Archive for August, 2013

The foolishness of “fairness”

19/08/2013, 07:28:08 PM

by Sam Fowles

Iain Duncan Smith has said he won’t apologise for trying to make our welfare state “fairer”. But “fairness” is both an impossible and irresponsible goal in public policy.

The “silly season” is upon us and, unlike Labour (who appear to have collectively gone on holiday to another dimension, so deafening has been their media silence) Ian Duncan Smith has decided to use it to sell (or resell) his welfare cap. Unfortunately, while – in keeping with the season – the policy itself is silly in the extreme, its effects will be terrifyingly serious.

But the welfare cap is merely symptomatic of a wider misconception, one which is endemic in both public policy and public discourse: that public policy can or should ever be “fair”. “Fairness” is an unachievable goal and aiming at it only leads to bad policy making. It encourages a skewed view of the role of government and the function of the individual in society. A government which aspires to make “fair” policy will always be reduced to distributing different shades of unfairness. A better conceptual framework for public policy is based, not on fairness but responsibility. Government should be a facilitator, allowing citizens to discharge their intrinsic responsibility to society.

The welfare cap offers an excellent illustration of the contradiction inherent in the idea of public policy “fairness”. Duncan Smith claims that he is eliminating the unfairness that some people on benefits have a higher income than the average working family. The power of this argument lies in its truth. If one is in the position of a lower middle class working man (Mr A) then it is not fair that you must pay taxes so that some people can live, without working themselves, on a larger income than your own family.

However if one takes a different perspective, for example, a child (Child B) in a large family whose father (the sole earner) has just become a victim of the civil service or army job cuts then it is unfair that your quality of life should plummet dramatically (perhaps just as you are taking A-levels, thus jeopardising your university place) because of this government’s attempts to impose the one ideology they can remember from their Oxford politics lectures. The total income of a family (regardless of the number of children or any special needs they may have) will be limited to £500 per week which will include, among others, carers allowance, child benefit and severe disablement allowance. The cap is patently unfair on those, such as the severely disabled, who require a larger income to maintain a basic quality of life.

When considered on this micro level, public policy will always be unfair on someone. The public debate is often distorted by a focus on the outlying data; the super rich or willfully unemployed. But this often distracts from the real impacts of policy on the majority of people which means we rarely get to see the big picture. When the public debate about welfare focuses on Mick Philpott it presents the misleading idea that the welfare cap is simply a matter of preventing abuse of the system. Actually it’s a matter of the government distributing unfairness.


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Letter from Wales: Here come “Carwyn’s Carriers,” the new Welsh budget airline!

16/08/2013, 11:00:05 AM

by Julian Ruck

It seems that Carwyn Jones now fancies himself as a latter day Biggles, without the goggles.

Allow me to give you yet another classic example of Welsh Labour’s fantasy economics.

On the 27th March 2013, the Welsh Government announced it had purchased Cardiff International Airport Ltd from TBI Ltd as a going concern for £52,000,000, claiming that technically, this was not a “nationalisation” as TBI was a “willing seller” and not being compelled to flog the asset – a bit of Carwyn’s legal training here if you ask me, semantic gymnastics at its best.

First minister Carwyn further announced,” The airport will not be operated by the Welsh government. It will be managed at arm’s length from government on a commercial basis and over time, I expect to see a return to the public purse on the investment.”

The  £34,311,000 valuation in 2010 (calculated as shareholders funds minus intangible assets) – the accounts of Cardiff international airport  filed with Companies House in 2011, showed  a £319,000 loss – seemed to have passed Carwyn by, he was probably too busy with his tailor trying to work out what colour robes to wear at his next druidical extravaganza.

For the record, the chief executive of Cardiff’s main rival, Bristol airport, one Robert Sinclair, observed that the £52,000,000 paid was “well above market value when compared to recent transactions involving UK airports – it gives us concern that ongoing  government involvement and support is highly likely.”


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Labour must expose the Tory wealth trap

14/08/2013, 11:05:13 AM

by Dan McCurry

The Tory wealth trap is making the rich richer, while the rest of the population either stands still or gets poorer. There is no trickle down effect caused by the squeezing the real economy with ill-timed austerity, while flooding the financial markets with cheap money, QE. All this achieves is to boost asset wealth while eroding wages, through pay freezes and inflation.

This wealth trap is caused by the desire of the Tories is to preserve their own wealth, but is exacerbated by the failure of George Osborne’s original economic policy, of expansionary austerity, whereby companies would be inspired by the cuts to invest. When that didn’t happen and the economy froze for three long years, he resorted to creating a debt bubble through subsidised mortgages.

