The New Social Democracy?

By Adam Peggs

This morning, Anneliese Dodds gave her first conference speech as Labour’s Shadow Chancellor, as part of the virtual party conference ‘Connected’, and began to etch out the beginnings of Labour’s new economic strategy. The former Shadow Treasury Minister, who has been an MP since 2017, is the first woman ever to hold the role of Shadow Chancellor of the Exchequer. As a Shadow Treasury Minister, Dodds was known for strong performances at the dispatch box and an impressive command of the details of tax policy. She is a figure associated with the ‘soft left’ of the party (though she has avoided this label) and is formerly a Labour Member of the European Parliament and a public policy lecturer.

Since becoming Shadow Chancellor, Dodds has talked promisingly about laying out a new economic settlement, has advocated a wealth tax (though this is not the official frontbench position), has highlighted the shocking disparities in the country’s tax system and called for taxation to be redesigned. She has also suggested that she views the economy in comparable terms to John McDonnell. However, in April she distanced herself from Labour’s policy under McDonnell of ‘Inclusive Ownership Funds’, though she praised the co-operative principles behind the idea (notably Shadow Treasury Minister Wes Streeting described the policy as ‘outrageous’).

Dodds is in charge of a broad team of Shadow Ministers, encompassing the breadth of the PLP. Left-winger and Shadow Treasury Minister Dan Carden will likely expect an economic direction which grows out of the successes of McDonnellomics. Others such as Bridget Phillipson and Pat McFadden will favour a sharp pivot to the centre ground and a return to the days in which the party was in partnership with finance capital.

Dodds began her keynote speech with an attack on the government, highlighting the United Kingdom’s vast numbers of excess deaths, the fact the United Kingdom’s economy is the hardest hit in the G7 and the disproportionate impact of the pandemic on ethnic minority groups and disabled people. The opening will likely please those who have been waiting to see robust opposition to this chaotic Tory government and those looking for greater political substance in opposition rhetoric. Dodds also focussed on keyworkers, arguing that those who contribute the most often earn the least and offering solidarity with care workers (who predominantly earn less than the living wage). She also attacked the government for its austerian rhetoric, warning that any cuts will generate unemployment and will hit those who can least afford it the hardest.

A widely publicised aspect of Dodds speech, trailed to the BBC overnight, focussed on wasteful public spending by the government during the pandemic. Dodds was right to highlight the cronyistic fashion in which the Conservatives have handed out contracts and the issues with the Coronavirus ‘job retention bonus’, which will do very little to save or create jobs. But by focussing on wasted public money the party risks ending up reinforcing the rationale for the right’s agenda on fiscal conservatism – encouraging deficit hawks in the Treasury and in the Tory Party to decry Labour policies as a ‘spending splurge’. Members are right to be wary that this could impede a transformative policy agenda down the line. Nonetheless, the party are right to attack the Conservatives on these issues – it’s a question of doing so effectively and strategically.

In policy terms the key aspect of Dodds speech was her call for the country to ‘recover, retrain and rebuild’. In substantive terms she is calling for a job recovery scheme to subsidise businesses in selected sectors to bring back workers part time. She is calling for a national retraining strategy – crucially here she emphasised the need for workers (not capitalists) to be at the centre of retraining programmes. We will need to see concrete Green New Deal proposals from Labour, linked to this economic programme – so that the party is offering clear plans for job creation in new green industries. Though this aspect was missing from the speech, Dodds touched on the subject yesterday. It’s here that Labour’s plans are likely to be most impactful in countering the economic crisis and reshaping the economy afterward. This is where the Labour left will need to seize opportunities to push for a radical and transformative programme.

A surprising turn in Dodds speech was her decision to explicitly name and shame large companies which have sought to fire and re-hire their workforce on worse terms and conditions. It was a good move and a reminder of who the party was founded to represent. Last week Starmer announced that this practice should be banned, and it was reiterated. Though this isn’t bold or necessarily ambitious, Labour’s backing of a ban on firing and rehiring staff on worse terms is vital. Along with a call for companies who receive government bailouts to pause dividend pay-outs to shareholders this represents a willingness to square up to big business.

In terms of the post-pandemic economic settlement, Dodds’ keynote speech featured no huge policy announcements, with those at the top of the party currently keen to avoid making major commitments nearly four years from an election. However, the speech did offer us an understanding of the new Shadow Chancellor. Dodds wants big changes to how the economy is run and her thinking represents both a continuation of the break from Labour’s pre-2015 orthodoxy and a softening of that agenda. For a first foray, Dodds got off to a strong start but Labour will need to outline its alternative political economy in detail or risk missing a big opportunity.

Image: Official portrait of Anneliese Dodds MP, Source:, licensed under the Creative Commons Attribution 3.0 Unported license.