Lib Dems – Page 11 – thinking liberal

Ed Miliband is Labour’s John Major. Short term success presages long term disaster

Britain’s two big party conferences are over, setting out the battle lines for next year’s general election. I keep seeing parallels with the 1992 election, which the Conservatives won unexpectedly. In the past I have drawn direct parallels between the two main parties then and now. But in interesting ways the Labour party resembles the Conservatives in 1992: pulling off an unexpected victory, leading five years later to its worst ever defeat.

The Labour conference was shocking. This was supposed to be a party with its blood up, ready for a battle to crush those hated Tories and despised Lib Dems. Instead we witnessed a subdued Labour Party, simply hoping that the other side would lose. The plan is to win the General Election in May 2015 by default. There are three elements to this plan. First hang on to the hard core of voters that were loyal at their low point at the last election in 2010. Second, snaffle up an extra 5-10% of voters who voted Lib Dem last time and are fed up with that party. Third: allow Ukip to eat into the Tory vote. Labour strategists think that these three things will be enough to give Labour an overall majority. The party does not have to spell out a clear policy vision, just create some mood music by talking tough about the nation’s finances, and “saving” the NHS.

It could work. This kind of strategy reminds me a lot of John Major’s strategy for the Conservative Party that he led from 1990 to 1997: visionless, and relying on its opponents’ weaknesses. This led Mr Major to that spectacular and unexpected victory in the 1992 election, followed by the Tory party’s worst ever defeat in 1997. Something like the same fate awaits Ed Miliband’s Labour Party. At Labour’s conference he failed to address doubts about his leadership. His speech was a disaster. It was an overlong, rambling, whinge-fest, full of speechmaking clichés. His act of not using a script and teleprompt drew much praise the last time he tried it. This time it meant that he forgot to include some vital messages on the deficit and immigration, passages that it is hardly surprising his subconscious suppressed.

Over the four years or so of Mr Miliband’s leadership, the Labour Party has proved remarkably united, and in London at least, its local organisation looks in good shape. After three terms in power, this is a remarkable achievement, considering what happened to the Tories after they finally ended 18 years of power in 1997. But this achievement looks more like Mr Major’s clinging on to power after Margaret Thatcher was ousted in 1990. It comes at cost of not resolving conflicts within the party. In particular much, if not most, of the party’s grassroots thinks that austerity is the malicious pursuit of class warfare by the rich, and that capitalism is an utter failure. They are egged on by a collection of intellectuals untroubled by the responsibilities of ever having run anything. But the party’s leaders, who have genuine ambitions to govern, realise that this is mainly nonsense. Though they have been clear about this in their speeches (when they remember to mention it), there is no sign that their followers have actually taken it on board, such is their detestation of the current government.

And that’s not Labour’s only faultline. Labour are under attack in their working class strongholds. Ukip are taking votes from the party in northern towns, where the party is not used to being challenged. The SNP made a very successful appeal to the working class voters in Labour’s stronghold in Glasgow in Scotland’s referendum. Labour’s leaders are being urged to respond to this by sounding “tougher” on such touchstone issues as immigration and human rights, which is taken as meaning undeserved privileges to migrants, terrorists and criminals. Labour have made some mealy mouthed concessions, especially on immigration. In particular they suggest that the Labour government was mistaken in allowing free immigration of east European migrants after their countries entered the EU. This is very muddled. The tension between liberals and working class conservatives is palpable.

For now Labour are papering over the cracks. Even if they hold together until the election, there is sure to be an explosion after it. If they win, a Labour government will be utterly unable to reconcile the conflicting ideas of their supporters. They will simply pick up where the last, deeply unpopular, Labour government left off. If they lose, their supporters will be unable to understand why, given what they see as the self-evident failures of the coalition years. And if the party is forced into a coalition with the Lib Dems (if that party does better than expected), or a grand coalition with the Conservatives, the reactions of Labour’s supporters can only be guessed at.

Meanwhile the Conservatives are sharpening their knives. This party’s divisions are even greater than those that Labour is troubled with. But their leader, David Cameron, delivered a strong conference speech, setting out a very clear strategy for undermining Labour’s passive electoral hopes. This is the familiar “two-horse race” theme, so that Mr Cameron’s leadership skills can be compared favourably with Mr Miliband’s. And then there is tax. Labour’s ambivalence over reforming the public sector and benefits can be linked to the prospect of higher taxes for the majority. Interestingly the Conservatives are making no attempt to woo middle of the road liberals, attacking the Lib Dems for stopping their illiberal ideas on civil liberties. This is no doubt part of their strategy to woo back Ukip defectors. But they may also calculate that raising the liberal credentials of their coalition partners may help the Lib Dems win back some of their defectors to Labour. This vigorous Conservative attack on Labour will put the latter under severe strain – though it is difficult to see how the Tories can win outright.

The outlook looks dire for Labour. Things are no better for the Tories. It is difficult not to think that Britain’s traditional two party politics is on its last legs.

Would a Miliband victory be good for the Lib Dems?

Here’s a paradox. Britain’s political party leaders are the most mediocre, as a set, that I can remember. At least in 2010 we had Gordon Brown: a disastrous prime minister, but one who at least had the moral authority to help lead the world from economic disaster in 2009. But next year’s General Election looks to be the most interesting contest for a very long time. The shame for Liberal Democrats like myself is that we are bit part players, hoping to hang on to most of our parliamentary seats, but without playing much part in the national debate. But the rise of Ukip means that three-party dynamics remains potent. But perhaps the Lib Dems longer term prospects are better?

To start with, we have an unknown effect from the Scottish referendum later this month. Whatever the result, this will surely change dynamics north of the border in ways that it is difficult to predict. The Westminster elite hardly dare confront the possibility of a Yes vote, though the race is tightening and this is a real possibility. They have contented themselves with promising extra devolution for the Scots, without addressing the implications for England. If the Yes result comes, the Westminster politicians will have nobody but themselves to blame.

The constitution of the UK (note this not a “Scots question” – it affects us all) remains the most important issue hanging over our politics, including next year’s election. But for a moment I want to join the Westminster chatterers and put this to one side (the chatteres’ favourite website politicalbetting.com seems to think that the forthcoming Clacton by-election is more important than the referendum), and consider other dynamics.

Over the summer the Conservatives had looked quietly confident, and I shared that confidence on their behalf. They faced a strong challenge from Ukip, whose message appeals to many of their activists, but they seemed ready for that. David Cameron’s promise of a referendum on the EU is highly credible, and it is good bone to throw to potential Ukip defectors. Meanwhile they can promote scare stories about letting Labour in, and also blame the government’s more unpopular policies (to the right) on their coalition partners, the Lib Dems. The Euro election results in May seemed to support this confidence; Ukip were rampant, but Labour’s performance outside London looked lacklustre. Ukip were as much a problem for Labour as the Tories, and Labour’s message to Ukip supporters was (and remains) confused, unlike the Tory one.

