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Archive for February, 2011

Bye-bye big society – Cameron lets the Treasury kneecap the new bank at the heart of his big idea

18/02/2011, 07:00:30 AM

by Atul Hatwal

For months now, voices within the Labour party have been cautioning against writing off the big society. Thoughtful voices that look beyond the immediate rough and tumble of partisan politics. It’s been a staple from the emerging blue Labour stable that Cameron was on to something.

With the prime minister’s speech on Monday, we finally got to see some of the detail.

While the lipstick and eyeliner turn the head, underneath the party paint, this is an LRF – a low resolution fox. Looks great at the bar, but up close, things are not so hot. For all the allure of the pretty words, the raw material is flawed.

The commitment at the heart of the big society that will make the warm fuzziness real is the big society bank. The Tory manifesto was very specific on what this bank would do:

“…provide new finance for neighbourhood groups, charities, social enterprises and other non-governmental bodies. This will provide social enterprises with the start-up funding and the support they need to bid for government contracts”.

As the government has faced-off against the big charities about cuts to grants, the story missed by most of the media is that the big society bank is being set-up specifically not to deliver their manifesto pledge.

The charities aid foundation, a leading sector finance provider, has signalled the danger:

“We are concerned that if the funds are only made available on a commercial basis the interest rates could be too high for many charities and social enterprises…”

The operative words are “on a commercial basis”.

Over the past few years I’ve worked with many charities on their financing arrangements, several that were in the room on Monday, and one thing is crystal clear: a commercial return is impossible to deliver on most public service investments.

The consultation paper is vague on what the rates of return will be, but in the current social investment market, “commercial basis” means a minimum 25% on a typical investment. Factoring in the inherent risk associated with a sector that is feeling the full weight of the cuts and the size and financial track record of the organisations involved, this can easily head north of 40% – that’s if they consider the investment at all. (more…)

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Friday News Review

18/02/2011, 06:55:38 AM

Dave vs. Nick

David Cameron and Nick Clegg will go head-to-head over Britain’s voting system with Cameron warning AV would lead to further political horsetrading, and Clegg countering that first-past-the-post fosters distrust in politics. In carefully choreographed speeches, following the referendum on 5 May being given royal assent, the two men will start a delicate operation to set out views on voting reform passionately held by their respective parties without damaging the coalition’s stability. One source described it “as a temporary and limited undocking”. Cameron will speak first in London followed two hours later by Clegg in Leeds. Cameron is expected to be the more prominent campaigner in the coming week after polling showing Clegg is the best poster boy for the no campaign. The prime minister will say: “In the next 11 weeks the debate over AV is going to heat up right across the country. Throughout this time I’ll be making my case loud and clear.” – the Guardian (more…)

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Protest is not the preserve of the young.

17/02/2011, 02:00:22 PM

by Victoria Williams

We all know what a protester looks like. They are long-haired, middle class, vegan, university students who wear woolly jumpers and read the Guardian. Look at the comments on the Mail Online and you’ll discover that they are also “lentil munching yoghurt knitters”. And so they may be. And so what?

The stereotype has been around for decades, and, though irritating to serious political activists, it has generally been harmless enough. Until now. Now protest matters again, and so does our perception of those who participate in it. The problem with our commonly held view of activists is that, as with so many stereotypes, it is simply not correct. The faces we’ve seen at demonstrations in London and throughout the UK in the last few months have come from all backgrounds (and have sported a variety of fetching hair styles and fashionable alternatives to the knitted jumper). And while we can laugh off silly assertions about hair and fashion sense, the enduring belief that those engaging in political protest are all very young is more pernicious. (more…)

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Somebody tell the government that some disabled people are actually, er, disabled

17/02/2011, 07:00:48 AM

by Sally Bercow

The disability living allowance (DLA) is forecast to cost the taxpayer £12 billion this year, the same as the department of transport’s entire annual budget. So briefed the Whitehall machine as the government launched its public consultation on DLA reform in December (the consultation closes tomorrow).

Doubtless, the figure of £12 billion is correct, but before you rush to join the chorus of Daily Mail-minded souls and proclaim your horror, bear in mind that we spend three times more on defence than we do on disabled people (around £37 billion a year), that renewing the UK’s Trident nuclear deterrent will cost around £20 billion, that we have spent over £20 billion on the wars in Iraq and Afghanistan. I’m not saying that we shouldn’t spend those sums on defence, Trident or our international adventures (well maybe I am – but that’s a whole different column), but the point is that it’s all relative.

