Sleepwalking to irrelvance, part 1

by Lisa Ansell

After a year in which Labour believed it could be all things to all people, last week’s election result brought home the pickle the party is in. Gleeful delight over a Liberal Democrat implosion, and debates about a voting system many didn’t want or care about are fun, but Labour’s results show the British political map is being redrawn. David Cameron faced taunts that with deep seated anger at a Labour government, he couldn’t achieve a convincing lead. Labour’s problems are much much deeper.

With ‘Cleggmania’ long forgotten, the assumption that everyone fed up with the Labour party would duly return home out of anger with Tory-Lib Dem government were misguided. This should have been no surprise. Support in Scotland collapsed, and with it the support that would have facilitated the move to the left that many within the party yearn for. Those precious southern swing voters successfully poached by Blair have left Labour, travelled through the Lib Dems, and, dependent on which side of the fence they were on to begin with, have settled back home as Conservatives, or are cast adrift. Any gains to be made from anger at the government have already been made. Conservative support has consolidated, the Liberal Democrats have rendered themselves unnecessary. Cameron has a clear message, solid support, funds to fight an election.

Labour’s most secure support came from the north of England, where the perception of Labour as opposition to the cuts was the driver for campaigns. Towns like Barnsley and Oldham, where hordes of Islingtonites had failed to suppress dismay at the lack of facilities, while they informed residents that Labour was the only option for them. Towns where the inequality that Labour was comfortable with is demonstrated clearly, where Labour’s cuts are already hitting hard.

Conventional wisdom says that Labour not only has to stay with the policies that hit the north hardest to appease those desirable southern swing voters, it “has” to take another swing to the right. And the towns, communities, and unions who underpin the only solid “support” Labour has left, have to be too dumb to notice.

Ed Miliband has been attempting something along these lines since he took his position as Labour leader. Far from the pledges to listen and “learn lessons”, he has attempted to build a loose coalition of “progressives”. Appearing all things to all people. Clinging on to liberal aspects of the “left” that don’t require a change in economic policy.

Complacency about Labour’s right to the default support of those affected by the cuts allowed Miliband to hijack the march for the alternative without a qualm, fully aware that many were protesting about cuts that started before Labour left office. Conferences paid for by the TUC, billed as opportunities to organise and fight the cuts, have been used as Labour recruiting grounds.

Nationwide those who said that Labour was supportive of cuts that affected them personally, were told they were wrong. That they were expendable and should accept it. Told to shut up and constructively fall behind the political vehicle with the most chance of defeating the Tories, or be considered hostile to “the cause”. All while, Labour publicly tries to distance itself from being too closely associated with the unions.

Grassroots members of unions, mainly made up of low-paid women, are beyond disquiet at their dues being used to support a party happy to target mothers, children, and the ill and disabled first. With union resources used to fight welfare reform and the continuing marketisation and fracturing of public services, undermined by affiliation to a party pledged to continuing those same policies. Arguments about historical ties are already untenable. A further swing to right will break the last threads of the relationship that is barely keeping Labour solvent. Or threaten a crisis within those unions, as members kick against their exploitation.

The Liberal Democrats and the Conservatives only have to ask Labour for a “credible alternative”, to neutralises Labour’s occasional attempts at opposition. Arguments against the government’s programme have to be made carefully, lest they implicate Labour policy. Debate about issues which are the subject of an unprecedented level of cross-party consensus has to be avoided at all costs.

Everyone outside the Labour party understands that a manifesto economically to the right of Thatcher, and a hairsbreadth from the Conservatives, can only be presented as either opposition or an alternative for so long. The conviction underpinning the anger of Labour activists when confronted with people unwilling to pretend that Labour has a right to their support suggests the Labour party has a blind spot where it most needs clarity: the effects of its economic and social policy prospectus, and the positions of its own party.

Labour came out of the general election better than could have been expected. The party has wasted 12 months in opposition, which could have provided an opportunity to examine what went wrong, and move forward.

This opportunity was wasted in favour of spinning the status quo as something new, manufacturing tribalism over the minor differences between it and the Tory-Lib Dem government, and dismissing anyone who dared to point this out the folly of this. A manufactured AV debate, and faux-tribalism have not prevented people from noticing that Labour has looked away as our welfare state has been dismantled.

Labour hasn’t even made the “protest” gains that would be expected from anger at a government who dare do what Thatcher didn’t. The Conservatives are now ready for an election, and Labour is trapped in a cul-de-sac from which it cannot escape in its current form.

