In June 2014 I spent some time in Loughborough on election day for the European Election with the Labour Candidates Rory Palmer, Khalid Hadadi and Matthew O’Callaghan, who was standing in the Westminster seat. I was able to get some photos as I went around with them.
This is a post I’ve held back from writing because I didn’t want it to sound tetchy and add a siren voice to the election campaign. But now that the result of the general election is history, I can say what I think more openly. Like that’s ever really bothered me you might rightly add!
I left the Labour Party last year and joined the Greens because I didn’t have any hope that the policy ideas being offered by Ed Miliband where adding up to a winning platform for Labour for the election.
While I hoped that Labour would come-up with the goods, I continually felt I wasn’t going to be satisfied. Instead, every time I looked at statements being made by the Green Party I found myself agreeing not only with the sentiment and the way it was expressed, but also the practical reality of what was being put forward. There was no prevarication, no coded messages, no empty aspirational gestures.
Instead, the policies of the Green Party were clear and forthright. I kept asking myself when would a policy I agreed with come out of the Labour Party? When would I see a distinctive campaign be launched that I could get behind and know that it would make a difference?
It never came.
What confirmed my decision to leave Labour was hearing Ed Miliband welcoming delegates at the Labour Party Conference and Manchester, by declaring the city a ‘Tory and Lib-Dem free zone.’ It was at that point that I knew that Ed Miliband was only going to try to appeal to the core vote of the Labour Party and wouldn’t bother to try to reach out to Conservative or Liberal Democrat voters.
I’d been disillusioned with Ed Balls for some time also, and for two reasons. Firstly he spent more time learning to play the piano and running marathons while he was shadow chancellor than he did crusading against the evils of inequality and for social justice; and secondly, as William Keegan in the Observer noted, Ed Balls u-turn on attacking austerity was a huge error.
As Keegan wrote in June 2013 “We now seem to be witnessing a collective failure of nerve. At just the moment when even the International Monetary Fund is owning up to having got it wrong, Labour, fearful of entering the next election campaign being pilloried as the spending party, gives the impression of being trapped in the headlights. And just for good measure, those highly respected independent thinktanks, the Institute for Fiscal Studies and the Institute for Government, have lamely accepted that it is going to be a case of “austerity, austerity, austerity” for the remainder of the decade.”
What was perfect ground for a coherent and clear economic policy, against austerity, instead got crowded out by an over-projection of personality and spin. As the result, as yesterday’s election proves, people saw right through Labour’s lack of policy.
There’s no point in opting for austerity-lite under Labour when you have George Osborne on hand to offer you a full-strength glug of masochistic austerity-max!
The Green Party is clear. Austerity sucks.
I’ve been a bystander in this election, the first time in twenty years of being politically active, as I need to finish off my PhD thesis, but once that is out of the way I’ll be stepping-up my support for Greens in Leicester and their rejection of this stupid form of economic flagellation.
By the way, when I was in the Labour Party I voted for the other Miliband – I bet a lot of people are now wishing they had as well.
It’s worth watching this debate in parliament to see how nasty the Tories really are.
Only in the topsy-turvy world of Neo-Liberal economics can the further decline in Greek Gross Domestic Output (GDP) be called a triumph. And yet, that is what economically conservative newspapers like the Daily Telegraph are saying about the latest batch of figures that show that Greece is in recession for the twentieth consecutive quarter.
According to the Daily Telegraph “Excluding the borrowing costs on its massive debt burden, the Greek government is now raising more money than it spends.” What the Telegraph isn’t reporting is that this has been achieved by massive lay-offs of civil servants, a relaxation of the minimum wage and a punitive property tax that will only be exempt for those living below 6000 euros a year.
Obviously, the most simple economics lesson from history has not been heeded. When in a slump, the only way out is to stimulate demand in the economy. As Simon Jenkins in The Guardian has rightly pointed out for some years now, the best way to do this is to give the money directly to people to spend, rather than to bankers in the form of Quantitate Easing and the purchase of bonds. How much QE money has been salted away in tax havens and used to keep share prices high?
