The Rise of New Labour (Pocket essentials: Politics) (Paperback)

This booklet (pamphlet really) covers a lot of ground in its 94 pages, but Ramsay’s arguments are compelling and intriguing. According to Ramsay, Competition and Credit Control introduced under Heath abolished controls on borrowing. The interest rate alone would control credit in the economy. Heath hoped that this would create a credit boom that would finance industry. What happened instead were a consumer boom, a rise in property values, a flood of imports, and a trade deficit. Because Heath would not allow interest rates to rise high enough to suppress borrowing, he got roaring inflation. Trade Unions campaigned to increase the wages of their members in order to keep up with inflation. (As Ramsey points out, trade union militancy was not the cause of inflation, as was often stated, but the result of inflation. If unions were chasing after wage rises lower than inflation, they were effectively asking for a cut in wages. Therefore, to say that wage rises were responsible for inflation in the 70s is to mistake effect for cause. A myth that has become established as fact.) In 1973, Heath suspended Competition and Credit Control.

When Labour came back into power, inheriting Heath’s inflation, James Callaghan went to the IMF and borrowed money to defend the value of the pound, which by this time had taken a hammering. This they did. They also brought down inflation without causing a recession. The electorate thanked the Callaghan government by turfing them out of office and putting Thatcher into No. 10.

The nightmare began. Thatcher came in to power with the intention of bringing down inflation through controlling the money supply. Raising interest rates would do this. This would create a recession, but the long-term benefits would out-weigh the short-term cost, and if the manufacturing industry would bear the brunt of the recession, so be it. She didn’t care. Manufacturing was old hat. Manufacturing was also the base for the craft unions and where support for Labour lay. Who cared about them? Emphasis shifted away from manufacturing and towards finance, a shift that was to be financed by North Sea Oil. The City of London captured the imagination of the Conservative Party, and in time, the Labour Party as well. As a result, Britain’s manufacturing base was reduced to almost nothing. Northern England, Wales, Scotland, and Northern Ireland wallow in depression while the economy in the South East of England, where the financial industry resides, continually overheats.

This is the gist of Robin Ramsay’s argument, I think. Like most people, I’m no economist and in order to follow Ramsey’s argument, you need to keep your wits about you. There is more. He goes on at length to explain how after losing four elections in a row the Labour Party embraced Thatcherism in order to get elected; how the present incumbent of No. 10 recreated the Labour Party to resemble that of the American Democrat Party – always a paper tiger; and how the institutions of Britain (especially the Treasury) undermined Britain’s true interest. There is also an interesting look at the relationship between certain sections of British society, including the Labour Movement, and the United States. There is a lot to mull over here, but for those confused as to the direction of the Labour Party under Tony Blair, then Ramsey explains what happened, why it happened, and why it need never have happened. For those who refuse to accept the present consensus of neo-liberal doctrines, then this book should be a welcome addition to your armoury. Ramsey knows his stuff. He has done his homework. Read this booklet and you will see UK history in a different light.

The summary puts Ramsay's case very well, so I need not add much here. It may though be added that the problem is a broader one. If, for instance, Neil Kinnock got more votes than Tony Blair then what we have now surely must be a failure of British democracy. Our 'first past the post' system should really be thrown into the dustbin of history, and why we Brits are always so darned reluctant to learn from our European neighbours (including how to manage a National Health Service, get the trains running on time and so on) should be a reason for national shame.

Speaking also as a barrister, I would like to add one theory to the question of why Blair joined the Labour Party in the first place (page 68, note 6). One explanation suggested by older colleagues is, whilst studying for his Bar Finals, young Blair fancied the star student of his year - Cherie Booth. The only snag was her ardent 'old' socialist ideals; especially with her brains she was doubtless a future MP and more. A (sham) conversion to her cause was thus essential, otherwise he'd no chance of wooing his way into her affections. And then, once hitched and practising, they agreed that whoever perchance stood first for Parliament would maintain that role with the other pursuing a legal career/looking after the kids etc. History had it that Blair was selected for the Beaconsfield by-election in, I think, 1981. Doubtless he was the man for that particular job, but, alas alack, if only the lady was chosen first ....

Finally a couple of gripes that otherwise would have lead to maximum star rating. Firstly, even a short tome like this would benefit from an index. If a larger, more detailed critique is ever produced (yes, please!), then that must be corrected. Secondly and flowing from that, Ramsay relies a great deal on news clippings and hearsay evidence. There are surely plenty of 'old' Labour politicians still out there - Lords Healy and Hattersley spring to my mind - whose consciences should be pricking them to come forward. If they were not contacted then that is a serious omission. And thirdly a surprising slip-up is its apparent assertion that Labour lost an election under John Smith's leadership (page 8). The great man of course sadly died before leading the Party to inevitable victory. Ah, another big if only ...

Otherwise four quid could not be better spent by anyone who cares for democracy, this fine country of ours, and who exactly is governing us.

John Smith, it seems, was an MI6 agent (and MI6 are a tool of capitalist interests), the creation of the SDP was a CIA plot designed to cost Labour the 1983 election (perhaps they were involved, but the SDP got almost as many votes as Labour did so there must have been something in it!) and, perhaps most bizarrely, the rise of Tony Blair is attributed to the Israeli government, who saw the opportunity of putting a pro-Israeli at the head of British government. Those are the ones that have stuck in my mind, but there are others.

Ramsay's discussion of economics is simplistic and misleading; where in reality there is debate he starts from the assumption that his own views (that manufacturing is vital and needs protection through control of the exchange rate) are self-evidently correct, and that the present view that government should seek to control exchange rates through interest rates is dangerously insane. I have my own views but I wouldn't criticise Ramsay for reaching different conclusions from me. The problem is that he never bothers to go through the arguments and reach the conclusions; he just rants, and we hear one side of every story.

Finally, the book is pervaded with anti-Americanism. Ramsay at several points launches into diatribes on the failings of American foreign and domestic policy. Many would agree, but it's rather weak to do this, draw as many links as possible between New Labour and the USA as possible and then sit back and let the reader conclude that we're being led into a ruinous mimicry of the USA. He never offers as examples any policies that Labour has 'borrowed' from the USA and which he can show are leading us the same way.

This could have been an interesting look at one of the most important changes in domestic politics in a generation; the fall of socialism and the rise of the centre-left. Instead we get a incredulous lecture from an unreformed socialist who can't believe we've all been so stupid, and instead of engaging in a debate snipes at New Labour and presents some fairly incredible conspiracy stories.

Dangerous nonsense.