This doesn’t mean that it is all over. But unless Labour can undergo the reflection that was promised after the general election and reassess its position in a new political map,it is likely to stagnate and become irrelevant. Political commentators looking at the election result without rose-tinted spectacles that the possibility of a future career in politics provides are now contemplating whether we are locked into a long period of Conservative hegemony.

It could take years for new political forces to emerge, and the majority, who are aghast at what the Tory-Lib Dem government is doing, are left floundering in a wilderness without a political party strong enough to offer an alternative. There are options open to Labour, but taking them would require abandoning the arrogance the party has shown in the last 12 months. And formulating a credible economic alternative, instead of telling people black is white and getting upset when they refuse to play along.

The second part of Lisa Ansell‘s critique will appear on Uncut next week.


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32 Responses to “Sleepwalking to irrelvance, part 1”

  1. Gary says:

    Lots here to agree with, and one thing to add: the fallout of the AV referendum. As Philip Collins points out, 650 MPs will soon become 600. Only 1 of the lost 50 will be in the South East. Labour will be routed by this, ‘cos 301 will give power, and Cameron already has 307.

    All he has to do therefore is sit and wait until the economy eventually recovers and the redrawn consituencies take effect. The default position now is therefore a Tory majority. This redoubles the onus on Labour to create a much more compelling picture.

  2. JohnB says:

    ‘Those precious southern swing voters successfully poached by Blair have left Labour, travelled through the Lib Dems, and, dependent on which side of the fence they were on to begin with, have settled back home as Conservatives, or are cast adrift.’ Evidence, please.

  3. iain ker says:

    The second part of Lisa Ansell‘s critique will appear on Uncut next week.

    *********************************************

    The apocryphal story of Mike and Bernie Winters playing the Glasgow Empire springs to mind.

    Played there many times myself. Found the audience pussycats.

  4. Chris says:

    Basically, this article suggests Labour should lurch economically to the left. This is utterly, utterly delusional.
    The reason Labour is doing so poorly is due to one Ed Miliband, who quite simply makes a terrible leader. When he was selected, anyone with any sense saw immediately we had lost the next election. The frustrating thing was having to waste 5 years whilst the unions and other ‘labour traditionalists’ figured this out.

    Now it’s clear that the left of the party are seeing the impending disaster and are responding with the narrative that Ed is too right wing?!
    Unbelievable.
    We will only regain credibility again when we ditch Miliband and acknowledge our role in the economic crisis.

  5. Lisa Ansell says:

    Chris, you misunderstand my point- a swing to traditional left positions would be suicide- see next part.

    Surely you are not suggesting that people in towns like Rochdale, Doncaster, Barnsley, and Sheffield, are not going to notice that Labour are supporting the cuts they are demanding votes on the back of opposing. People can read.

    Left/right is an economic axis- and Labour ARE a right wing party at present. The ‘left’ as you appear to define it no longer exists anywhere but Labour’s head. We do however have an economy, in a very serious state, and are in the midst of global shifts- and if Labour cannot see the wider picture, come up with a credible economic alternative(ie different to the Conservatives) then that leaves Labour in a very serious spot.

    And while tribalists and factionalists are thrashing out old arguments about a left/right political spectrum, believing the only alternative to this economic agenda, is a return to some kind of archaic left wing position- then I think Labour are in trouble. Because quite frankly- the world is a very different place now than it was in the 70’s, and the global economy is undergoing some very significant shifts.

    Re: evidence for swing voters returning to Conservatives, and not returning to Labour-:the election results?

    Labour are not in a position to fight, never mind win an election- and if you think that is about a choice between Labour returning to the ridiculous positions of the archaic left, or pursuing neo-liberalism to the death- then you miss what is happening in the UK right now.

  6. Lisa Ansell says:

    And I think one of the key problems in this situation, is demonstrated clearly across the political blogosphere. Until tribalists and factionalists can let go of myopic slanging matches about choices which are irrelevant, and start reassessing the risks to the economy we face, the current situation, the way the political map is changing, and their own position= Labour will be in the wilderness. Those looking for an alternative will be subject to years of Conservative hegemony, while new political forces and parties emerge.

  7. Chris says:

    Sorry if i’ve misintepreted what you said.

    I presumed you were arguing that Labour did not need to cut the deficit in the way the Darling plan proposed. To argue this, is, I believe, very “left wing” because it would be an argument against the realities of the markets and the deficit situation. Giving out the message of “we are not going to be held to ransom by the markets” is great union rallying talk, but utterly detached from reality (I’m not saying you’re proposing this, but many unions are, or just hiding their heads in the sand).