Instead of the stimulus money going into the Greek economy to ensure that it can grow it’s way out of debt, the austerity nutters are continuing to bleed the Greek economy dry while expecting a miracle. No wonder the politics of fear and uncertainty are taking hold in Greece.
The Greek unemployment rate is now at a staggering twenty-seven per cent, with no sign that it is coming down. All those people out of work, dependent on squeezed state benefits and charity hand-outs. Before long we have to start asking what will be left of the Greek economy, because at this rate there is going to be very little to work with afterwards to restore growth.
As Zygmunt Bauman points out “The fraudulence of the promised ‘trickle-down’ effect of opulence at the top has now been laid bare – for everybody to watch helplessly and bewail – but the ‘collateral casualties’ of the grand deception are here to stay for a long time to come. The foundations of social solidarity and communal responsibility have been sapped, the idea of social justice compromised, the shame and social condemnation attached to greed, rapacity and ostentatious consumption have been wiped away and they have been recycled into objects of public admiration and celebrity cult”.
It is not the ordinary people of Greece who brought this about, but the international financiers in London and around the world who have inflicted this burden on the Greek people. I can only utter my indignation – twenty quarters of recession! Surely someone might have got the idea by now that this isn’t working? Imagine how much it is going to cost to repair the damage and sort out the cost to Greek society once this wicked experiment is over?
There’s a lot of debate within the Labour Party these days about the best way to engage voters and communities. As the traditional allegiances of paid-up members of all mainstream political parties becomes less defined, the challenge is to think of new ways to excite people about political issues.
Politically active citizen’s are now likely to take to social media to get their voices heard, and to hear its echo from the people that they follow and debate with online, rather than attending formal political meetings or joining branches or chapters of civic organisation.
There is less of a desire, it seems, for people to get together in the same room and to try to work through the grind of managing a traditional organisation or feeding a traditional political machine. Many constituencies have ageing members and struggle to bring in new-blood. It’s a problem across all parties, and Labour isn’t immune from its challenges.
The talk within the Labour Party is to ‘reconnect’ with communities and individuals by re-developing the tried and tested skills of community activism. This idea of community activism is given credence from its origins in Barack Obama’s presidential campaign strategy, derived from the work of Arnie Graf. But it is largely nothing new.
The Labour Party has been embedded in working communities for decades. In its new form it’s essentially being rediscovered by the centralised marketing and strategy teams that now dominate all political parties.
One person who is rooted in this sense of community activism is Labour’s prospective parliamentary candidate in Loughborough, Matthew O’Callaghan. I’ve known Matthew for over ten years from my time in Melton Mowbray. Matthew transformed Labour Party politics in Melton, taking it from a solid Tory borough council, to one that ended-up with Labour in control following the rising tide of the 1997 general election.
Make no mistake, Melton is a tough place for Labour to get a voice, and against the odds Matthew was able to establish a base for Labour in the town by speaking up for the people who are so often forgotten. As the national fortunes for Labour fell, the task became harder in Melton, but Matthew never let go. Seeing off the Liberal Democrats and the British National Party, have been major achievements.
Matthew’s politics are firmly rooted in a strong sense of community. Although he is careful not to bring these things into his political activities, he deserves recognition for his work with the Melton Mowbray Pork Pie association, the East Midlands Food Festival and as the driving force behind the Artisan Cheese Fair. Each of these play a major role in supporting the economy of Melton Mowbray.
These are non-party political, and it is a testament to Matthew’s skills and forbearance that he has championed the needs of small producers and businesses while also working with major producers and government agencies who have the clout to export our local products internationally.
As a county councillor until 2009, Matthew was consistent in his commitment to running regular residents groups meetings. I’ve joined Matthew out on the stump, posting leaflets and canvasing from early in the morning until late at night. I always wondered where he got his energy from to be out and about with people in the town.
