[A-List] Paul Foot on New Labour

[Michael Keaney]

Considering the amount of time Paul Foot has spent over the years hammering
away at the Labour Party from the left, his more recent reincarnation as a
Roy Hattersley-like social democrat looks a little lacking in substance.
This article is perfect for someone whose ambition is to "reclaim the party"
from the New Labour mafia and reinstitute the social democratic policies of
old. But as an analysis of what is wrong with the Labour Party at present,
in the context of a significant financial scandal, it is a very poor effort
indeed. But it is indicative of the sorry mess that is the SWP, effectively
the power behind the Galloway throne heading the "Respect" coalition, in
that all it can do is lament the passing of Old Labour.

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Undercover capitalism

Paul Foot
Wednesday March 17, 2004
The Guardian

The dynamic genius of private enterprise capitalism was on display in the
House of Commons on Monday last week, though surprisingly no one mentioned
it. Under discussion was the country's most notorious insurance company,
Equitable Life, and the way it ripped off its policyholders. The
government's reaction to the scandal came from the financial secretary to
the treasury, Ruth Kelly, who blamed most of it on the Tories. The Tories
were rather peeved, and the Liberal Democrats not very impressed. But the
nit-picking party argument was all about regulation and compensation.

No one remarked on the astonishing phenomenon of a big hierarchical company
seeking people's money with all sorts of extravagant promises about bonuses
that it couldn't keep. Everyone seemed to agree that no regulator, however
strong, could control unscrupulous executives such as the gentlemen who ran
Equitable Life. The only MP even remotely connected to reality was Tony
Wright, Labour MP for Cannock. A long time ago, Wright wrote an interesting
book about RH Tawney, who was described as "the patron saint of 20th-century
British socialism".

I'm not sure whether Mr Wright is still interested in British socialism, but
it was probably some primeval Tawneyite instinct that prompted him to ask
Kelly: "Is this not the story of a period when the country was in the grip
of an ideology that said that people would be more prosperous and free to
the extent that the state did not interfere with their lives? Are not the
Equitable Life policyholders now being asked to pay a terrible price for
that ideology?" Unhappily, Wright rambled on to another question about
regulation, and let Kelly off the ideological hook.

So no one even asked why it is that companies like Equitable Life, with such
enormous power over people's incomes and pensions, not to say vast
investments in so many areas of British industry, are not in public
ownership, accountable to elected ministers. You have to go back half a
century to find anything like that proposition. In his famous best-selling
report in 1943, Lord Beveridge, a member of the Liberal party, argued that
the insurance companies played far too big a role in British public life to
be left in private ownership.

The Labour party national executive in 1948 and 1949 spent a lot of time
arguing over a proposal to nationalise insurance companies like the Pru and
Pearl. Aneurin Bevan and Will Griffiths were in favour; Herbert Morrison,
Stafford Cripps and Hugh Dalton against. The result was a botched compromise
known as "mutualisation", which irritated both sides but allowed big
"mutual" (but private) companies like Equitable Life to proceed on their own
sweet entrepreneurial (and deceitful) way.

The argument for public ownership and democratic control is now so "out of
date" that it hardly gets a mention even when huge private companies go down
the drain, as they do all the time. And the real point about Wright's
question is that new Labour is every bit as much "in the grip" of free
market ideology as the Tories ever were. Proof of that is all round us, most
noticeably in Downing Street.

Ever since the 1997 election, Tony Blair has packed his policy-making office
with people who have little or nothing to do with the Labour party, let
alone socialism. The guru behind the great top-up fees fiasco for instance,
Andrew Adonis, is still there, driving his divisive ideas through a
reluctant House of Commons and, according to a delighted Mail on Sunday,
hatching new plots for privatising state secondary schools.

Adonis came to Downing Street from the Liberal Democrat party. Roger Liddle,
Blair's adviser on foreign affairs and Europe, came from the Social
Democratic party, which split from Labour in 1981, causing it unprecedented
electoral damage, and is now absorbed in the Liberal Democrats. Another
Social Democrat who answered the call from Downing Street was Derek Scott.
His electoral achievement in the 1980s was to ensure the return of a Tory MP
for poor old Swindon. Standing as a Social Democrat in 1983, Scott got
13,000 votes. The sitting Labour MP was ousted in favour of a Tory. So upset
was Scott at this result that he stood again in Swindon in 1987, getting the
same number of votes and letting the Tories in by an even bigger margin.

You could see Scott on the BBC's Panorama on Sunday, criticising Chancellor
Gordon Brown for threatening to levy too much tax. And where is Scott plying
his trade? Shortly before Christmas he left Downing Street for better-paid
work at KPMG, one of the country's "big four" accountancy combines that
makes a tremendous amount of money advising rich corporate clients how to
avoid tax.