    “Surely you are not suggesting that people in towns like Rochdale, Doncaster, Barnsley, and Sheffield, are not going to notice that Labour are supporting the cuts they are demanding votes on the back of opposing. People can read.”

    I completely agree and have been calling this a joke for months. People have returned to the Conservatives because we no longer have a leader who could reach out to everyone and understand why people voted conservative (Blair). Plus, they hold us at least partly responsible for the economy.

    What do you propose as Labour’s economic alternative?

  8. “We will only regain credibility again when we ditch Miliband and acknowledge our role in the economic crisis.”

    OK. Taxes were too low during the boom, we defended asset prices too much and jobs too little, and we didn’t regulate finance capital strongly enough throughout our period in office. That, by and large, is the main set of mistakes we made which made Britain more vulnerable than other countries to the economic crisis. Now, tell me which political direction we would have been said to have been moving in if we had addressed them?

  9. John P Reid says:

    well said Lisa

  10. Real Chris says:

    @Chris

    “The reason Labour is doing so poorly is due to one Ed Miliband, who quite simply makes a terrible leader. When he was selected, anyone with any sense saw immediately we had lost the next election.”

    Nonsense. Firstly, he was elected not selected. Secondly, anybody who immediately thought that was blowhard moron. Ed had just beaten the candidate with the biggest money advantage in Labour leadership history, David couldn’t have started the contest with more advantages (even had the support of Dan “clairvoyance” Hodges) but Ed still beat him.

    “Now it’s clear that the left of the party are seeing the impending disaster and are responding with the narrative that Ed is too right wing?!
    Unbelievable.”

    Did you read the same article?

    “We will only regain credibility again when we ditch Miliband and acknowledge our role in the economic crisis.”

    The first thing Ed did was acknowledge Labour’s role in the economic crisis.

    @william

    You have a strange fixation on Brown that indicts a paranoid and obsessive personality, please seek the advice of a mental health professional or go back to posting on libdem voice.

  11. gwenhwyfaer says:

    william, your own judgement seems to have been somewhat overwhelmed by a tide of hatred – apparently directed at anyone who isn’t English. If you’re Labour’s future, the party might as well disband.

    (But I don’t think you are. I think you represent another tradition altogether.)

  12. Lots to agree with.

    Scotland. Well what we have seen is a successful election based upon Salmond: you’ve got to credit his charisma. But you also have to credit that the SNP isn’t New Labour. The Scots were voting for independence from *political* England: the New Labour, Lib Dems, and Tories. In Scotland people had an alternative to the politics that have stagnated in England. It is not clear (and I would even argue that it is not the case) that the Scots voted to be country to separate from England.

    In England, we have seen for two decades the rise of those that are against the core. Blair temporarily got those people to vote for New Labour, but he blew it with his wars in Iraq and Afghanistan, and in his embrace of the politics that is not far from the Orange Book and Cameroonism. It wasn’t Labour. It wasn’t centre-Left. New Labour was against public services, and that turned off people who were in favour of public services, which, yes, included the Left and included the Unions, but it also includes many Liberals and a large chunk of the Tories. These are people who are in support of a civic society. They are not in support of the relentless corporatism, the relentless shift from to a marketisation of public services, to a country that is run by the unaccountable, undemocratic, corporations.

    The NHS is an excellent example of where Blair was wrong, and where Clegg/Laws and Cameron/Letwin are wronger. What we do not need is a sharp shift to the Left. Europe shows us that. But the UK public over the last two decades have moved relentlessly to a situation of a 30% core Tory and 30% core Labour who would vote for those parties regardless and in spite of their policies; with the remaining 40% unable to associate with either. This is why there is a resurgence towards Salmond and everything that is not New Labour and not Cameron-servative.

    I am waiting with a lot of interest in see what Lisa will suggest will fill the void – that 40% that will determine the next government of the UK. My hope is that it will be the civic, public services orientated and yes, Left-leaning majority of this country.

  13. whatever says:

    yeah ok we’ve had enough diagnoses of the problem. is part 2 going to suggest a solution?

  14. Amber Star says:

    The Labour Party are seen as ‘weak’ on the economy; but when we concentrate on on the economy in isolation, we will always look weak. For Labour, credible economic policy arises from credible – & fair – social policies.

