The Fight Facing a Corbyn Government

Christine Berry

If a Corbyn-led Labour Party wins the next general election, big business will fight back – and we'll need a plan to defeat them.

Interview by
Alex Doherty

Once written off as an electoral liability, today Jeremy Corbyn could be the next prime minister. After his breakthrough performance in the 2017 election and the subsequent meltdown of Theresa May’s premiership, Labour stands a real chance of government. 

Yet, as disputes over Brexit dominate the political arena, Labour’s plans for remodelling the economy rarely find a place in media narratives. If Corbyn is to bring about paradigm shift like Clement Attlee in 1945 or Margaret Thatcher in 1979, his party needs to mobilise emphatic public support for its transformative agenda — and also be prepared to face down opposition from powerful interests in the City of London and beyond.

Christine Berry is co-author (together with Joe Guinan) of People Get Ready! Preparing for a Corbyn Government. She spoke to Alex Doherty of the Politics Theory Other podcast about Labour’s program for democratising the economy, how it can turn “taking office” into “taking power,” and what Corbyn’s team can learn from the strategies Thatcher’s government used to push through their own neoliberal revolution.


Over the last few months I’ve felt fairly confident Labour will form the next government — my anxiety is more focused on what things will be like if and when Labour do win. There’s a whole range of troubling issues, from the coherence of Labour’s program to media hostility and the opposition to Corbyn’s leadership within the Parliamentary Labour Party. What do you think are the key issues in making a Labour government a success?


The book comes from exactly the kind of sentiment you’ve just outlined. A lot of the debate is focused on whether Labour can win an election or form a government, and on how to mobilise to make that happen. But our anxiety is similar to yours — the real danger is not that we can’t win, but that we’re not ready for it.

If Labour takes power before it’s ready, and for whatever reason can’t implement its program, that’d be more of a setback to the hopes of the Left, possibly for the next generation, than us not winning the next general election. That isn’t to underestimate the urgency of forming such a government, particularly given challenges such as the climate crisis or the rise of the far right. But that’s only the beginning of the job that needs doing.

In the book, the first issue we raise is the platform — do we know what a radical Labour government wants to achieve. There hasn’t necessarily been a deep conversation about Labour’s positive agenda, beyond reversing austerity, but we argue that there’s been a lot more progress on that than a lot of people even within the movement realise.

The second is having hard-headed battle plans for how to implement that platform in practice, given that it involves a major rebalancing of power relations and taking on vested interests. We look at how Margaret Thatcher and neoliberals elsewhere prepared those kinds of strategies.

The third is facing down reaction by the vested interests threatened by that program and dealing with the kind of economic warfare that might result, including capital flight and currency crises.

Last is transforming the state — facing down the possibility of noncooperation from the institutional machine itself. That means repurposing Whitehall (i.e. the civil service) to make it capable of implementing that program. And the wider movement also has to give that government a sufficiently powerful social base to understand that program, to push it forward and to hold the government to account when it comes under pressure to water down its radicalism.


Looking at Labour’s platform, it seems the core of what you see as its radicalism is its plan to democratise the economy in various ways. Yet it seems that this hasn’t cut through very much — not only among the wider electorate, but even for instance in Labour Party forums on social media, where the program is almost solely seen in terms of anti-austerity and a kind of revivalism of the 1945 Labour government. So, if you’re right that this agenda is better thought-out than a lot of people expect, it doesn’t feel like it’s been particularly well articulated.


That’s definitely true. Even within quite politically-informed circles there isn’t a deep conversation about Labour’s new economic thinking. There’s a kind of irony if the talk of democratising the economy — which means participation — is being developed from the top down by quite a small circle of policy wonks and people around shadow chancellor John McDonnell’s office. We need much more political education and effort to cultivate movement debate and discussion around these issues, so it can be an agenda driven from the grassroots.

Economic democracy is about going beyond a return to the spirit of ’45. The accusation often levelled at Labour when it talks about nationalisation is that it just wants to go back to the past. But that isn’t the program — Corbyn and McDonnell have been clear that they’re not about replacing distant, unaccountable private elites with distant, unaccountable public elites. They have a solid critique of that model of nationalisation — what they’re really interested in is exploring new models of public and common ownership that are more localised, decentralised, and participatory.

So, you have Corbyn talking about passenger-run railways and an energy policy that involves an element of national, public ownership but also has a big role for municipal energy companies and community renewables cooperatives. There’s also a lot of thinking about how to scale cooperatives and employee ownership in the private sector. This means taking seriously the value of democratic participation and control by workers and citizens. The nationalisations of 1945 were much more about the idea that this would make industries more efficient — something easy to forget after thirty years of neoliberalism hammered home the message that public ownership means inefficiency.


