Fighting Neo-Liberalism since 1973


“In 1980 a huge breakthrough was made when Conference decided that the procedure for the election of Leader and Deputy would have a wider franchise… without the left, party members would have no say in the election of our Party’s Leader.”

Bryn Griffiths, Campaign for Labour Party Democracy, describes how the left continues to oppose neo-liberalism within the Labour Party

Vladimir Derer once explained why he helped form the Campaign for Labour Party Democracy (CLPD): “In 1973 there was a programme and this included a demand for 25 companies to be taken into public ownership. When this was published in June 1973 Wilson said we cannot do anything about it and unilaterally dismissed it… and that was when a number of us came together in June 1973.”

Healey set the scene

Margaret Thatcher is credited with the arrival of neo-liberal Britain, the idea that there can be no alternative to a deregulated market with privatisation, austerity, and a reduced state role in the economy. But perhaps Denis Healey’s rush back from the International Monetary Fund (IMF) to address the 1976 Labour Party Conference makes him a contender for that dubious crown?

As Labour Chancellor, Healey told Conference that he was negotiating with the IMF based on “Labour’s existing policies”. Amidst boos and calls for him to resign he said: “When I say existing policies I mean things we don’t like as well as things we do like. It means sticking to the very painful cuts in public expenditure on which the Government has already decided. It means sticking to a pay policy which enables us… to continue the attack on inflation”.

Healey’s IMF negotiation resulted in a 5% pay policy that led to what the mainstream media dubbed the ‘Winter of Discontent’ in 1978-9, brought the post war consensus crashing down, and ushered Thatcher into office.

Opposition to Benn’s alternative strategy

As the eighties started, CLPD supporters were becoming more influential on Labour’s National Executive Committee (NEC). At the same time, CLPD sought to involve the public sector unions, after they had clashed with Healey over his 5% pay policy.

In 1980 a huge breakthrough was made when Conference decided that the procedure for the election of Leader and Deputy would have a wider franchise. Younger Labour Party members should note two things: firstly, without the left, party members would have no say in the election of our Party’s Leader; and secondly, the trade unions did not secure more influence by disaffiliating, a self-defeating protest, but by asserting control over the party they created.

A conference at Wembley to determine the electoral mechanism was booked but the Parliamentary Party (PLP) moved fast, realising Tony Benn was an obvious candidate with his commitment to an Alternative Economic Strategy. The PLP held their own exclusive election and elected Michael Foot, previously of the left but now a willing prisoner of the right, to lead the Labour Party.

The PLP’s quick footwork meant that the left fell back on the Deputy Leader post and the Benn for Deputy Campaign was launched. Unfortunately, some key soft left figures (most notably Neil Kinnock) defected, to gift former Chancellor Healey victory by a fraction of a percentage.

The defeat of Benn followed by the defeat of the miners meant that Labour failed to transform its economic policy. By the time Labour returned to government Thatcher was claiming, because of this, that Blair was her greatest achievement.

Corbyn challenged austerity

Jeremy Corbyn represented a break from neo-liberalism and his leadership campaign was dubbed an antiausterity movement. A pivotal moment in the leadership campaign was when Jeremy defied Harriet Harman’s instruction to abstain on the Tories’ Welfare Bill and defied the whip. In 2017 Labour’s anti-austerity programme, with John McDonnell’s fully-funded manifesto, proved to be hugely popular and delivered the biggest Labour swing since 1945.

Starmer’s retreat into failed neo-liberalism

After the ‘Get Brexit Done’ election defeat, Labour has gone full circle and embraced a set of economic mantras of the 1976 Healey vintage. Starmer and his Shadow Chancellor Rachel Reeves went to Davos to calm the nerves of global finance. Meanwhile Wes Streeting’s commitment to National Health Service reform and a role for the private sector even secured the approval of Jacob Rees-Mogg, who took to Twitter to enthuse that “Labour’s Wes Streeting has opened the door to a conversation on reform of the NHS.”

Economic policy remains the battleground for trade unions and the left

Starmer’s team are undermining local democracy because they know, as the history above shows, economic conflict keeps reviving the left. Vladimir always understood the importance of economic policy but he also understood that to do something about it the trades unions must assert their democratic influence within the party.

Sharon Graham, the General Secretary of Unite understands what the current round of NEC interventions in local selections are about: “What is emerging from Labour is a pattern of behaviour to literally take out any MP or mayor who backs key manifesto demands on the re-nationalisation of energy, action on rampant profiteering and investment in UK steel… These actions by Labour are a major mistake and have serious consequences.”

  • Bryn Griffiths is a Colchester CLP member and a member of the Campaign for Labour Party Democracy (CLPD) Executive.
  • This article was originally published in the special 50th anniversary edition of Campaign Briefing, Read the full magazine here.

Featured image: Ronald Reagan and Margaret Thatcher in 1988. Photo credit: Wikicommons/National Archives and Records Administration – Public Domain photo

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