    Of course it is difficult for Labour to formulate a winning policy on the economy because we are up against a market ideology that is simple, stands alone & doesn’t need to be part of joined-up thinking.

    The conservatives among us want to keep the economics of New Labour: “We have nothing against people being filthy rich, as long as they pay their taxes.” These Purples must come up with a compelling story about what Labour will do with these taxes. A story so good, it can challenge & win the argument which says: New Labour ‘squandered’ the tax proceeds of a 10 year economic boom then borrowed for two years in an attempt to keep the spending ball rolling.

    Good luck with that – because nobody believes that any UK government will be able to make the filthy rich pay their taxes. The rich will just off-shore & tax haven & non-dom their way out of paying any tax that they can possibly avoid.

    So, if Purple Labour are all for businesses & individuals getting rich & they’re not going to going to tax the rich & they’re going to rein in spending… how is Labour not irrelevant?

    The only way that Labour can, in those circumstances, make any difference is to say: We’ll make sure that these corporations & individuals have to share the wealth by employing people & paying at least a living wage. Good idea – but there’s two problems with that:
    1. Workers from mainland Europe, coming to take advantage of the relatively high minimum wage means Labour will get beaten up by the ‘flockers’; &
    2. Only people earning less than the living wage will be incentivised to vote Labour.
    A living wage would only work as part of a broad change in social policy that New Labourites would never support.

    Purple Labour, without a credible way of taxing the wealthy & a credible plan for spending those taxes fairly (through the eyes of the Daily Mail reading public?) have nothing whatsoever to offer that trumps the Tories.

    There you have Amber Star’s critique of the let’s go round again, New Labour, Purples. More to follow in part 2….
    😎

  15. Merseymike says:

    But the local election results simply don’t bear out what you claim. Labour have never been ahead in most of the south and don’t actually need to gain many of the seats they won in 1997 to have a majority. There are plenty of marginals in the Midlands and North as well as the south. I really don’t know why there is so much panic. There isn’t likely to be an election until 2015, and its only a year since the last elections when the Tories emerged with the most votes. Tory voters generally voted for what they are getting. LibDem voters didn’t, and what about the many who might support us but positively abstained last time?

    And given that an awful lot can happen in four years, how can anyone claim hegemony on the basis of one set of election results a year into a five year parliament?

  16. Chris says:

    The union bosses *selected* ed miliband to throw their weight behind and campaign for as an “anti-Blair” candidate. It was reported widely at the time by numerous newspapers.
    He was perhaps the least impressive candidate in all of those running and the members (those with at least some sort of political sense) chose David Miliband.

    Anyhow, I’m pretty sure all the ‘told you so’ crowd will get proved right when he loses, so let’s continue this debate then.

    Yes, I do sound horrendously negative, but I really hope I’m dramatically wrong. So far I see zero sign of this.

  17. william says:

    @chris. Gordon Brown created an Augean stable with his economic incompetence.My surmise is that it is highly unlikely that Labour will form another government until the electorate believe,first,that the sins of the past have been admitted,and,second,that a future Labour government would be fiscally responsible.To date, not many people in England believe either proposition.My health is fine,thanks.

  18. @william

    I am glad your health is fine. I hope your friends, family and neighbour’s health are fine too because we are heading for an almighty crisis in the NHS. This is not just Lansley’s changes, it is his incompetence at running such a vital service (look at the mess we had in the winter over flu jabs – it was predictable that we would need flu jabs yet Lansley’s incompetence meant that we didn’t have enough).

    The “reforms” are truly abominable. We are moving towards a system where the NHS will only do urgent and emergency work. Read the Guardian front page today quoting Steve Field: “designated services” are those that the NHS will guarantee, ALL other services will not be guaranteed (and so they will not do them). Only A&E (and bizarrely maternity – ask any midwife, they will tell you it is NOT a medical condition) will be guaranteed. If you need anything else done, then you’ll have to pay for it yourself. Lansley has delivered the Tories’ wet dream, a healthcare system where the sick pay and the healthy get a tax cut.

    The NHS will be in a terrible state in 2015. It will be a far bigger issue than the economy. My argument against Labour right now is that they have allowed an incompetent Lansley to get this far, their opposition to him has been dire. They seem timid and afraid of him. Instead they should be driven by a rage over the damage he is inflicting on the most vulnerable in our society. If Labour do not win a stonking great majority at the next election solely on the Tory mismanagement of the NHS then it will show that they will never be capable of being in power again.

