Iraq and the crash: The ghosts haunting Labour

So here we are, at the end of 2015. For anyone who even slightly cares about centre-left politics, it’s been a dreadful year.

Labour is in a mess. Riven by civil war, still reeling from that gut-punch of an election, and behind in all the polling. The future promises to get worse before it gets better; the party currently finds itself in a stalemate that will hold only as long as neither side acts out. I wouldn’t count on that being the case for an extended period; the trigger could potentially be a poor performance in May’s local elections, Corbyn doing something deleterious like abolishing the National Policy Forum, or something as yet unforeseen. The stalemate is fractious, the Doomsday Clock at one minute to midnight.

In reality though, the existential issues are the same for Labour now as they have been for the past eight years. The party is still to find a convincing answer to the biggest questions; solutions are needed on the economy, and foreign policy.

On the economy, the credit crunch scattered Labour thinking. Despite Gordon Brown handling the crisis well at the time, the market collapse was skilfully manipulated by the Conservatives. George Osborne, who days before the collapse of Northern Rock had committed to match Labour spending plans, continually told the story of how a profligate Labour party splurged far too much money on silly things like public services. He was joined by every other Tory in doing so, and, complete rubbish that it was, it stuck. It became received wisdom. It was a masterful piece of political theatre.

People do recognise that there was no way that Labour caused a global financial crisis, that it began with sub-prime lending in America, that bankers taking excessive risks were to blame. All of this is understood, and yet this continual battering by the Tories worked its magic. They became the party most trusted to run the economy. It may have been by lying through their teeth, but by God it worked for them.

On his election, Ed Miliband tried to think through what it meant to be a social democratic party in a time where the prevailing narrative was of austerity and balancing the books, where (apparently) there was no money to redistribute.

Labour did not want to appear financially incontinent, and confirm all these Tory arguments. But nor was there any desire to simply ape the Conservatives and support austerity. Clever academic theories were thrown around, such as “predistribution”, or the “producers and predators”, but with no firm backing given to any of them, nor an articulation of what they might mean in practice.

As a result, Miliband didn’t know where to go. Certain policies were popular enough in isolation, such as the energy price freeze, but a full economic vision was never sketched out. Miliband equivocated, never apologising for the crash, as Nick Clegg demanded, nor denying responsibility for it. Voters were confused, and simply didn’t believe that Labour had found the answers on the economy. If we’re being honest, we hadn’t.

On foreign policy, Miliband was similarly confused. He apologised for the Iraq war on becoming leader, but never laid out what a Miliband premiership would have to say about any future military campaigns. Whether you think his decision to oppose intervention in Syria in 2013 was right or wrong, he prevaricated and oscillated through the debates, rather than showing any real leadership. He ended up vetoing the whole adventure almost by mistake. Part of the reason for this is the toxic legacy of Iraq, still coursing through the Labour bloodstream.

And now we have Jeremy Corbyn. Elected as leader this summer, in part because none of the other three leadership contenders had a compelling vision to sell to the party. None had clear, Labour answers to the problems of the economy and Iraq.

Jeremy Corbyn certainly has clarity on foreign policy, but that is not necessarily a positive thing. Despite being polar opposites, Corbyn shares certain traits with Tony Blair when it comes to foreign policy. Both manage to talk of the highest principles, whilst dealing in terrible hypocrisy. For Blair, talk of removing a tyrant like Saddam Hussein seems hollow given that he indulges others. For Corbyn, proclaiming a commitment to human rights jars with his long-standing commitment to forging alliances with those who oppose human rights for homosexuals or Jewish people.

This is not what I want the Labour Party to look like.

On the economy, it’s less clear what Corbyn wants. I was initially enthused by Labour’s appointment of a star-studded Economic Advisory Committee, but nothing has been heard from them so far, three months in. Given that the economy is always amongst voters’ top priorities, and that Labour lag far behind the Tories on perceptions of economic competence, this is something that more time has to be devoted to if we are serious about winning.

Of things Jeremy Corbyn has ventured on the economy, he suffers from Miliband-itis; quoting single issue policies rather than a coherent vision. Abolish student fees. Nationalise stuff. Anti-austerity. All this is fine, but, if we’re against austerity, what are we for? What does post-austerity look like?

On the economy, the answer has to be a more interventionist state. Successive governments have believed that the only thing businesses appreciate is cutting taxation. It’s not the case. We can do more than this. We can use the tax system as a means, rather than an end.

We have huge areas of the country with untapped potential while London hoovers up the money. Invest in these regions. Encourage firms to set up there, with tax breaks and grants. Support R&D. Build better transport links. State our aim to be a world leader in science and technology, and make it happen. Draw a thick line between Tory cuts and Labour growth.

On foreign policy, the answer has to be a considered Labour internationalism. Turning our backs on the world is not the correct lesson to draw from the errors of Iraq. More, that we need a framework for understanding when is right to intervene and when is not. Despite Blair’s failure to follow it himself, his Chicago doctrine lays out a set of questions we should ask, and I think it is still a good approach for weighing our options. Certainly, we should not commit to become a pacifist party, turning our back on people suffering in the world because they are not in our country, or not being oppressed by us. That is not in line with Labour values.

The Labour Party continues to be haunted by Iraq and the crash; it is up to all of us to find a way forward, to identify a new social democracy, untainted by the ghosts of Labour’s past.

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