Owen Smith Interview: On The ‘Likelihood’ Of A Labour Split, Politics Of ‘The Street’, And A ‘Real Living Wage’

'I think there is every likelihood that the party will split if Jeremy wins this election'

03/08/2016 13:55 | Updated 04 August 2016

Owen Smith is facing a huge task to defeat Jeremy Corbyn in the Labour leadership election. But he says he has a chance if enough Labour members and trade unionists realise that Parliamentary power is the necessary route to radical change.


On the wall of Owen Smith’s Commons office is a framed cartoon of him emerging, Dracula-like, from the shadows to scare the living daylights out of Tory Welsh Secretary Cheryl Gillan.

The picture, part of an award as ‘The MP to Watch in 2010’, underlined the Pontypridd MP’s reputation as a rising star six years ago. Smith slightly winces at the image, but as he embarks on the daunting task of the 2016 Labour leadership election, it also encapsulates his belief that the Tories will fear him much more than Jeremy Corbyn.

And it is Theresa May he most wants to start tackling over the despatch box. While the Prime Minister was in No10 chairing a Cabinet committee on an industrial strategy to give Britain a long-needed ‘pay rise’, Smith was in meeting young Londoners for whom such talk is cheap.

“I met this morning workers in Camden, eight people in good jobs, professional white collar workers, working for the council, unionised. And only two of them own their own homes,” he said.

“And that is becoming an epidemic across the country. So in my lifetime we have witnessed a massive shift in power away from individuals over their own lives to other big institutions, employers, capital in the broadest possible sense. And we’ve got to change that, absolutely got to change it.”

Bloomberg via Getty Images

He’s been busy unveiling a ‘workers’ manifesto’ of rights and conditions, and in Milton Keynes on Wednesday he will announce a pledge to set a ‘real living wage’ for all over-18s. It’s all part of his pitch to both trade unionists and party members that he is the candidate who can really put flesh on the bones of a plan to ‘reform capitalism’ - in a way that neither Ed Miliband, nor Corbyn, let alone May, could do.

“What I’m announcing is I think what any government should be trying to do now which is to deal with the symptoms of what is a really deep-seated, long-running structural set of problems in our economy,” he says.

A thick tome of Marx and Engels peers down from the bookshelf in his fifth-floor Westminster office, but the former Shadow Work and Pensions Secretary stresses it’s time for modern, radical rethink of the way the Western economies cope with globalisation.

“Thirty years really when we’ve seen increased insecurity at work, lesser representation for workers and greater strength and flexibility for employers and capital if you like. Labour has been weakened, capital has got stronger over a long period,” he said.

“But beyond the theory the net result of that is more and more people unable to buy their own homes, unable to live on the wages they earn from one job, having multiple jobs unable to provide for their children the things they’d like to be able to provide.

“Dealing with the symptoms requires a Government to do something in order to increase pay and security. It’s actually that simple.”


In the wake of the UK’s historic Brexit vote in the EU referendum, he believes that Labour has a chance to respond with its own message of change.

“Is there any wonder that ‘take back control’ was such an incredibly powerful clarion call at Brexit? Because it’s what people feel. I’m 46 now and in my adult life I think we’ve seen a reverse revolution in people’s ability to control their own lives and progress. Lots of the things that we took for granted and our parents took for granted about gradual improvement in your life and opportunities, they’ve just been eroded.

“Individuals who work here in Parliament, there are lots of them who just can’t imagine every owning a home. In my constituency that’s exactly the same, even where house prices are a lot cheaper, there are lots of people for whom it is increasingly impossible to own a home.”

And for many the problems of insecure work are stark, he argues. “The worst example of a terrible exploitation of a young worker that I’ve come across was a mate of mine whose daughter works as a waitress in a fast food restaurant 500 yards from where I live.

“And she works split shifts on a zero hours contract but it’s not designated as a split shift, she comes in works the morning and if the work dries up she’s effectively stood down. And then works again later on in the afternoon.

“Because she doesn’t drive and can’t afford on the wages she earns, which is minimum wage, to travel to the village where she lives back on the bus and then come back, she sits in a storeroom in between the hours when she’s working. And that’s replicated in town after town, job after job.”

Smith admits the Tories helped create more jobs but says for too many “the trouble is people are having to have multiple jobs in order to make ends meet.”

