Thursday, 14 December 2017

What would a Corbyn government actually be like?

All through this tumultuous political year, there’s been something strangely absent from the narrative: a clear picture of what a change of government might actually mean. What would a Labour government really do in practice and feel like? What challenges would it face? How likely is what we know of its programme to succeed? There are lots of reasons for this oversight. For one thing, a government led by Labour leader Jeremy Corbyn (above) looked very, very unlikely until the sudden Labour surge between mid-May and early June. For another, the whole Brexit imbroglio has distracted attention from the normal story of blue-versus-red political competition. Last and perhaps most importantly, the whole ‘Corbyn phenomenon’ looks much more like a populist single issue campaign of remarkable passion and energy than a traditional government-in-waiting.

So in this blog, we’re going to have a look at what a Corbyn government would actually be like. There’ll be no attempt to construct a point-by-point account of some future history. What’s to come is far too uncertain (and contains way too many moving parts) for that. What we’ll be doing instead is building up a picture of the main elements that will decide the course of a new Labour administration. What we don’t know has rather the upper hand over what we do know. But we can speculate, an important enough process regarding any Opposition’s intent and prospects, but critically now when Labour is on the edge of power – just a handful of seats away from being able to govern as a minority.

So what are the main elements of chance and choice involved? Let’s take a look, in no particular order, at the likely results of a future General Election; then, the potential reactions among the Corbyn movement as Labour turns its agenda into concrete actions; thirdly, at the economy and the leeway it will give any left-wing government; and then fourth and last, the intentions of the small clique at the heart of Mr Corbyn’s Labour Party. We won’t be able to settle on exact conclusions, but perhaps the veil of ignorance will be parted a little: unknown unknowns will be turned into known unknowns, and light thrown on the main constraints and room for manoeuvre.

Labour’s Parliament. One major element will be whether Labour can forge a governing majority. Despite their better-than-expected result back in June, Labour are still a very long way from governing outright. With 262 Members of Parliament, they are still 64 seats (and a 3.6 per cent swing from all other parties) away from governing with an absolute majority: they probably still require another sixty MPs (and a 3.4 per cent swing) to govern with a working majority, enjoying a lead of one over all other parties given that the Sinn Fein Members from Northern Ireland do not take their seats. Just a couple of polls taken since June have suggested that Labour are strong enough to get to that finishing line.

Now we mustn’t suggest that their relatively watery lead on average means that they cannot make it to 326 MPs. Labour managed to leap from about 26 per cent at the start of the last election campaign to 41 percent by the time all the votes were counted. But it’s still a tall order. They’ve squeezed out a lot of the votes that were the easiest to seize upon: Greens and left-leaning Liberal Democrats have already flocked to them, along with younger moderate Remainers in South and South-West England. Remember that polls now assume that 2017’s relatively unusual turnout will hold next time, too, especially among young people: longer-term experience suggests that it might not.

So it might be that Labour has to rely on the Scottish National Party to govern. Given the latest polling in Scotland, it seems unlikely that they will be able to win enough seats from the SNP to end their reliance on them if they can’t push over a lot of seats in England. In that circumstance, Mr Corbyn will be faced with lots of problems. He will probably have to do some sort of deal with the SNP, especially if he is a long way from a majority – at about the 280 or 290 seats that current polling averages put him at. The SNP might well want more money for Scotland, a demand that might do a lot of damage to Labour’s reputation in England – especially if the bill comes to a much higher figure than the £1bn that Prime Minister Theresa May was forced to disburse to Northern Ireland by the Democratic Unionists back in the summer.

There might also have to be a second Scottish independence referendum, in which Mr Corbyn’s obvious ambivalence on that issue might do nearly as much harm to his political standing and reputation as his disastrous campaign in the 2016 European Union referendum. Even given SNP support, Labour might find it hard to govern on the home front, given English Votes for English Laws – the process by which House of Commons committee votes on English issues are limited to England’s MPs. Labour probably tell themselves that they can just put down law after law and dare the SNP to vote them down. In reality, since the SNP rely for a key part of their electoral coalition on the idea that there may never be another successful Labour government at Westminster – and that the SNP therefore have to ‘stand up for Scotland’ alone – that party’s MPs will be looking from day one for an excuse to bring Labour down. These are clearly grave dangers here for any future Labour government.

