A very British strike

6 Feb 09
DAVID LIPSEY | Politics has few more frightening sights than Business Secretary Peter Mandelson in contempt mode.

Politics has few more frightening sights than Business Secretary Peter Mandelson in contempt mode.

Hearing his parliamentary statement on wildcat energy strikes was chilling, even if you had done nothing more wicked all day than hang around the House of Lords.

To paraphrase, the strikers had nothing to complain about. The jobs were available on fair terms to British workers and, besides, if the government did anything to protect them, the jobs of hundreds of thousands of British workers in the European Union would be in peril.

Contempt is often fear’s fellow traveller and Mandelson, underneath, must have been alarmed about what was happening. These strikes echoed the unrest over energy prices that once rocked Tony Blair’s government. The same characteristics have accompanied these actions: spread by word of e-mail, unexpected, unpredictable.

But it goes beyond this, for they are an early sign that the credit crunch could have more far-reaching political implications than has been contemplated.

Comment on the crisis has focused on its economic effects, which will indeed be bad or worse. Insofar as politics have come into it at all, it has been whether or not the crisis would help Gordon Brown pull his political irons out of the fire. At first there was the Brown bounce, as the prime minister acted decisively. Recent poll evidence suggests this was a dead cat’s bounce. Indeed, and worse for Brown, the corpse may be starting to stink as the consequences of the crisis hit home.

Will there be an election in May or October or will Brown go his full term? What will the result be? What would be a surprise is if the political consequences of the recession turned out to be as limited as whether Brown wins or loses.

The election will not, after all, offer a choice between radically different approaches to the crisis. The Conservatives have desperately tried to put blue water between themselves and the government by criticising its spending and borrowing plans.

But the common ground between the parties is much more extensive than the contested ground. Both parties see the need for exceptional measures. They both want to save the banks. They both want to encourage them to lend again. The Tories have not even dared say they will repeal the higher taxes being imposed on the well-off.

This common ground contrasts with the much wider range of policies that could plausibly be put forward. Both major parties assume that globalisation continues, and is a good thing. But in previous such crises, most countries have resorted to protectionism. This can take the blatant form of beggar-my-neighbour tariffs or the less blatant form of state subsidies to troubled firms.

A truly Right-wing party today could make a credible-sounding offer. Send foreign workers home. Stop further immigration. Get out of the EU. Add substance to the PM’s slogan of ‘British jobs for British workers’. Such a stance would lead to a nasty illiberalism in public life, but that does not mean it would lack electoral appeal.

A truly Left-wing party could make a credible offer too. Nationalise the banks. Sack their managers. Tax bonuses. Clobber non-doms. The Left in Britain has always been ambiguous about free trade — remember Tony Benn’s import-controlling alternative economic strategy in the 1970s? So it could add import controls to this menu.

Such a policy would of course run directly counter to the thrust of economic policy since Thatcher. But if that policy has gone wrong, who’s to say that would decrease its attractiveness?

These possible alternatives give our politicians a difficult dilemma. Do they, as Mandelson did, confront the alternatives? Or do they rather bend their policies to accommodate them?

The answer will depend on public opinion. For, ultimately, we live in a democracy, and therefore the political class does in the end what the people, in their inchoate way, want it to do.

The position in early 2009 really is unprecedented. It is not simply that we are facing a recession, for this has happened from time to time through the history of capitalism, and will happen again should the system survive.

What distinguishes this recession is that the inevitability of recessions has long been forgotten. We have had such a long period of sustained prosperity that we even had the hubris to think we had eliminated boom and bust.

No-one under the age of 40 or so has had any adult experience of substantial unemployment, of a sustained fall in living standards and of the desperate uncertainty that accompanies both. We cannot tell how people will react politically, as well as economically, to that experience. It would be unwise in these circumstances for the political class to behave as if it can just continue with business as more or less normal.

David Lipsey is a Labour peer

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