Creating an economy that works for all

A Labour government could overhaul a struggling, unjust economic system: A manifesto by Hilary Wainwright.

April 21, 2018
21 min read


Hilary WainwrightHilary Wainwright is a member of Red Pepper's editorial collective and a fellow of the Transnational Institute. @hilarypepper


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Picturehouse workers stage a demonstration for living wages and fair working conditions.

Labour will tackle the inequalities in our economy, deliver investment to every part of the UK and develop an industrial strategy to create highly paid, highly skilled work.

We will tackle tax avoidance through a Tax Transparency and Enforcement Programme, closing loopholes. There will be no income tax rises for those on less than £80,000 a year and no increase in personal National Insurance or VAT rates. Nor will VAT be extended to food, children’s clothes, books, newspapers or public transport fares. Corporation tax will rise, but small businesses will be protected by the reintroduction of the lower small profits rate of corporation tax and by excluding them from quarterly reporting. Our manifesto is fully costed and we plan to eliminate the deficit on day-to-day spending within five years. Our Fiscal Credibility Rule that government should not be borrowing for day-to-day spending will be overseen by the Office for Budget Responsibility, accountable to Parliament.

We will create a National Transformation Fund to invest £250 billion over ten years in infrastructure. We will complete the HS2 high-speed rail link through Birmingham to Leeds, Manchester and on to Scotland and build a Crossrail of the North, a new Brighton Main Line and Crossrail 2 in London. We will also complete the Science Vale transport arc, from Oxford to Cambridge through Milton Keynes and pursue electrification and expansion throughout the country. In energy, Labour will invest in new low carbon gas and renewable electricity. On communications, we will deliver universal superfast broadband by 2022, improved mobile internet coverage and expanded free wifi in city centres and on public transport. We will improve 4G coverage, invest to ensure all urban areas, major roads and railways have 5G coverage and instruct the National Infrastructure Commission to work on rolling out ‘ultrafast’ within a decade.

Our industrial strategy will be based on the following measurable missions: ensuring 60% of UK energy comes from zero-carbon or renewable sources by 2030; getting the highest proportion of high-skilled jobs in the OECD and meeting their target of 3% of GDP to be spent on R&D by 2030; creating a National Education Service for England; negotiating a new deal with Europe that puts jobs first; improving procurement; and capping energy costs and investing in public energy provision. Special councils will be established to oversee the security and growth of specific industries and private investment encouraged by removing new plant from business rate calculations. Firms providing local or national government services will have to meet high standards, including respecting workers’ and environmental rights, paying suppliers on time and moving towards a 20:1 highest/lowest pay gap. We will appoint a Digital Ambassador to promote Britain’s digital economy.

Labour will create a National Investment Bank that will deliver £250 billion of lending power, supporting a network of regional development banks to finance small businesses and co- ops. We will overhaul the financial system, separating investment and retail banking to protect consumers, preventing bank branch closures where there is a clear local need, consulting on breaking up the publicly-owned RBS into local banks and extending Stamp Duty Reserve Tax to cover more assets.

On business, Labour will amend company law so directors owe a duty to employees, customers, the environment and the wider public, as well as shareholders. Takeover rules will be amended to protect workers and pensioners and Labour will legislate to reduce pay inequality. To support small businesses, we will mandate the National Investment Bank and regional development banks to prioritise lending to them, introduce a package of reforms to business rates and crack down on late payment. We will aim to double the size of the cooperative sector in the UK, making employees the buyer of first refusal when a company is up for sale. Labour will bring key utilities back into public ownership, including rail companies as their franchises expire, energy supply, water and Royal Mail.

On energy, Labour will introduce an immediate price cap and take energy back into public control in stages. We will insulate 4 million homes and offer homeowners interest-free loans to improve their property. For renters, Labour will improve on existing Landlord Energy Efficiency regulations and re-establish the Landlord Energy Saving Allowance to improve efficiency. Labour will ban fracking and transition to cleaner fuels and renewable energy. Labour remains committed to nuclear energy and the targets in the Paris Agreement and the Climate Change Act. As part of the Brexit negotiations, Labour will prioritise maintaining access to the internal energy market and Euratom.

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It’s widely recognised that Jeremy Corbyn’s success, along with that of Bernie Sanders in the US and Pablo Iglesias and Ada Colau in Spain, is a product of a deep and widespread disaffection – to the point of anger and contempt – with the political class, and politicians themselves. ‘They are all the same’ is the response that party canvassers hear from every other house they visit. Corbyn, Sanders, Iglesias and Colau are popular precisely because they are different. They do not behave like normal politicians. They are clearly not conventional politicians.

