Saturday 28 December 2013

Will 2015 Be Labour's Poisoned Chalice?

It's tough being a political party. Life outside of government is relatively care free affair. You can formulate policy, spend your time critiquing and criticising, and look forward to a fair amount of time sat atop opinion polls. But once you're in power it's a whole different ball game. It's time to come up with the goods you promised in opposition. It's an occasion for breaking promises and getting found out, as our friends the Liberal Democrats have found to their cost. A party's image takes a battering, its representatives in local, devolved and European bodies pay the price of unpopularity, its leading figures defamed and lampooned and, eventually, the electorate give it the boot. This begs the question: why bother? That's the question Jackie Ashley more or less asked in The Graun the other day.

Okay, I'm guilty of being a touch facetious. Come 2015, what in Trot-speak we used to call the "objective conditions" are not going to be much different. Will the economy be growing or not? It won't matter to most people, for whom pay is likely to remain lagging behind inflation. Will joblessness be down? Probably, but again not replacing sacked public sector workers like-for-like and seeing more and more jobs cut up into zero-hour, part-time and temporary-sized chunks is no recipe for a feel good factor. Exports are down, and debt - public and private - is at record highs. There's very little chance of that "rebalancing" Osborne and Dave like to bandy about meaningfully occurring before 2015, except on one measure. Slashing the state-employed work force and/or outsourcing/transferring many hundreds of thousands of them to for-profit businesses can make it look as if the private sector are storming heaven, or some such rhetorical nonsense that accompanies any indication of economic growth.

The situation will be grim, so does Labour really want to win? Of course, the answer depends on what Labour does with its victory. But first things first, we know what the party has announced so far. We know it will abolish the bedroom tax straight off. At a stroke our very poorest, including hundreds of thousands of disabled people, will get immediate relief. For readers getting prissy about voting Labour, you might want to consider that. We also know that the party has promised a repeal of this government's Health and Social Care Act - the one that transformed the NHS into a market for service delivery, a market that is subject to EU competition law and one in which public providers of health services are discriminated against. A complete waste of money, as well as something many sitting on the Tory benches will benefit financially from. That also makes a real difference. Yet both of these, in a way, are "easy" policies. They're on the right side of Labourist politics, and they will save public money too. The political pain comes with the tough issues.

As is customary these days, Ed Balls has committed Labour to the Coalition's public spending plans for 2015-16, just as Brown and Osborne did before him. This doesn't necessarily mean a Labour Treasury won't play around with the monies it has. There's a bit of wiggle room in £720bn. Yet telescoping forward from the vantage point of 2013, and given the forewarnings about "tough decisions", a programme of cuts will carry on. Sure, there is a political logic in sticking with established spending plans. Straight away the sting of "tax and spend" Labour has been drawn. Not being able to take Labour on without the Tories attacking their own plans, it could be smart politics. On the other hand, it's a gamble. Is it strategically wise to allow your spending plans to be set by an out-of-his-depth chancellor and a gang whose blueprint for the economy is The Road to Serfdom? The answer has to be no. Nevertheless, barring an Osborne-style pledge for an emergency spending review, that is likely where Labour will be. So, Labour's hand is not of its choosing, and the chancellor will ensure the cards are shuffled in such a way to be to our maximum disadvantage, but its up to the leadership team how they play it. Here's my suggestion.

From day one of the Coalition, the Tories and LibDems have approached economic questions politically. Wedded to Adam Smith sans his moral injunctions against money-grubbing, they have not wasted the crisis in ensuring that working people pay for it, and continuing to ensure the redistribution of power and wealth to the very rich from everyone else. Theirs is a sectional, class war government justified by a doctrine of economic necessity in the first instance. This is a policy orientation bought at the expense of the long term interests of those they champion. Their very political economy has to be met by one of our own. Thanks to its baggage, calling it a five-year plan is perhaps best avoided but Labour has to be bold about restructuring British capitalism. Labour's immediate and long-run health demands that it does so. Cutting doesn't work and has been shown not to. Instead, it needs to be smarter with taxpayers' money. Cracking down on tax dodging is an ever-green cure-all, but it needs putting into practice. Cracking down has to mean *cracking down*, up to and including shutting down off shore crown dependencies where trillions have been parked. Being smart means recognising that HS2 is 30 years too late and will do little to improve Britain's economic performance. Far better would be investing those colossal sums in wiring the entire country up with high speed broadband and wireless internet. Perhaps it should also be free. It is also about time the need for a submarine nuclear deterrent was rethought. What does Britain gain from swaggering around the world pretending to be a great power?