  19. AnneJGP says:

    Lisa, thank you for a very thought-provoking article. Some very interesting comments too.

    I’d like to focus on this paragraph:
    Labour’s most secure support came from the north of England, where the perception of Labour as opposition to the cuts was the driver for campaigns. Towns like Barnsley and Oldham, where hordes of Islingtonites had failed to suppress dismay at the lack of facilities, while they informed residents that Labour was the only option for them. Towns where the inequality that Labour was comfortable with is demonstrated clearly, where Labour’s cuts are already hitting hard.

    This expresses very well a Labour trait that disturbs me profoundly. I’m a southerner who is somewhat sympathetic to Labour’s world-view. There are two glaring anomalies about Labour, however, which together are more than enough to put me off voting for Labour. The first is the economy, which has been discussed endlessly.

    The second anomaly is encapsulated in your paragraph above. It’s quite simply this: places where Labour has held sway for generations typically do not show signs of any ability to improve the lot of those who live there.

    Places where Labour has held sway for generations are its show-case, its track record. The Labour party should ask those “Islingtonites” what sort of a show-case, what sort of a track record, they provide.

    It shouts aloud of hand-outs rather than hand-ups – keeping people dependent on your vision of big-state control. It shouts about a party that is afraid of people overcoming their circumstances in case they stop voting for you.

    I’m desperately sorry about it, but why should I give my vote to such a collection of deadbeats? Your show-case places give me every reason not to do so.

  20. Chris says:

    @william

    Completely agree… What’s so depressing is that after Brown has saddled us with what could be years of un-electability, the dinosaur union leaders go and force someone on us resulting in yet another atrocious leader who simply cannot lead.

    When will they learn?

  21. Amber Star says:

    @ AnneJGP

    Your comment highlights one of the reasons that Labour failed to beat the SNP in Scotland. Solidly Labour areas outside the economic hotspot cities of Glasgow, Edinburgh & Aberdeen feel that 13 years of New Labour made too little difference to their lives.

    It may turn out to be that, one year into this Tory-lead coalition, they haven’t had long enough to appreciate the difference that Labour made in comparison to what life is going to be like under the Tories. IMO, their hope that the SNP can stand up for Scotland, against the Tories, is naive. Time will tell on that point.

    But there is definitely a feeling that New Labour didn’t do enough to ‘lock out’ the Tories when our huge majority gave us the opportunity to do so. Cameron’s Tories have shown themselves to be much less faint hearted. Without a majority, they have crushed AV, brought in a 5 year term for themselves, packed the Lords with Tories & are to push through boundary changes that are intended to disadvantage Labour (their hopes for the effect of this may be somewhat over-blown but it was surely their intention to remove a large number of Labour seats).

    To conclude: I agree with you. Labour does need to take better care of itself & its own voters.

  22. Mike Killingworth says:

    To deal first with the personalities: Ed Miliband was elected leader because he was seen as not-the-Blairite (his brother David) and not-the-Brownite (Ed Balls) candidate. None of the candidates were or are Prime Ministerial material – it is far from clear to me that anyone on the Labour Front Bench is. Why the Party has been unable to recruit any class acts to its team is a real question which deserves the attention of this site and others.

    Obviously I don’t know what Lisa’s going to say in Part II, but the big change economically seems to me to be the global labour market, in which Brits can only compete in the financial services industry and those jobs which can’t be globalised (e.g. transport, personal services). Tory Mayor Boris Johnson reckons the London living wage to be £8.30/hr – I would estimate that as approximately ten times the global rate for semi-skilled manual work.

    It’s probably true that a Beveridge-style safety net is never going to be affordable again, given the lock the global banking system has over fiscal policy. It’s pretty much a given that over the next few years income inequalities will rise to Brazilian levels, and it may well be an even bet that life expectancy will start to fall, as it has in Russia.

    And all this before we consider the fact that race is a more powerful engine of political cleavage than class, and that socialist policies (of any sort) have never been introduced in ethnically diverse nations.

  23. Lisa Ansell says:

    Hi- I had a conversation on twitter about this piece and a f air point was raised. I said that teh Labour vote collapsed in Scotland, but is important to point out that much SNP support came from outside Labour vote, and it wasn’t necessarily just an issue of losing support in Scotland. I allude to it in next piece. Anyway- was fair comment. Completely cede point made by @manzanotti . Clumsily phrased and a bit misleading to say ‘collapsed’ possibly.

