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Undoing New Labour’s Legacy: Start with Welfare ‘Reform’.

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Image result for Welfare reform tony Blair

Blair’s Welfare Legacy.

Before people get bogged down in the rows over the Labour leadership election, it’s perhaps better to look again at some of the policy legacies of New Labour which need challenging.

This is not just economic strategy (the acceptance of austerity post 2009), foreign policy, or internal party organisation.

It’s bedrock issues about the ‘Third Way’, a politics “in favour of growth, entrepreneurship, enterprise and wealth creation but it is also in favour of greater social justice and it sees the state playing a major role in bringing this about” (Anthony Giddens).

A key aspect of the Third Way, for both Blair and Brown, was reform of the Welfare State.

In the area of unemployment it was important to equip people with the means to compete on the labour, ‘global’  market, to ‘encourage’ them to  so in return for benefits. There would be no rights to social security  without ‘obligations’. That is to follow what the out-of-work were obliged to do what the state, or rather the private companies and Third Sector bodies contracted to ‘train’ them, told them they needed to do. In other words, the state claimed rights over the unemployed.

In January 1998 Tony Blair, Prime Minister, outlined the basis for the approach (Independent).

The reform of our welfare state is not to betray our core principles of social justice and solidarity. It is to make them live, breathe and work again for the modern age. Over the last 18 years we have become two nations – one trapped on benefits, the other paying for them. One nation in growing poverty, shut out from society’s mainstream, the other watching social security spending rise and rise, until it costs more than health, education, law and order and employment put together.

“When I look at the welfare state, I don’t see a pathway out of poverty, a route into work or a gateway to dignity in retirement. I see a dead end for too many people. I do not believe this is how Attlee or Beveridge intended things to be. I want to clear the way to a new system. Long-term, thought-out, principled reform is the way forward.

Case for Welfare Reform.

This was one of the 5 Pillars of Blair’s government repeated in 2002.

A welfare state based on rights and responsibility where we gave opportunity to people on benefit to get into work; but demanded responsibility in return; where we came down hard on crime; but offered ways out to those committing crime..

These were the schemes to “Get people into work” introduced by New Labour, under Blair, and then, Gordon Brown,

The New Deal (renamed Flexible New Deal from October 2009) was a workfare programme introduced in the United Kingdom by the first New Labour government in 1998, initially funded by a one-off £5 billion windfall tax on privatised utility companies.[1] The stated purpose was to reduce unemployment by providing training, subsidised employment and voluntary work to the unemployed. Spending on the New Deal was £1.3 billion in 2001.

The New Deal was a cornerstone of New Labour and devised mainly by LSE Professor Richard Layard, who has since been elevated to the House of Lords as a Labour peer. It was based on similar workfare models in Sweden, which Layard has spent much of his academic career studying.

The schemes were delivered by private companies and the ‘voluntary sector’.

After some ‘training’ and endless ‘job search’ (sitting in a room with a computer endlessly applying for posts) most people were sent on ‘placements’ in companies, the public and charitable sector. This was nominally set at 30 hours a week, but in many cases the hours went to a full 40.

They were (initially) given an extra £15 a week on top of their dole, and their travel expenses. It would be needless to add that this meant their work was paid well under anything approaching the minimum wage. There were none of the labour rights given to the employed, and obviously cases of bullying and exploitation were quickly signaled. A more common result was that some people proved ‘unsuitable’ for placements, or, in some cases, simply did not turn up for their placement.

Many examples of work experience were much more positive, but it was extremely rare for anybody to find a job in the place where they were sent, or for it to help directly anybody getting work. Indeed some felt that the fact that you had participated in the scheme functioned on your CV  as a mark against you. It became part of the way people were trapped in a “dead end”.

We have a lot recently about ‘sanctions‘ against claimants. These happened under the New Deal for, amongst others, the reasons just given.

Well this, during the New Deal,  was the position under New Labour (2009) just before the Coalition (2010) came to power.

So, we are always hearing about the millions of people who New Deal has supposedly helped get such jobseekers back in to work off benefits. You have also heard about how poorly New Deal participants are treated and perhaps you have your own experiences to back up this, but Ipswich Unemployed Action can reveal that over 679,820 sanctions have been awarded to lucky New Deal participants since the year 2000.

Here is one case study of the system worked (2010).