Jack Taylor via Getty Images

Yet if so many people are hurting, why did they deliver a majority to the Tories in 2015? “Not everybody did,” he replies. “They won, but let’s not say the exactly swept the board. People had lost faith in Labour, we had lost credibility and we had lost trust in the country.

“We weren’t strong enough as an Opposition. Under Ed and certainly not strong enough under Jeremy to be able to rebut that and make a Labour case.”

He says that the “the best proof” that many Britons are struggling was shown by the way Theresa May herself tried to reassure the nation she would act on inequality.

“She stood on the steps of Downing Street, effectively making a speech that a Labour Prime Minister could have made, reflecting that reality that we all know is out there,” he says.

“The difference is of course she’s not really going to do anything about it. She’s absolutely not going to take the big reforms that are required to the Labour market in order to shift the scales of power back in favour of individuals and people against big corporations and against other vested interests.

“And there’s the irony of course, a party that preaches freedom and individual liberty is presiding over a massive erosion of liberty and individual freedom because people are becoming once more wage slaves - having to concentrate all their efforts to keep their head above water.”


But does he risk sounding like a poor-man’s Ed Miliband, suggesting that corporations and business are the enemy within?

“I don’t think corporations are evil at all, I don’t think business is evil at all. I think corporations and business are necessary in order to generate wealth in our economy,” he said.

“But I do think the changes we made back in the 1980s and have accelerated under successive governments, were misguided in assuming that liberating the ability of companies to be flexible and to trade and to use the market assuming that offering that maximum flexibility would mean that resources were distributed efficiently and equitably and that all boats would be floated, is just clearly untrue.”

He can’t resist a reference to Sir Philip Green and the BHS collapse. “Because some boats are left floating very high and some are beached on the mud. And have been left beached for 30 years and some parts of Britain are left beached while others are floating off to the Riviera.

“So it is true that some people a lot of people maybe bumping along and getting by, but that’s not enough. I still aspire to Britain being a home owning democracy, I still aspire to everybody having wealth and prosperity. I’m not someone who’s going to be happy with some people having that and others not having that. So I think we’ve just got to be a bit bolder about it. And much less accepting that it’s all OK. It’s not OK.”

Smith says that any Labour government he leads would instantly enact a ‘real living wage’, as well as bring back wage councils in low wage areas like retail, hospitality and the care sector. “Nine million people would benefit from the introduction of sectoral wage councils. We did it in Wales with the agricultural wages board, after the Tories scrapped it, wages are now 6% higher as a result of that protection they get.”

Alex Wong via Getty Images

With Donald Trump and even Hillary Clinton backing off free trade deals such as the trans-pacific partnership, and many in Europe sceptical about the EU-US trade plans, Smith warns that there is a risk that the benefits of free trade could be lost.

“There is a risk of that. There’s a very clear risk. There’s a risk that a radical Right, essentially put forward like Trump or UKIP in this country a populist programme, a protectionist programme, that would be damaging for our economy because we are an outward looking, trading economy, we always have been,” he said.

“But we do need to think much harder at how we reindustrialise and the truth is we were too quick to assume we could survive on services, to assume the capacity of the UK to benefit from financialisation and globalisation was so much greater than our competitor countries, Germany, the Netherlands, France, that we could allow our manufacturing base to decline.

“Successive Governments, Labour and Tory assumed we could offset [the decline] through a growth in services. That’s obviously untrue. We’ve got a surplus in services of £89bn, we’ve got a deficit in goods of £129bn. We are racking up debt because of our balance of payments issue. Netherlands, Germany they have got a much higher proportion of their GDP from making stuff.

“Osborne was right when he said we’ve got to restart the march of the makers. He just hadn’t a clue how to do it, and he didn’t believe it.”

Many polls suggest that a lack of credible leadership on the economy was a key reason Labour failed to win back crucial Tory marginals like Nuneaton. What would Smith do to change that?

“Circumstances will be very different of course. If the Tories are right, the deficit will be largely wiped out. There are different ways in which we win back credibility around the economy, one of them is not accepting the framing of the Tories, which is constantly to say we’ve got to get to a surplus in our expenditure in order to safeguard against leaving debts to our children,” he said.


