Reviewing the Policy Review: Labour's capitalists come out of the closet

Labour Briefing no. 84, 24 May 1989, p. 6

Transcribed or corrected by hand from the printed page.

By-line as printed: Phil Hearse (Islington North CLP).

"They haven't gone far enough, but it would be churlish not to admit that the Labour Party has moved a long way, and very quickly" was the response of the SDP's John Cartwright to the new Policy Review documents.

Cartwright even beagn to speculate about the possibility of the SDP rejoining Labour.

Neil Kinnock has demanded "realistic policies for the next 30 years" and has effectively written off socialism for a generation.

Those who reluctantly support Kinnock on these proposals on the grounds that they may be necessary to win a general election must answer two questions:

• what kind of Labour government would emerge on the basis of these policies?
• will they be understandable and popular with the electorate?

The central documents of the Policy Review are those on economic policy and defence.

On the economy, we are met with a barrage of anti-socialist "Noes":

no wealth tax, no nationalisation of banks and financial institutions, no renationalisation (except for buying back shares in BT and water), no exchange controls – no anything which threatens capitalism.

The essence of what is proposed is profoundly anti-working class. The document proposes a programme of government-funded investment and at least partial restoration of the welfare state. But how is this to be financed?

The answer is to "shift resources from unsustainable consumption to productive investment." To you and me that means "raising taxes".

It means that Bryan Gould, Neil Kinnock and their friends want to chop down the "unsustainable consumption" of those sections of workers who may be a little bit better off than they were ten years ago, and who are currently trying to defend their living standards against creeping inflation by going on strike.

But shouldn't there be higher taxes? Shouldn't socialists want less spent on personal consumption and more on investment and the welfare state? The answer is that it depends on whose consumption you are talking about.

While the economy document proposes to raise taxes on workers to much higher levels, taxes on the highest "earners" – those making hundreds of thousands or even millions of pounds each year – will only be 50%... much less than the old "surtax" rate under successive postwar governments.

A modest proposal by David Blunkett to raise this to 60% was unceremoniously dismissed. Any notions of mobilising the huge reserves of unproductive capital, overseas investments, or reduced arms expenditure were also vetoed.

Kinnock and Gould have now openly said that "we have to accept that we live under capitalism and we have to make it work better."

The net result is that Labour will simply be labelled the Party of High Taxes which wants to pay for investment and welfare by squeezing ordinary people.

Incidentally, Bryan Gould's contempt for the excessive consumption" of most people in this country beggars belief.

By any measure of advanced capitalist countries, Britain, or rather British workers, enjoy a low wage economy, low consumption of durable goods, and a small "surplus" after basic needs like food and clothing are met.

The chances of such an economic policy gaining widespread electoral support are remote. If Labour gets elected at the next general election it will be despite this policy, not because of it.

Now the defence fiasco, which goes under the name Britain and the World.

Kinnock wants to abandon unilateral nuclear disarmament not because of any intellectual breakthrough in his understanding of the drift of world politics, but because he thinks such a shift is essential to win an election.

But caught between the pro-nuclear logic of "multilateralism" and the anti-nuclear logic of the unilateralism supported by the majority of Party activists, Kinnock has come up with one of the most extraordinary doublethink arguments in recent history.

According to Britain and the World we shall keep nuclear weapons... in order to negotiate with others the best way of getting rid of them.

The smallest child can see this is an absurd formula, which is in reality a garbled gloss on Kinnock's real policy, namely to keep our bombs until the Russians get rid of their's – the traditional stance of multilateralists since Gaitskell and before.

In a paper submitted to the Policy Review committee on defence, Ron Todd tore the new stance to threads.

He pointed out the illogicality of an "anti-nuclear" policy which keeps three out of four Trident submarines, and which moreover keeps American bombers with hundreds of nuclear weapons on British territory under US control.

Leaving aside the technical irrationalities of the new position on nuclear defence, the whole thrust of the argument is based on an obscurantist Cold War myth – the myth of the Gorbachevite tanks waiting to roll into West Germany.

The anti-socialist and anti-working class character of the Policy Review documents comes out sharply in the document on "democracy" and the proposals on trade union law.

Key aspects of the Tory anti-union laws, including secret ballots for strikes and the banning of at least some sympathy action, will remain. The courts will still be able to interfere in the affairs of unions and declare strikes illegal.

The Policy Review rejects a Bill of Rights, rejects reducing the voting age to 16, and (what else do you expect?) rejects removing discriminatory legislation which makes the age of consent a ridiculous 21 for gay men.

So what kind of Labour government would this be a recipe for? Yes, you're right, it's a recipe for the kind of right-wing social-democratic governments we saw in the 60s and 70s under Wilson and Callaghan.

The ideology is more openly right-wing – especially on nationalisation and the welfare state – but in essence it's the same old story... with one difference.

Such a government would be elected in a situation of even more catastrophic collapse for British capitalism than existed in the 1970s, and would have even fewer answers to the accompanying economic and social crisis.

It was the shambles of the Callaghan government and the discrediting of Labour which gave rise directly to Thatcherism.

If the collapse of Thatcherism is followed by a right-wing Labour government or even a Kinnock-led coalition, the eventual debacle could lead to something much nastier than even Margaret Thatcher has yet come up with.

transcribed from the page image, 2 Nov 2026; spelling as printed (beagn; their's; 'Now the defence fiasco, which goes under the name Britain and the World.' is an incomplete sentence as printed; the opening quote mark before 'excessive consumption' is missing in print and is not supplied). By-line 'By Phil Hearse / Islington North CLP' in rules at the head of the fourth column; the article fills the upper part of page 6 (Labour Party: Policy Review) under the kicker band 'Reviewing the Policy Review' and is complete there. The intro is set in bold. Left out: the Labour rose logo set into the text, and the other pieces on the page ('Economic Policy: Gould's strategy won't work' by Ken Livingstone MP; 'Lesbian and gay rights: "No holds barred" campaign'; 'Inside the NEC: How they voted on the Policy Review' by Mark Seaton).