LETTER: How Labour can follow Keynes

From Mr John Pilgrim

Sir: There is, says Andrew Marr ("Labour's president without precedent", 22 August) no serious possibility that Tony Blair's New Labour will engage in large-scale neo-Keynesian policies.

The Delors employment package (delayed in the UK by Conservative government opposition) already provides statutory and financial measures in the European Union for public sector support for the creation of jobs and avoidance of redundancies through enterprise restructuring, technology and skills development. The replacement of unemployment and benefits with subsidised training and job starts linked to industrial diversification is essentially neo-Keynesian. As is the renewal of housing capitalisation through the Housing Corporation and the release of council capital holdings from house sales, which Roy Hattersley rightly recalls as a major Labour policy commitment.

Labour has repeatedly reaffirmed its commitment to development financing, which has provided and will continue to provide substantial public-sector capital resources, but under banking disciplines, for job, enterprise and agricultural development to combat poverty in the Third World. The Labour group in the European parliament has made clear its concern at the insufficiency of any similar capital provision to the former Soviet Union and Eastern Europe as a means of countering poverty and unemployment.

The Labour Party can afford the time needed to give reality to an ideology that is international in scope and that embraces the mechanisms and historical record of these developments of Keynesian principle. This convergence of the UK with the international systems and practice is opposed by the Conservative Party, especially in the context of its attitude to Europe, and is likely to define the ideological position that some commentators have looked for in New Labour - more impatiently and less perceptively, perhaps, than the party itself.

Yours etc,

John Pilgrim

Bath

23 August