All The Frightened People Running Home Before Dark

The last glimpse of a mainstream political party not assuming that Britain’s future lay in ‘the service economy’ (in general) and the City (in particular) was in 1988 when the Labour Party was doing its policy review after the defeat of 1987. The economic part of that review was done by a committee chaired by Bryan Gould MP. Gould represented a current within the Labour Party and wider labour movement at the time which was hostile to the bankers. It had concluded that the key structural conflict in Britain wasn’t between the classes, the Marxist view, but between the interests of the domestic and overseas sections of the economy; which in shorthand boiled down to the City on the one hand and manufacturing on the other. 1 This group included Neil Kinnock, as his 1986 book, Making Our Way, shows, and Bryan Gould, who was appointed by Kinnock to chair the committee on economic policy. Gould’s committee duly produced a detailed analysis of why the bankers had too much power and how to reduce it. 

But the Gould committee report was rejected by Neil Kinnock as soon as it was finished. Gould tells us that, just before the report was due to be published, a group of Labour MPs came to see him to try to get it stopped or modified. One of them was the then rising star of the back-benches, Tony Blair. This was 1988. Gould went on to stand against John Smith for the leadership of the party in 1992 and lost heavily. New Labour – at its core the capitulation to the financial sector– could be said to have begun there.  

We still don’t know why the Gould report was dumped. My guess would be that the group around Kinnock wanted to get elected more than they cared about the state of the British economy or the fate of its citizens; and having lost two general elections, decided that the bankers were too powerful to challenge. By this time – 1988/9 – the City had been largely sold off to American banks in the so-called big bang of 1986 and was well on its way to being an extension of Wall Street; and thus to be anti-City of London increasingly meant being perceived as anti-American. But for a while a Labour Party which was explicitly an anti-City of London party did seem a real prospect. For whatever reason, the policy review document on the economy was abandoned and Labour began the long process of making itself acceptable to the City of London – even though the City then was only about 2% of the British economy.

History Lesson Cancelled, Class Revision In Progress

The explanation for that generation in the wilderness is familiar enough: the party’s pitch to the country was tone deaf. On the economy, law and order, defence and a hundred other issues Labour had nothing to say that chimed with what people wanted to hear. The party was more bothered with pleasing its own fissiparous cliques; the wannabe Dave Sparts, the bedsit revolutionaries, the local government crackpots who refused to set a rate, the headbangers of Militant.

The “loony left” were responsible for torpedoing Labour’s reputation and sinking the party’s chances with their puerile antics in Labour councils up and down the country and through their reckless control of the party’s policy-making machinery. Fringe causes were put before mainstream concerns, with many in the party seriously accepting the flawed logic that stapling together a collection of special interest groups would create a counterweight to Thatcher’s electoral coalition of aspirational voters.

Let us first acknowledge the tenuous connection to truth in Kevin’s rant, the left in the party in the 1980s did too uncritically accept the idea that if Labour was more left wing, then it would win an election.

However, he conveniently overlooks a number of facts. Firstly, that the most obvious cause of Labour’s defeat in 1983 was not the left, but the cynical disloyalty of those who split from labour and formed the Social Democratic Party in 1981, and which boosted the Liberal/SDP alliance to 25% of the vote in 1983. There is an exaggerated folk-legend in the Labour Party about how dangerous the Militant Tendency was, but it was the centre-right group within the Labour Party, the Social Democratic Alliance, who went to the Tory press with lurid accusations that eleven members of the NEC were communists (including Neil Kinnock and Michael Foot), who campaigned against Labour in the 1979 European elections, and who announced that they would stand candidates against Labour in the next general election, leading to their expulsion in 1980.

The snarl behind the smile comes as no surprise to some old acquaintances. There are Labour MPs who have never forgiven Kilroy-Silk for the way he abandoned his seat of Knowsley North in 1986 at the height of the party's bruising battle with the Militant Tendency. As a rightwinger who held lavish parties at his grand house in Burnham, Kilroy-Silk was an easy target for the Trotskyite group, which launched a bitter and bloody battle to deselect him as the Labour candidate in the seat he had held since 1974. The Labour high command, under the direction of Neil Kinnock, piled resources into Merseyside to help him. The party's efforts saved his neck, only for Kilroy-Silk to announce that he was leaving Westminster to present his own television programme.

Neil Kinnock is widely seen as having done much of the groundwork to make the New Labour project possible. As Labour leader he fought hard to remove the left-wing Militant tendency from the party and attempted to modernise its image and policies.

He hired TV producer Peter Mandelson to oversee Labour's next election campaign. Under his guidance the red rose symbol - rather than the red flag - was adopted. Mandelson also talent-spotted Blair and Brown, to whom he became a friend and mentor.