This surely goes deeper than authenticity, modesty and an evident commitment to social justice and living out the social values that they preach. I will argue that if movements of the new transformative left which are gaining such support from those disgusted with the old politics, are actually to be transformative – and not end up either making the same compromises as left governments in the past, or being defeated by the hostile forces that will undoubtedly face them – then the leaderships and their supporters will need to rethink their practice and go beyond simply a new kind of personal leadership. And no doubt such rethinking is already underway. I want simply to contribute to this process, by exploring what it means for building on the undoubted success of Labour’s 2017 manifesto.

First, a point should be made about the limits of a manifesto. A manifesto, like any set of policies, tends to imply the perspective of the architect setting out the plans for the builders to implement, under architectural supervision – or civil servants and the state apparatus to implement, supervised by a Labour government. My critically constructive take on the 2017 manifesto, and indeed any radical manifesto of a left party preparing for government, begins from a military metaphor rather than an architectural one. The reason is that where a radical, socialist challenge to dominant interests is envisaged, it needs to have an eye to questions of the balance of power, the terrain, agency, leverage and allies, that is, within a framework of strategy, rather than simply ‘policy’, as if it could be separated from questions of agency and the mobilisation of power.

We have only to recall the memories evoked by ‘Chile’ and more recently ‘Greece’, to remind ourselves of the concerted hostile powers ranged against a radical government whose policies threaten the international interests of capital. The 2017 manifesto might read as if it were no more radical than a reconstruction of the gains of Attlee’s post-war welfare state, proposing a government committed to halting and reversing the last two decades of austerity and planetary destruction and reconstructing institutions to defend and extend the principles of public goods against the insistent imperatives of the deregulated market. But such a project would of necessity be extremely radical and face far more hostile forces than in the post-war world of a mobilised self-confident public and an infrastructure of regulations requiring private businesses to work for a public goal.

POWER FROM BELOW

In this context, stronger forms of state intervention and control over infrastructure will be a necessary condition – including over telecoms, transport, energy and probably land too, but also over finance, turning the banks into public utilities – but it will not be sufficient. The lesson from all, so far failed, attempts to implement a radical industrial strategy indicate that such a transformation requires the exercise of power within production. It may be supported by state intervention, but requires the exercise of power from below, power as a transformative capacity involving the practical knowledge and self-organisation of working people. This points clearly to a vision of a truly left government as one that enables the transformative capacity and collaborative creativity of workers and consumers to be realised, rather than substituting for it. It must involve a direct transformation of production, not simply more radical forms of redistribution. there are important and very welcome commitments in the manifesto which have exactly this enabling purpose, strengthening workers’ existing transformative capacities. For example, there are several commitments to support the growth – indeed the doubling in size – of the co-operative sector, through a National Investment Bank and regional development banks, specifically charged with supporting it, and through legislation to create a proper legal definition for co-operative ownership. Also very important and notably innovative is the commitment to introduce a “right to own” making employees the buyer of first refusal when the company they work for is up for sale.

There are several other commitments to re-establish and extend public ownership which could potentially be combined with participatory forms of control, avoiding the paternalism of the 1945 government. The truth is that the Attlee government delivered its impressive legislative programme of reforms in a way that failed to entrench radical change in the actual social relations of daily life – work, family, community and public pro- vision. Remember the scene from Ken Loach’s 2013 lm The Spirit of ’45 where, as the flag of the National Coal Board was being hoisted outside the nation’s mines to much joyous celebration, the people taking their seats in the managers’ offices were – much to the humiliation of NUM militants – bosses of the private companies or senior ex-military personnel. In the 2017 manifesto, the commitment to “in-source our public and local council services as preferred providers” could be implemented through a partnership with UNISON branches, many of which have already had experience of resisting privatisation, with alternative proposals for improving the quality and public efficiency of the service through participatory forms of public administration.1 Similarly the various commitments to ‘Wider Ownership of the Economy’ could be carried out in partnership with organisations of labour and of communities of users. But this needs to be made more explicit and prepared for in close collaboration with grassroots organisations, whose practical knowledge and potential power would help to strengthen the popularity and credibility of these significant challenges to corporate power.

It is this idea of developing popular transformative capacity, as part of the process of building support for a transformative left government, that needs more work. This needs to be explored in terms of ‘strategy’ rather than ‘policy’. The notion of strategy would direct us to map – and discover and test out how to mobilise – the resources of transformative power that could reinforce the power that is gained from winning office (always necessary but never sufficient). Such a strategic preparation is especially important given the unfavourable terrain left by decades of neoliberal austerity: the destruction of much of industry; an economy dominated by finance, resulting in devastating geographic and class inequalities; a democracy with its everyday substance hollowed out by privatisation, by the ruthless weakening of the trade union movement and destruction of workers’ rights and by significant attacks on the rights of women, homosexuals, black people and people with disabilities.