There was hardly an issue of the Melton Times when a quote from Matthew wasn’t published, and he can hardly walk through the town without someone stopping him to say hello or thank him for the work he has being doing.
Melton’s loss is certainly going to be Loughborough’s gain, as Matthew is aiming to regain the seat for Labour at the 2015 general election. The early signs are that Matthew will be doing this by embedding himself in the life of Loughborough, getting to know the shop keepers and businesses, the schools and the community groups, both in the town and in the surrounding villages.
It would be worth checking out Matthew’s blog to find out what he’s up to, and how he’s bringing his form of community politics to Loughborough, and how it can win for Labour.
According to a post on the New Statesman website, Ed Miliband is determined to pursue the development of One Nation Labour as an ambitious and transformational intellectual project, as well as an ambitious plan for government and the reform of the British economy. The article quotes Stewart Wood, “Ed Miliband’s consigliere” who outlines five principles behind the project:
1. A different kind of economy
2. A determination to tackle inequality
3. An emphasis on responsibility (at the top and the bottom)
4. Protecting the elements of our common life
5. Challenging the ethics of neoliberalism
So far this discussion is largely taking place in the closed circles of the policy review and the policy-wonks who work in them. The question is, are these principles going to be accepted more widely, and will they work in practice. It’s often easy to build a theory or an ideology in the seminar room, but to make it work in the harsh reality of daylight and people’s lives, is something else.
So for each principles there are a whole host of problems and issues that need to be thought through:
1. A different kind of economy – in what way, we could just as easily invest in an economy that is more capricious and selective and which offers less sustainability and resilience to shocks and change. We need some meat-on-the-bones that takes us past the Thatcherite simplicity of ‘private good’ and ‘public bad’, so what examples and models can we look to that tell us something about longed-for economic model of the one Nation Labour dreams?
2. A determination to tackle inequality – this is more radical than it first seems. Putting full employment, back at the heart of economic decision making will wipe away the last remnants of the failed Thatcherite model. For over forty years we’ve worked to suppress inflation at the expense of maintaining high levels of unemployment. The waste and immorality of confining people on the dole, or locked into benefits, needs to be challenged. Inequality was at it’s peak in the 1970s in Britain, at the point when full-employment was last prioritised as an economic good. There’s only one chant that the Labour Party should repeat – Jobs! Jobs! Jobs!
3. An emphasis on responsibility (at the top and the bottom) – restoring the principle of moral and social virtue to our individual and collective actions will be a lot harder to represent in an accessible and emotional sense, but a-politicism of democratic consumerism is unsustainable, both from a social point of view, but also from an ecological point of view. Resisting the technocratic and bureaucratic mind-set that dominates much of our public life, either as the market is allowed to provide a value-free tool for the allocation of resources, or the determination by the state, means that individuals lose site of the impact that decisions have on individuals and communities. It doesn’t mean that we stop fighting for change, but we do it in a way that is sensitive and empathetic to the lives of the people who are affected. Thatcherism is regarded by many as an absence of that empathy, with it’s focus on hyper-individualism and the ‘value-free’ marketization of decision making. There are values outside of the market that need to be cherished and fostered if a pluralistic society is to flourish.
4. Protecting the elements of our common life – the lack of investment in our cities, in social housing and in shared resources, mean that our daily life is too often a struggle and a challenge. Infrastructure that allows us to move around and get about have been hollowed-out in our towns and cities for too long. Finding locally run businesses and services is becoming harder and harder. Our high-streets are dominated by national brands, a handful of large supermarkets, and a lack of sustainable investment in family and community economies. Do we need a thousand Thorntons shops on the high-street? Do we need a supermarket with a twenty-five per cent share of the grocery market? Local competition needs to be looked at so that independents and new business get a fair crack at making a success of their businesses. Local communities should assume responsibility for local competition in goods and services. The unfair advantage of the giant supermarkets is killing our high-streets, while simultaneously blocking anything that can innovate and challenge the charity shop and pay-day check culture of decline.
