The real ‘new politics’ of post-crisis Britain

The Conservatives understand – and exploit – the electorate’s concerns about ‘place’

As I argue in my forthcoming book Austerity Politics and UK Economic Policy, if austerity were simply an argument about the merits of deficit reduction, its critics on the left would have won hands down. Indeed, the regularity with which George Osborne now delays the deficit reduction end date clearly shows that he agrees. Alas, austerity is more than simply a laboratory experiment for macroeconomic theory. It builds upon instincts among the electorate around security and fairness that have sharpened since the financial crisis, which I believe have given life to a new politics of ‘place’.

In the second part of this essay (below), I argue that Labour has been too slow to grasp the centrality of place to post-crisis political discourse in Britain. This first part outlines the character of the politics of place and shows how the right have used it to justify and embody their austerity agenda.

Crises destroy complacency about the basic building blocks of our lifestyles, of which physical space is probably the most fundamental; accordingly, people are now more concerned about the spatial organisation of their lives. Place – and associated concerns around identity and belonging – has therefore become a key dimension of numerous political and policy dilemmas. The most obvious examples are heightened anxiety about immigration and membership of the European Union, which both reflect concerns about individuals’ and communities’ ability to exercise control over their own social environment, even if they manifest politically as rather spurious claims about economic impacts.

More generally, however, the crisis appears to have unleashed or unearthed a wider set of anxieties about the security of forms of spatial organisation – from our homes, to our towns and cities – which were once taken for granted, or more precisely, which we once assumed were immune to the ebbs and flows of the wider economy.

The genius of austerity is that it quietly builds these anxieties into the case for the smaller state. In terms of our homes, or so the argument goes, the Conservative party will naturally support our desire for home-ownership so that we can secure our own financial well-being – at the same time, however, the state’s ultimate responsibility to provide decent homes is further diluted.

In terms of our towns or cities, the Conservative party promises to empower local communities to take control of their own economic destiny, as exemplified by the northern powerhouse agenda. There are two key ruses at the heart of this agenda. The first is that it is designed to correct the north-south divide.  In fact, inequality between northern and southern regions has grown significantly under the coalition and Conservative governments, not least due to their decisions on how and where to cut public spending.

The second ruse is that the northern powerhouse represents some kind of empowerment for the north vis-a-vis central government.  The tacit Conservative argument in this regard – inspired by the ‘new urban economics’, which claims to have identified market-led forces of ‘agglomeration’ as the key to local prosperity – is that successive governments have effectively held back northern cities and regions precisely because they have sought to manage Britain’s geographical inequalities. By having to support depressed regions, more resilient regions have suffered. Of course, when the political elite is telling us to ‘beggar-thy-neighbour’, even if the neighbours in question are just a short trip down the M62, most of us want to believe that our town or city belongs in the resilient camp, while down the road lie the depressed regions.

This helps to explain why the so-called devolution agenda involves so few economic powers actually being devolved (and the powers that are being localised will come attached to severely depleted budgets anyway). If the north wants to succeed, it must prove itself in the only arena that matters, the global marketplace, and compete internally to an extent for the scraps of foreign direct investment that might come its way.

Invariably, northerners will attempt to rise to the challenge. We are a proud bunch – but we should remind ourselves what pride is often said to come before.  By accepting the argument that we can and should take more control of our own areas, northern cities and regions have entered negotiations with central government over devolution at an immediate disadvantage, because it is assumed that, before the crisis, we had complacently allowed ourselves to become dependent on the south.

Once this assumption is allowed to go unchallenged, the authority for determining the details of what devolution should look like in practice will always belong to the right. The result is a devolution agenda founded on the principle of a smaller state, partly reconstituted at the metropolitan level, shorn of the redistributive mechanisms that hitherto had properly acknowledged the dependence of London and the south-east on the economic contributions of the north to the national economy.

It is not my intention here to criticise civic leaders in the north that have signed city-deals with the Treasury, or signalled their intention to do so. They recognise the politics of place and reflect the desire among their electorates for greater control over the local area. Moreover, when it comes to acquiring the powers that this might entail, George Osborne’s northern powerhouse is the only game in town, even if it is rigged.

The argument on austerity will not be won by academic macroeconomists dusting off their Keynesian textbooks. It must be confronted as it exists in actuality, not theory, and this means constructing a progressive politics of place – the absence of which is the subject of the second half of this post.

Austerity is anchored in a new politics of place, but Labour is adrift

In the first part of this essay (above), I argued that, through the northern powerhouse agenda, the Conservative government have successfully exploited post-crisis anxieties about place to justify their ongoing austerity crusade. In this second part, I argue that Labour has been too slow to grasp the centrality of place to post-crisis political discourse in Britain.

Labour’s reticence on place is understandable. The party has for a long time been wedded to the quintessentially post-place discourse around globalisation, which of course reflected, albeit disingenuously, the British left’s traditional support for universal, or placeless, values such as human rights and equality.