Alas for the Conservatives their plan seems to be falling apart. The Tory MP for Clacton, Douglas Carswell, defected to Ukip, resigned his seat, and has caused a by election which he intends to contest under his new party’s banner. Clacton is a stronghold of the disaffected, white, aging, excluded working classes that is Ukip’s core constituency; a victory for Ukip looks certain. This gives Ukip real momentum. But, worse, it emphasises the divisions within Tory ranks between the more sensible moderate types represented by David Cameron, and what liberals regard as a lunatic fringe, whose strength has grown. This will encourage Tory voters to defect to Ukip, and discipline within the party to break down. That could scare off donors. Add this to the fact that the electoral system is weighted against the Conservatives, and they party’s challenge is looking steep indeed.

Which shifts the focus to Labour. That party has a clear hope that it will win the 2015 election by default. They have swept up a lot of former Lib Dem voters, and it seems certain that they will hang on to them. If the Tory vote sags because it is undermined by Ukip it looks good for the party. Labour faces its own challenge against Ukip, but generally in areas where they have very large majorities. There is an excellent article in today’s FT by Matthew Goodwin, who has been following Ukip’s rise closely. He may well be right that Ukip poses a severe long-term challenge to Labour in its northern heartlands, where its organisation is weak. But even he admits that this is more of a problem for 2020 than 2015.

So Ed Miliband’s Labour party could secure an outright majority after next election. And then his problems will really start. He is bound to disappoint his left wing supporters, including those Lib Dem defectors. The British economy remains fundamentally weak and unable to support the size of public sector that these supporters seem to feel is their birthright. There are no quick answers to this underlying weakness, and many of Mr Miliband’s ideas will make things worse, not better. Neither will he please the grumpy working class voters to whom Ukip is appealing. There will be a sense of betrayal among one group of their supporters, and panic amongst the Labour machine politicians in northern towns, who have taken their power base for granted. And the question of Scottish devolution’s affect on England will need to be faced, or, worse, the impact of Scottish independence. The party would surely be overwhelmed, rather like the Conservatives were after 1992.

But the Conservatives will not be much better off. They will remain divided between pragmatists, who lean towards EU membership, and idealists for whom the EU represents all that is bad. The party is likely either to lurch to the right or fall apart. Ukip, feeding off disillusioned Labour voters, will rise relentlessly.

You could hardly define more propitious circumstances for the Liberal Democrats, provided they stay away from any temptation to form a coalition with Labour. Labour will end up by prolonging many hated coalition policies, vindicating the party’s record in coalition. Meanwhile the rise of Ukip will create a strong anti-Ukip political backlash. As the Tories fail to contain their right, and Labour panics over its loss of working class votes to Ukip – this backlash will present a real opportunity for the Lib Dems, in a highly dynamic four-party play. This opportunity would be best exploited by a new leader. It would be ideal if this was a commonsense, well-grounded female – a Birgitte Nyborg. Alas I cannot see such a choice being available (my preference, Dorothy Thornhill, Mayor for Watford, is unlikely to be in contention). But the opportunity for a comeback is palpable.

What should the Lib Dems do now though? It has little choice but to stick to its guns in the coalition, and concentrate on winning any parliamentary seat where local strength is sufficient to make it winnable. This will mainly be about denying seats to the Conservatives. If things go very badly for the Tories, they may start to pick up some centrist voters from them generally – though that’s a long shot. But they must remember: the opportunities will be after 2015, they should do nothing that will make that comeback harder.

Interesting times indeed!

Rethinking Liberalism 6: reinventing the state

So far in my series of essays my conclusions have been quite conventional, if a little left of centre. We need to keep capitalism in a mixed economy; the state will need to get bigger to cope with the demographic challenge; we will have to tax the rich more as middle incomes are squeezed. There’s nothing here that would upset the denizens of Whitehall unduly, notwithstanding the economic liberal tendencies of some. But I think we are badly let down by our system of government. It will have to change radically – and yet the complacency of the Westminster elite is overwhelming. Liberals must rally to challenge it.

Unfortunately one of the best examples of this establishment complacency comes from our own Liberal Democrats. Back in the 1990s I was inspired by anti-establishment rhetoric from our then leader, Paddy Ashdown. The whole system was rotten, he said; we were the outsiders and only we could change it. Then, in 1997 the party arrived as a serious force in Westminster politics. But, somehow, under the leaderships of Charles Kennedy and Nick Clegg (or the brief leadership of Ming Campbell, come to that) this radicalism came to be toned down. In spite of some radical language from both of these leaders, policy was more about trimming the Westminster policy agenda here and there without counting too much controversy. Ideas, such as a local income tax, which might have meant a decisive break from the Westminster-centred way of the world, were quietly buried. By the time Lib Dems took up cabinet jobs in the current coalition, they looked very comfortable in their new Westminster ministries, with the possible exception of Vince cable, the industry minister.

And the public could sense this. My heating engineer, classic old-school lower middle-class, told me that the Lib Dems had sacrificed their principles to get their hands on the prestige of power. Mr Clegg looked as if he was enjoying themselves too much. This feels very unfair, of course. There was a national crisis in 2010, and the compromises of coalition were needed for the country’s sake. And the Liberal Democrats have stopped the Conservatives doing a lot of silly things, like cutting Inheritance Tax. But there’s a grain of truth in the accusation; what about the promise to really shake-up British politics? It’s not clear that senior Lib Dems ever wanted to do more than change the standard Westminster priorities a bit, by pushing education and redistribution up the agenda and making the odd stand on behalf of civil liberties, unless real heat got applied. If there has been any reinventing of government, it is mainly Tory ideas that are driving it. And they are about keeping the basic Westminster architecture in place, but diversifying the delivery (more private contractors and Quangos in place of top-down state hierarchies). The attempt to devolve more power to democratically accountable local bodies has been a particular disappointment. Each step forward is accompanied by at least one step back. The malign orthodoxy of the Treasury, with its insistence on a highly centralised model of power, remains unchallenged by key Liberal Democrats – or so it appears.

Why does this matter? Firstly because the pressures caused by the demographic shift have only started. I have already written about pensions. Health costs will rise too as the ratio of older people increases. And then economic growth will continue to stagnate, for a variety of reasons, including the increasing number of people entering retirement, but for other reasons too. Meanwhile the twin (and related) economic deficits of government finances and trade are unsustainable in the long run. The government has to tax more and spend less. It has to become much more efficient and effective.

The country’s direction of travel is not encouraging. Government cuts have been very painful, and the public is tiring of them. Endless privatisations are affecting the quality of service. The fiscal deficit creeps down, but it is still very large, and he trade deficit is getting worse. This shows that the underlying economy remains weak, and that growth is hardly more sustainable than it was under the last Labour government. No sooner does the economy grow, than does Sterling appreciate to undermine all the rebalancing. Meanwhile the country is sleepwalking into the breakup of the United Kingdom (even if Scotland votes No in September) and exit from the European Union, as political dissatisfaction with the status quo grows. Pulling all the usual levers of power in Westminster seems to be doing not much good.