A difficulty in communicating that message is that this conception of government as a way of enabling democratic participation is just so alien to the entire political culture. Even among its partisans Labour is seen paternalistically — as the “good parent” opposed to the nasty conservatives. Is the problem the way this agenda is articulated, or just that it stands so far outside the mainstream of people’s perceptions?


I think that’s really true. As part of the Framing the Economy project I worked on a couple of years ago with the New Economics Foundation and the New Economy Organisers Network, we did some focus groups on how to talk about the economy. We tested out the language of democracy, based on the idea that the economy has been captured by the few and needs to be reorganised to work for everybody. We found this really didn’t cut through with people. People thought we meant referenda on every decision, and that this would be a terrible idea. That was the only way they could conceive of applying democracy to the economic arena. For as you say, there isn’t a tradition of serious public discussion of this.

Working out how to do that is definitely a major challenge for Labour, developing the policies that can carry that story. That’s what Thatcher achieved with her policy for council tenants’ Right to Buy their homes — which was, at that time, just as radical a change in public discourse and the boundaries of the possible. That policy carried her agenda because it told a story about what kind of nation we want to be, and the kind of individuals that would make up a property-owning democracy. That gave millions of people an immediate, tangible stake in her agenda — it wasn’t just an abstract story you had to understand on a theoretical level. That was very successful for her, in turning around the discourse.

In the book we discuss whether Labour could find its alternatives to Right to Buy. One of the ideas mooted there is inclusive ownership funds, gradually giving workers a stake in the companies they work for. That carries the story about what economic democracy means, in a way that would give millions of private workers an immediate stake in Labour’s agenda.


Isn’t a problem, there, the fact that people don’t primarily identify themselves through their work? It could be said that such an identification has significantly declined, and the relatively fluid nature of the labour market makes inclusive ownership funds less appealing now than they might have been in the 1970s when Swedish Social Democrats were arguing for something similar.


I think it’s definitely true that people identify less with the job they happen to be doing at any particular time. But inclusive ownership funds give people an immediate stake in the dividends of the company they’re working for at that time, in the same way as you have the right to accrue a private pension with that firm.

It gives people a benefit regardless of the fact they might change jobs. So, too, does the value of having control over your workplace. As we know from experience, when you’re alienated from your job and have no control over what you’re doing, it’s bad for your mental health and well-being. We’d all feel good about doing something about that. The new wave of organising in the gig economy — in Uber, Deliveroo, and such like — and the victories it’s achieving, is giving the lie to the idea that it’s no longer possible to organise workers collectively or to identify as workers because of the more fluid and precarious labour market.


Looking at the battle-plans that the Thatcher government drew up, especially the Ridley Plan, could you tell us a bit about its strategy for defeating the Left and the postwar consensus?


I would really encourage everyone to read the documents that were the backbone of this strategy — the Ridley Plan and the Stepping Stones report, which are both available online. They’re not particularly long but they’re very illuminating. The Thatcherites had a clear idea of what they were about and who the enemy was — the public sector and organised labour. They knew that they were trying to achieve a wholesale reorganisation of the economy toward private ownership, entrepreneurialism, individualism, and finance. And they strategised for it before coming to power.

The Ridley report is essentially a battle plan for privatisation. It’s a power analysis of where the unions were weak and where it’d be wise for the Thatcher government to pick battles early on to build momentum, and where the unions were too strong to be taken on right away. There’s a whole discussion of the power of the National Union of Mineworkers and the groundwork the Thatcherites would need to lay before taking them on, which closely mirrors what did eventually happen. The plan also talks about industries that were untouchable for the moment and would need to be privatised “by stealth” — and these words were literally used, including with reference to the National Health Service.


It could be said that project is ongoing…


Exactly. The repercussions of that strategy are still with us. But the important thing is the foresight — they understood that rebalancing the economy wasn’t just about having the right policies and implementing them, but a massive shift in power that needed to be planned for. And they did that quite effectively.

The Stepping Stones report was the equivalent for communications and narrative. It talks about how intimately linked this strategy for power was to the need to win the battle for narrative and shift the political discourse. That meant a strategy for discrediting the unions in the public debate, using people’s discontent at strikes and the Winter of Discontent to turn that from Labour’s big asset into its Achilles’s heel, and to use that as the jumping off point to gain mass public consent for this program.

