On Tuesday 26th August 2025 at 7.30pm, Politics in Pubs Manchester hosted a discussion on whether Britain’s outlook has changed from one of nation building optimism to a grim acceptance of national decline.  And if so, what can be done about it?  Continuing our discussion around reclaiming sovereignty and rebuilding the nation, writer and researcher Pauline Hadaway invited us to revisit the spirit—and substance—of postwar Britain and ask what made the post-1945 Social Democracy Order possible and how did it ultimately fail? Why are we now unable to translate popular desire for change into solutions to basic problems of housing, health, transport and energy supply? And what does this tell us, not only about the failure of state capacity but our own capacity to take democratic control?

Introduction

Pauline began her talk with a quote…..

“The IMF are only bankers. They are not elected. They are not responsible to anybody. Their only interest is money. Once you accept that they have the right to dictate policy, you accept that democracy is finished.”

……and, in the best tradition of pub quizzes, Pauline asked Politics in Pubs to guess who said this and when?  What do you think the answer is? Click on the arrow before the question to reveal!

Who said this? When did they say this and what was the event in question? The options were:

1. Margaret Thatcher in 1988,
2. Tony Benn in 1976 or
3. Nigel Farage in 2015

The answer was 2. Tony Benn. The quote is from Benn’s objection to the IMF’s conditions attached to the £3.5 billion loan sought by Britain which required us to relinquish supervision of our economic policies to the IMF and ushered in a damaging period of austerity.  In Pauline’s view, this marked the end of the Social Democracy Order and Labour’s promise to extend democratic power to citizens.

The Social Democracy Order…

The Social Democracy Order (as coined by Clement Atlee) began after the collective experience of the stock-market collapse and failure of the markets in the 1920s and 30s.  The financial instability was a contributing factor to World War 2.  Extending democratic power to citizens meant enabling them to be involved in economic, social and civic decisions.  After the second world war Britain was in an optimistic, modernising mood.  Labour won the 1945 election and was seen as defender of the national interest.  The mass mobilisation of people and resources in 1939, and universal suffrage in 1928 left Britons with a sense of empowerment:  they were no longer going to defer to ‘the toffs’ or to ‘the markets’ which had created such instability leading up to the war.

During elections, political parties fiercely contested their ability to fulfil government’s side of the social contract and prove that their government would deliver rising standards of living, better public services, and fairer distribution of resources.  Subjects’ unconditional loyalty to King and country and the patriotism of the 1920s and 1930s was no longer on offer – government had to be seen to be focussing on the national interest in order to grow the economy and deliver what Britons needed.  Votes were hard won by any party.

A fusion of interests – private profit and public good – created the right conditions for the manufacture of goods, and public spending.  Achievements between 1945-55 by both Labour and Conservative governments included the formation of a national house building programme (resulting in two million affordable homes), new towns and roads, the National Health Service, nationalised utilities, and clean, cheap, reliable energy from the National Grid.  Evidence of those achievements is still apparent in the development of Manchester’s suburbs and housing estates, and its old hospitals.  People from those times would today still recognise the building development though it has deteriorated as Benn predicted.

…and its demise

Pauline described how the Social Democracy Order was swept away by the oil crisis of 1973, when the United Kingdom found itself amongst others embargoed by the Organisation of Arab Petroleum Exporting Countries for supporting Israel during the Yom Kippur War.  The embargo caused a global fiscal crisis which fractured Britain’s sense of its place in the world, and pre-empted a re-focussing away from the national interest.  The fusion of interests between private profit and public good was blown apart by the oil crisis when capital was withdrawn from the markets.  Failure of the Social Democracy Order to deliver economic growth following the oil crisis gave rise to a turbulent era and the mantra that ‘there is no alternative to the markets’.  This mantra contributed to a sense of powerlessness and fatalism among Britons exacerbated by the terms of the IMF loan which stripped Britain of some of its sovereignty (although Britain had already given away some of its sovereignty in 1973 when it joined the European Economic Community in order to seek economic shelter).

Tony Benn now saw economic decision-making no longer in the hands of people and their representatives but dictated by the markets.  He went along with the Government’s borrowing plans but argued that Britain should stand for self-determination by standing against the conditions.  Between 1979 and 2007, the promises made by Thatcher and Blair were well-rehearsed but Britons were aware of our national shortcomings, which dramatically came to the fore in 2008 with the banking crisis.  This and other crises have been parasitic – the failure of successive governments to fix the roof in between the hard times compares unfavourably with the productivity of the post-war era.