5. Challenging the ethics of neoliberalism – does neoliberalism have an ethics? Merely stating that we expect people to adopt and sign-up to an ethical code is a challenge. Protecting free speech in the workplace, promoting trade unions and work-based councils will show that sharing power and decision making is more effective than the obscene forms of executive management, with immoral pay differentials and autocratic leadership cults. A return to a mixed economy, with growing support for mutualism, cooperatives and sustainability. This does not necessarily mean a return to statism and centralised control. Until fairly recently the Labour Movement was defined by thousands of small mutual societies, cooperatives and trade unions. The benefit of new online technologies give us the opportunity to communicate and organise in many diverse and provocative ways. Allowing a few small super-national web companies, like Facebook, Google, Apple and Microsoft to dominate the marketplace in the name of efficiency will be a betrayal of the gift that the Internet promises – self-determination and organisation.
There are many long-term, serious questions to be asked about the One Nation Labour project, it’s time we started having this discussion more openly.
Given the current crisis of capitalism there are many commentators who are arguing that the left, or progressive side of politics, need to return to an over-arching counter-theory to capitalism. Indeed, the shock of the present crisis is leading to a fundamental re-evaluation of the very form of capitalism itself. Not only is the crisis allowing for a reappraisal of the long-standing economic views, it is also generating considerable rethinking on all sides of the political/idealogical spectrum as well. In some cases this reappraisal is allowing us to look again at writers and thinkers who have previously been shunned and written-off. The irony of this crisis is that a re-reading Marx throws-up insightful historical challenges and allows us to find pertinent resonances with today’s political economy. This must be giving many on the left a tingling sense schadenfreude.
As with Karl Marx, so it is with John Meynard-Keynes. I’ve just finished reading Robert Skidelsky’s Return of the Master, a brief account of the relevance of Keynesian economics as a response to the present economic crisis. Originally published in 2009, at the point when the shock of the crisis was being tentatively dealt with, Skidelsky outlines the key ideas of Keynes and how they might be applied in order to ensure that there was no return to recession. Obviously, economic events have continued to zig-zag since Skidelsky put pen to paper, and the early opportunity he describes to embed recovery now seems to have been squandered with the self-defeating drive for austerity. Given the circumstances, then, these are timely ideas that are rightly enhanced rather than diminished, and need to be more fully explored.
Robert Skidelsky argues that Keynes would have said that this ongoing crisis is based on three flaws. The first flaw has been institutional, with the governing and regulatory authorities being unprepared to deal with the high level of uncertainty that the global economy is now struggling with. Secondly, Skidelsky points out, has been a significant flaw in intellectual thinking that has been embedded around economic theory since the mid-1970s. This thinking says that we are all independent, rational economic agents that are capable of always making an optimum decision about our well-being, as long as government doesn’t interfere. Finally, there has been a collapse of moral thinking, where bankers have gambled shareholders and taxpayers money without incurring any personal loss or accountability themselves.
While many have argued that the present crisis is a problem of debt, Skidelsky argues that if we employ Keynesian insights into the origin and management of the crisis we might see the cause and the solution in a different light. Rather than thinking of this financial crisis as a problem of debt, Keynes’ insight is to see this as a problem of excessive saving. Rather than looking at the individual countries that are facing crisis we should, according to Keynes, take a step back and look at the level of aggregate demand in the global economy. If we did step back we would see that there are considerable amounts of capital looking for investment opportunities. The problem is that there is so much uncertainty that investors are not investing and instead are looking for safe-havens in which to hoard their liquid assets, either as cash or bonds. Everyone is battling-down-the-hatches for an imagined on-going storm, and as Keynes points out, the herd mentality takes over leaving the financial system to run dry of lubricating credit and finance.