What have liberals to say about this advancing gloom? The first point is that we want people to have as much power as possible over their own lives. That means we dislike people being dependent on the state. It is here that we differ from the socialist left, who don’t mind if the public has a permanent client relationship to state agencies, as this creates a political constituency both amongst the dependents and the employees who serve them. Liberals should recognise that in a modern society the state must play a very big role – but we also need to push back on dependency. The state should fix problems so that demand for state services reduces.

The second point is that we believe that as far as possible state structures should be fully and democratically accountable to the people they serve. The state does not devolve power to citizens, but citizens delegate power to the various levels of government. This too is difficult in the modern world. Many problems are complex and must be solved at a national and international level – and the further up power is delegated, the weaker accountability becomes.

Have we delegated too much power to transnational bodies like the European Union and the World Trade Organisation – with the threat of more as part of a transatlantic trade deal? I don’t think so – these structures merely recognise the transnational nature of problems and the need to agree international standards and laws. Countries that opt out of these structures don’t seem conspicuously better off as a result. Is Australia, for example, really a better and happier place than Britain? Its recent economic success is as much down to the luck of geography and natural resources as anything else. Does having to dig up vast amounts of prime farmland to get at the coal beneath, while poisoning the great natural wonder of the Barrier Reef, really look like freedom?

No. I think the main problem is that we have delegated too much power to Westminster, and that the Westminster elite is protecting itself rather than solving the countries’ problems. It has created a series of administrative silos that perpetuate problems rather than solving them. To tackle this we need to do three things.

Establish a federal system for United Kingdom, by creating a new English parliament and English government, based outside London, and taking to itself the same set of administrative responsibilities as the Scottish government has.
Radically reform the way public services are commissioned to ensure that solving problems for their clients becomes their prime driving force. This will entail a radically increased role for locally accountable agencies.
Reform the country’s tax system to follow this radical redistribution of responsibilities so that every level of government controls more of its own revenues – alongside a system of transfers to ensure a fair distribution of resources.

Each of these three depends on the others. Federalism is required to break up Westminster complacency; public services will only be properly remodelled if it is not controlled from Westminster; power cannot be decentralised unless tax is decentralised too. I will pick up each of these themes in future essays.

The Orange Book 10 years on: is this the way to reclaim liberalism?

Today I attended a conference organised by CentreForum to mark the tenth anniversary of its publication of The Orange Book. Viewed in hindsight, the Orange Book was an important political event, that did much to set the tone of the following decade. But does its version of liberalism have what it takes to drive political ideas in the next ten years? On today’s form the answer to that question is no.

The Orange Book was edited by David Laws, currently education minister, and briefly in the Coalition cabinet; other contributors were Vince Cable, Chris Huhne, Ed Davey and Nick Clegg – who are or were all members of the Coalition cabinet, along with a number of other people who became ministers – an event that none would have foreseen at the time. While it took on a broad definition of liberalism, it was its espousal of economic liberalism that caught attention. It was not favoured by the Liberal Democrats’ then management, as a General Election beckoned in 2005. But after Nick Clegg took on the party leadership it came to define the party’s official policy line. It can plausibly claim to frame the guiding principles of the Coalition government itself, and not just the Liberal Democrat element. To the book’s supporters this was a victory of a coherent political philosophy over the mushy protest politics and left-wing opportunism that preceded it. To its opponents the Orange Book’s success was the triumph of a “neoliberal” elite over the party’s core values.

The conference consisted of two panel sessions, with three speakers each, in the morning, a keynote speech by David Laws at midday, with a response by economics journalist Anatole Kaletsky, with a final panel session after lunch.

The first panel consisted of Mark Littlewood, currently of the Institute of Economic Affairs (IEA), a right-wing think tank, but also a former Lib Dem functionary; Tim Montgomerie, a Conservative agitator who founded ConservativeHome; and Vicky Pryce, formerly a government economist and Lib Dem member.

Mr Littlewood led with a lightweight defence of economic liberalism: a formula of smaller government and lower taxes, which, he claimed would lead to stronger economic growth, whose benefits he did not bother to spell out. He felt that the country’s governing philosophy was still social democracy, and that economic liberalism had not been given a true opportunity to show what it could do.

Mr Montgomerie was much more interesting. He pointed out that economic liberals needed to confront two issues which threatened to undermine their system. The first was “social capital”, the family and community structures and the value system without which a liberal economy could not flourish. The second was inequality, of which the most important aspect was the division between those who owned their own houses and those that didn’t. His take on both, and especially the first, had a conservative slant – but the challenge was good. He made the excellent point that the best way of reducing the size of government was reducing demand for it, through a stronger society. This is a point that few in the political elite grasp: the objective of most public services is to reduce demand for them – one reason that they have less to learn from the private sector than may think.

I found Ms Pryce rather less memorable. She made a call for stronger leadership and coherence in government. Our current system was too subject the a “do something” culture, responding to whatever the Daily Mail happened to be beefing about, with individual ministers acting without reference to each other.

The second panel session was meant to focus on public services. It consisted of Paul Marshall, who founded CentreForum and effectively funded the Orange Book; Greg Clark MP, a Conservative minister in the Cabinet Office; and Norman Lamb MP, the Lib Dem Health minister. They never really got to grips with the issue public services, confining themselves to generalities.

Mr Marshall is a hedge fund manager, who also founded ARK, a chain that runs Academy schools. He showed himself to be an economic liberal extremist, which he claimed was necessary for social liberal ends. He promoted the myth (as did Mr Clark) that it was the government’s policy of supporting independent academies that had caused a substantial advance in school standards, especially in London. This is a rather annoying rewrite of history: credit for London schools lies mainly lies is forcing proper accountability on local authorities and established schools, as well a degree of state assistance and support. For Mr Marshall education pointed the way for other services, such as health – that advances could be made through using a diversity of providers. He was right, however, in his passionate denunciation of the complacency within the educational establishment.

Mr Clark proved an interesting speaker. His big idea was decentralisation from Whitehall, on which he claimed a lot of progress had been made with the City Deals that he had worked on with Mr Clegg. Unlike some, he clearly understood the implications of this: that it meant breaking away from the idea that everything had to be done the same way across the country. He did not refer to the Coalition Communities’ Secretary, Eric Pickles, who recently decided to regulate the way in which local governments managed their parking enforcement.

Mr Lamb broadly agreed with this, but seemed a bit wearied by the political difficulties of executing reforms. He felt that our highly centralised government was the wrong way of going about public policy, as the many failures of the NHS had demonstrated.

Mr Laws offered a rather complacent speech, celebrating the success of the Orange Book, while barely acknowledging the challenges to it, such as rising inequality. Mr Kaletsky’s was much more interesting. He understood that the world had changed and that conventional liberal economics was not up to the task. Fiscal policy had to be restored as a policy instrument alongside monetary policy; inequality was not just a matter of social justice but economic efficiency; government would have to both to take up less expenditure and extend its regulatory reach; public pensions and the health service would have to be curbed. While I find this analysis is flawed, it at least challenged the complacency.