Fast forward three generations from the post-war era:  in 2022–23 fewer than 8,500 new social homes were built in England while over six times as many newly homeless families joined the already record numbers of households – including 165,500 children – living in temporary accommodation. The NHS, once claimed to be the envy of the world, faces chronic staffing shortages, rising litigation and borrowing costs and soaring waiting times. Electricity prices are now among the highest in the world, while our public services are threadbare and our roads are crumbling. How has this happened?

Neo-liberal order

Labour was the architect of the old Social Democracy Order but these days the party offers a neo-liberal order which people don’t want.  Speaking before the last General Election, Keir Starmer invoked three prime ministers as a way of defining his mission as part of the supposed forward march of post-war Britain. Where Clement Atlee had instilled Labour with a mission for ‘duty and patriotism’, and Margaret Thatcher had rescued the nation from its ‘stupor’, Tony Blair had combined these spirits of social responsibility and ‘natural entrepreneurialism’ to usher in a new Britain. While clearly talking himself up as prime minister-in-waiting, Starmer was in fact raising the recurring problem that has faced successive post-war governments, especially since the 1970s: how to project political authority and a sense of national purpose with increasingly limited access to economic resources and dwindling state capacity.

Starmer’s solution was to meet with Larry Fink, CEO of Blackrock, to discuss re-building Britain.  His logic is that if you want to transform your country but you have no money and the markets are not happy about it, and you can’t raise taxes – try private finance.  Some politicians endorse pre-2008 remedies where the national interest and the interest of the markets are seen as one and the same.  But relying on the the markets always has a sting in the tail.

What does the future hold?

Will the British state once again act as transformative and democratic?  Will it be a facilitator with the markets and private capital?  Or will it maintain the technocratic, managerial approach?  One thing we can be certain of is that crises since 2008 have resulted in a huge transfer of wealth between poor and rich.  The EU Referendum brought a crisis of democracy when Parliament tried to overturn the result.  Covid and the immigration crisis are costing the British taxpayer phenomenal expense.

Pauline concluded her introduction in the same way that she started it – by asking us another question. Pauline believes that Britain still has remnants of the Social Democracy Order, evident in the expectation that the state should intervene in the national interest, and the popular yearning for a better future.  But is the state capable of mending the broken promises of the past?

Discussion

Perhaps our politicians need a change of mindset?  Our post-war parliament had leaders shaped by combat.  Financially, Britain was broke but patriotic – we needed to spend on defence because of Russia.  It made politicians more willing to compromise e.g. Bevan allowed the new NHS’s doctors to retain some of their private practice.  However, the seeds of doom were sewn before 1973 – for example when failure of the NHS model became apparent.  The NHS lead to better health which should have lead to less spending on the NHS – but increasing longevity and growing demands ensured that spending ballooned.

PH – People were shaped by war and were fed up after being mobilised.  Politicians came from the people.  The weakness of the democratic socialism model was the tightrope of achieving economic growth while meeting the people’s need for a better standard of living etc.

The six day war caused the price of petrol to rocket before the oil crisis occurred.  Special interest groups are too powerful.  Energy is the key and the economy depends upon it.

PH –  Energy created huge amounts of cash which was poured into the banks.  The wars emptied oor resources and achieved little.

People from the post-war era would still recognise the building work in Manchester although the pre-fab and hospital buildings were not intended to last.  They probably would have expected the living standards of their children to be better than theirs – did they?  And will our children’s be better than ours?

PH – They probably would have believed that things would get better but now there seems to be a fear of what is in store.  What do we do about it?  How could we develop policy on energy, housing, transport and industry – and could they be framed around the national interest? Is private capital the answer? Are new policies the route to a new politics?

There are all sorts of crises but it doesn’t mean that the whole system has to collapse.

PH – There is a contest between labour and capital – it collapsed after the oil crisis because there wasn’t enough money which meant the government couldn’t get anything done.  The nation-state is what matters when it comes to wealth creation.

Productivity also helped to fund the post-war boom, aided by increased mechanisation and workers being involved in their workplace.  Wage claims were matched by productivity gains.  There was an ‘all in it together’ understanding which went out of fashion after the oil crisis but seems to be creeping back in, with people working together to improve their communities without seeing the state as the solution.  We need to take the state back and take back responsibility – serving our own national interest by taking action ourselves.

