Bryn Jones looks at decentralise, decommoditise, democratise and asks is it “Burnhamist” socialism or a rhetorical charade?
Andy Burnham’s leadership acceptance speech declared his government would reverse “40 years of neoliberal politics and economics”. Because these had “centralised political power and privatised economic power”. Instead, he claimed, his government will put “control” back into democratic institutions and local communities. But can he do this when his own government and he himself has committed to be unashamedly “pro-business”? Will the financial forces and economic thinking that have embedded neoliberalism in his party, the media and the government apparatus, trump aspirations to empower civil society and local government? Is the vision strong enough to reverse an entire governance programme?
Burnham made reference to alternatives to this 40-year orthodoxy that are tantalisingly reminiscent of longstanding socialist principles. Intriguingly and refreshingly, these echoed the ideas of the Hungarian Karl Polanyi: an icon of socialist intellectuals and a direct opponent of market economics as a governing paradigm. Polanyi could be to Burnham’s socialism what von Hayek was to neoliberalism. Burnham condemned the British privatisation of “the essentials: housing, water, energy, transport”. A surrender that “led to concentration of more wealth in fewer hands and fewer places.”
In the 1940s, Polanyi had similarly argued that market capture and private ownership of fundamental resources impose intolerable burdens on the human condition, trigger revolts and eventually lead to their “de-commodification”. A process achieved through the post-World War II social ownership models. If shelter and housing should be accessible to all, as Burnham said, the “sell-off of council homes leaves the nation chasing rents in the private sector through the benefits system (adding) if we don’t have control over the essentials how can we control inflation, public spending and the rest of the economy?” As candidates for decommodification, Burnham directly cited only housing and transport. He commended the plans of the Liverpool mayor, Steve Rotherham to bring the Merseyside rail network “back into public ownership”. Burnham’s broader ethos could be boiled down to three concepts: decentralise, decommoditise, democratise. These principles are implicit in the self-financing, arms-length public corporations advocated by Mainstream supporters Matthew Lawrence and Alex Williams (The Productive State: A Framework for Manchesterism). Burnham is right to criticise the “sell-off of council homes…for leaving the nation chasing rents in the private sector”. However, this transfer is only the tip of the iceberg of a rentier economy. It is forces within investment finance – private equity, asset management and wealth funds – that are buying up housing and other public assets to extract guaranteed revenues: rents. Some deals have saddled the UK government with massive debt under New Labour’s infamous Private Finance Initiative.
These investors, exemplified in the water industry, extract guaranteed revenues with minimal investments in physical and human capital. The obvious question: how would these vampire businesses be treated under a government that claims to protect families and communities from their depredations? What will happen to them and the exploitative system on which they thrive and that Burnham professes to deplore? As a long-time member of the Co-operative Party, Burnham ought to support principles of common ownership and democratic control.
Modified forms of this ethos could be applied to the current nationalisation of railway services and, though not yet directly in Burnham’s sights, to failing private utilities such as water companies. There are multiple examples of “multi-stakeholder” organisations to serve as models. Boards could have proportionate representatives of consumers and workers plus, if necessary, representatives of the Government of the day. If members of mutuals, such as Nationwide Building Society, can elect their directors, why shouldn’t rail workers and passenger groups, for example, do the same in their industry?
However, to put control back into local communities, de-commodification needs to proceed as an integral part of his other aims of devolved and decentralised governance; not separately or in parallel with social ownership. If this does not happen, a strategy of re-socialisation as “public control” could degenerate into bureaucratic and technocratic systems, as alienating for the people and communities they are meant to serve as privatised or Whitehall forms of management are.
Democratisation must also, and above all, be applied to the political system, if voters and communities are to gain some sense of real control. Leaving aside the most scandalous aspects, like the disproportionate voting system and the House of Lords gravy train, there are troubling questions about Burnham’s flagship policy of government devolution to regional mayors. These are billed as “decentralisation”, but there is a very real danger they will only recreate at a lower level, a bureaucratic and managerial centralisation of powers.
In the West of England “combined authority” (WECA), for example, there have been clashes between the policy views of its constituent councils and those of its mayor. Which of these two sets of leaders most represent the views of their electorates? On a thorny issue like transport, there are local grievances that remote plans from WECA are formulated in ignorance and indifference to the priorities of local councillors and campaigners. Dialogue with the mayoralty ranges from the difficult to the non-existent. Since the combined authority mayors now hold the (delegated) funds, they decide many of the spending priorities. With local councils consequently stripped of some of their powers, the democratic deficit looks likely to widen. There is no sense of an imminent taking back of control here. In some respects it feels as though control has been lost. For decentralisation to work, it must be accompanied by democratisation.
Local Government Secretaries Angela Rayner and Matthew Pennycook, Burnham’s hand-picked ministers, do not seem to have got the message about restoring local control and preventing private interests from draining power and housing provision from local communities. They have rejected local council plans for 800 social housing units in the Brick Lane area of East London. Instead, they have endorsed private housing and a data centre for City financial traders on the site. This £500 million redevelopment of the former Truman’s brewery had been rejected and criticised by Tower Hamlets Council and local campaigners for giving away a potential local asset to profit-seeking developers. Tower Hamlets Council has around 30,000 families on its social housing waiting list. The developers’ plans would provide just six social housing units. Such gentrification also tends to raise private rents in the locality.
Burnham describes areas that pioneered Labour politics as victims of extractive neoliberalism that needs to be eradicated. Tower Hamlets in the East End of London is one such classic area. But Pennycook and Rayner’s decision does not correct this exploitation. Instead, it makes a mockery of local democracy and only adds to rentier exploitation of local resources. If his government continues this enthusiasm for serving those regressive interests criticised by its Prime Minister, all the impressive talk about restoring control, decentralising government, and reversing private sector enrichment would seem to be worthless. Is this likely to be the practical reality of Burnhamism?