A4e: Reed in Partnership

A4e don’t have premises in Ipswich – they wholly subcontract out to Reed in Partnership who lease space inside Crown House (near Tower Ramparts). Initial comments on A4e/Reed in Partnership:

  • A4e were the biggest New Deal Prime Contractor – in the spotlight for fraud and overcrowding
  • A4e tried to shut down sites giving criticism such as sister site New Deal Scandal (including for reporting their finance director resigned/got demoted after fraud allegations) and also closed the original Watching A4e website
  • Reed in Partnership were the first to deliver New Deal in 1998 – they were caught in a £3 million fraud
  • Looking at past history – A4e and Reed in Partnership seem a good match
  • Reed in Partnership are accused of harassing past participants impersonating the DWP Fraud team (*)
  • Emma Harrison (A4e not the model/actress) has refused to acknowledge or talk about a4e’s failings
  • Reed in Partnership and Reed etc. are also part of the same group yet they are pretty much isolated from each other (no website links to each other etc. or mention about parent company).
  • A4e promised a cafe like environment and a chill-out lounge – neither exist in Ipswich
  • You can’t make a Tea or Coffee – participants are advised to ask staff for one
  • Flexible New Deal participants have to pick FIVE (5) job areas – 2 more than a Jobseeker’s Agreement (3 job areas)
  • Reed in Partnership staff have to have at least 6 months experience in high pressured sales environment
  • Reed in Partnership Ipswich is TOO SMALL – OVERCROWDING – Ofsted apparently have raised concerns – rumours have speculated that someone was sanctioned for being a few minutes late (bus came late) solely because the room was too full for the person to join
  • Reed in Partnership uses profiling – AVOID GIVING TOO MUCH INFORMATION AWAY!
  • Reed in Partnership forces participants to sign a disclaimer giving them the ability to apply for jobs on your behalf etc. and to contact future employers (probably pretending to be DWP)
  • Ask for a 7 journey supersaver card – if you don’t ask you wont get – this is easier then finding the cash to get on the bus and waiting for it to be reimbursed later
  • Reed in Partnership offers “decoy training courses” under various different names such as “JOURNEY” – these wont help you secure employment – waste of time – consists of asking questions about the person next to you, what famous people you would like to meet/have dinner with, and the usual shit (interview modules, CV modules).
  • Reed in Partnership contradicts themselves and will stab you in the back. Advisers have noted about a) travel costs to work b) budgeting the minimum money you require etc. and provided modules in their courses regarding “making sure you are better off, in work” HOWEVER the next moment all participants are TOLD to apply for any job – NMW – few hours from home etc. Seems like they are trying to prepare people for sanctions. Its not fair to advise people not to spend half your wages on travel to and from work, yet the next moment sanction them for 6 months money for refusing a job which matches this entirely.
  • Reed in Partnership have an ongoing legal dispute with Yell (Yellow Pages) – and Flexible New Deal participants are banned from accessing yell.com – rather an important resource for speculative applications. Whether this is an injunction preventing yell being accessed or not is unknown at this stage.

To put it simply, the ‘training’ courses and all the rest were, in many people’s eyes, worthless.

Then there was this: A4e Fraud.

The document A4E doesn’t want you to see. (Left Foot Forward. March 2012).

On Thursday, the website Ipswich Unemployment Action provided a link to an internal A4e document (pdf), that appeared to indicate poor performance on behalf of the embattled welfare-to work company, which has won more than £200million in contracts with the department of work and pensions.

And this,

A4e boss Emma Harrison paid herself £8.6m last year. Nothing unusual for a top banker perhaps. But her company is funded by the government to find jobs for unemployed people. And it’s being investigated for fraud

The article contains this paragraph,

Just lately, you may have seen some of the slightly more negative coverage of Harrison and the company she founded in Sheffield, 21 years ago: A4e (it means “Action For Employment”), who were decisively glued into the heart of the welfare state by New Labour, and have seen their importance increase thanks to the coalition. They specialise in that very modern practice known as “welfare to work”, and their only income in the UK comes from public contracts. The company’s promotional blurb characterises what it does as the simple business of “improving people’s lives”.

And there was this,

When New Labour was in power, A4e forged close links to its ministers. One of A4e’s consultants is David Blunkett, the former work and pensions secretary who advocated private involvement in welfare reform.

Mr Blunkett declares on the register of MPs’ interests that he is paid up to £30,000 a year by A4e. There is no suggestion of impropriety by Mr Blunkett, but he may be embarrassed by the probe.

It is the widespread view amongst activists that New Labour paved the way for the present punitive social security system, the shambles of Workfare (now being abandoned) and full-flown sanction-regime, not to mention the blatant profiteering by private companies now running substantial sections of the welfare state.

A root and branch challenge to this legacy is needed.