John Hoskyns, a key adviser involved in the report, said it isn’t enough to win an election if it just reflects people’s dissatisfaction with the current state of affairs — you also need a popular mandate to drive through this transformative shift.

That goes back to the earlier question about how far the agenda of economic democracy is understood among the movement, never mind the general public. The lesson is that Labour needs a clear mandate to drive through this transformative shift, as well as the battle plan and the strategies to take on existing powerful interests.

One caveat to that is that on the Left we often have a tendency to overestimate the Machiavellian brilliance of the Right and of the neoliberals and then beat ourselves up as shambolic underdogs by comparison. One of the things I found interesting in researching this book is that even at the end of Thatcher’s first term, John Hoskyns was lamenting the lack of strategy in exactly this kind of terms. He was giving speeches saying no thought was being given to how to make tomorrow’s battles winnable. The guy who ran the Institute for Economic Affairs [a right-wing think-tank] didn’t even vote for Thatcher in 1983 because he was so frustrated by her lack of radicalism. For the people involved in that revolution at the time, it seemed as messy and uncertain a victory as we might feel today. That’s important to remember — seen in the rearview mirror, paradigm shifts might seem inevitable, neat, and tidy, but it’s never like that at the time.


You have a quote where Thatcher says “we’re going to have a miners’ strike”: there was a conscious decision to provoke a crisis in order to defeat the Left. In Labour’s case, we can see some tendencies within the leadership to placate finance and the media and show an image of moderation. But it seems that if Labour is to be successful it needs to provoke crises and enter into these sorts of pitched battles which it can win. Do you agree — and what do you think the equivalent battles could be for the Left?


It’s definitely our perception that the Labour leadership has a strategy of presenting a moderate front. We hear all this talk of John McDonnell going round the City of London to sit down for cups of tea and try and reassure the capital markets that they’ve got nothing to fear — that it’s all a question of public investment that will stimulate the economy and that this will be good for them, that there’s no tricks up our sleeves, that we won’t have capital controls and so on.

That’s an understandable political calculation, given the risk of backlash from the financial markets, which could destabilise a Labour government. That’s clearly the scenario they’re trying to avoid. Thatcher also said there’s no point embarking on a battle unless you’re reasonably confident you can win.

My thinking shifted as I wrote the book. I went into it thinking the City of London is the equivalent for us of what the unions were for her — the Death Star, the powerful elite we need to take on. A radical agenda for banking reform would involve things like forcing the separation of retail banking from investment banking, breaking up the big banks, taking banks into public ownership or doing more with those already in public ownership like Royal Bank of Scotland, imposing much stricter regulation on banks’ more socially-damaging activities, and supporting community banks as alternative. My view would have been — you’ve got to go ahead with that on day one, when you have most political capital, or it’s never going to happen.

But I think the lesson of the Thatcher offensive — and perhaps this is what Labour is thinking now — is that if you do try and do all that on day one and you’re not ready, and those institutions have the economy by the jugular (as Ridley said of the public sector unions in the 1970s), all you do is destabilise your government and the economy, and you can’t implement the rest of your program.

Instead, what you need to do first is build up the power of public banks and reduce the power of private banks, creating a situation where the economy as a whole is less dependent on finance, so that you are in a position to provoke that confrontation at a time when it’s politically and economically opportune and you can win. Our fear is, if that’s not happening, then that confrontation gets postponed indefinitely.

The financialisation of the economy and the power of the City is such a fundamental part of our economic malaise and the skewing of power and control in the economy that we’re skeptical it would be possible to implement a radical economic program while leaving that untouched. So that confrontation might be our equivalent of the miners’ strike.


When you draw an analogy between the incoming Thatcher government and the incoming Corbyn government, in some respects it might make our situation seem better than it actually is. Obviously in the late 1970s the unions were extremely powerful, but the power of business remains the key determiner — a Corbyn government will live and die on growth rates. Given the overwhelming hostility of not just finance but business more generally, my worry is that analogy doesn’t entirely hold. From your perspective, is the way to deal with that to disaggregate business, perhaps by winning over small businesses?


Yes, in a nutshell. We touch on this in the book — in this agenda of economic democracy there is the possibility of breaking open any simplistic pro vs. anti-business dichotomy and splitting our opponents. That’s something Thatcher was good at. We’re already seeing the business community fracturing over Brexit and the traditional alignment of business with the Tory party is starting to break up in quite interesting ways.