Again, easy stuff in terms of pain. Not so easy with the practicalities. For example, chasing tax dodging is a complex business involving courts, other states, international negotiation and so on. Technically speaking it'll be a while before money is repatriated, but politically Labour will reap the rewards. The same is true of HS2 and, perhaps, Trident. But these are not the magic bullets some of my erstwhile comrades think. They will not magic away deficits and debts, though, of course, they could go some way to addressing them. Labour needs to use the stick of the law and the carrot of corporation tax to prevent businesses from dumping their costs onto taxpayers. Uprating your workers above the living wage? Here, have a corporation tax cut. Provide company-wide child care for employees? Have another. Take life-long learning and job security seriously? Recognise collective bargaining? Relinquish one-sided PFI contracts? The list goes on. Assuming there will be no nationalisations and renationalisations or radical legislation like one shareholder, one vote; businesses have to be incentivised by the tax regime to make sure they have direct material interests in discharging social and environmental responsibility. This will go a long way toward putting money in people's pockets and making them feel more secure in work and life generally. It's a start.

These can be done or begun within the parameters set by the Tories. If there is one lesson Labour should take from the Coalition, it is to move with haste and ensure a new settlement is bedded down in short order, before the opposition in the Tories, in the media, in finance, and in other sectors of the establishment start organising around their bleating. And then after that first year, if Labour need to borrow more it should do so - but soften the inevitable nonsense from the right by announcing a simultaneous zero-based budget review of public spending, beginning with procurement, outsourcing, internal market costs (health, education, defence, etc.) and high salaries. If a public body cannot afford to run certain services, it certainly cannot afford to pay reams of officers on £100k+.

Looks relatively rosy, doesn't it? But it's not. While this is going on there will still likely be cuts, even though Ed Balls and Ed Miliband know they're counter-productive and act as a drag on economic activity. Every single cut across every single department needs to be thought through in terms of *net* saving and *net* cost. There's no point laying off tax inspectors if that will damage your revenue stream in the medium term. Throwing public sector workers onto the dole is stupid if it will cost more in redundancies and depress the local economy.

Could winning in 2015 do Labour in? Yes, but it's not inevitable. It's a question of politics. Labour has a chance, if it wins the election, to permanently change British capitalism, to 'under-promise and over-deliver' as the leader is fond of saying. The prize is not just a better society, a foundation on which further social advances could be built, but also, perhaps, an almost permanent marginalisation of the Tories and the backward, sectional, moneyed interests they represent. It's not a matter of praying that Labour succeeds - it's a call for every labour movement person to get on board to push and campaign for what needs to be done.


Unknown said...

Please explain why it is not fair for someone (such as a single person) should not give up their publicly provided good which is too large for them for some else (such as a young couple with children) to move in to. This sounds like a sound and equitable social policy.

jimboo said...

Because there are no smaller social housing options available. There is a dearth of 2 bedroom flats but virtually no single bedroomed homes available. As it is against the rules to give up a property for a dearer option the private sector is barred from those in social housing who are trapped by the bedroom tax. It is simply a punitive tax on the poor.

jimboo said...

Glut of two bedroom flats meant to say, thank god there are no pedants hanging about.

Anonymous said...

I am sure Brian will agree with me that all rich folk should have to give up their second and third homes, their second and third cars, their private swimming pools, their multiple holidays per year, their childs ridiculously lavish indulgences etc etc etc. These public goods in a few hands, while others go hungry is a downright disgrace.

Brian hints at something I have said for some time. Let us have real austerity, not this cruel and viscous attack on those at the bottom. Let us challenge what everyone has, and let us start at the top and work our way down from there. If after relieving the wealthy of all their superfluous public goods, we still have to take stuff off the elderly poor and the disabled, so be it.

Unknown said...

But these are not publicly provided goods: a rather important distinction in my view.

Anonymous said...

Brian, have the balls to carry through your logic to dare I say it, its logical conclusion!

You have opened up the question, some people receive x amount of public goods, which you narrowly, and conveniently (if you wish to be an apologist for the wealthy) define as those specifically provided by the government. But this leads (again very conveniently!) to a very narrow view of economic life and of austerity. Austerity becomes limited to those on low incomes, those who rely on publicly provided services (most people). So your view totally discriminates against those who have relatively little in the first place and leaves be those who have relatively a great deal. I am sure you are conscious of this.

But all great development of ideas have started with limited ambition, so we must thank you for raising the question, thereby allowing us to take your idea and run with it, so to speak.

In our society goods are provided via a division of labour, and many of the vital goods provided are made by those overseas. Also many publicly provided goods, such as universities, provide those who have plenty in life with vital tools to give them that edge over those less fortunate, or possibly less able. But that they rely on publicly provided goods is obvious. But why isn’t the car made in Vietnam by Vietnamese workers a public good, whereas the operation carried out by the NHS doctor is? Isn’t it correct that we should view all goods and services as public goods, that if less labour and material were directed to the wealthy then that would free up resources for everyone else? Couldn’t we prioritise say, operations over 50 varieties of shampoo or ornaments over road building or Ipad production over military spending or military spending over Ipads.

Then when we as humans think in these terms can we then t start to think of austerity in much more fundamental terms, rather than turning into an exercise in cruelty and pandering to the lowest common denominator, more likely than not to fail and be overturned by the next government anyway?

You have shown the way Brian, time for people to question what other people get and why. The poor have every right to ask this question just as much as the rich do.