Review: New Labour Plc by Dave Osler

By Paul Hunt (June 2004)

New Labour as a party of business

"This is not a one-night stand, it’s a long term relationship". - Alan Milburn, former Secretary of State for Health and a leading Blairite, sums up well the relationship between Labour and big business.

Dave Osler’s book shows in a graphic manner how the Labour Party, a party that was set up over 100 years ago to represent the interests of working people and trade unionists, has been completely taken over by capitalist interests. That New Labour is slavishly pursuing the interests of big business will, of course, come as no surprise to most trade unionists and socialist activists. But Osler shows the extent to which the party is completely riddled by entrepreneurs, career politicians and fat cats out to make a quick buck.

He is also clear that this isn’t some sort of temporary takeover or swing to the right, which has happened several times before in Labour’s history. This isn’t about personalities. "New Labour is not in the grip of a 1950s Sci-Fi style invasion of the body snatchers", he writes. "What we have witnessed over the last decade is the organic transformation of a major political party. If Blair fell under a privatised bus tomorrow, the changes would stay in place". The fact that this is not just a matter of one right-wing leader was shown by the recent parliamentary vote regarding university top up fees. With Blair seemingly facing defeat, Gordon Brown, who some believe would move the party to the left, persuaded some of his close allies to vote through this anti-working class reform.

Of course, big business funding of Labour is not a new thing, a recent phenomenon since the rise of Blair. Big-business tycoon Robert Maxwell, for example, was a Labour MP. Other notorious examples, pointed out by Osler, include the former Labour leader of Newcastle council, T Dan Smith, who was arrested on charges of bribery regarding development contracts which he had handed out whilst redeveloping parts of the North-East.

But the last 20 years has seen a dramatic change in who funds the Labour Party. In 1983, the unions contributed 96% of Labour’s funds (and held 90% of the vote at the Labour Party conference). By 1991, the unions contributed 53% of party funds and, in the general election of 2001, just 35%. The unions’ votes at the Labour Party conference (itself stripped of serious policy-making powers), have been cut to below 50%.

Osler correctly points out that "there never was one unified ‘Old Labour’, of course", which is true. It is also true that the Labour Party was never a genuine socialist party in the Marxist sense. It was what Lenin described as a "bourgeois workers’ party", ie a party with a leadership that was not prepared to go beyond the limits of capitalism, but with mass working-class support through the trade unions. Most importantly, it is where most working-class people looked to in search of progressive change. Now the Labour Party has been decisively transformed, into a party that is backed to the hilt by big business.

This transformation has not happened in isolation from world events – indeed, it has been international developments that have helped the ‘New Labour’ faction to secure their position. When the battle took place over the changing of Clause Four of the Labour Party constitution, which was Labour’s commitment to public ownership, Osler notes that "historical precedents underlined that this was a high–risk strategy. Labour leader Hugh Gaitskell had tried a similar move in 1959, but had been unable to secure acceptance". But the situation was different to that of the 1950s, both within the Labour Party and on the international arena.

The expulsion of supporters of Militant (the forerunner of the Socialist Party) and other socialists, along with the defeat of the 1984-85 miners’ strike, meant the right-wing gained ascendancy. Combined with the campaign against socialism, and the ‘end of history’ propaganda put out by the ruling class following the collapse of the planned economies in the USSR and Eastern Europe, the pro-capitalist wing was able to successfully remove Clause Four from the party constitution.

A vital part of this transformation was the snuffing out of much of the democracy in the party. The assault on democracy from the ‘New Labour faction’ was an attempt to silence and destroy the left in the party. The right wing closed down the Labour Party Young Socialists, which was a stronghold of Militant supporters, and introduced the one-member, one-vote system in internal party elections, to reduce the role that the unions would have in decision-making. Today, Labour Party policy is decided not by the national conference or, between conferences, by the national executive committee (NEC), but supposedly by policy forums. Constitutionally, the NEC has no real power and is now elected every two years rather than annually. So channels that could have once been used to effect policy changes have been closed down or at best severely curtailed.

The author has researched well the influence that big business has in the Labour Party, and has compiled in a useful appendix a list of corporate donations to the Labour Party. There are all sorts on this list – the National Express coach company, Vauxhall Motors, Orange, Scottish Power, J Sainsbury’s Plc, and so on. They certainly seem to get their money’s worth.

Since Labour has come to power there has been widespread privatisation of public services, including the infamous Private Finance Initiative (PFI), otherwise known as the Profit From Illness scheme. This actually started life under previous Conservative governments and, put simply, it is where the private sector is able to deliver ‘public services’ for private profit. Under the Tories, 50 PFI contracts were signed in five years. By December 2001, however, after four years of Labour government, Osler shows that over 450 PFI deals had been signed. Just one example of how big business has gained much since the election of this New Labour government.

Another massive source of income for Labour comes from wealthy entrepreneurs. Again, the list is massive, with some donations totalling a few thousand to those from the likes of Lord Sainsbury who, as Labour’s largest single backer, has given over £9 million. Any coincidence that he was given a peerage in 1997, and made science minister in 1998?

Despite more money coming from big business, it is at the moment mainly from types such as Bernie Ecclestone, ‘self-made’ millionaires (although not exclusively). The Tory Party still has firmer roots in the ruling class, which go back centuries. And Osler points out: "Most of the controversial donations have come not from the FTSE 100 crowd, but from the sort of business wide-boys still anxious enough about their social position to pay and shore it up".

So where now for the Labour Party? The Labour Party has long ceased to be any type of workers’ party, even one which partially represents the interests of working people. Efforts to reclaim the Labour Party, an idea put forward by sections of the trade union movement and the left, have so far proved futile, and are likely to remain a waste of energy and valuable time. Whilst nothing is ever ruled out completely, the main trend is away from the Labour Party, with the RMT union taking the decision to leave the Labour Party, and other unions discussing the question of disaffiliation.

The Socialist Party has played a prominent role in putting the question of a new workers’ party on the agenda, and the need for independent working-class representation. This useful and insightful book is a reminder that New Labour is rotten to the core, and that socialists need to put forward the idea of a new party more than ever.



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