  24. Lisa Ansell says:

    THe problem is that the filthy rich’s money had to come from somewhere. Labour did preside over the most astronomical shift of wealth upwards, and an incredible stagnation of social mobility. Welfare spending is directly related to problems in the rest of the economy- Labour thought could mask that inequality with tax credits and housing bloody benefit, and pub sector jobs. If the plaster that is the welfare state is going to be ripped away, surely it had occured to Labour that the equality issues it masked would come to the fore. If women can’t earn enough not to need state support because of the gender pay gap, and the state suppoort is being pulled away- I want to talk about the gender pay gap, and the cost of childcare..

    If the welfare spending is a problem, we should discuss why. While Labour are shouting down criticism, we cant discuss economic reality. And actually, given the problems the cuts expose I think people will be wanting to.

    The towns where the cuts hit hardest are likely to want to start discussing the reasons the cuts are goingg to hit hardest.

  25. Lisa Ansell says:

    Chris

    I thin there has to be recognition of changing nature of global economy.(including end of western hegemony and what that might mean in future- as Chinese economy is looking to overtake US very soon) There is an evidence base to suggest we should question the assumptions about the benefit global companies bring, and what they cost in subsidising low wages – what do they bring that is sustainable. I think we have to assess governments role in a global economy, and a distinction between businesses that are beneficical and should be rewarded with tax breaks etc and those where it may be less apppropriate. I certainly think an assessment of the current risks posed to our economy is in order, and I think soon. I think deficit could be least of our problems. I think we have to look at how we can maintain long term attractiveness in a global market, how we can best protect ourselves from its failures(and there are many) and assessingn role market confidence should have in overriding evidence in public service planning.

    I dont thin the choice is neo liberalism or death, or a return to 70’s statism. State support is not desirable- but in order to reduce it one must look at what is causing it. Its relationship with problems in economy- find ways to reduce it properly. State spending to mask widening inequality was never going to be sustainable long term, and isnt post financial crisis.

  26. Amber Star says:

    @ Lisa Ansell

    THe problem is that the filthy rich’s money had to come from somewhere.
    —————————————————–
    It came from sold-off Uk public assets. Instead of having them working for the British people, they made a tiny few filthy rich. Mrs Thatcher gifted them our water, gas, electricity, oil, telecomms, bus routes, railways, airlines & air-space. Now they want our postal service, forests, roads, universities, schools & NHS.

    It came from selling companies that were built on the back of Uk infrastructure & workers, their brands & methods moved out of the Uk; then we provided an import market for these goods without a question being asked about what this would do to the Uk economy & employment in the medium term.

    It came from off-shoring services (e.g. call centers) under the pretence that it made the service cheaper for customers. It didn’t, it just increased the corporate profits. And the redundant Uk workers were only entitled to a pittance in severance; nothing that would deter the off-shoring of jobs.

    It came from the move away from cash to electronic transactions with almost no protection for citizens as the country transitioned. This allowed the banks to take a skim from each & every transaction, to levy huge charges & loan-shark interest rates on people who found it difficult to manage this new, electronic money; witness the protection insurance mis-selling. £5bn stolen from ordinary people & that’s just the tip of a gargantuan ice-berg. There were no huge profits from ‘clever’ casino banking. The huge profits came from ripping off ordinary people who didn’t know how to manage electronic money.

    It came from our pensions; as corporations took pension holidays that were ‘justified’ by inflated assets. The employees weren’t given contribution holidays or a share-out of the ‘surplus’ assets, only the employers. And when the pendulum swung back & the schemes were underfunded, the employers were allowed to reduce benefits, bar new entrants etc. instead of having to make good the short-fall.

    Meanwhile, none of us have any significant power or over-sight about how our pension funds are managed. It’s all in the hands of the skimmers who buy & sell & gamble with our money always taking something for themselves from every transaction. Nobody has asked them to make the trades, they have carte blanche. Yet they, or their associates, are entitled to take a slice every time they do it.

    And they take no involvement whatsoever in the corporations in which they have invested our money. Those corporations pay massive, unjustified sums to their ‘key’ men (& they almost always are men) & nobody raises an eyebrow. That’s our money; not the money of mythical, well-informed shareholders who approve of what the corporations are doing. Our money being spent in a way that makes us furious but we have no power to intervene.

    So – “THe problem is that the filthy rich’s money had to come from somewhere”, Lisa. It came from somewhere, Lisa. It came from us. And they didn’t even have the good grace to pay their taxes.