The Tory policies are about to get worse. The current mortgage subsidy is £3.5bn. But this was only to buy new builds, which is excusable if it helps create shovel-ready jobs. However, the £3.5bn is about to be expanded to £12bn for all mortgages, just for the year running up to the general election. There couldn’t be a more blatant bribe than pumping up house prices in the run up to an election, without a care for the damage this will do to the economy in the medium and long run.

The most cynical aspect is that the pumping up of debt is all done “off-balance sheet”. George Osborne used to accuse Labour of not regulating the banks, who did off-balance sheet accounting, so who is regulating George Osborne, when he does exactly the same as a cover for his failed policies? The total amount of mortgage guarantees should be added to deficit, not recorded off-balance sheet, as this is the amount we are liable to if they go wrong.

It has always been Labour’s policy to invest in the real economy, the place where people have jobs and businesses. The original QE program was limited to creating liquidity in finance, oiling the wheels following the banking crisis. The Tories have transformed it into a massive hand out for the rich, at the expense of the rest of the economy.


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A tale of two very different Guardian interviews: Darling and Burnham

13/08/2013, 10:54:24 AM

by Jonathan Todd

Decca Aitkenhead reported this weekend on Andy Burnham telling her that Labour must shout louder or risk election defeat. Some twitter reaction suggests that this would help Labour on the doorstep. As with Chris Bryant’s Monday morning Today appearance, we might wonder, however, whether it is content more than volume that is causing Labour to fail the Daz doorstep challenge.

Almost exactly five years ago, Aitkenhead interviewed Alistair Darling. Maybe there is something about the summer heat that causes Labour politicians to unbutton themselves around her. “Now Alistair,” Aitkenhead records his political advisor imploring when they sat down for the interview, “tell her everything. Make sure you tell her everything.”

This instruction implies, unsurprisingly, prior calculation. And for all the conviction that Burnham was eager to display to Aitkenhead – for the NHS and for comprehensive schools, in particular – we should probably also assume, as is the way of serious politics, calculation on the part of Burnham. We might, therefore, wonder what the calculations of Burnham and Darling were intended to accomplish.

“No one had any idea,” Darling replied when asked whether anyone had anticipated the scale of the financial crisis that was still unfolding at the time of his interview. He warned that the economic climate of 2008 was “arguably the worst … in 60 years. And I think it’s going to be more profound and long-lasting than people thought.”

This remains the weakest economy on record and, as Mark Carney noted last week in his first press conference in charge of the Bank of England, those records go back more than one hundred years.

This speaks amply of Darling’s prescience. We might wonder whether so many would now blame Labour for the state of the economy if we’d done a better job in 2008 of getting across what Darling’s interview sought to communicate: we’re being hit by a unprecedented, global shock, which we must travel a long, hard road to recover from.

Darling was doing what Labour does at our best: being honest with the country about the scale of the challenges that confront us and providing leadership to meet them. He was, however, rewarded with “the forces of hell” from Gordon Brown’s operation next door. Presumably, they either didn’t accept that things were as bleak as Darling contended (but Carney’s assessment bears out Darling’s judgment) or reasoned that to acknowledge as much would reflect badly on Labour (but while reality can’t be denied, as Bryant discovered, it can be explained, and better in terms of the inefficiencies of global capitalism than the Labour government).


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Union backed change to Labour rules set to wipe out party groups like Labour Women’s Network

12/08/2013, 07:29:58 AM

by Atul Hatwal

It started as an attempt by sections of the union movement to target Progress. But Uncut understands that a rule change, submitted by ASLEF and initially intended to outlaw Progress, has been drafted so broadly that it would in fact wipe out a range of Labour party groups.

These include Labour Women’s Network, all of the Labour Friends groups (such as Labour Friends of Israel and Labour Friends of India) and even TULO – the trade union and Labour party liaison organisation.

Under the terms of the amendment, all of these organisations would have to transfer half of donations received, above the first £25,000 per annum, to the central party, crippling their ability to operate. The amendment states,

“Delete rule 5.B and insert:

B. Political organisations not affiliated or associated under a national agreement with the party, but whom engage in internal activity, shall be required to:

(i) Notify the national party of all legally reportable donations received.

(ii) Transfer 50% of all donations received beyond the first £25,000 per annum to the national Labour Party.

C. Incorporated organisations that engage in internal activity shall be required to provide upon request all legal, constitutional, and financial documentation to the National Executive Committee to ensure that they meet acceptable standards of democracy, governance and transparency.  These organisations are expected to abide by the authority of the NEC in such matters.