Activist opinions. One startlingly underwritten element of Labour’s recent story is its waning enthusiasm for redistribution. There are no two ways about it: on lots of measures, inequality is likely to be higher after one term of Labour than before. Very few of the party’s proposed measures will do anything to reduce income inequality. Abolishing tuition fees will increase it. Cancelling or restructuring student debt, which Labour has dropped broad hints about, will have the same effect. So will accepting the Conservatives’ welfare cap and Universal Credit changes – 'reforms' to which Labour is committed.

So will rail nationalisation, in all likelihood, since increasing investment (and perhaps reducing fares) on the railways will inevitably favour those commuters in the South East of England who mainly use trains – as well as creating a standing political economy incentive to ratchet up government spending on a mode of transport disproportionately utilised by rich people. Hard or fixed rent controls? Likely to increase inequality as landlords flee the sector. Opposing any sort of equity release from states to fund social care? The same, at least when compared to the Conservatives’ hastily-abandoned plans for a so-called ‘dementia tax’. And so on. If you throw in Brexit – likely to increase disparities between Britain’s richer and poorer regions – what limited egalitarian measures Labour is promising (for instance a minimum wage higher than that planned by the Conservatives) will be like throwing pebbles at a bulldozer.

Regional Investment Banks? Well, that’s not necessarily a bad concept – though they are massively overhyped. But investing more in each region might actually widen the gap between rich and poor. We don’t know much about the criteria for Labour’s new policy infrastructure on this front, but suffice to say that if you invest more in Leeds, Birmingham and Manchester, you might find that the surrounding towns and villages – where most of the deeper poverty is actually happening – will get worse. Meanwhile, some of Labour’s actually good ideas take effect for many years. More spending on early years education is to be welcomed with as much praise as we can muster. But, of course, the effects will take more than a decade to become apparent.

What will happen when Labour activists look at an economy and society that is quite a lot more unequal after five years of Mr Corbyn? What will they do? Well, probably nothing – firstly because he has entirely naturally and understandably reshaped the party in his own image, and secondly because a one-term government can be cut quite a lot of slack on the way to bigger objectives. Remember that the Thatcher Government had not achieved very much at all by the time of its re-election in 1983. Most of its really long-lasting reforms were still to come. Recall that the Blair government hadn’t changed much in the public sector by the time of the 2001 General Election, having focused instead on constitutional reform and the pursuit of peace in Northern Ireland. Having trended very slightly downwards for many years (though a lot depends on how you count these things), the admittedly crude and problematical Gini coefficient measuring income inequality will go up under Labour. Its members will give their leaders more time. Voters as a whole might not – which brings us to the national economy.

Economic uncertainty. One big and important story will be provided by the economic backdrop. If Britain’s poor productivity and therefore growth picks up a little, or even if growth continues to chug along at a low-but-sustainable level, there might not be too much to say on this front. Socialism in one country will be easier to deliver. Mr Corbyn will turn up and beam beneficently at lots of new schools, hospitals and rail stations, and what popularity he attracts will hold up or even increase as older and more Jeremy-sceptical Britons say to themselves ‘well, this isn’t so bad’. But if the economy goes south, things will be much grittier – especially in relation to the public spending pledges that now seem to be Labour’s raison d’etre.

Despite many partisan assertions to the contrary, Labour’s manifesto was almost entirely uncosted. Oh, of course, they said it was ‘costed’, but their maths basically amounted to rocking up at Tesco’s and trying to buy a month’s shopping with just a single twenty pound note. Their numbers were and are totally unrealistic. The money they promise to raise only from big companies and richer Britons just is not there. If growth continues, well, that might not prove too much of a problem. They can raise Corporation Tax even higher than they said they would. They can rein back on some of their spending pledges, while making sure that they do give effect to some of their highly-legible signature plans such as the abolition of university tuition fees. They can (whisper it) run the score up using some of those stealth taxes familiar from Tony Blair and Gordon Brown’s time in office, for instance freezing allowances and allowing silent income tax rises to take some of the strain.