Good Riddance to New Labour? Or, Not?

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No Future! No Future! No Future for You! (?)

Tony Wood has written what may be one of the most significant political articles in New Left Review  (here. ) It is devoted to British politics. Here and now. Wood,  known for writing on Chechnya, grapples with the central issue of this election. That is the future of New Labour.

At  times Good Riddance to New Labour is marked by the vapid theory that Britain is a ‘prison of the nations’ (Ukania) – a strange gaol where prosperous Scottish Nationalists eat at their fill. Fortunately this gestural belief that regionalism and sovereigntist fervour  in Scotland and Wales are the wave of a better tomorrow, and a tendency to see ‘democracy’ in constitutional terms rather than, say, industrial or social, is not the principal message. Wood presents a brilliant overview of British politics, a ‘conjunctural’ portrait of all the factors that are concentrated in this election. Where he really hits all the right notes is through focusing on what exactly is wrong with New Labour.

As Wood begins,

The UK elections of May 2010 will mark a watershed in British politics. After thirteen long years, New Labour’s economic model lies in ruins, but a reckoning has been delayed until after the vote.

He concludes,

The specifics of New Labour’s record—one murderous war after another; slavish devotion to finance; promotion of rampant inequality; repeated assaults on civil liberties; fragmentation and privatization of public services; outrageous corruption—make plain that they have fully merited being turfed out of office. Good riddance; this execrable government deserves to go.

That is a balanced judgement. Not much more to loathe in the list. Whatever marginal improvements there’s been (such the much exaggerated minimum wage – a feature in plenty of other countries where I don’t notice it getting cited as a historic victory) they’re undercut by this catalogue of disasters.

Brown does not deserve anything other than a humiliation. Whether we also merit the punishment a Tory victory would bring, or the uncertain prospects offered by a variety of Coalition possibilities, is another matter.

How have we  got to this point? Wood’s analysis melds political science, political economy, finance, social surveys, high politics, international relations, and ideology.

For us it’s the meeting point between ideology and Blair and Brown’s government strategy that matters most. To begin with, New Labour claimed to be a new hegemonic project. That is, one with deep roots, able to channel the votes of the aspirational working class, the middle class concerned about their futures, and dynamic business forces, into a ‘new’ (always that adjective)  progressive alliance. One once called the Third Way, between socialism and neo-liberal capitalism. Though very soon (as it was no longer ‘new’) that expression got dropped. It became er….No-one has yet named ‘it’ properly, and perhaps never will, but let’s say Christian social marketism.

They might conveniently forget it now but many on the centre-left (a very New Labour phrase) accepted that the labour movement was no rising power. That the New Labour constituencies and voicing of their concerns was the way to gain, and maintain, a powerful reforming government. The media and ‘progressives’ decked this out with their concerns, from constitutional reform (a New Left Review hobby-horse), to tax and welfare changes to lift up the deserving and improve the listless. Above all there would be a massive expansion of state funding for public services – where all types of Labour supporters worked in or depended on.  

To Wood there never was a hegemonic ‘moment’. That is a time when New Labour joined up its vision with the voices of the masses, and became the dominant common sense of society to the point where all other views were subordinate. The above constituencies were there to be captured, and their votes were not the expression of a new regime of truth. They won in the face of division, not over real adversary.

“New Labour’s remarkable longevity has largely depended on the unprecedented eclipse of the Conservative Party, which after its ejection from power in 1997 disappeared for a protracted bout of internal blood-letting; it only began to re-emerge as a contender after 2005. Within Britain’s two-party system, a decade without serious competition left the field empty for Labour, which—thanks also to the distortions of first-past-the-post—secured commanding majorities with declining levels of popular support.”

In terms of ideas and inner-party Tory politics, it’s hard to fault this. New Labour got Conservative backing precisely because it appealed with similar ideas. Blair (sometimes called by the Right, ‘the best Conservative PM we’ve got’)  went with the Conservative grain; he did not strive to establish a different set of political and economic opinions (on anything from markets to international relations) He, and Brown, are meritocratic, not egalitarian, Christian believers in charitable help, defenders of reconciliation. In short, conventional thinkers well in the mainstream of European Christian democracy.

Yet there needed to be a certain momentum behind New Labour. If in voting terms who can doubt that,

“If Tory absence provided the negative foundations of Labour’s ‘weightless hegemony’, its positive basis was supplied by the long economic boom that began under the Major government, and from which Downing Street continued to benefit until 2008. This record-setting period of expansion was premised on the inflation of a series of asset-bubbles, above all in housing, which, together with the spread of more complex debt-based financial products, permitted the creation of significant wealth effects for UK homeowners and property speculators..”