D. The NEC shall be responsible for the interpretation, implementation, and enforcement of these rules.”

Labour party officials have confirmed that this drafting has an extremely broad application. On this basis, if the rule change were passed, thousands of pounds would be slashed from groups, as funds would be appropriated by the national party.

This would have a major impact on the operation of the Labour party.


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Labour history uncut: “They didn’t tell us we could do that”

09/08/2013, 06:14:56 PM

by Pete Goddard and Atul Hatwal

“We are like marooned sailors on a dreary island”

Not a Morrissey lyric, but the upbeat analysis of Ramsay Macdonald, leader of the new national government, as he pondered the position of the small group of Labour ministers who had stood with him.

They had reason to feel lonely. Macdonald was still prime minister, but when Parliament returned, his government benches would be dominated by Tories and Liberals. Across the floor of the house, former Labour friends and colleagues would glare at him in angry opposition.

Meanwhile, over at Transport House, headquarters of the Labour party, the Transport Union (T&G) and the TUC, the mood was punchy. Ernest Bevin of the T&G declared, “this is like the general strike, I’m prepared to put everything in.” Although if it was like the general strike, he’d then take everything out again after a week and experience total defeat.

On the 27th August, two days after the fall of the Labour government, the party issued a manifesto. Something that clarified Labour’s position on the big issues.

It said, “We oppose the cuts.”

It then said, “Yes, the same cuts we were actually proposing two weeks ago. What? What? Shut up.”

Montagu Norman, governor of the Bank Of England – never trust a man whose names are the wrong way round

On the 28th, the parliamentary party was due to meet to ratify the manifesto and elect a new leader.

As a meeting of the PLP, invites went to all Labour MPs. In a moment of supreme administrative awkwardness, this included Macdonald and the rest of the splitters

It was a pivotal moment.


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Letter from Wales: Potty Plaid rewrite the rules of marketing

09/08/2013, 11:29:41 AM

by Julian Ruck

To those of a more shall I say rounded, political persuasion, I appreciate that what goes on in Wales may sometimes appear to be delightfully farcical, if not plain dotty and  believe me, the vast majority of Welsh folk would probably agree with you.

A typical example of Taffy complicity in keen but intuitive “Wales forever” slippery slopes, occurred last week.

The headline hitting the Welsh press went as follows: “Tourist video voiceover Is ‘too Welsh’ for English.”

Seriously, and we’re not talking here about the Welsh language.

Apparently, the story goes, Carmarthenshire county council’s marketing and tourism department (remember, that Carmarthenshire is a hot-bed of Plaid Cymru nationalism, it swung the “Yes” vote to devolution by a margin of .6% in a miserable turnout of 35.4% back in the 1997 referendum)  had commissioned a video clip to help Welsh accommodation providers pull in English customers.

A young boy was employed to do the sales pitch, there was just one problem – no-one could fight their way through his worthy Welsh accent! It was concluded by the powers that be– and after some market research in Sheffield, I’m not kidding – that the target market in England would have one hell of a job understanding what the young fellow was going on about and like I say, he wasn’t even speaking in Welsh!

It gets better.

A spokeswoman for the council said, “the voiceover was changed as the young boy had lost his two front teeth just prior to filming, which made him more difficult to understand.”


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Does Labour even have an opinion on monetary policy?

08/08/2013, 09:22:41 AM

by Jonathan Todd

This is a rare thing: some thoughts from a Labour perspective on the politics of monetary policy. Maybe it derives from reverence for the last government’s decision to make the Bank of England independent. Perhaps it comes from a slowness to appreciate how the George and Mervyn show has so smoothly transitioned to the George and Mark show. In any case, we do not hear enough from Labour on monetary policy.

Ed Miliband followed Stella Creasy is stressing the importance of having females on banknotes. While the symbolism of this is significant, it is only symbolism. As Carney was being pictured with Creasy and other campaigners, in the manner, according to Dan Hodges, of “three schoolgirls who have just won a Blue Peter competition to design a new bank note”, he was putting the finishing touches to an intervention of more than symbolic consequence.

That this heralded the age of the perpetual never-never – otherwise known as forward guidance or cheap money till the other side of the election – is also predictable. It has not come from the ether. It is what Carney did in Canada. Like all the most profitable, international consultants, he’s selling the same recommendations to a new client. As a variation on the framework adopted by the Federal Reserve at the end of last year, it is also of a piece with an emerging monetary consensus.