But if the British economy is only crawling forward, if Brexit really slows growth (and it’s at least quite likely that it will), or if Labour come to power in the wake of a disorderly Brexit, then things will be much harder. If they’re also hit by a 'normal' recession, for which we are more than overdue, things will be more difficult still. Note here that there is also the danger of a withdrawal of foreign investment and spending as companies take fright at the election of an apparently radical leftist administration. That’s not vastly likely, as we’ve already had quite a big sterling devaluation and withdrawal of funds after Brexit – for obvious reasons. But it is certainly possible, as Labour’s own wargaming for just this eventuality reveals. Then, things could get very tough indeed. Slamming on capital controls to stem the outflow, at the same time as trying to withstand a damaging Brexit slowdown or navigating a garden-variety recession could mean that austerity budgeting will have to be intensified, not reversed. There’s precedent for that, as when the left-wing Labour Chancellor Stafford Cripps made every pip squeak in the late 1940s. But what on earth will happen if then-Chancellor John McDonnell – John McDonnell, of all people – starts slashing public sector pay? Your guess is as good as ours.

What do Labour want? Fourth and last, we come to the vexed question of what it is that Mr Corbyn and Mr McDonnell actually want. Labour’s militantly reasonable manifesto from 2017 is one thing. The history and values of their advisers – Seumas Milne, Andrew Murray, Andrew Fisher – is quite another. Those advisers have spent their lives arguing and writing in direct opposition to the entire thrust of Labour’s post-war history. Mr Murray, for instance, was a member of the Communist Party (and North Korea enthusiast) until very recently. They possess as their highest lodestar an opposition to the United States of America and all its works, including the rules-based economic trade and payments system the US and its allies have built since the early 1990s. Their sympathy for America’s opponents, wherever they may be and whatever they think, somehow manages to be both Putinist and Trumpian in equal measure – if that truly is the contradiction that it at first appears.

So Labour went into the last General Election arguing that the UK government should replace the Trident nuclear weapons system; retain its key role within the North Atlantic Treaty Organisation; refuse to raise income tax except for the very wealthiest citizens; and only to nationalise utilities that used to be publicly owned. So far, so good. But what we don’t know is if Mr Corbyn and Mr McDonnell do wish only to reverse some of the Thatcherism’s wilder instincts in this manner, or whether these proposals are a mere transitionary programme towards a much more radical agenda.

What if Prime Minister Corbyn simply took Trident off station, or ordered the removal of the nuclear submarine’s missiles? He must be desperate to get that chance: and it seems deeply unlikely that his Cabinet could stop him. The concerning precedent set by the fact he ignored the resignation of nearly his entire team in 2016 shows that he would not care in the slightest were there to be a rash of Ministerial resignations. What if this NATO-sceptical Prime Minister refused to go to the military aid of a NATO state under attack that was pleading for assistance? What if Brexit meant much higher middle class tax rates to pay for the end of public sector pay restraint? What if second-term proposals encompassed a much deeper drive towards co-operatisation of the economy, or ‘differential compensation’ (as already rumoured) for another big bite at nationalisation – code for paying shareholders out on the basis of Ministers’ moral judgement of their past behaviour? What if pushing forward government control of the economy ended up meaning reducing (or ending) the Bank of England’s role in monetary and regulatory policy? What if the British economy can only be restructured behind a wall of capital controls? The answer is that we simply don’t know. Britain might become a very different place indeed, though if more than one of these policy changes really were to transpire, a Labour split would become much more likely. Perhaps by that point it wouldn’t really matter.

There we must leave it, with the observation that there is much more about a Corbyn Labour government that we don’t know than that which we do. We just don’t know whether Labour can fight its way to a durable overall majority, massively boosting Mr Corbyn’s power and removing any Labour reliance on the SNP. We’re not sure how Labour members will react as the gap between rich and poor rises, following a decade or two of overall stability (or slight falls) in income inequality. It’s unclear how Labour would react to economic problems, whether those turn out to be just squalls or develop into real storms. And perhaps most profoundly at all, it’s opaque as to how far the Labour leadership team want to push things. Do they just want Britain to look rather more like Denmark and Sweden, or do they want to break with every actually-existing international model and sprint towards that left-socialism that Syriza imagined but could not deliver in Greece?

We end the year knowing a lot less than we thought we did when we entered it. Perhaps that realisation is a good thing. But the potential shape of the Labour government that does now look more likely than not – its challenges, its choices – is hopefully a little bit clearer after the last few paragraphs. Its politics are still there to be shaped: by General Election voters, by party members inside the policymaking machinery, in little and large economic decisions alike, by the public’s reaction when Labour’s true values are revealed. As ever, most of what happens next is up to you.