In the afternoon the final session had James Cameron, Chairman of Climate Change Capital, Maajid Nawaz, co-founder of Quilliam, and Jeremy Browne MP, a former Lib Dem minister, notorious for his robust economic liberal views. This session raised the issue of sticking to liberal values in an international context. Mr Nawaz said that liberals had to emphasise the global nature of liberal values, and not soften them for cross-cultural sensitivities. Liberals should appeal to individual members of ethnic minority groups, and not approach them via their paternalistic community leaders. Mr Browne put to much emphasis on global competition for my taste – but he did make the point that the Lib Dems were potentially missing an appeal to a younger generation who were both economically and socially liberal. While all speakers emphasised that challenges were increasingly international, and the cross-cultural nature of liberal values, none made the obvious progression that liberals should organise themselves internationally, rather than being stuck on national lines.

Overall impressions? To me this conference showed that the Orange Bookers are nearly out of road in the Liberal Democrats. All the most challenging speakers came from outside the party. The world, and Britain in particular, faces major challenges. The rich are taking too big a slice of the economy, which is slowly throttling overall growth. Everybody else is finding life increasingly precarious. Meanwhile the demographic challenge is threatening to overwhelm what taxpayer funded services can provide and climate catastrophe beckons. These developments are not the result of too large a government and an excess of social democratic policies. They result, at least in part, from the application economic liberalism. The Lib Dems will either sink back into the mushy world of protest politics that it inhabited in 2005, or develop challenging new ideas to confront the problems of now. The Orange Bookers seem to be doing neither, and are in danger of irrelevance.

The search for a new Liberal narrative

There is a basic human need to understand the world in terms of simple stories. This is as true of politics as it is for other parts of life. Something that explains how we have got to where we are – and guides us towards what to do next. These are referred to as “narratives” in the jargon of political marketing. A narrative is a critical part of the political “brand”, another useful piece of political marketing jargon, which refers to what the public understands to be the core elements of a political party or movement. And liberals the world over, but especially here in Britain, are adrift. Here it is brought on by the spectacular collapse in support for the Liberal Democrats since they entered coalition government in 2010, and the way the other parties are veering away from liberal policies. In the European elections only about 2.5% of the British electorate voted for the only avowedly liberal party on offer.

I particularly like this article, The not so strange death of Liberal England, by Simon Radford in Left Foot Forward. I think he articulates very clearly what many liberals are currently thinking, especially those on in the Liberal Democrat and Labour parties. I will draw shamelessly from it as I develop my own narrative of how liberals and Liberals have reached the current dark patch.

Mr Radford suggests that Liberalism (as I will call the political movement which started with the Liberal Party) started in the 19th Century when the key political battle was between landowners and tenants. The state was tilted heavily in favour of the landowners, both terms of trade (particularly the lack of free trade of food) and taxation (little or no income tax). Liberalism was the movement that took the side of the tenants, and free trade was its central organising principle. To this were added the ideas of social insurance, and the birth of the welfare state. It was a long struggle, but the Liberals won, led by Asquith, Lloyd-George and Churchill, before war struck in 1914.

But the game had already moved on. The central drama was now the battle between the capitalists and workers. Liberal policies of free trade did not address this conflict. Instead the Labour movement arose, based on organising workers and forcing capitalists to give up a more equal share of the wealth – through better wages, workers’ rights, taxation and an expanded welfare state. The Liberals faded into irrelevance between the two wars.

Then came what many mistakenly regard as a golden age, after the Second World War. The forces of technology and demographics combined to give steady growth in which the wealth of all advanced. Social democracy was the prevailing wisdom, with a large role given to labour unions. Labour had a strong enough hand to ensure that they a decent share of the gains went to the workers. Liberalism had little to add, although liberal instincts accorded well the optimistic and more tolerant ethos of the times. Many in the Conservative and Labour parties described themselves as liberals.

Then came the 1980s, when capitalists advanced and labour retreated. Some on the left see this as the result of a sinister coup, masterminded by politicians such as Margaret Thatcher, to corrupt a system that was already working well. But the social democratic system was by then collapsing under its own weight, and it did not need much of a push to send it crashing to the ground. The old liberal ideas of free markets and trade came to the fore, and brought forward economic growth, but the process was not led by liberals; state services were neglected and taxes cut. By the 1990s new technology and globalisation were adding to the mix. The hope was that the benefits of growth would spread to all.

But the public weren’t happy with the political leadership. Labour were not trusted because they were associated with the collapse of the social democratic system, in welter of industrial disputes and stymied productivity, in the 1970s. And yet they disliked Mrs Thatcher’s Conservatives, and their rejection of social solidarity and neglect of public services. Liberalism started to revive. It offered a kinder version of the capitalist system. Tony Blair’s Labour Party managed to capture much of this liberal enthusiasm (calling his ideas a “Third Way”), which, allied with traditional Labour supporters gave him a ruling coalition which lasted from 1997 to 2010 (though he himself had been turned out by then). Although Mr Blair’s “New Labour” was the main beneficiary, the Liberal Democrats prospered too, establishing themselves as a credible third force, in a way that would have seemed unimaginable in the 1950s, 60s or 70s. And it seemed to work; the country enjoyed steady economic growth, the benefits of which were distributed widely – inequality of income may not have been reduced, but it didn’t increased either.

But then came the bust of 20008-2009. It turned out that the growth enjoyed in the Labour years was built on air. They had expanded government ahead of what the economy could sustain, and much of its new infrastructure had to be dismantled. Living standards fell, hurting especially for those on low or middle incomes, while those on very high incomes still seemed to prosper. Worse, the quality of work seemed to fall for the majority, especially for most young people entering the job market. Steady, if mindless, factory jobs were swapped for rootless service ones, often badly paid. Meanwhile the low interest rates required by the sagging economy hit the country’s growing army of pensioners, as bank deposits yielded less and annuities became more expensive. A sour political mood has resulted.

Populist, conservative narratives are taking hold. Globalisation is seen as the problem, and especially two obvious elements: immigration and the country’s membership of the European Union, which is blamed for loss of control over immigration, bad laws and regulations, and excessive subsidies to foreigners. This narrative is incoherent, but it is not my purpose to pick it apart. The problem is that liberals have lost confidence in their own narrative.

Capitalism is not working for all. A minority is raking off profits and amassing wealth, while most of the rest are having to put up with increasing insecurity. But how to replace capitalism, since the usual alternative, state ownership and direction, has proved such a spectacular failure under Communism? The left say that increased state power is the answer. The Labour party has come up with various ideas for forcing capitalist enterprises to behave better. But these are hardly liberal. Liberals dislike the idea of putting peoples’ fates in the hands of wise bureaucrats. And also Labour’s ideas are pessimistic. It’s all about stopping people from inflicting harm, and little about allowing people to better themselves (as this week’s Economist Bagehot column points out).

Liberals are optimistic about human nature. They want to help people to help themselves, and allow them to make their own choices. I think there is an optimistic narrative to be found. It is about taking on both big government and big corporations. Working internationally to curb multinational businesses. Developing more sustainable lifestyles which are more locally based. It means ditching an obsession with economic growth for a broader understanding of well-being.

I aim to develop these ideas further. But it is clear that such a narrative implies some hard choices. It may mean that liberals are unable to accept the compromises entailed in coalition government. But if there are no hard choices there is no credibility.