His answer, buoyed by the defection to his camp of Corbyn’s economic advisers such as David Blanchflower and Simon Wren-Lewis, suggests he is ready to challenge the orthodoxy that Labour should accept it lost the argument on the deficit.

“There is an alternative way to look at that. Which is to say, can we really afford to leave our children with crumbling schools, without the ability to purchase their own home, with hospital waiting lists that are growing by the day, with insecurity at work, with questions as to whether it’s worth going to university because you are not going to come out of it at the end of it with a job that’s going pay off the debts that you accrue?

“These are massive questions. Can we afford to leave our kids with assets, and institutions and infrastructure that are crumbling? That’s leaving them with debts. Because unless we are never going to fix these things, somebody at some point is going to have to fix them.

“How do we look the British public in the eye and say ‘we get it, we see that there are massive problems with our economy and with infrastructure and with the social contract between citizens and the state, and we see those issues and we see why you’re angry and we see why you want to take back control. And what we are going to say to you is we’re going to be the government to do that. We are going to take back control on behalf of people. We’ve spent a lot of money floating the banks, let’s start floating the people once more.”

So does Smith reject the argument that being seen to be tough on financial deficits is some kind of virility test for the Opposition?

“We’ve allowed the Tories to hedge us in and the truth is the last Labour government was too timid in some regards,” he replied. “They are trying to have their cake and eat it of course, they are trying to say they are dealing with the debts and investing in the future. The truth is they are doing neither.

“The failed policy of austerity, at the point at which the private sector was failing to invest in Britain we should have been investing, We chose not to and we compounded the problem of the crash, crash that was caused not by Labour spending on schools and hospitals but by bankers’ greed and the rapacity of the banking system that had grown up.

“Again round the table this morning [with the workers in Camden] one of the first questions somebody asked was ‘why is it no bankers have gone to jail in this country?’ After that Savings and Loan scandal happened 500 odd bankers went to jail, why are we allowing it to happen again? I am genuinely worried that we have fundamentally failed to learn the mistakes of last time, our banking system is no more secure than it was last time. 


Of course, it was Ed Balls who led Labour’s policy in the last Parliament. What does he think of the way some Corbyn supporters now blame Balls for accepting some Tory cuts? At one rally, Diane Abbott joked “remember him?” when someone mentioned the former Shadow Chancellor had lost his seat.

Smith side-steps the question of how Balls is now perceived by some Corbyn campaigners. “It’s a measure of how low we’ve sunk that we are so incredibly disunited right now,” he says.

“If there is one big reason I am standing in this race it’s because I’m utterly passionate about making Britain a more equal place and that every kid in every corner of Britain has the same good opportunities that they ought to have. At the moment disadvantage of birth and income at birth totally influences where you end up. And the only way we change that is by winning power.”

Warming to his theme, he points to his central theme: that Corbyn is a politician more comfortable with street protest than Parliamentary power.

“Ever since we’ve had the franchise, it’s not for us to shout through the railings moaning at those in this place about what they are doing. It is for us to seize power in this place [he points to the Commons] in order to guarantee that our values, our belief in equality is implemented, that our values are put into practice.

“And what makes me furious at the moment is we look far from being able to achieve that. And that some in Labour are happy we are pursuing a sort of purity exercise in terms of the values we espouse.

“I’m never in favour of trading our principles for power, but we’ve got to win power in order to put them into practice and if we are disunited if we are fighting each other we will never win.

“Because it is an iron rule of politics in this country and elsewhere that unless you are united and have a common sense of purpose you can’t convey to the country what you think the sense of national purpose, national mission should be, and you can’t be convincing in either your critique of what’s wrong with the country or your set of prescriptions as to how you fix it.”

Andrew Aitchison via Getty Images

Smith reveals that the moment he decided to stand for the leadership was during a heated private meeting with Corbyn at Westminster, after he asked the Labour leader if he was prepared to see the party split – or even wanted it to split. Corbyn didn’t answer, but he says McDonnell did. The Shadow Chancellor has dismissed as “complete rubbish” suggestions that he advocated a split party. So is he lying?

“Yes he is,” Smith replies. “Don’t take my word for it. Take Kate Green’s or Nia Griffiths’ or John Healey’s or Lisa Nandy’s, all of whom were in the meeting with me, when I put it to Jeremy three times that I was worried that the party was going to split if he carried on.

