New Labour fully espoused globalisation as a positive force for economic growth. Nearly thirty years later, supply chain disruptions, geopolitical shifts and Trump’s tariffs have put the ideal of globalisation into question. Kevin Hickson and Jasper Miles argue that Keir Starmer’s Labour should design policy for a post-globalisation era.

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Something momentous may be happening in British politics. To be sure, we have been here several times before and on each occasion very little materialized. However, the threat of closure of the Scunthorpe steel works and the government’s intervention to save it has the potential to have much wider implications, not least for British social democratic thought.

For 30 years or more social democrats have subscribed to the idea of globalisation. New Labour was thoroughly committed to it. As long as the economy grew it didn’t matter how wealth was created since increased tax revenues would fund extra public expenditure. Tony Blair welcomed the era of globalization. In his book, The Third Way, Anthony Giddens argued that the left had been too slow to modernize and needed to appreciate the economic and cultural benefits of globalization. For Peter Mandelson it was one of the key differences between Old and New Labour. On coming to office in 1997, Gordon Brown gave independence to the Bank of England so as to reassure the international financial markets, a clear acceptance of the constraints of nation states within the globalised economy. The crash of 2008 should have more seriously questioned this framework. Yet, it was quickly interpreted by the incoming coalition as one of fiscal mismanagement requiring austerity.

The Government’s intervention to save the Scunthorpe site of British Steel might be a quiet acknowledgement that we can no longer rely on the economic paradigm of globalized free markets.

Economic paradigms collapse not in one immediate transformative act but by steady accumulation of anomalies and several things have exposed the shortcomings of economic globalism. The pandemic highlighted the fragility of global supply chains, the war in Ukraine the over-reliance on Russia for gas and oil and Chinese exploits raising concerns over national security, as highlighted by steel but also in mobile telecommunications and energy, represented by companies such as Huawei and Jingye. Once strong advocates for laissez faire on the right of the Conservative Party such as David Davis and Iain Duncan Smith are now much more circumspect. Lord Hannan is one of the few to continue to make the case for free markets. The New Labour focus on globalization now seems very dated, as advocates of Blue Labour, among others, have argued. The Government’s intervention to save the Scunthorpe site of British Steel might be a quiet acknowledgement that we can no longer rely on the economic paradigm of globalized free markets. Donald Trump’s adoption of tariffs in preference to free trade has radically changed the rules of the game.

Governments without a clear sense of ideological direction cannot maintain their direction and are buffeted by events, as Starmer’s experience in office has so far shown. 

A return to the centrality of the nation?

Under Keir Starmer Labour has espoused an ideological “quietism”, projecting competence and “seriousness” as the only virtues needed to govern well. However, governments without a clear sense of ideological direction cannot maintain their direction and are buffeted by events, as Starmer’s experience in office has so far shown. 

Within British social democratic thought there exists a different strand to the globalist one described above. For much of its history – certainly since Labour became a party of majority government in 1945 – it has been attached to the nation state (a source of frustration for “progressives” on the right of the party, the Marxist left and the array of now popular critical approaches). The appeal to nation trumped that of class. In 1945, the desire was to build a “New Jerusalem” with constant reference to the nation – the National Health Service, national insurance, national assistance, national parks etc. Hugh Gaitskell revealed in his final party conference speech in 1963 that he was deeply patriotic on the issue of European integration. His successor, Harold Wilson wanted to unleash what he termed “the white heat of the British technological revolution“. James Callaghan had deep respect for the monarchy, police and armed forces. As late as 2009, Roy Hattersley could wax lyrical on the virtues of England. The Brexit referendum in 2016 led to a rediscovery of Labour’s Eurosceptic tradition, albeit on the margins of the party. 

A degree of trade friction would be a good thing encouraging greater reliance on domestic production.

Policies for the post-globalisation era

A commitment to this tradition of Labour patriotism today would recognize that the form of globalization that characterized the post-Cold War era is over and the adoption of the following policies among others.

• Firstly, welcoming an extension of public ownership including steel but also the railways and water companies. The market, contrary to what economic liberals say, is not always superior and has clearly failed in these sectors. Rather than being apologetic about this, ministers should champion public ownership.

• Secondly, institutional reform designed to increase the autonomy of ministers of the crown accountable directly to the electorate. This should start with abolition of the Monetary Policy Committee of the Bank of England (MPC) and the Office of Budget Responsibility (OBR). Gordon Brown recently called for interest rates to be lowered to avoid recession. He is right but this cannot be done by ministers because of the independence granted to the MPC which he introduced. The OBR has repeatedly got its forecasts wrong.

• Next, changing the discourse on Brexit which still persists in seeing the Leave vote as a problem to be managed rather than an opportunity to introduce social democratic reforms free from the constraints of EU state aid and competition rules. 

• Fourthly, a realization that – something Trump’s tariffs will now encourage – production matters and not just consumption. A degree of trade friction would be a good thing encouraging greater reliance on domestic production, a “buy British” campaign and a preference for domestically-owned companies in public procurement. Moreover, such policies will help shield Britain in this new era of great power politics, aiding self-reliance and national security in an increasingly dangerous world.

• Reforms to the education system, especially in further and higher education, with a greater focus on, and parity of esteem for, vocational courses and a recognition that a mass-market University sector is not an unalloyed good.

• Finally, a stricter immigration policy – a rigorous points-based system with tougher measures to deter illegal immigration and a much clearer focus on integration of those allowed to stay in the UK.

All of this requires seeing the state as a force for good, alongside a rejection of the radical left’s cultural assault on Britain, and England in particular. As was once clearly understood by Labour’s patriotic tradition, the emotive force required for a programme of national renewal is patriotism.

All articles posted on this blog give the views of the author(s), and not the position of LSE British Politics and Policy, nor of the London School of Economics and Political Science.

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