    The Purple bookers want to keep treading this path. But you can’t walk hand-in-hand with these people, Lisa. Because they never have enough. They don’t understand the word ‘fair’. There is no point at which they will stop. They will hang you upside down over a bannister & shake the loose change out of your pockets then drop you on your head when your pockets are empty.

    New Labour failed to curb them, & was forced to help them in their hour of need or see the entire Uk banking system collapse. Did they appreciate becoming filthy rich on New Labour’s watch? Did they appreciate being saved? Apparently not because they waged a vicious war against Labour & Gordon Brown at the last election.

    So I say again, you can’t work with these people, Lisa & any economic strategy that is built on a ‘partnership’ with them is certain to fail the very people that Labour is supposed to represent.

    Lisa, I hope you read this & think about it & investigate my points before writing Part2 of your analysis. Please do not dismiss it as a rant, diatribe or tinfoil-hat syndrome. Every part of it is supported by evidence.
    😎

  27. Richard says:

    “Support in Scotland collapsed” No it didn’t Lisa, the Labour vote held up. What collapsed was the Lib Dem support which went to the SNP. Always worth looking at the below-the-line figures before leaping to false conclusions.

  28. Lisa Ansell says:

    Amber Star- part two was written at same time as part one! Richard- see comment further up thread. Apologies.

  29. Amber Star says:

    ….Welfare spending is directly related to problems in the rest of the economy- Labour thought [we] could mask that inequality with tax credits and housing bloody benefit, and pub[lic] sector jobs.
    —————————————————————————-
    You didn’t mention pensions – which makes up the lion’s share of benefit spending – but I’m guessing you’ll get to that later.

    The Welfare you did mention is directly related to our relationship with Europe.

    First, I must emphasise that I am not a blinkered Ukipper. I recognise that Europe is an important export market for certain Uk goods & services; & that a large part of our retail/ service economy is linked to goods imported from Europe (e.g. BMW & mercedes cars, Miele, Zanussi, Nef appliances etc. etc.). And that New Labour were emphatically pro-Europe rather than grudgingly so (which has become a bit of an issue in itself).

    So, back to the subject: why do I say that tax credits, child care credits & housing ‘bloody’ benefit are linked to our relationship with Europe? Because Uk workers earn more than Europeans earn. But we also pay much more for housing, transport, water, electricity, gas, goods & services than Europeans pay.

    So, from a business perspective, in the short-term, it would be better to manufacture & provide services from Europe to the Uk, thereby minimising costs & maximising prices. How did Labour slow the flight of business to mainland Europe? Subsidising the cost of Uk workers by giving them help via tax credits, childcare subsidies & housing ‘bloody’ benefit.

    Taking away those benefits won’t mean that corporations increase wages to make up the short-fall. They’ll simply continue to pay the same, leaving households to make up the loss & face a drastic drop in living standards.

    Okay, so why didn’t New Labour force the companies to increase wages to make benefits unnecessary? Because, as I said, they’d simply have moved their business to mainland Europe.

    What about businesses that can’t be moved? Why not make those businesses which can’t move pay a living wage?
    Because that would make the Uk much more attractive to economic migrant workers from the EU. Those workers would earn here & spend in Europe to maximise the value of their earnings. And those corporations which New Labour made wealthy? Won’t they do their bit by voluntarily & patriotically employing Uk workers? They didn’t & they won’t &, as things stand, governments can’t force them to do it.

    Surely businesses can see that if they off-shore everything, British people soon won’t have any money to spend on their goods & services. Won’t they have killed their own market? Lisa, they don’t care. They’ll take the money they’ve made personally; &/or they’ll service the new market they’ve established in the lower cost region.

    But that’s less for everybody, isn’t it? They really don’t care. They’ll happily take a bigger slice of a smaller cake. As long as they are doing fine, nobody else matters.

    This all sounds so bad. How did we ever get to where we are?

    New Labour did have ten years during which the third way seemed to be working out fine. We all propped each other up & achieved more together than we could alone. But never, ever pretend that businesses & banks were our ‘partners’ in this. We enabled them & stayed just one tiny step ahead because we were faster & smarter & willing to share & we worked harder than them to see trouble coming & head it off.

    What went wrong, then? We credited them with seeing that it was working well for most of the people, most of the time. We believed that self-interest – if not common interest – would inform their decisions (which is a fancy way of saying they wouldn’t kill the golden goose). And this, actually, was New Labour’s only mistake – but it turned out to be a big one.