“And I put it to John explicitly that I thought he was content with the party splitting, and he literally shrugged his shoulders and said ‘if that’s what it takes’. My interpretation of that is that John meant if that’s what it takes to maintain his grip on power and his version of the Labour Party, his project, if you like.

“And that’s the moment at which I thought someone has to got to stand and articulate a desire for Labour to remain a united party and show the country that we can be a credible government in waiting once more. Yes we can be radical, but we’ve got to be credible and we’re not.”

But Smith stresses that while he has “ruled out serving in the Shadow Cabinet” if Corbyn is re-elected as leader, he would support him from the backbenches.

“Even with Labour as disunited as we are presently, and even with us so badly led as we are presently, two minutes of a Labour government would be better than any period of Tory government.

“Jeremy is a man with principles and I agree with Jeremy about quite a lot of things. But Jeremy is not a leader, he fundamentally cannot lead the Labour party. You cannot be a leader of the Labour party, if you cannot command respect within the Parliamentary Labour Party. If we can’t win what are we in it for?”


Does he think that mandatory reselection will be back on the agenda after a Corbyn win? Smith’s answer is the clearest he’s given yet.

“I think there is every likelihood that the party will split if Jeremy wins this election. I don’t think it’s a risk, I think it’s a likelihood. There are some on the hard left of the party like McDonnell, and some on the Right of the party, who have become fatalistic about that. And that has to be stopped. That is why I think people need to vote for me because I’m going to make it my mission to stop that happening.”

And does he think McDonnell will push for mandatory reselection of MPs, as Unite recently approved at its policy conference? “I’m absolutely convinced of that. “

But wouldn’t Corbyn resist such demands, preferring to unite the party? Smith looks sombre. “I think Jeremy mentioned reselection in his opening speech in this campaign. At his launch the word deselection came out of his mouth, I think that tells you all you need to know.”

Smith repeatedly underlines his own leftwing roots. His grandfather Jack became a miner at 13 and lost his job during the Depression. The 1984/5 miners’ strike was his ‘political awakening’ and as a teenager he joined a march with workers from Maerdy Colliery near his Pontypridd home.

The strike was “a magnificent loss” and he agrees “100%” with Neil Kinnock’s verdict that without a national ballot of the NUM union, the industrial action was doomed.

“You’ve got to command support and you’ve got to start from a foundation of unity and a solid footing. And the problem with the strike? It didn’t start with that,” he says.

“Because of the way in which Scargill was gung-ho, and frankly egotistical, vain. And I fear there are parallels with how we are presently proceeding. Disunited parties cannot win.”


Smith was also a teenager when Kinnock made his famous conference speech rounding on Militant. “I was 15..He was having a go at Derek Hatton…my family, we were massive admirers of Michael Foot. We were people who believed in the Left of the Labour party in lots of ways, but there was a destructiveness, a tribalism in Militant that was just destructive of the Labour party.

“There are some people who have come back into the party who are not just similar, they are the same people, in certain parts of the country.”

Which brings him back to his central campaign message that Corbyn and McDonnell are more focused on protest than winning power through the ballot box at a general election.

“There’s a long noble tradition of extra-Parliamentary activity. A tradition going back to Noah Ablett and the miners’ ‘Next Step’ through to the communist leaders in the miners unions in the 30s to Ralph Miliband and his coruscating view of Parliamentary democracy, through to Tony Benn,” he said.

“All people who saw The Street as being as important as Parliament. I do not come from that tradition. Jeremy does. But I do not. John McDonnell does. I come from a tradition which is about a Parliamentary route to socialism.

“It’s a Bevanite tradition that fundamentally believes we won the franchise, the working man and woman won the franchise and once we’ve won it, Parliament is the fulcrum, and the Labour party is the vehicle first, last, always.”

Smith points to McDonnell’s line in 2012 that Labour was just a ‘tactic’, and his advice to the Left that ‘if it’s no longer a useful vehicle, move on’.

“There ain’t another bus coming along if this one breaks down,” Smith says, his voice rising with barely concealed anger. “John McDonnell would see this as being, you know I’ve heard him say it, it’s a ‘flag of convenience’, ‘it’s a vehicle for the struggle right now’. Well, he’s completely wrong. It is the only vehicle.”

This is the first instalment of our Owen Smith interview. Read Part 2 HERE.

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