of the last eight years the Lib-Dems have gone from ‘equidistance’ to Lib/Lab links and now to the right to woo Tory voters. These policy shifts have nothing to do with ideology or principles, but everything to do with trying to get into power in town halls and parliament.

Ideologically there’s little difference between the Lib-Dems and New Labour. Increasingly the Lib-Dems are adopting New Labour policies. Last year Paddy Ashdown said of co-operation with Labour, "the chapter is closed but the book isn’t". Significantly, he acknowledged that a coalition will happen only "when Labour needs it". He foresaw the Lib-Dems being called on either when Labour was about to lose office, or in a hung parliament. Ashdown is right. New Labour, with their huge parliamentary majorities, haven’t needed the Lib-Dems, yet.

The growing disillusionment with New Labour could, however, turn into plummeting poll ratings against a backdrop of recession and war. Some ‘left’ MPs could split away. The Tories could begin to revive. Then the Lib-Dems could be called on. Not without opposition in their own ranks, but probably not enough to stop the allure of power. Paddy may still see his pact. Who knows, he may even get his cabinet seat!


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