So while £12 billion for disability benefit is a hell of a sum, maybe, just maybe, we spend that much because – and hold onto your hats here – there is actually a genuine need. Could it be that, with a small minority of dishonourable exceptions, the people who receive DLA really are deserving of it? That they actually rely on the help DLA provides, so that they can cover the higher costs of living, care and mobility that come hand in hand with their disability? After all, there is no evidence of widespread fraud – indeed the 0.5% (£200 million) fraud rate for DLA, while unacceptable, is nevertheless the lowest of any benefit. (more…)

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Thursday News Review

17/02/2011, 06:55:16 AM

Command and control

The Labour leader, Ed Miliband, and the shadow chancellor, Ed Balls, have ordered the party’s frontbenchers to clear all policy statements with them before making an announcement. The order – which covers speeches, newspaper articles, press releases, contributions to parliamentary debates and endorsements for campaigns – applies to every shadow minister. Statements with financial implications must be cleared with the shadow Treasury team as well as the leader’s office, while those that do not involve spending go to Miliband alone. The move will be seen as an attempt byMiliband to impose tight discipline on his party in the hope of fending off Conservative claims that Labour are “deficit deniers” who would allow public spending to creep back up. But it also appears to consolidate Balls’s position by giving him a joint role as arbiter on Labour spending plans. – the Guardian

Cameron U-turn on forest sell off

The highly contentious plans for a £250m sale of England’s forests will be abandoned because of the furious backlash that has hit the Government. David Cameron humiliated his Environment Secretary Caroline Spelman in the House yesterday, and shocked MPs, when he disowned the policy. The Prime Minister signalled the retreat when he admitted he was unhappy with the proposals under which woodlands owned and run by the Forestry Commission would be sold off over the next decade. – the Independent (more…)

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Sharia law for the City of London

16/02/2011, 03:30:59 PM

by James Watkins

When it comes to the banks, Labour often seems to tie itself in knots. Without the square mile, the finances of the country are seen to be on shaky ground. At the same time, governments around the world which took it easy on the bankers contributed to the financial morass we are in now.

For many in Labour, there seems to be no centre-left vision or school of thought other than to accept the model of banking we have now – while maybe taking another look at regulation. But as recent events demonstrate, even this seemingly pragmatic approach is a risk too far and is one which led Gordon Brown to call for “markets with morals”.

As for the government, with Vince Cable seemingly out of the picture in pushing for fairer bank terms to small businesses, all we now have left is a threadbare deal with the banks from chancellor George Osborne. This has the non-binding target of £190 billion for lending being a gross amount, not net. So it is very possible that, as businesses repay their loans and others have credit withdrawn, the gross target is met, but net lending declines. (more…)

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The sheer effrontery of right wing attacks on local government pay

16/02/2011, 12:00:36 PM

by Andy Dodd

Last week, the institute of directors released a report claiming that the country’s debt position could be greatly improved by “progressive” measures such as abolishing the right to flexible working hours, eliminating time off for training and removing the right to a free hearing at an employment tribunal.

And now a strange study, from the independent incomes data services, bowls another full toss for the right wing to hit into the orbit of planet loony. It cites senior executives in local government who earn more than the prime minister. Predictably enough, by teatime, the forums on the Daily Telegraph web site were loaded with comments about “fake CEOs” who “take no risks” and are paid “vast sums”.

Without constructing a blanket defence for all local authority chief execs, some of whom may well be overpaid, it is a little confused to take the PM’s salary and argue that this should be the arbiter for senior management pay in the public sector. And, given the challenges currently facing senior managers in inner city local government, to say that they take no risks and are fake is absurd. (more…)

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On the campaign trail in Barnsley, Tom Watson finds a new voter group: the Ed Miliband Tory

16/02/2011, 07:00:16 AM

by Tom Watson

While holding my tie in his clenched fist, Benjamin Wegg-Prosser once described me as “that Prescottite” who tries to be a “hard man of the soft left”. No, I never understood what he was on about either. It was late. We were young. Ish.

In so doing, Benjamin was unwittingly demonstrating that labels are usually unhelpful. Sometimes though, they help the non-activist understand the complex world of UK politics. And, even more occasionally, they help a politician understand UK politics.

If ever I were allowed to define myself, it would probably be as a “Kempian pragmatist” – a follower of the former MP, Fraser Kemp. Fraser’s phenomenological approach to life gives him the rare ability to sniff change in the air. He can feel the faint pulse of a political tremor before it reaches the clipboards of the opinion pollsters, those who write the reports that land on the desks of the people who sit behind them in newspaper offices and political party head quarters. (more…)

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Austin v Khan: the Labour splits on multiculturalism.