This is not a crisis of debt, argues Skidelsky, it is a crisis of thrift and hoarding. Overall there is more than enough capital in the international financial system, it’s just that much of it is being locked away. The levels of capital investment by both private companies and by individuals has dropped considerably, and continues to be depressed. In this scenario it is left to the investor of last resort to step-in and provide support for investment until private investment returns to sustainable levels. That’s government acting on our behalf. It will only be when private investment is functioning in a more balanced way that governments can begin to deal with their accumulated budget deficits and start to manage their debt overhangs. This, of course, will take time and effort to achieve, but as Keynes points out, we have to make an assessment about the future anyway, the question is do we have sufficient confidence in that future? Governments role, therefore, is to enhance certainty in the financial system so that investors can make their plans for the future, knowing that they are likely to get a reasonable return. It is this confidence in the future that only government can provide in these circumstances, and which has been so clearly blown away in the present responses of governments around the world, some who have followed the heard and set unrealistic short-term targets and made irresponsible analogies with national credit-cards and household debts.
Ironically personal debt is being paid off at record levels, but as Paul Krugman points out, ‘Your spending is my income, and my spending is your income’, so demand is being further depressed because of the ongoing lack of confidence. Promoting and directing demand, therefore, is the number one priority for governments in these circumstances. Since the 1980s demand in the UK economy has been stoked by privatising debt. The rise in home ownership, personal loans, credit cards, tuition fees, and so on, have given many the sense that their relative economic position has improved. However, there is good evidence, suggests Skidelsky, that overall growth rates have been lower following the Reagan-Thatcher period than in the previous Keynesian, demand-management period. It is going to be difficult, therefore, for the UK and US economies to be rebalanced on the basis of the expansion of conspicuous consumer activity. Instead, the expansion of the economy is going to have to be directed through investment in collective and shared resources, manufacturing, transport and energy services. The time to worry about debt, argues Keynes, is not in the slump but in the boom.
In the meantime we have an opportunity to renew much of our crumbling infrastructure on the basis of the long-term loans that Britain has access to on the markets at record low rates. How we prevent the hoarding of resources that could otherwise be invested is going to be the greatest political challenge of our recovery. How do we ensure that the resources we direct into the economy are going to have any effect? Well, the £350 billion that has gone into the banks as part of the quantitative easing programme run by the Bank of England doesn’t seem to have had any impact in the real economy. The banks are hoarding this cash as insurance against uncertainty. It’s not being invested directly. The job of government in these circumstances is to focus this investment directly and urgently into the economy. Many argue that there is nothing worse than leaving our children with our debts. There is something far more pernicious though, and that is keeping them in poverty now and depriving them of the resources to make a difference in the future. As Keynes is often quoted saying, in the long run we are all dead anyway, so why deprive yourself something that you need now?
So what can be done? Are we past the point in which the standard approach to stimulus packages can be effective? Tinkering at the edges is not going to solve this problem. Instead, government is going to have to take charge of developing a full, extensive and considerable investment plan for the economy. It is essential that a national investment bank is established that has the capital to lend directly to businesses at favourable rates, and can support local government and other state institutions to renew our social infrastructure. We have to avoid a return to consumer credit bubbles, but cash needs to be flowing in the economy. Wages have to rises, benefits have to rises and charges for daily activity – such as transport and media – have to be slashed. Our transport network is patchy at best, so a long-term boost will be welcome by millions. Our rail services need major investment. Our cities are in desperate need of integrated, modern transport infrastructure; our town and city centres need to be refocussed to priorities urban life. Families have to be able to live in city centres, free from excessive and oppressive traffic, anti-social behaviour and crime. Our communication and IT networks need boosting significantly just to keep pace with investment in emerging economies. Sustainable development and green technology needs to be rolled-out and embedded everywhere. Support for knowledge creation and learning is a lynch-pin priority. Our healthcare and social care services need continuing improvement.
