Why is the abolition of the 10p rate of tax unlike any other rebellion of backbench Labour MPs? The answer lies in the mood of Labour backbenchers following decades of modernising the party, a process that began under Neil Kinnock but only became a root and branch operation under Tony Blair and Gordon Brown.
Repeated Labour defeats in the 1950s were accompanied by the burst of outriders demanding a revision of an exclusively economic definition of socialism. This plea ought to have fallen on fertile ground. There has always been a sizeable proportion of activists who believe that socialism could not be achieved without first changing the kind of people we are. Herbert Morrison, Peter Mandelson’s grandfather, touched on this when he claimed that socialism can only be built by socialists.
Morrison’s plea was, sadly, a backward cry to a lost age. Emphasis on Labour’s ethical roots lost its dominance when Ramsay MacDonald formed the 1931 National Government against the overwhelming wishes of the Labour Movement. MacDonald was the chief proponent of the fundamental importance of developing a nobility of character. Following the 1931 debacle, not only was MacDonald viewed as a charlatan but, as a consequence, his approach to politics became deeply suspect. In place of ethical regeneration of individuals the Labour party looked increasingly to a more mechanistic basis to underpin radical change. That mechanical approach centred, first, on nationalising much of the economy, and then, as a result of the success of the war economy, of central planning.
Labour’s 1960s revisionism began the long march to New Labour. The electorate of the 1950s had already jettisoned any hope Labour had of building a revival around a planned economy, no matter how much the verb planning was prefaced by the adverb democratic. Anthony Crosland, now the best remembered of the early revisionists, attempted to prise Labour away from the belief that only by nationalising the commanding heights of the economy could socialism be established. Labour instead needed to stress equality as its goal and high public expenditure as a means of achieving this new society.
Crosland’s objectives were to be realised only under Tony Blair. He, at least, had seen how Mrs Thatcher transformed the Tory party. She and a small boarding party seized control of the Conservatives and systematically threw the old crew overboard, and with that crew went their ideas on how to run the ship of state.
Blair, along with Gordon Brown and Peter Mandelson, conducted a similar operation in the Labour party, seizing power from within. Most of Labour’s sacred furniture was cast to the waves. Out went Clause 4, to be replaced by a lengthy consideration about values. Labour MPs and activists went along with the birth of New Labour as there appeared to be no coherent alternative that might appeal to the electorate.
Slowly but surely most MPs found themselves signing up to a project that, step by step, sacrificed their own beliefs on how to achieve a socialist commonwealth and which marked clear red water between the party and anything that might conceivably be offered by the Tories. Once activists became engaged, each revisionist demand was simply a logical step from changes already set in hand.
No matter what the new doctrines New Labour proclaimed about the market, all the party’s activists believed it remained committed to the poor. This was the political life raft clutched by many a party member as they floated among the wreckage of yesteryear’s political ideas. And true to form, no government has redirected more resources to poorer pensioners and families than New Labour. That the means of delivering such help was by way of a tax credit system that might as well have been designed at the Mad Hatter’s tea party was ignored. The sheer amount of money sloshing around was more than enough to assuage most doubts.
This, then, is the background to the 10p abolition uproar. Labour MPs are horrified to find that many of their poorest constituents are made worse off. They need no reminding, as some of the London media do, that £2 or £3 a week is for these households a significant part of their budgets at any time, but particularly so when prices are on the rise.
The horror felt by Labour MPs is compounded when they, like so many other groups, have been made better off overall by the Budget changes, knowing that their poorest constituents are largely footing the bill. But this anguish felt by MPs masks a much deeper crisis. The 10p abolition strikes at our integrity as centre-left politicians. While consenting to throwing overboard practically everything associated with Old Labour, we MPs could still walk with our heads held high, belonging to a party that, while winning the yuppie vote, was also always promoting the interests of the poor, and doing so much more effectively than any other political party. Building the broad coalition was important, but this building was not a substitute for the core belief.
The very essence of being a centre-left MP was rudely and brutally questioned by the 10p abolition. And MPs have reacted by letting their decent instincts be known. What is the point of us being Labour MPs if we cannot protect the poorest?
The government was slow to grasp the intensity of feeling that gripped Labour MPs right across the party. The 10p revolt is unlike any other faced by the Labour leadership over the past 11 years. On many other issues — such as the 90-day detention proposal — MPs may equally strongly disagree with the leadership’s line. But whatever stance these individual MPs take on these issues, none believed the matter to be of first rank. The consequences of abolishing the 10p rate are; and it has at a stroke placed clear red water between practically the whole of the Parliamentary Labour Party on the one hand and the government on the other.
The government to its credit is trying to row back, but is doing so knowing that it has burnt its 10p boat. Crucially, the government must publish immediately a simple statement that we can all understand: that it will strive to devise a compensation package that covers as many losers as is possible, and that the package itself may have to be made up by a number of measures, but that all the measures will be backdated to 6 April of this year. It is the broad outlines of what a package might take — Inland Revenue and tax credit measures — that the government must relay to the voters in Crewe as well as to the rest of us in the country.
Frank Field Is MP For Birkenhead.