Wednesday, 9 May 2012

The left's tale of two cities

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness…”
- Charles Dickens, A Tale of Two Cities

There seemed to be eerie echoes of Dickens’ words last weekend in the parallel events in those same cities of London and Paris. It was, in the midst of an economic downturn, a very positive one for the left. Yet it is also as yet unclear how the results will be interpreted: wisely, or otherwise.

 London, Miliband rather secured the best of all possible worlds. For months the media had speculated that a defeat in the mayoral election would be a calamity for Labour. They were wrong. In the end, the defeat was such a personal one for Livingstone, and the wins elsewhere so resounding, that it seems to have caused very little damage at all to Labour’s 2015 electoral chances. And probably much less than might have been caused by Miliband’s jousting with a revitalised, awkward Livingstone as the party’s highest-placed representative in public office. Barring some major personal calamity, his position is secure.

o, the only damage might have derived from Labour having selected such a poor mayoral candidate in the first place, as even the normally-supportive New Statesman described him, thus reminding the electorate that it is not yet looking like a sure-footed party of government.
That said, the vote was clearly a punishment of the Coalition, first and foremost. It is hard to see it as a vote of confidence in Labour’s policies, given how few have been announced. It was also on low turnout and against seats which were last contested in 2008, the crisis year when the country suddenly turned against Gordon Brown. Not to have made significant gains would have been, frankly, a disaster.

Meanwhile, in France, François Hollande’s presidential victory is likely to have given great encouragement to his British counterpart. It makes Hollande the first leader of the left to return to power in a major European country, and the temptation for Labour is to perceive this as its long-awaited signal that the pendulum is swinging back from right to left.

“A new dawn has broken” tweeted MEP Mary Honeyball yesterday. While I admire her positivism, it is, in fact, a rather old, and very likely false, dawn. The Parti Socialiste has a traditional, Continental, social-democratic set of policies and has has come to power in possibly the most unreconstructed Western economy in terms of its attitude to state ownership and labour laws. France, even under Sarkozy, has still been subsidising failing state-owned companies, as well as holding steadfastly to its 35-hour week (the Economist recently ran a marvellous cover story called “France in denial”). All in an era where the Far East can run its factories at high levels of productivity and a fraction of the cost.

And, regarding his policy programme, it is difficult to see Hollande being a pragmatist in government. For example, take this declaration from a January speech:
“My enemy is not another candidate, it is not a person, it has no face, it is the world of finance.”
All very well, I suppose, down with capitalism: hurrah. But, whatever additional regulation the financial sector may need, is it a good idea, on any level, to emote about it being the “enemy”? In any event, this is an approach that Miliband would be wise not to try to emulate; in a country like ours, where one-fifth of GDP derives from the City, it would have very deep implications for government credibility, for borrowing and for investment. It is easy for France to talk about a financial transaction tax when it has a tiny financial sector compared with the mighty City; everyone wants higher taxes for the other guy.

The worst thing either leader could do now is to think that all this is a vindication for old-fashioned social democracy: quite the reverse. In both countries, harsh austerity programmes have made the right unpopular, little more. Both parties seem to be casting around for solutions. Hollande, having just won an election, naturally has the more advanced policy programme. Some ideas are sensible, such as splitting French banks’ retail and investment arms; some, such as 75% tax for millionaires, look like pointless populism which will make activists feel better but will change little. Worse, there are signs that he may reject the fiscal compact with other Eurozone countries, which would be a severe blow to a fragile euro.

While it seems plausible that ultimately Hollande might “do a Mitterand” by, once in power, shifting towards the centre, there is a plausible alternative scenario: that, being unable or unwilling to take on conservative elements in his own, stagnant party, he will end up like Spain’s Zapatero: a hapless victim of economic events, rather than a bold visionary of a new leftism. Or, as Olaf Cramme and Patrick Diamond of the Policy Network put it:
“The danger is that leftwing parties will be elected by default but will have little idea of what to do with power in the aftermath of victory. Lacking direction, they will quickly flounder – risking catastrophic defeat only a few years later.”
In the meantime, the smartest thing for Miliband to do may just be to smile for the photo opportunity with Hollande, and leave it at that. Hollande still needs to prove that he has a sustainable vision which truly resonates with the French people, and has not merely capitalised on the backlash against the financial crisis and the resultant Sarkophobia.

Just as in Dickens’ tale, the revolution of the sans-culottes has not yet caught the imagination of the public this side of the Channel and seems unlikely to, without either a radical rework of its policy programme or a Coalition meltdown. Meanwhile, over there, it may still end with heads rolling all over the place.

This post first published at LabourList, and was linked at Liberal Conspiracy


  1. The new dawn is far more likely to be us of the far left. Action planned in UK before end of May.

  2. "where one-fifth of GDP derives from the City,"

    One fifth of one fifth I think you'll find. About 4% of GDP is The City.

    Total financial sector (ie, car insurance etc) is more than that but that's not "the City".

  3. Peter Barnard has already made a similar point at LabourList (and I suspect that the linked piece at LibCon is his, too). I was referring to the City *and dependent businesses* (accounting, law, recruitment, property etc) which depend upon the City for their livelihoods. If you removed these, it would certainly constitute a lot more than 4% impact to the UK economy.

    Anyway, whatever we might quibble about definitions, the key point is that the impact of an FTT is hugely greater for the UK than it is for France - do you agree with that?

  4. May fizzled out and my trip to the Turkish border is on hold.


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