    We believed these corporations would be concerned about their own survival. But they aren’t. Because the men running these companies make sure that their personal financial wealth is guaranteed when they sign on & thereafter they will tear the arse out of a business for short-term gain or even just to feed their own ego. And nobody will stop them because:
    1. The politicians believe that they will never get elected, if they make a stand against corporations; &
    2. We, their shareholders, are rendered impotent by being separated from our investment in these corporations by the pension firms who play with our money but exercise no over-sight regarding the longterm future of ‘our’ companies.

    So what’s to be done? How can Labour change any of this? Not by jumping on the Conservative benefit bashing bandwagon, that’s for sure. The Conservatives are about to send us into a deathspiral the like of which you have never seen before.

    The theory is that by yanking away subsidies, the cost of rents, energy etc will fall as people’s inability to pay for them causes demand to fall. They think this will happen gradually & costs will gently deflate. I don’t think so. The costs will either stay high & people will be unable to afford anything except the absolute necessities or there will be a domestic crash that will finish what the 2007 crisis started. Either way, the pain is likely to be horrendous for many people.

    But the Conservatives aren’t worried about it. Their plan is to say: You wouldn’t all be skint: if you weren’t paying so much tax to support the state, if companies didn’t have to pay any tax, if women stayed at home & let the men have the jobs, if the immigrants weren’t such a strain on the shrinking economy, if British workers were cheaper than Indian & Chinese workers etc. etc. And it is a logical position. It is an unfair, immoral, short-termist position but it is logical in a nasty way.

    And by the sounds of things, you are going to explore how benefits can be withdrawn & wages will go up & costs will come down & it’ll all work out fine, if we follow where the Conservatives are leading…. I really hope that isn’t what you are planning for Part2 because that really would be sleepwalking to disaster, never mind irrelevance.
    😎

  30. Lisa Ansell says:

    Amber- three parties: one economic policy? Seems like that ground covered for quite a while.lol

  31. El Sid says:

    @Amber Star :
    “nobody believes that any UK government will be able to make the filthy rich pay their taxes. The rich will just off-shore & tax haven & non-dom their way out of paying any tax that they can possibly avoid.”

    That’s just a counsel for despair – and it ain’t necessarily true. There is a way to make the filthy rich pay more tax – and that’s to reduce their tax rates. In 1976-77 the top rate of income tax was 83% and the top 5% of earners paid 25% of all income tax, compared to 20% paid by the bottom 50%. By 1999 the top rate was 40% and the top 5% were paying 39.8% of all income tax, and the bottom 50% had dropped to 11.6%. And of course those were shares of a much bigger pie.

    As another example, even the Guardian acknowledged that Brown’s North Sea tax grab before the 2005 election had the effect of reducing the ultimate tax take : http://www.guardian.co.uk/business/2008/mar/05/oil.utilities

    Laffer doesn’t always apply, but he’s not a bad starting point when thinking about how to raise the maximum amount of money from tax. Of course it helps if you analyse the response curves correctly – the IFS has suggested that the Treasury is using the wrong models (p7 of http://www.ifs.org.uk/budgets/budget2009/tax_benefit.pdf) and that the Treasury would make more money if the top tax band was reduced to 40%. It depends whether you think it’s more important to raise money for social programmes or to “kick the rich” whilst raising less money. Personally I’d be more pragmatic than dogmatic.

    In fact I think that could be a motto for the next few years of Labour in opposition, as a way to regain public trust. There’s been calls for honesty about Labour’s role in the public debt. I wouldn’t frame it quite no narrowly. I’ve not seen anyone really critiquing those 13 years, what worked, what didn’t – and how Labour might be a more effective government next time round.

    Never has so much data been available on various outputs of public services. So there’s lots of raw material to be analysed to see what worked, what didn’t, and how it matched up to the promises and electoral rhetoric. In some cases the lessons were learnt whilst in power, and the necessary U-turns made – like foundation schools/academies, and Darling’s attempts to reduce the complexity of Brown’s tax system, which may have been well-intended but just didn’t really achieve its aims in the real world. Sure Start sounds wonderful in principle, but in practice it benefited the middle classes most and it never really achieved its aims. So do you go for pragmatism or dogmatism – and in a world of shrinking budgets, can we afford to do anything except ditch the things that don’t really work, and do more of the things that give most bang for the buck?

  32. Lisa Ansell says:

    I dont like to say I told you so, but this could have been written last week! hahahahaha

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