Why you should vote Liberal Democrat on 22 May

Britain, along with the rest of the EU, faces a very interesting set of elections this week, for the European Parliament. Our polling day is Thursday 22 May, when there are also local elections in many parts of the country, including London, where I live. I am not an impartial observer of these elections, but I do try to express my views dispassionately, and set aside the pure propaganda. Here is what I think of the various contenders.

Let’s clear the decks a bit. I am thinking mainly about England; my knowledge of the politics of other parts of the UK is better than that of most English people, but that is a low bar indeed. In Northern Ireland I have a strong inclination towards the Alliance Party, because of its non-sectarian ethos. I dislike the Scottish Nationalist Party (SNP) mainly because I am a unionist. But I will say for its politicians that they put Scottish politics above Westminster politics; SNP politicians do not aspire to a place in the British cabinet. Still, this is less relevant to the European Parliament than elsewhere. I have rather more sympathy with Welsh Plaid Cymru, who tend to set out a clear social democratic, reformist agenda. But Welsh politics is messy, and I don’t feel confident talking about it.

And neither will I talk about the local elections. These should be determined by local issue and the local politicians’ records – and not the subject of a sweeping blog post like this one.

In England there are five contenders for your vote: the Conservatives, Labour, Ukip, the Greens and the Liberal Democrats. Voting for any other party is a wasted vote, even under our proportional system – since there is no system of transferable votes outside Northern Ireland. There are many other parties contesting these elections, but they simply don’t have enough traction to get up to the level needed win a seat. This is to be welcomed in the case of the BNP, who did manage to win a couple of seats last time, in 2009.

The party everybody is talking about is Ukip. The main reason offered by people for voting for them is that they are political outsiders, and that supporting them will give Britain’s established political elite a well deserved black eye. This is about the only good reason for voting for the party. They are chaotic and ill-disciplined, and they don’t take the work of the European Parliament seriously, and so their presence will damages the national interest. Inasmuch as you can detect clear views, they tend to be illiberal. If you are a Eurosceptic, there are other parties you can vote for who will do a better job of representing you and the country in this forum, which has significant political power, whether or not you accept that is a good thing.

But do our political elite deserve such a kicking? Many of the voters I have met on the streets think so; they feel let down. This is not just our newspapers stoking things up, with the rest of our media in tow. Politics has become too professional, and not enough politicians genuinely engage with voters. Focus groups and polling might be quite useful for informing politicians about what people are thinking, but they don’t help people feel involved. But will the shock of voters defecting to Ukip, or not voting at all, make them change their behaviour? There is little sign of this. I am not sure the problem is entirely soluble in a modern, developed society. But to make things better we need political reforms, not protests. These reforms need to make politicians more responsive to voters. This means changing our electoral system, and it means devolving more power to local levels where it is much easier to involve people in decisions.

The trouble is that Ukip stands for a sort of conservatism. They want political reforms, but focusing on the European level, not at the national level, where they are most needed. This sort of conservatism tends to reject useful reforms, as we saw in the debate on the Alternative Vote system (which would have been a small step in the right direction), and the soft spot so many people seem to have for our appointed House of Lords. It’s not the right kind of kicking, and it is the wrong election to do the kicking at.

Most Eurosceptics would be better served by the Conservative Party. The Conservatives have a clear view on Europe: renegotiation and a referendum. This is surely the most sensible way forward if you believe that being part if the EU is bad for the country. The European Parliament cannot deliver on this agenda – but Conservative MEPs will be taken much more seriously in Brussels than Ukip ones, and will thus do a better job of representing the country – though they would have had much more influence if they had not left the parliament’s Christian Democrat grouping.

But is a referendum right for the country? Like many supporters of the European project I dither on this. I don’t think it is a good idea for the UK to leave the EU. This is mainly because emotionally I feel a strong European identity (maybe because I have lived a short while outside Europe). But more practically, our obligations within the Union are forced on us by our economic circumstances, and leaving it would make little difference. It would be a colossal waste of political effort that should be devoted to other issues. Meanwhile the uncertainty it would create, as so many things of commercial importance are renegotiated, would blight the country exactly where it can least afford it. Many of the same arguments apply to just having a referendum on the issue – never mind actually leaving. The main argument for a referendum is that it would lance the boil and let the country move forward. I would sooner wait until the EU is forced to undertake more significant structural reform that anything the UK can force on its own.

And so to the Labour Party. Their campaign for the European Parliament is focused on the “cost of living crisis”. Regardless of the merits of this, it is exactly the sort of irrelevant focus-group based politics that has given politicians such a bad name. Their election literature mentions practically nothing about Europe or the European Parliament. This kind of cynical campaigning should be rejected. Politicians should be courageous; currently Labour only want to play safe. I can respect David Cameron for his referendum strategy on Europe, which required quite a bit of courage. Labour are running from the fight.

And the Greens? They deserve respect: their literature (at least here in London) at least talks about what they would do in the European Parliament. They don’t talk about Britain in Europe, but about the sort of Europe they want. That is what these elections should be about. I am just less than convinced about their vision. For me it is too anti-business. Good intent is no substitute for knowhow. We should be pushing Europe towards an environmentally sustainable future – but we have to take the public with us. We have to challenge big business vested interests – but also allow big business to keep people in jobs, and provide that element of economic stability people crave. I don’t think the Greens have a clear idea of how to get that balance right.

Which leaves the Liberal Democrats. The Lib Dems are the most Europhile of the parties (though quite a few Europhiles inhabit the Labour Party and the Greens). This has one particular advantage: it means that they part in the European Parliament’s processes with more enthusiasm, and so are much more influential than they would be otherwise. Liberal Democrats have held some very influential positions (such as Sharon Bowles’s chairing of the Economic & Monetary Affairs Committee). In this work they do a good job of standing up for British interests – and can actually talk about their track record in the Parliament with pride. They have also shown a lot more courage in standing up for a pro EU position – unlike the Labour Party – and unlike the party has done in previous elections to the European Parliament. You may not think all of their pro EU arguments are convincing (though the same can be said of most of the anti EU arguments), but they have done the campaign a service by talking about it.

Right through the country’s history Britain, and England before it, has never been sure about the role it should take in Europe. There have been times when the country has successfully pursued a global agenda while retaining minimal involvement in European affairs, such as in the mid to later 18th and 19th Centuries. At other times the country has been a fully fledged player, such as Waterloo in 1815 and the First and Second World Wars in the 20th Century. Right now the country’s dependence on trade leaves it no option but to be heavily involved in its European connections, whether or not the country stays in the EU. I believe that means that the country’s leaders should try to shape the EU from within. Others feel that by leaving the EU, it will be easier for the country to find the best path in the world. If you share my view, then the Liberal Democrats are the party for you. If you don’t, then you might still consider voting for the party as highly effective operators in the parliament. Otherwise think of voting Conservative or Green. Don’t vote for Labour or Ukip, whose campaigns are taking British politics in entirely opposite but wrong directions.

Politics is not about policies. Why the politicians are failing.