This indicates a more deep-rooted base – the hard-nosed homeowner, the hard-working family, the hard-minded individualist – right up to the financier. Who are hardly ‘weightless’ social agents.

Blair and Brown have  built a state in this image, the ‘market state’. One that hives off for private profit public assets and revenues. An extremely heavy, cumbersome, regime, riddled by  the typical inefficiencies and profiteering  of private enterprise applied to public ends. Thus,

 ” from the 1990s onwards, rather than assets being sold outright into private hands, it was now streams of public revenue that would be handed to shareholders as guaranteed profits. This has taken two main forms. Firstly, subcontracting: under Major, public enterprises were encouraged to contract out provision of services to private companies, opening the way to a new realm of commodification. This trend was rapidly expanded under Labour, now reaching from local refuse collection to the administration of welfare, from dentistry to prisons. These immense subsidies to private profit have occupied a significant, and rising, proportion of government outlays: in 2007, subcontracting alone, at £68bn, accounted for 20 per cent of current public expenditure.”

Joining this are even more leaden instruments,

“The second modality has been the Private Finance Initiative (pfi)—of all the Conservative policies which New Labour has adopted and then accelerated, perhaps the most damaging in its long-term impact on public services.ce infrastructure, which would then be leased back from them under 25- to 30-year contracts. Large portions of public funds would now be mortgaged ..The real justifications for the scheme lay rather in accounting legerdemain and neoliberal ideology: delegating ever more of the state’s functions to capital.”

The third pillar of the market state (not described as such by Wood) is equally important. That is its reshaped  ‘training’ and disciplining functions. These are carried out by market-oriented public educational bodies, and, for the unemployed (over 2 and a half million people) by private companies funded by state largesse. Several billion pounds of public revenue flow into these bodies, which range from highly selective Universities to sink schemes for the out-of-work. These apparatuses are both meant to equip people to sell their skills on the ‘global’ marketplace, and to reform the recalcitrant poor and workless. In reality the encroaching private sector has profited without delivering results. The introduction of workfare – forced labour – for the long-term unemployed will seal the nature of the market-state. That is it will explicitly demand  duties  to work for  quarter of the minimum wage.

Rather than summarise the rest of the Tony Wood’s article we will concentrate on its conclusions. That is, what can be done to tear the party and government from its support for the market-state? Not to mention changing its  other policies (a long list, including above all,  foreign adventures and the occupation of Iraq and Afghanistan).

Wood notes,

“What of the argument that Labour might still be persuaded to return to its better, social-democratic self? As noted, the party made its social-liberal turn much earlier than its European counterparts, seeking to reverse the catastrophic electoral defeats of the 1980s by accepting the Thatcherite settlement and dropping any redistributive programme. Kinnock marked the first stage of this shift, Blair its culmination. The dominant impulse behind it was not so much ideological as instrumental: a quest for electability rather than a Damascene conversion. This produced a progressive hollowing-out of the party, under the sign of a ‘modernization’ led from above. Under Blair the party conference became an echo chamber for pronouncements from on high. The void at the party’s core has been filled by conformism and careerism, hunger for electoral success distancing it ever further from its origins in the labour movement.”

Anyone who has been active in the Labour Party knows this is the case. In the mid1990s I wrote a lengthy article for Tribune describing the new system of Policy Forums, at their inception, in these terms. Others did as well. If anything the blockage of democracy has got worse since. From patrician disdain at the Bennite upsurge (how dare these people tell us Parliamentarians what to do!), to general dislike of any radical rocking-of-the-boat, we have a managerialised hysteria well satirised (though not by much) by the series In the Thick of It. The real left is wholly marginalised. The ‘centre-left’ of Compass is a wistful presence, reduced to a pale version of 1950s social-democracy. Enfeebled local parties, whose activists are often reduced to those seeking election, are no counterweight.

This is the result,

” Labour’s steadily declining share of the vote, and even more by the rate of abstention in the party’s industrial heartlands. Here Labour has been buoyed by the lack of electoral alternatives. But still, one of the striking features of the last decade has been the extent to which the party’s longest-standing supporters now refuse to vote for it—including many who had been party members. This is another index of the party’s degeneration: its membership halved in the decade after 1997, and has now reached a historic low of 166,000. To be sure, the phenomenon of declining party-political membership is not confined to the UK. But even within the broader landscape of decreasing partisanship, Labour seems in worse shape than its European analogues: the French ps, notorious for being a collection of notables, currently has around 200,000 members; in Germany, the spd is rather larger, at 500,000, while the Italian pd claims over 800,000 iscritti. The actual influence any of these members have over policy is open to question, but it is clear that the Labour Party faces a comparative lack of cadres…”

We would add that this lack of activists is equally visible inside the trade unions, where even formal memebrship is becoming rarer. The generous and disinterested (since rewards are meagre for the unionised) use of union political funds in a last-ditch campaign for Labour’s re-election will have little efffect. 