There is so much to do to even out the collective share of our national wealth. This is just a start, there are many more services and resources that need to be developed, but rather than thinking that this has to be done privately, the emphasis has to be on high-quality collective provision. We need to be bold about our working lives as well. The French have got some things right. The cap on hours worked each week, the ‘Tobin’ tax on finical transactions, increases in the top rates of tax, increases in inheritance tax and death duties. To balance the rises in inheritance duties we can cut national insurance taxes and income taxes. End the tax subsidies on second homes. Tax rental income for landlords of residential and business properties, but balance these with tax-breaks on investment in these properties that renew the physical infrastructure.
These are radical actions that are aimed to shifting investment out of the vaults and the savings accounts and into peoples pockets. There is no point locking-up savings while living in poverty now. What virtue does that serve? Anywhere that wealth pools, collects and is hoarded should be taxed to avoid usury, exploitation and gate-keeping. This alternative approach should have one primary purpose, to get wealth flowing and circulating around the economy. One of the great lessons from capitalism, which underlines the importance of getting this process right, is that it is not necessarily the amount of wealth that people have per-se, but the extent to which this wealth is creatively deployed, recycled and recirculated – invested in other words – in things that matter. This is the time to invest in our public services for the good of all. In doing so we will enrich us all. In doing so we will moderate the vast extremes of income and wealth accumulation that has done so much damage to our country. And in doing so our towns and cities will become, as Keynes wanted, more harmonious places to live.
Melton Needs an Economic Boost Now
Melton Council has today launched a consultation on economic strategy for the borough. According to the Melton Times “A DRAFT blueprint aiming to boost economic development and prosperity” is going out to the public for consultation. The consultation comes at the same time that the UK economy is struggling to get out of recession. Figures reported today tell a grim picture in which factory output has dropped significantly. The Telegraph reported “Manufacturing PMI fell from 48.4 in June to 45.4, where anything below 50 indicates contraction. The result was far weaker than analysts’ expectations of 48.6.”
As reported in the Melton Times “The strategy, which will eventually be adopted by Melton Council, highlights numerous key goals including building on Melton’s standing as the ‘rural capital of food’, increasing the number of knowledge-based/hi-tech businesses in the borough, improving links between businesses and education providers to ensure young people have the qualifications and skills the future economy needs, and supporting the Melton BID Company in its efforts to revitalise the town’s economy.”
Rutland & Melton Labour’s online organiser, Rob Watson, said in response to the consultation “It’s really important that Melton Borough Council adopts a sense of urgency and starts to use all the powers of the Borough Council to stimulate economic growth now. The focus on austerity and cuts is failing, with businesses really struggling. Melton has a lot to be proud of and there is much more that the Borough Council can do now to ensure that business are given a boost and jobs are created.”
The report can be download from the Melton Borough Council website.
Here’s a really handy website from the Institute of Fiscal Studies, that can work out for you where you sit on the income distribution scale. Are you a high-earner, or are you low-paid? Just how rich are you? According to the IFS
“When asked this question, most people think they are in the middle. From people in the poorest third of the income distribution, up to people in the richest five or ten per cent, many will happily report that they think they’re in the middle. Obviously, not everyone can be in the middle and IFS has used the latest data on household incomes to give you an accurate picture of where you actually are in the distribution.“Where do you fit in?” is a simple tool that lets you know your position in the income distribution and can be accessed online here or downloaded as an iPhone App.”
As we look for ways to boost the economy and get much needed cash circulating, one thing we can do straight away is give every child at school a free school meal. Not only would this help the economy by taking pressure off squeezed working families, it would also boost achievement.
According to the Institute for Fiscal Studies “When all primary school pupils in Newham and Durham were offered free school meals, attainment levels rose. Pupils in these areas made between 4 and 8 weeks more progress over a two year period than similar pupils in other areas.”
Not only would the economy benefit, as the cash that would otherwise have gone to pay for meagre meals will get spent locally by families, giving local suppliers much needed and increased orders. It will also cut the record number of children who are arriving at school hungry. They would get the help they deserve.