A Labour government would drive a wedge between small businesses, those producing socially useful things and willing to get on board with an agenda of democratisation, and on the other hand the extractive, unproductive sectors of the economy like the City of London. Ed Miliband had a try at this when he spoke of “producers versus predators.” It didn’t end well for him — partly because in those different political times there was less courage in Labour to withstand the inevitable hostility from certain sectors of the establishment.

But that is the divide — makers versus takers. And there are possibilities, including as regards banking reform: many small businesses are absolutely furious with the banks closing branches and ripping them off. The publicly owned Royal Bank of Scotland has gone through scandal after scandal with its arm meant to help struggling businesses instead deliberately pushing them toward bankruptcy and hoovering up their assets. I think large swathes of the business community could be brought on board by an agenda of transforming finance, giving the lie to the outdated neoliberal narrative that lumps all businesses together as one homogenous community of interests that would lose from a socialist program.

You said a Labour government will live and die by growth rates. The idea that we need to go beyond growth as a measure of progress is usually seen as a fluffy hippy idea — not a priority for a socialist government. But I think this is an important part of understanding how we ended up with Brexit and the political alienation we’ve got. For decades, growth rates haven’t translated into rising living standards for most people, let alone a better quality of life. People want higher wages, better employment security, more time with their families. Policies like a four-day-week are more in touch with what matters to people: they allow us to speak to people’s sense that even if economists are saying the economy is growing, they don’t feel their lives are getting better.


As well as the labour movement, Thatcher also had an internal enemy — the sections of the Conservative Party that were still quite wedded to the postwar consensus. She also dedicated herself to defeating them. And looking at the Parliamentary Labour Party (PLP) today, much of it is borderline mutinous, while even within the leadership there are those broadly supportive of Corbyn but who have a worrying naive view about the reaction that might be coming…


I agree… There is a need for political education even at the highest levels. But the hostility within the PLP is linked to the inexperience of many of the Shadow Cabinet members about to take high office. If you had a Venn diagram of people in the Labour Party sympathetic to the Corbyn project and those who have experience running the country, the middle area where those two circles overlap is virtually nonexistent.


Ed Miliband, possibly…


Yes. The same goes for special advisors and people behind the scenes preparing Shadow ministers to run the country — there’s just one or two such people [sympathetic to Corbyn]. The fact that large sections of the PLP and those with experience running stuff are not just unsympathetic but outright hostile means there’s no institutional memory being passed on. That’s a massive issue for an incoming Corbyn government. It’s being considered as a problem to be tackled but needs to be taken much more seriously.

I may not also be speaking for my co-author here, but the hostility within the PLP also poses the need to reach out to other potentially radical parties like the Scottish National Party and the Greens. That’s what hegemony is about — trying to shift the political consensus more broadly, not just within Labour. If you can’t necessarily rely on the votes of all Labour MPs, building bridges with others and widening the conversation become even more important.

The movement also has a role in that. Like Hoskyns said, if you’ve got sufficiently wide public support and a strong mandate to push through an agenda, it becomes more difficult for elected MPs to go against that. If Labour comes to power without a clear wider understanding of what its agenda is, then it’s a lot easier for centrists and right-wingers among its MPs to cause trouble.


In terms of facing down reaction, you cite the example of French Socialist François Mitterrand, who came to power in 1981. His very radical agenda was blown off course by capital flight and so on. Could you tell us about these historical parallels and how a Corbyn government could avoid a similar fate?


Obviously, there were particular circumstances there that don’t apply to Corbyn — like Mitterrand being in the European Monetary System. But the underlying issue of those kind of headwinds, particularly in a very open economy like the UK’s with an outsized financial sector, needs taking very seriously. There’s already talk of capital flight or assets being moved offshore to stop them being taxed away. Since we went to press John McDonnell has ruled out any capital controls, but we talk about that as one of the things Labour does need to plan for in order to prevent it being destabilised.

Capital controls are about insulating yourself from the international system, and there is evidence of them working in the short term, but they can’t do so in the long run. We suggest that if we’re serious about building a new political consensus at home we also need to be doing that internationally. That demands a strategy, working with left-wing movements in other parts of the world, to replace international neoliberal institutions like the WTO and IMF, and to confront problems like taxing wealth and climate change that a single government can’t do on its own.

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About the Author

Christine Berry is a freelance researcher and writer. She is a fellow at the Next System Project, a trustee at Rethinking Economics, a commissioning editor at RENEWAL journal and co-author of People Get Ready.

About the Interviewer

Alex Doherty is the host of Tribune Radio's Politics Theory Other podcast.