15/02/2011, 03:00:58 PM

When Sadiq Khan accused David Cameron, in his “multiculturalism” speech in Berlin, of “writing propaganda for the English Defence League”, he did not get a lot of support from his own side.

None of his senior colleagues condemned him. But they were quick to be muted.

He did get backing from some quarters. Atul Hatwal, in Uncut, for instance, was unusually unstinting in his praise:

“While others were either hiding behind the sofa or couching their disapproval in the gentlest and most respectful of terms, only Khan called it as it was.

The Labour party lost its compass on this issue years ago. Under Blair and Brown the traffic was only ever one way. For years the right have been able to ritually burn multicultural straw men with impunity. The mark of Duffy has only made the party more timid.

But sometimes there are issues where it is simply a matter of right and wrong. No politics, no triangulation and no trading. These irreducible beliefs used to be what distinguished Labour and gave the party its moral centre”.

Khan’s shadow cabinet colleagues remained ominously, but tactfully, silent. The Labour default setting on race held firm: say nothing if you can help it.

Elsewhere on the front bench, though, some shadow ministerial colleagues were rather more boisterous in their pronouncements.

Step forward Ian Austin, shadow sports minister and MP for Dudley North, in which marginal seat the BNP looms large. Hewn from the illiberal granite of West Midlands Labour, Austin was clearly incensed at Khan’s intervention and not prepared to join former Brownite colleagues like Douglas Alexander and Yvette Cooper in taking it lying down.

At business questions that week, he told the House of Commons:

“May I add my voice to a call for a debate on the prime minister’s important speech at the weekend, so that we can discuss in the House how we can build a much stronger sense of what it means to be British, based on the contribution that people are prepared to make, whether they want to work hard, play by the rules, pay their way, whether they are prepared to speak English, because that is the only way to play a full role in British society, and their commitment to the great British values of democracy, equality, freedom, fairness and tolerance”?

“The prime minister’s important speech”. Not exactly “propaganda for the EDL”. Austin’s message is pretty plain. On this issue, for him, Cameron is on the side of the angels, Khan on the side of the others.

Speaking to the Express and Star, Austin warmed to his theme:

“Ever since I became an MP I have been campaigning to build a much stronger sense of what it means to be British. It is only by building a stronger sense of patriotism and national pride, that we can tackle extremism and build a stronger and more united society. If we don’t stand up and say Britain’s history and its values make this the greatest country in the world, how on earth can we expect anyone else to believe it? And if people do not learn to speak English how can they play a full role in society”?

Khan and Austin represent opposite extremes of a major divide within Labour. Neither is alone. While the likes of Atul Hatwal are trenchant in support of Khan, Britain’s longest serving Muslim MP, Khalid Mahmood, spent most of the day of Cameron’s speech telling any broadcaster who would listen that the PM’s central argument was right.

These divisions matter because opinions are very strongly held on either side. And because it is an issue which, directly, shifts votes.

It is surprising, in which case, that these splits are not receiving more attention.

Posted in Inside | 11 Comments »

Cable has capitulated to the City. It doesn’t have to be this way.

15/02/2011, 01:01:41 PM

by Dan Cooke

What does Vince Cable have in common with Eric Pickles, Michael Gove and George Osborne? Oh, and Ed Miliband and Ed Balls too? Answer – they are all cursed by the iron law that their careers, like all political careers, will end in failure (or, at least, will be seen as a failure, whatever reasoned protestations to the contrary their future selves might make).

So, as renewed rumours have surfaced this weekend that Mr Cable is contemplating resignation when the independent commission on banking inevitably fails to deliver the radical restructuring he has called for, perhaps he should be sanguine about the harsh judgment that will, if he does so, be pronounced on his contribution to politics.

It is clear now that his resignation will be less a “nuclear” explosion for the coalition than the detonation of an ideological neutron bomb – devastating for his own influence, but leaving Tory and orange book values intact. Following the limp conclusion of “project Merlin”, maintenance of the status quo on bank structures would indeed be a sad anti-climax to the expectations fostered when Cable declared himself co-equal with the chancellor in banking policy.

It would represent a further blow to Cable’s reputation among former admirers after a miserable list of disappointments: his role in the tuition fee betrayal, the self-inflicted loss of responsibility for the Sky deal, the daily complaints that his department has no strategy for growth and its scrapping of regional development agencies (described by Mr Cable, as “Maoist and chaotic”, but allowed to pass all the same by this secretary of state). (more…)