Defining the Third Way is like trying to nail jelly to the wall. But its core appears to be a mix of platitudes (the world has changed, compromise is necessary) and delusions (you really can please all of the people all of the time). Together these lead to timidity, lack of moral compass, and paralysis when tough choices must be made.
No serious analyst disputes that parties of the left had to adapt. The decline of manufacturing and growth in home ownership and individual aspirations reduced their traditional base. The 1989 implosion of Eastern Europe discredited state socialism as an ideal. And eighteen Tory years of direct tax cuts rendered it impossible, even were it desirable, to rebuild the centralised welfare systems of 1979. Labour had to win Sun readers as well as Guardian readers, and appeal to the upwardly-mobile propertied classes as well as the dispossessed, many of whom do not vote.
So far, so unexceptional. And compromise between competing interests is honourable and essential in politics. The Low Pay Commission saw employers, trade unionists and independent experts hammer out agreement on the national minimum wage, though regrettably Labour then gave business a second bite of the cherry in cutting the youth rate and extending it to 21 year-olds. But splitting the difference is not always possible. There is no Third Way on fox-hunting, and tighter regulation would satisfy neither passionate opponents nor passionate supporters. The government has prevaricated for five years. It should pass the will of the Commons into law, or forget it.
Fundamentalist minorities held the government to ransom on Clause 28, a malign Tory relic which feeds anti-gay prejudice under the pretence of protecting children, and which has not produced a single prosecution. Compare this with the great social reforms of the 1960s Labour administration, which gave private member’s bills on liberalising abortion and legalising male homosexuality fair winds and practical help. When has New Labour showed equal courage?
This weakness of nerve also affects economic decisions. Transport policy vacillates to reflect prevailing volumes of outrage from motorists and from rail passengers. Faced with evidence that less privileged young people are deterred from higher education or achieve below their potential, Labour promised a review of student funding. Proposals initially expected in 2002 will be delayed for at least a year, because every alternative is unpopular with someone. The average graduate may attract a 20 percent earnings premium, but public sector workers and people with broken employment gain far less. So the fairest system is a graduate tax, where repayment reflects the real gain to the individual. If this is unsellable, to the Treasury or to voters, then perhaps it was a mistake to rule out rises in general income tax.
Remember, the Tories never actually cut tax. As Labour famously pointed out in its ‘22 tax rises’ poster, lower direct taxation was counterbalanced by higher indirect taxation and phasing out tax reliefs. Unfortunately, the fuel protests showed that voters have finally caught on, and Labour is running out of options. At the same time the problems of pushing people into private arrangements are increasingly obvious. Thrifty workers find their pension funds robbed by Maxwell or mis-managed by Equitable Life.
Encouragingly, Labour is starting to recognise that whoever owns public services, the government will be blamed if postal delivery collapses and trains do not run on time. The basic state pension was increased against the current dogma, to stem the loss of seats and votes from angry electors.
For the 21st century, Labour needs guiding principles: ‘From each according to their means, to each according to their needs’ would be a good start – tempered with sufficient pragmatism to win further terms in office. Dismissed by The Economist as ‘vacuous’ and by Stephen Byers as ‘flaky’, the Third Way offers neither.
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