So what does this imply for the May ballot-boxes ?

I feel, from going campaigning against the BNP and whatever political activity a left-winger can presently undertake, that something important has changed. That not only are people not enthusiastic about New Labour (for a vast variety of reasons) but they no longer care about appeal to loyalty. That they are determined to vote for those they choose – not those they are told to support. For the left this means that if we vote for the left, left Labour and Left socialists (as I would at least hope) we should really be thinking about new mechanisms that can effectively represent us on the political landscape . That we should not vote for those in the Labour Party who took us into the market state is another aspect we should consider. That our long-term projects need to be brought forward for yet another effort at creating a serious left organised alternative. Meanwhile…

As Wood states,

surely the clinching argument against New Labour is one of simple democratic principle. Any government with a record as appalling as this one’s deserves to be punished at the polls, if accountability to the voting public is to have any meaning.


Written by Andrew Coates

April 27, 2010 at 10:59 am

New Labour’s Unfinished Revolution Finished Off?

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Philip Gould: Thank you!

The plight of Georgina Gould, her contretemps in the Eirth and Thamesmead constituency, must have touched many hearts. It reminded me of the role her father, Lord Philip Gould, played in New Labour, for both Blair and Brown. His book, The Unfinished Revolution (1998) rightly stands as a classic. Gould set out the strategy for government whose results are with us today.

The Polster retells some anecdotes about the hard, ” aspirational” working class, that he knew in his (non-Lordly) youth. Today, he notes, the “new middle class” is at the centre of the country – drawing energy both from his old acquaintances, and the dynamic forces unleashed by markets. Newness, he discovers, is happening all over the planet. This globalisation needs “managed change”. People need to be equipped to go out and sell on the world market. Old fashioned statism, and class based politics cannot cope with these changes. Mandelson and Liddle (in their Blair Revolution. 1996) saw the key to winning British elections, and successful government, in wedding the “dynamic market economy” , “real equality of opportunity”, with a dose of social equity. Gould added that this “social” awareness should appeal to New Labour’s core constituency, the “people of the suburbs.”

Apparently, at 19% behind the Tories, the leafy lanes and driveways of the UK, not to mention my terraced street, are deserting New Labour in droves (here).

The only book on political polls which made a serious impact on me was Butler and Stokes Political Change in Britain. This, appearing in the 1970s, worked with a methodology that differentiated voters according to ‘cohorts’. That might mean, for example, that Gould’s aspiring hard-working, car-driving, home-owner, is a group that ‘came of age’ politically with Thatcher. They backed her primarily on economic grounds – mortgages, low taxes – with a degree of patriotic pride. They went over to Labour when they were convinced that the same ruthless pursuit of their interests and British self-assertion was served by Blair. A bonus was that the ‘social’ but of New Labour appealed to the Old Labour constituency and even those flinty types who liked good public services. Those to the left of that had nowhere else to go.

This strategy – a coalition hinged on the new middle class, the new Subject of History – had a lot of faults. For a while they could bear having to pay increased costs. Of privatised utilities. More and more farmed-out state provision,. Or the cost of schemes like PFI. Okay, what was left fully public was undermined. The managers-turned-businessmen taking over the rest were useless grasping cack. So? That group, the privatising middle class, did very well thank you. Having got rid of the Labour Party as a real political power-base, they created a version of Craxi’s Italian Socialists – a ‘big tent’  dependent on state largess.

A problem. Not foreseen – the economy would not always be “dynamic”. Even the hardest of hard employees don’t like facing the Dole. Or dynamic entrepreneurs enjoy going bust. They tend to whimper. Ask for help. When they don’t get it they take their votes elsewhere.

Instead of building up a lasting constituency based on an egalitarian, class, interest – making conditions better across the board — Gould successfully argued for this competitive ‘equality of opportunity’. When it’s become equality to fail, then the strategy falls apart.

Still Gould’s got his Lordship and I’m sure his daughter won’t end up on some  ‘training’ scheme for the unemployed.

Written by Andrew Coates

April 19, 2009 at 11:01 am