PH – Productivity was an issue – democratic socialism couldn’t create the wealth needed to raise living standards and public services.  Governments failed to balance all the competing interests.  Cheap energy would increase productivity today.

The national interest hinged upon the Labour Party and the trade unions.  Lessons need to be learned from the past – trade unions should be focussed on members and not have a political agenda of their own such as supporting Palestine etc.

With a policy of mass immigration since Blair, we should be changing it to incentivise British culture and the British way of life.  There seems to be a policy of creating a surveillance state to quell criticism and opposition, with casualties like Lucy Connelly, Tommy Robinson and Rupert Lowe and a new crisis of civil unrest brewing.  Britain could not replicate the building development of the post-war era because everything stops while we build bat tunnels.  People from the post-war era might recognise the buildings but not the people, nor the ideologies in institutions like education.  We are watching the decline in Britain.  We’re not really a social contract type of nation – we’re more emotional, sharing a collective cultural sentiment about our country.  Brexit was neither expected nor wanted by the elites which is why it has not been delivered. Southport symbolises how far the government has lost the trust and faith of the population in its ability to keep us safe – all promises and policies over the last thirty years have been broken.

PH – While we have not gone back to the Social Democracy Order there is merit in its ideas and its focus on the national interest.  The post-war era should have been the beginning of progress not the end.  New Labour tried to recreate it.  We should look for the value in the model but be open to change.  There was an assumption about what it meant to be British without being overtly patriotic.  What does the recent practice of the public erecting the Union flag and St. George’s flag in prominent positions on lamp-posts and motorway bridges (Operation Raise the Colours) mean – is it a symbol of fragmentation rather than celebration?

This isn’t the right time for making policies – Britain needs a huge crisis to bring everyone back together first.

PH – Policy formulation about how to re-build Britain is exciting as was the building of railways, roads, new towns and houses in the post-war era.  Ordinary people should be involved in that.  Even prisoners of war in Colditz held meetings about how they wanted to re-build Britain when they returned home!

The civil service is one of the biggest employers with its low productivity and low accountability.   Quangos obscure which politician is responsible for which function, making it difficult to know who is actually leading the country.  Policies are not driving things – ideologies are.  Global policies are not suitable as domestic policies.  We need better leaders and much better accountability.

Government should be the solution but it’s actually the problem.  The powers that be have a hatred of Britain and its extensive history.

Key moments in history mark the defeat of the working class.  Trade Unions and Labour should focus on democracy and wealth creation. Is a populist moment needed to effect change? The demise of the Soviet Union was an alternative model and is still unresolved.

A blend of agency and leadership is preferable.  A parliament full of Tony Benn and Graham Stringers would be good because of their understanding of and belief in the national interest.  A forthcoming populist moment or crisis may turn out to be civil disorder or the formation of a Reforn UK government.  In his press conference today, Farage made several references to the national interest and asked the viewing public and attendant journalists “Whose side are you on – Britain’s interest or the interests of internationalism?”

Labour’s transformation of Britain’s post war infrastructure was revolutionary.  Planned economies, the markets, international capital and modern monetary theory have had their impact since then.  In the post-war era we were more homogenous.  Severe cuts to wastage and a shared purpose have been replaced by a managerial style of government and a ‘Loadsa money’ value system.  The NHS was good at first but has been taken advantage of.  It is the last visible vestige of the post-war era but has become a financial black hole.

Thank you

Politics in Pubs Manchester would like to thank Pauline Hadaway for introducing our topic tonight with a fascinating and thought-provoking talk.  We would also like to thank our wonderful hosts at The Welcome Inn.  Cheers all!

About Pauline Had-away

Pauline Hadaway is co-founder of The Liverpool Salon. She completed her doctoral research at the University of Manchester, examining the cultural economy and the politics of peace building in Northern Ireland after the Good Friday Agreement. Pauline works as a researcher and writer, most recently, ‘The Slow Strange Death of Labour Britain’ in ‘The Idea of the Good Society’ (eds. Kevin Hickson and Matt Beech 2024) and Callaghan in Northern Ireland’ in James Callaghan: an underrated Prime Minister (eds. Kevin Hickson and Jaspar Miles), co-authored with Kevin Bean (2020).

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