Yet the politics of place should not be interpreted as an inherently right-wing agenda. A progressive politics of place is possible.  The Blair government had actually started to sketch out what it might look like, having devolved significant powers to the home nations (excluding England) and London, established the regional development agencies and attempted – before being thwarted by referendum defeat in the north-east – to establish new democratic processes at the regional level.

Tony Blair’s subsequent regret at having started the devolution ball rolling helps us to understand why he proceeded only tentatively, once new national assemblies had been established in Scotland, Wales and Northern Ireland. However, what Blair feared was precisely the kind of politics that is now required: locally-rooted resistance to a neoliberal growth model.  Blair did not want to see his ‘economic miracle’ derailed by parochial demands. Yet, now that we can appreciate the illusory elements of New Labour’s economic record, Labour should begin to appreciate too the value of liberating local areas to pursue their own developmental paths.

As I explore in my paper ‘The Resurrected Right and Disoriented Left’, Ed Miliband actually started to prepare plans for a decentralisation of powers during his time as Labour leader, but he did so rather quietly, and did not make these ideas a feature of his 2015 election campaign. This added, in the post-mortem, to the sense of incoherence that typified Miliband’s Labour.

By and large, while Miliband had many worthwhile policy ideas, he lacked the political instincts to know which were worth promoting. The contrast with Cameron and Osborne, in both regards, could not be starker.  Miliband’s tentativeness on place clearly contributed both to Labour’s heavy defeat in Scotland and the decision of many local Labour leaders – notably Richard Leese et al in Greater Manchester – to informally detach themselves from the national leadership and make a deal with Osborne.

There are nevertheless others drawing on other traditions within the Labour party that have sought, both before and after the 2015 election, to address the devolution issue. Blue Labour, for instance, under the political leadership of Jon Cruddas and the intellectual guidance of Maurice Glasman, offers a narrative which is essentially only about place, insofar as it criticises both market and state for crowding out the spontaneous civic activism of local communities. However, Blue Labour figures appear to have simply welcomed any and all instances of devolution of positive expressions of localism, irrespective of policy detail and economic implications.

Indeed, Cruddas has been most active recently in calling for greater recognition of English identity, including within the Labour party, guided by the notion that Englishness is an inherently progressive agenda with a tradition of supporting associational life against unfettered free markets and an overbearing central government. The result of this focus on culture and identity, however, is that Blue Labour offers no meaningful perspective on what institutional form devolution should take.  It offers neither a critique of the Conservatives’ plans, nor a tangible alternative.

The current Labour leader clearly rejects the progressive connotations that Blair attached to globalisation. Yet his politics – which ironically are very much locally rooted – reflect the same neglect of the value of place that characterised the whole New Labour project.

Jeremy Corbyn has thus far offered very few thoughts on the current devolution agenda, other than to dismiss the northern powerhouse as a ‘cruel deception’ during his leadership election campaign. The issue is clearly not one of his priorities, with the result that the gap between local Labour leaders in the north and the central party has grown into a chasm in recent months. Of course, Corbyn’s shadow cabinet is still a broad church, despite January’s‘ reshuffle. There are some, such as Lisa Nandy, who appear to endorse, in general terms, the direction of travel established by Osborne in tandem with northern leaders, while others, such as Jon Trickett, recognise the transformative potential of the politics of place yet remain sceptical of the specific northern powerhouse agenda.

The end result is an intensification of incoherence within Labour ranks. There is a sense, simply, that the Conservatives now largely own the discourse on localisation and decentralisation, at least in England. Corbyn’s strategy is evidently to confront the overall austerity agenda directly in an attempt to convince the electorate of its macroeconomic erroneousness. Yet, as argued above, the equation of austerity and deficit reduction is little more than misdirection: the more nebulous concerns that feed into austerity, such as those around place, have to be confronted directly.

Labour’s most immediate priority is to find a way to accommodate the localist sentiment that now exists within the labour movement. Corbyn interprets his leadership election victory as based on opposition to austerity economics, and even some of Britain’s recent foreign-policy stances. Although this may be true in some ways,  Corbyn’s victory also means something very different on the front line of local politics within the Labour party. It reflects a demand by individuals for greater empowerment, so that they may exercise greater political power themselves, not only through the medium of the party leader.

Corbyn is as much a product of the Westminster bubble as his recent predecessors were, but his supporters have transposed on to him their own critique of Britain’s distant and over-centralised political system.

More fundamentally, Labour needs to understand that localisation is, potentially, a way by which collectivist politics can be renewed, not fragmented. When the state is more tangible to citizens, they are more likely to appreciate the benefit of acting collectively through the state machinery to achieve common goods.  An approach to economic change that actually invites people to take ownership of the transformation they want to see will be more sustainable and better achieved where the democratic process is within touching distance.

None of this is to suggest that action at the national level (and indeed via international organisations) is no longer relevant to the pursuit of social democratic objectives. But, if Labour trusts local communities to govern themselves to a greater extent, then they in turn will place greater trust in Labour when the party tells them that certain powers are best exercised at the national level.