Trends turn against Labour
Ben Dilks with the latest from the wonk world
There could not be a more overt gathering of the ‘global elite’ than the World Economic Forum in Davos. Beneath the shimmer of the Swiss Alps, the £15,000-a-ticket summit plays host to an equally glittering array of world leaders, celebrities and billionaire financiers – the targets of the anti-establishment rhetoric that has recently dominated politics.
Last month Theresa May was met with an unsurprisingly lukewarm reception from attendees when she told the world’s biggest companies that they need to start paying their taxes. In her carefully worded address, the prime minister stressed her support for free trade and globalisation, but emphasised how support for the status quo was being undermined because ‘those who prosper seem to play by a different set of rules’.
Both the narrative assumed by the government on this subject and its negotiating position for Brexit – as fleshed out by the prime minister over recent weeks – bear a remarkable resemblance to the stances recommended for Labour by party donor and arch-Brexiteer John Mills.
In Healing the Wounds, published by Labour Future – the sister organisation to Labour Leave – Mills states his reading of the Brexit vote is that ‘everyone hugely underestimated the pent up anger … largely caused by the way in which in which recent economic developments, particularly globalisation, had disproportionately benefited the metropolitan elite at the expense of the wider community’.
This analysis clearly chimes with many. Far more controversial though, is the tonic that is prescribed. Mills firmly advocates that Britain should leave the single market, on the basis that this would leave us free to set our own trading terms elsewhere – essentially the stance now adopted by the government.
Sceptics fear the lower exchange rate that would likely be necessary in this scenario for the United Kingdom to remain globally competitive would go hand-in-hand with high inflation. This in turn, they say, would drastically impact the living standards of those on low and middle incomes.
Lacking in Mills’s analysis is any consideration of the dangers of his proposed course of action being implemented by a Conservative government rather than a Labour one. There is of course the ominous prospect that the Tories use Europe’s potentially hostile response to Britain’s exit from the single market as political cover to – as May puts it – ‘change the basis of Britain’s economic model’. And we all know what that means.
Whatever happens, what is certain is that Brexit marks the beginning of a phase of profound disruption to the way the economy works. There is of course a risk that the dominance of discourse about how exactly the UK untangles itself from the European Union serves as a distraction from the many other pressing issues facing the country.
Progressives must think imaginatively if they are to come up with ways to insulate the population from the downsides of a variety of other powerful trends. These issues are flagged up in a new report published by the Institute for Public Policy Research. Future Proof: Britain in the 2020s examines four key disruptive forces beyond Brexit, namely: population growth and demographic shifts; changes in the economic world order thanks to globalisation; accelerating technological change; and the imperative to decarbonise in the face of climate change.
Labour’s apparent inability to offer a credible response to a single one of these challenges may lie behind the party’s dismal poll ratings.
It is a problem the Fabian Society dares to confront head on in its new paper Stuck: How Labour is too weak to win, and too strong to die. The report finds the possibility of an outright Labour victory to now be ‘virtually unthinkable’ and argues Labour will need to explore the possibility of working in coalition even if the party’s poll ratings miraculously improve. The prediction that the electoral system will provide a ‘firewall’ which enables the party to retain 140 seats in the likely eventuality that ratings continue to slide will come as little comfort to anxious Labour members of parliament.
Ben Dilks is commissioning editor at Policy Network. He tweets at @BenDilks
Fabian Society, ippr, John Mills, Theresa May, World Economic Forum