On the other hand, new resources and potential allies are emerging as a result of great social movements that have grown up in recent decades contesting global corporate power in almost every sphere of life, from birth control, through education, food, water, transport, waste, wages, trade, the economy, technology and the future of the planet. What is distinctive about these social movements is that they have become a sphere of civil economic alternatives, consisting of more or less autonomous productive initiatives – co-operatives, social enterprises and networks of enterprises, projects and individuals, especially in the information and communication technologies that are at the heart of contemporary capitalism – pursuing values and ideas born of resistance to neoliberalism and likely to share the goals of a transformative left government. I would argue that future Labour Party strategy, with the help of local branches of Momentum, the co-operative movement and radical trade union branches, should map the transformative potential of this hybrid civil economy and consider how it can be strengthened, including through closer alliances with the labour movement, to prepare for the new opportunities that a left government might open up. For example, the manifesto’s commitment to a “right of ownership”, giving workers first rights to buy a company up for sale, is going to be more meaningful if workers have been able to develop their own alternative plans for the future of the company. Such a process could benefit from learning from and collaborating with economic projects that have been directly concerned with creative alternatives, for example, in relation to renewable energy or organic foods. A workers’ takeover of a conventional food company could strengthen a chain for healthy, organic and fair trade food which in turn could be further extended through the value-driven policies for public procurement at all levels – local as much as national – proposed by the manifesto. One way of putting this is that whereas the manifesto includes several (albeit insufficient) institutional forms by which ‘the many’ – citizens as knowledgeable economic actors, whether workers, would-be workers, consumers, service users and communities – can be agents of industrial transformation, it says little, except in the section dealing with renewable energies, about changes in the content – the ‘use value’ to use Marxist shorthand – of production. A serious omission, for instance, and a step backwards from a commitment Corbyn made during his initial campaign to be leader, is the Arms Conversion or Defence Diversification Agency that Corbyn spelt out in convincing details in speeches in 2015. In this example, he presented a vision of a process of economic democracy through which ‘the many’ – through the practical knowledge and social anti-militaristic values of workers and communities – could shape a transition from an economy in which military production dominated manufacturing to an economy in which all the resources and creativity locked into military production were liberated for socially useful purposes.

LEARNING FROM HISTORY

Moreover, this innovative alternative already has a history and international experiences from which to learn. Indeed Corbyn, in his speeches on this, referred to a plan for socially useful production drawn up by the Lucas Aerospace workers in the 1970s as evidence of workers’ capacity collaboratively to control the uses to which investment and productive capacity should be put and to use the experience as a model for the promised Arms Conversion Agency. The Lucas workers were resisting redundancies and factory closures while at the same time refusing to continue making components for military planes. They provide an exemplary case of the exercise of workers’ transformative capacity and the potential power this could create, if supported by a government whose strategy for change was not to presume that governmental office alone gave it the power needed to change the purpose of production and the direction of investment. In the end this prefigurative alternative, despite widespread support, was blocked by Lucas management defending its prerogatives, by a Labour government defending its monopoly of politics and by a trade union leadership threatened by the multi-union unity and political consciousness of its shop floor activists. But its legacy lives on and as new generations challenge the destructive logic of corporate-driven production, the idea continues to appeal of working with those who have inside knowledge of production – indeed the designers and skilled engineers on whom production depends – to reverse the dominant direction imposed by government and management.

So the issue of the agents of a transition towards a low-carbon economy and an economy working for the many, not the warmongering few, is a central one. It is one which needs to be addressed not simply when Labour ministers arrive in their departments – only to be faced with permanent civil servants who present them with options that take for granted the existing priorities of production.