Today the FT’s excellent Janan Ganesh writes on how the British Conservatives are failing to get the ethnic minority vote (£). Also this morning two opinion polls showed that the Labour Party had lost its poll lead to the Conservatives. We can add the Liberal Democrats and the Greens to the list of underperforming political parties in Britain, leaving the field clear for the insurgent Ukip. Mr Ganesh points to a reason for the Conservatives’ failure, that applies just as much to others (except the Greens perhaps).

Mr Ganesh says that the problem is that politicians “…think politics is about policy.” And yet voters hardly know what policies the particular parties stand for. The Conservatives note that conservative values and fear of immigration are at least as prevalent in ethnic minorities as elsewhere. So they freely talk about immigration being excessive and about the need for stronger controls. And yet all this heightens voters’ suspicions that the party is not inclusive. The Conservatives have been here before. In the 2001 election they went down to a catastrophic defeat after pushing policies (on Europe in particular, as well as immigration) that seemed to play well with voters, and yet heightened their reputation as the most toxic brand in politics. They fared little better in 2005, when they tried similar “dog whistle” tactics. Their fortunes only changed when David Cameron went to prodigious efforts to de-toxify the Tory brand by advocating policies (environmentalism, gay marriage, and so on) that could distinguish the party from their former selves. Unfortunately for them, this change did not go deep enough into the party’s inner being, and it is wearing thin.

Labour seem to be in a similar fix. They have used a lot of clever researchers to fix on a series of populist policies. These include fixing energy prices and controlling private rents. All these policies, apparently, play well with focus groups. Also they have chosen “the cost of living crisis” as their overarching theme – since many voters feel hard done by in the aftermath of the recent economic crisis. And yet their poll ratings are fading. The policies are popular but they are damaging the Labour brand – or at least doing nothing to strengthen it.

The Lib Dems find themselves in a not dissimilar predicament. Most people seem to think that their influence on the coalition government is for the good. They are associated with some popular policies, such as raising tax thresholds. And yet their poll ratings languish around the 10% mark. They are perceived as politicians no different from the others in moral fibre, who enjoy being in power a bit too much.

The paradox is that British politics has never had more sophisticated advice. Each party leader is surrounded by clever people with access to the latest evidence-based theories. and yet they are all failing – and the height of ambition seems to be to fail at a slower pace than the others. What is needed is a bit more old-fashioned nous.

The last really successful party leader in this country was Labour’s Tony Blair. He employed a lot of sophistication as well, but the secret of his success was that he understood political brand building. The rise of Labour in the 1990s under his leadership was nearly a policy-free zone. So much so that when he won in 1997, his government lacked momentum because it did not have a clear idea about what to do.

What Mr Blair realised is that to build voters’ trust you have to do things that are hard. In Mr Blair’s case, he took on the Labour left, overturning all their sacred policy shibboleths, and changing Clause 4 of the party’s constitution. It was a process of destroying polices, rather than making them. To be fair on Mr Cameron, his rebuilding of the Tory brand involved some hard things – but he chose not to be quite as radical, and left the conservatives in his party silent but undefeated.

For the Liberal Democrats, their time in government might in time come to be seen as courageous rather than self-indulgent. Their leader Nick Clegg’s firm stand on Europe is a clear step in the right direction – though as yet there is no sign of a poll boost. Petulant rows within the coalition, such as this weekend’s on schools, are probably not helpful though. Proper rebuilding of their party’s brand will have come after next year’s General Election.

That applies to Labour too. It is too late for Ed Miliband to resolve the tensions within his party, and so give voters a clear picture of what the party stands for, beyond its headline grabbling policies and slogans. For all party’s difficulties with ethnic minorities, it is perhaps the Conservatives that have least reason for discomfort, once the European elections next week are out of the way. They are failing more slowly than the others, and if they don’t panic they will recover a lot of the ground they have lost to Ukip, unlike Labour. It probably won’t be enough to win them a majority, because they failed to reform the electoral system in their favour, in spite of clear opportunity having been presented – through a combination of the Alternative Vote and boundary changes.

So here’s what I predict for 2015. The Conservatives gain some seats but fall short of a majority. The Lib Dems lose 10-20 seats, but still leaving a substantial voting block in Parliament. Labour make few advances. Ukip will pile up 10% or more of the vote, perhaps surpassing the Lib Dems,but get one seat at most – they will take most of their votes from Labour. The Conservatives will attempt a minority government.

The rise of Ukip. What should the Lib Dems do?

My heating engineer is voting for Ukip, the United Kingdom Independence Party, the reactionary insurgent English political party. This party has hit the zeitgeist, even here in cosmopolitan London. Political activists from other parties seem to have no idea how to handle this. This should give us pause, especially in the Liberal Democrats. The party needs to rediscover its anti-establishment roots.

The typical reaction to Ukip from political insiders is annoyance. This party breaks almost every rule of political correctness. My Facebook account is bombarded by posts pointing out the various unsavoury views held by Ukip candidates, and denouncing them a as a bunch of idiots. All this is true but irrelevant.

The perception by many voters is that the country is run by a political establishment that makes life easy for themselves and their friends. They are not interested in listening to what the public wants. My engineer says that it has always been that way, and nothing is changing. Voting for Ukip is the only way he can see of mounting an effective protest. Besides, some of their policies, like a vote on the EU, strike a chord. This feeling is especially strong amongst the white working class. This group accounts for a lower proportion of the population here in London, so maybe Ukip will do less well here. But the disillusion with politics is not confined to white working class people. Last weekend an Indian-born gentleman told me that he expected bad behaviour from Indian politicians, but he had expected better from British ones.

Meanwhile the professional politicos, and their army of hangers-on, whether or not politically affiliated, attack Ukip as if they were normal politicians. They criticise their candidates and their policies. But they do not address the disillusion from which Ukip support springs. Indeed, the more they protest, the more disillusioned voters appreciate that voting for Ukip will annoy the establishment.

This is hard for a Lib Dem. In one sense Ukip’s rise shouldn’t bother us too much. Lib Dem core voters are the least likely to defect to Ukip, since they are anti-liberal. Indeed the Lib Dem strategy of talking up Ukip for the European elections later this month is quite a sound one – as this election depends on rallying the core vote. But we used to be able to pick up the disillusioned too. We were the party locked out of the establishment, with the least stake in it, and whose mission was to shake it up. The party leader Nick Clegg conveyed this message forcefully in the General Election campaign of 2010.

But coalition government changed all that. Now the party is part of the establishment, and they seem to relish it. And the record on political reform is weak. The voting system is the same; the House of Lords is still there; the balance of powers between the local and the central does not appear to have changed radically. A U-turn on student tuition fees shows that Labour and Conservative politicians aren’t the only ones that break promises. Lib Dems might argue this unfair: there is only so much they can do when both Labour and the Conservatives won more votes and parliamentary seats. The riposte to that, though, is: just what is the point of the Lib Dems then?

The answer to that is that lasting political change tends to happen slowly. Revolutions can happen, but they always disappoint. The Lib Dems have in fact forced some significant changes while in government, and blocked a number of illiberal moves. Even my heating engineer admits that you can’t expect people to campaign to get elected and then to refuse a share of power. So what do the Lib Dems do? I think they need to focus on three things.