The problem however, reflected perhaps in the relative weakness of the manifesto on the means of workers’ participation in the development and the implementation of its otherwise radical industrial strategy, is the fact that trade union organisation in what’s left of industry is weak compared to the 1970s. In that era, the Lucas Aerospace Combine Committee – all twenty to thirty of them – crowded into Tony Benn’s office in the Department of Industry to discuss the nationalisation of aerospace and ended up exploring the idea of their own plan for Lucas Aerospace. At that time, not only were a very much higher proportion of workers in unions, but workplace trade union organisations in manufacturing were very well organised. This organisation ran across craft and general unions and across office and factory floor, so that the joint shop stewards committees of a factory – and then increasingly across factories covering a whole multi-plant corporation – collectively knew as much about the whole production process as management, and probably more. Their collective practical knowledge of the overview of production and their organised presence at every point in a production flow whose smooth operation depended on them, gave them great leverage. As a result they had considerable collective self-confidence as workers. The idea of workers’ control was not strange and Tony Benn’s radical industrial strategy saw workers playing an essential role. It proposed an explicit collaboration between government and organised labour, through planning agreements that were intended as a process of negotiation between management, unions – including the shop floor and office representatives of the company concerned – and government. Furthermore, they were to be a condition of government aid. So important were the workers intended to be in this process that Benn, Stuart Holland, Judith Hart and others involved in this policy spent a lot of time meeting large numbers of shop stewards in engineering centres such as Tyneside and Coventry, encouraging them to prepare for this process. In one case, which I observed in Tyneside where I was working at the time, the shop stewards in shipbuilding produced their own proposals, headlined ‘Workers’ control with management participation’ – a sign of the times. Interestingly, these preparatory meetings across the country were facilitated by the Institute of Workers Control, an independent educational and research organisation with close links to Tony Benn, his network of left MPs, Constituency Labour Parties and also the left in the major unions. Could Momentum play a similar role now?

Organising Today

Such a preparatory process now would have to be very different in terms of the constituencies that it would need to reach out to. There are no longer the well organised, company-wide, industry-wide shop stewards organisations confident in their capacities effectively to run industry. However, the unions retain a strength in key strategic areas of the economy, especially concerning logistics. Unite has recognised this by creating a dedicated ‘Leverage and Organisation’ department. This department can claim several important victories, for example over Crossrail, partly because of the way that it combines traditional industrial action with tactics learnt from new direct action movements. One of these is UK Uncut, which used direct action street theatre tactics to focus attention on tax evasion, by occupying the shops of companies that evaded tax, sometimes turning them into hospitals, libraries or other public services for the day.

The state of trade union organisation does not remain static. To survive, unions need members and at the same time workers have begun to refuse the indignities of neoliberalism, such as zero hour contracts, with strikes like that of McDonald’s workers and bargaining efforts like those of the GMB, forcing Uber to treat its drivers as employees. Such precarious workers have been part of the Corbyn ‘surge’. This is recognised in the manifesto with an impressive list of measures in the section on “A Fair Deal at Work” that will shift the balance in favour of trade unions and labour, but in a way which recognises their role in ensuring industrial development in the public good. Indeed I would argue that the combination of a commitment to a new deal at work with an industrial strategy that includes new rights of workers over production overcomes the traditional divide between politics and economics. This divide is ultimately what defeated the transformative economics of those like the Institute of Workers Control and Tony Benn, who put it on to the agenda but never gained the possibility of leading the party.

Already the new leadership is providing a platform for initiatives, often local, that focus on public procurement and the use of public funds to improve the conditions and the power of labour. This both prefigures in the present what would be possible on a far larger scale through government and also begins to shift the balance of power towards labour. Examples are spreading of civil and local initiatives of this kind, not as naïve attempts to create islands of socialism, but initiatives that go beyond single enterprises. Several trends are especially notable: in particular, opposition to the socially destructive impact of global markets; challenges to the values and design of the technologies now destroying the foundations of human and animal life; the pervasive impact and potential of the new information and communication technologies, and the centrality of how and by whom they are controlled.

The new politics of the Corbyn leadership and of Momentum already indicates an alertness to these new grassroots alternatives. Momentum’s importance is that its roots lie at least in part in this civil economy.

Where Next?

Alex Nunns, author of the most authoritative description of Jeremy Corbyn’s ‘improbable path to power’, comments that it is Corbyn’s participatory ethos, rather than the specific detail of policies, that was really the essence of Corbyn’s entire campaign. For disempowered party members in particular, it was the reason Corbyn was so appealing. He was offering them empowerment, and there was no mistaking the message – every aspect of Corbyn’s candidacy, from his own selfless demeanour to the specific form of rail nationalisation he was proposing, was about inviting people to take part.

If Labour is to make this appeal to the strong desire for ‘new politics’ the basis of its preparation for government, and if a Corbyn government is to fulfill the transformative potential of the movement behind it and be able to withstand the multiple pressures of capital, a future manifesto has to go beyond a return to the settlement of 1945. It has to be part of a strategy to stimulate new productive sources of transformative power and in particular to strengthen those alternatives.

This extract comes from OR Books new publication ‘For the Many, Preparing Labour for Power’ edited by Mike Phipps. Use the discount code “FOR THE MANY RP” at purchase on the OR Books website to get a 20% discount.

Hilary WainwrightHilary Wainwright is a member of Red Pepper's editorial collective and a fellow of the Transnational Institute. @hilarypepper