First they need to consolidate their core. This means liberal internationalists, who seek a fair distribution of society’s wealth, and limits to state power. This may be rather vaguely defined, but there are clear values around which the party can rally. Without this core, nothing else is possible. The party compromises on key issues, such as Europe or human rights, at its peril.

But it is a minority pursuit. Most people aren’t liberal or internationalist by instinct. They prefer the values of identity and keeping everybody else at bay. So the second thing is that Lib Dems must keep reaching out people beyond their core. The relationship here is inevitably more transactional: specific issues and promises. The long term aim should be to listen and to build trust.

If that sounds wishy-washy it shouldn’t. It has a name and it is called Community Politics. Some Lib Dems practice it very effectively, look at Sutton in London. Most sitting Lib Dem MPs try something along these lines. For all that the implications seem to escape most modern political insiders, including younger Lib Dems. They prefer social media and clever communication strategies. Community politics is about looking people in the eye, and helping them when you can, but also explaining that you can’t compromise your core beliefs. It’s not about clever graphics, it’s about human engagement.

But a strong core and community politics is not enough for the party to progress. The party needs to convince voters that it feels their pain, and advocate real changes to the political system. In the past the party has thought too much in terms of national political reforms, and especially the electoral system. But to voters this sounds like juggling the same old rules in favour of the party, rather than promoting fundamental change. Most are sure to think that the disastrous AV referendum in 2011 should put that matter to rest for the time being.

Instead the party should focus its attention more on devolving power from Whitehall to a local level. The Coalition trumpeted localism, but lacked a clear vision of what was required. Many in the political establishment are against it, in practice, if not in theory. But there is a prospect of building up alliances across political parties. “Power to the People” is a corny slogan, but something like it needs to be the rallying cry. It has to hurt. It means confronting thorny issues like local taxation and finance, and it needs to mean job losses in Westminster ministries. It also means allowing groups of local authorities to combine to take on more responsibilities. STV for local elections should also be part of the mix, but the main deal should be about power.

Rally a liberal core. Reach out through community politics. Advocate radical devolution of power from Westminster. These will do nothing to fend of Ukip in 2014 – but in the long run they could show the voters that the Lib Dems really are different.

Why Labour are losing the election in 2015

According to press chatter, there is mounting worry amongst those that surround Ed Miliband, the leader of Britain’s Labour Party. I don’t know anybody in this elite circle, and I can’t offer an opinion on whether this is true. What I can say is that it should be. After ducking hard choices when the going was good, he is now in real trouble.

The immediate cause of the Labour wobble, if that is what it was, was the poll bounce for the Conservatives after the recent Budget by the Chancellor, George Osborne. The previously secure Labour lead simply vanished. This poll bounce disappeared as quickly as it came. Clever charts showing that it was part of a longer-term trend look premature. But it did show that Labour support is not solid, and that the Tories are not quite as terminally unpopular as many suggested.

But what really convinces me that Labour are in deep trouble is this exclusive piece in yesterday’s Independent, highlighting an article Mr Miliband had written for the paper. Here’s the first paragraph:

Ed Miliband has promised to rescue Britain’s struggling middle classes by boosting their living standards as he warns that the “cost-of-living crisis” will last for at least another five years.

This seems to be part of a bid by Mr Miliband to rebuild his electoral standing; today he is launching a policy about devolving more power to “super-City” regions, building on a policy developed by the Liberal Democrat leader Nick Clegg, as he will not say.

This political drive builds on two themes that Mr Miliband has been developing. The first is “the squeezed middle” – a deliberately vague reference to people who feel they are neither favoured by government handouts, nor part of the rich elite. It is interesting that this seems to have migrated to “the struggling middle classes”, when it might just as easily refer to working classes (if you get beyond the bureaucrats’ tendency to use the term “working class” to refer to people who are not working, and entitled to state support, as an alternative to the word “poor”). The second idea is “the cost of living crisis”, referring to the fact that for most people incomes have not increased as fast as prices over the course of the last government.

No doubt Labour’s polling shows that these ideas cover a large swathe of generally unhappy people, who might therefore be sceptical of the government’s record. The problem is how to appeal to them. Almost by definition, these people are out of the scope of state benefits. In fact they tend to resent the size of the state benefits bill, apart from the old age pension, whose cost they tend to underestimate. They are not employees of the state, a separate and distinct constituency, even if they share some of the same problems). So how to address their standard of living? There are two ways: tax cuts and a stronger private sector economy. On both counts Labour’s credibility is behind that of the Coalition.

The best sort of tax cut to reach the squeezed middle is a cut to personal allowances, i.e. the point at which people start to pay tax (including its National Insurance equivalent, something all parties seem happy to ignore). But the Coalition has already been increasing this quite aggressively, mainly at the expense of higher rate tax payers, some of whom are now claiming to be part of the squeezed middle too. Worse, it is one of the few policies that is closely identified by the public with the Liberal Democrat part of the coalition, which Labour is extremely keen to denigrate – they have picked up a lot of ex Lib Dem voters. They have floated the idea of a 10% tax band, which is just a less efficient way of delivering the same policy – and has uncomfortable echoes with one of the last Labour government’s policy mistakes.

There is an even bigger problem with taxes. Labour has to convince voters that it will not put taxes up to pay for an expanded state. That means signing up to a series of things, like a cap on benefits expenditure, that will be unpopular with core Labour voters, and not even particularly sensible from the point of view of economic management.

But tax cuts are a fairly minor palliative. What would really cheer voters up is the prospect of incomes rising in the private sector. The trouble is that Labour has done nothing to dispel its reputation for being anti-business. Quite the opposite. Mr Miliband’s view is that there are good businesses (“producers”) and bad ones (“predators”). Wages are being squeezed by the predators to benefit their top managers and shareholders. So his anti-business policies are directed at these predators (banks and energy companies to the fore), while helping the producers. This argument is not entirely without merit, but it is a tough sell. And in practice it is pretty much impossible to create policies that discriminate successfully between the two classes of business, and all those that inhabit the grey zones in between. The result is that Labour’s policies designed to address this problem, such as the devolution to the cities, don’t look as if they will deliver much of a boost to wages in the short term – even if they are perfectly sensible. And sensible policies are liable to get matched or pinched by the coalition parties anyway.

The Conservative counterattack to Labour will point to the fragility of the current economic recovery, and say “Don’t put all this at risk”. Of course one thing that could put the fragile recovery at risk is the Conservative plan for a referendum on the EU. But does Labour want to go out with all guns blazing on that issue? Perhaps I underestimate Mr Miliband, and that is his plan. But so far he is happy for Mr Clegg to take the lead on the issue. In fact you could not inaccurately describe Labour’s emerging strategy as “I agree with Nick”. A liberal, centre-ground stance that wants more devolution from Westminster, but with a strong attachment to the EU.

So Labour is embarking on an impossible task to convince the electorate that it can out-do the coalition parties at their own policies. This won’t work. But what it will do is to de-motivate their core constituencies of public sector workers and the squeezed bottom, as I might call the voters suffering from benefits cuts.

The trouble is that Labour hoped to get the best of both worlds after Mr Miliband was elected. That they could adopt a “Blair-lite” strategy that allowed an appeal to the centre ground, while at the same time harnessing the wave of anger from their core voters at the government’s austerity policies, which, incidentally, allowed them to harvest a lot of Lib Dem voters. But Blair-lite lacked credibility as soon as the economy started to revive. There was a choice to be made for either Blair II, an unashamed dash for the middle ground, including an apology for the record of the last government’s economic policies (though that would have been too much for Mr Blair himself). Or they could have gone for unashamed social democracy, making a case for higher taxes, a bigger state, and less aggression on cutting the deficit (isn’t going for a balanced budget just willy-waving after all?). The first of these two choices might well have destroyed the party, given the depth of anger over “The Cuts” – but the second choice was never properly debated or confronted. It would have been perfectly respectable and courageous – even if expanding the state back to the size it was in 2008, or even 2010, would have taken a very long time.

The Conservative General Election campaign has not got started yet. They will allow Ukip their moment of glory in this year’s Euro elections, then quietly mug their voters by stoking up fears of Labour. Labour’s credibility will fall apart, and they will have increasing trouble fending off Tory attacks and keeping their core supporters loyal.

If I was advising Ed Miliband, I would be worried.

French lessons for British social democrats

Opposition has brought a certain coherence to the British left. There is nothing like a hate-figure being in power to bring about a sense of unity. And the idea that runs through the left’s thinking on the state is social democracy. But last weekend’s electoral disaster for the French Socialists, and the rise of Marine Le Pen’s National Front should give them pause. The left is becoming is becoming disenfranchised from the working class.

What do I mean by social democracy? It is the coming together of several elements. The first is the conventional understanding of western democracy and the rule of law – in contrast to a more radical revolutionary style. The second is a grudging acceptance that the private sector is the primary motor of the economy – but heavily managed to prevent its excesses damaging society, including strong protection for employees’ job security. Next is strong, national government, setting standards that apply across the whole country, rather than the chaotic and inconsistent approaches that come from bottom-up policy. Then there is a faith in large public services, covering health, education, railways and much more. A strong social, state-funded safety net is added to it. And it is all funded by high levels of taxation, with a strong progressive element.

In Britain I have noticed that a historical narrative has built up around this idea. Social democracy’s breakthrough moment was the Labour government of 1945 (after the perceived success of the country’s state directed war effort). Something like a consensus built up around it, as economic growth allowed the scope the social democratic system to be extended. Then disaster struck in 1979, when a new breed of politicians, the “Neoliberals” were allowed to take over. Mrs Thatcher’s government started to dismantle the social democratic apparatus. Tony Blair’s Labour government wasn’t much better. But at least Mr Blair’s public sector “reforms” were balanced by Gordon Brown’s creeping extension of the scope of public services. In 2010 the Tory-led coalition of Tories and the neoliberal wing of the Liberal Democrats has continued the dismantling process. But the neoliberal ideology is a demonstrable failure – leading to the financial crisis and escalating inequality. The new Labour leadership, under Ed Miliband, has shown interest in reviving the old social democratic system, but it is being urged to be more radical. Social democrats within the Lib Dems hope that the party’s current leadership will be up-ended and the party will never again be associated with Tory government.

My aim here is not to challenge this flawed narrative, though I choke when I’m told that privatised industries like energy, telecoms, water and even the railways all better run when under public ownership. I want to draw parallels between this social democratic vision of society and France. For surely the country where these ideas have been carried through most thoroughly is France. Of course the Left would rather talk about the Scandinavian countries, Denmark and Sweden especially. But these are small, homogenous countries which do not make good parallels – and never mind the often rose-tinted spectacles.

But France is a big, diverse country like Britain. It’s anti-capitalist attitudes are deeply embedded. It combines a very efficient private sector with a strong central government run by a very well-educated and brainy elite. More than half the national income is paid in tax. And in 2012 the Socialists were swept back into power in a landslide. But now the economy is sliding and the Socialists are deeply unpopular. The working classes are defecting en-masse to the anti-establishment, anti-immigrant, anti EU National Front. What are the lessons?

But first a word of caution. It is commonplace for Anglo-Saxon commentators to write the French economy off as a basket case. It is not. Slow growth is probably an affliction that all developed economies will have to deal with. It was no accident that France weathered the 2007/09 crisis better than most developed economies – and just how secure is the new growth in Britain and the USA? Still, it has some big problems.

There are important lessons for the left in both strategy and tactics. Strategically the toughest lesson is than not all neoliberal inspired ideas are rubbish. The world economy is changing, thanks to trade and, above all, to technology. National economies must adapt to this. Developed economies are already highly dependant on global trading – shutting it off would mean a step backwards and reduced living standards. Accepting it means that industry has to reshape, causing job losses in obsolete industries. The neoliberal approach of letting market forces shape the change, by allowing struggling business to go bust and not getting in the way of new industries to take their place, is the quickest and cleanest way of adapting to this change. Fighting it means declining tax revenues, which means putting pressure on the public services and the social safety net. By pretending that there is an alternative to the globalised market economy, all the left does is build up false expectations about what can be achieved. That is the first cause of the Socialist failure in France. Too many on the British left don’t understand this basic, strategic problem.

The tactics are just as important. In France the Socialists have become part of a distant elite, remote from struggling working-class communities. They are full of clever intellectual answers, but they don’t feel the pain. Hence the appeal of the National Front. The British left too is too attached to its own intellectual sphere, sustained by Westminster think-tanks, and various left-wing publications – as well as intellectual cells in universities and (to a lesser extent) insulated public services like schools and hospitals. Strategy is set by using opinion polls and focus groups, not by politicians in the hard grind of finding solutions for hard-pressed local communities.

There is a tactical blind alley here. The focus group approach is telling politicians to respond to working class (and much middle class) anger by taking a tougher line on immigration, the EU and so on. To be fair on the left, they are resisting this temptation. But it isn’t just the pollsters and focus groups that are pulling politicians in that direction: any politician who spends serious time with the public understands that the pollsters aren’t making this up. The problem is that pandering to this anger also leads to false expectations; for very good reasons the politicians can’t deliver, and if they did the public would not like the result.

How to win back working-class communities while staying true to liberal instincts? Well you won’t find the answer in grand reforms and new laws promulgated in London or Paris. It isn’t about crafting the right sort of attack material to wound the right. It is about politicians winning trust by getting out into their local communities, meeting people and facilitating solutions that people can see. The choice of the word “facilitating” is important. It is about helping people to help themselves, not creating new government schemes (though these have a place). It is about mediating between different interest groups, not stoking up fights. People are much more realistic than many give them credit for. They appreciate honest facilitators and mediators more than people who just stoke up anger. But they are suspicious of elites that would rather talk to focus groups than their local electors, or who want to make their name with some new national reform – rather than helping to sort out a local housing estate, or bring together local ethnic groups.

It’s a hard road, but it is one the left must embrace if they are to avoid the fate of the Socialists in France.