All of which sounds very elite and removed from the shop floor. Yet what could be more shop floor than worrying about how many people are on it? The rate of employment, in other words. By targeting the unemployment rate, Carney has created something akin to “the bank for the workers”, which I argued for at a Pragmatic Radicalism event at the start of this year.

All I was really doing at this event was cribbing the Fed’s idea. But, for some reason, there was something about targeting the unemployment rate that seemed apt for our party. The clue is in the name, as someone once said.

If the Fed is targeting the unemployment rate, wouldn’t you think both that this might be something the Labour party can call for and an idea whose time has come?


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As the party looks forward to conference season, there’s unfinished business over Falkirk

07/08/2013, 08:20:23 PM

by Rob Marchant

There is a distant rumbling going on within the labour movement, with parliament in recess and the media in silly season, which will surely last until conference. It may, in fact, last until next Spring’s special conference. Or it may even last until the next general election.

Perhaps thanks to the timely intervention of the summer holidays, the media circus seems to have moved on from the Falkirk selection debacle.

But not so fast. This one will continue to rumble, and the reason is simple: we have ended the current chapter with two poles of the Labour party power structure effectively giving diametrically opposing versions of events, and both cannot be right.

This uneasy truce is neither sustainable in the long-term – truth will invariably out – nor making for anything like a trusting relationship in the near future.

To recap: Miliband has supported his party organisation, who seem to be telling him that Unite made moves to fix the selection. Len McCluskey, on the other hand, denies any wrongdoing whatsoever on the part of his union. He, along with various other party figures, is asking for the report of the party’s internal investigation to be published.

This is in spite of the fact that some clear facts are known: that people were signed up as party members without their knowledge and that the clear beneficiary was Karie Murphy, described by Channel 4 as a “close friend” of McCluskey and office manager to Tom Watson MP, his friend and former flatmate. The chair of Unite in Scotland, Stephen Deans, also happened to be, very handily, the chair of Falkirk West constituency Labour party.

We may never know the full contents of that report; if it has not been published or leaked by now, it seems pretty likely that it never will be. It is also completely understandable why: it would very likely cause a massive and unwanted row between the two sides.

Miliband is stuck. One cannot help speculating that McCluskey is perhaps only calling for it to be published out of pure brinkmanship, because he knows that Miliband will not do it. But whatever the answer, the report itself is now key.

In the midst of all of this, BBC Radio 4 made a rather intriguing recent programme called “Fight over Falkirk”. Intriguing because its “storm in a teacup” conclusion seemed to go directly against what insiders have been saying for weeks.

The three key BBC claims were: one, that at least some of irregularities were not down to recruitment through Unite’s Union Join scheme anyway; two, that the NEC didn’t see the full report, only a damning executive summary; and three, that the body of the report didn’t seem to support that summary.


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C’mon Ed, fight

05/08/2013, 08:43:06 AM

by Dan McCurry

In case the reader needs reassurance that Osborne is a failed chancellor, you only have to look at what the financial services people are saying. A couple of weeks ago, Citywire ran with this headline, “Hooray for the (debt-fuelled) UK recovery!”

How about this funny analysis from the stockbroker Hargreaves Lansdowne:

“Former US president Abraham Lincoln has been credited with saying the problem with politics is you can never please all of the people all of the time. In a more contemporary setting and with the UK yet to regain ground lost during the 2008-09 recession chancellor of the exchequer George Osborne has struggled to please anyone at any time since stepping into 11 Downing street three years ago.”

However, the one thing that the Tories do massively better than Labour is this: When they are down, they come out fighting. Even when the world took note that Keynes had won and austerity lost, they carried on fighting.  The question is, what does Labour do? Has Ed Miliband and Ed balls given up? Do we only have an opposition on a Wednesday lunchtime?

While the Conservative party refuses to publish their membership numbers, due to their decline, our party is fizzing with excitement. This whole party wants to take the fight to the Tories. The only thing that’s stopping us is that we need the leadership to show the way.

“I see you stand like greyhounds in the slips,
Straining upon the start. The game’s afoot:
Follow your spirit, and upon this charge
Cry ‘God for Harry, England, and Saint George!”

Forget about trade union reform. That stuff is history. The unions have shown contrition over that Scottish selection thing, and it’s over. What looked like a Clause 4 moment, has become navel gazing. Concentrate on what’s happening with the Tories. It’s interesting and dangerous, for them and us. Look.

The Tories want to turn defenders into attackers. Unlike us, they don’t have a vision beyond making lots of cuts, and the cuts agenda will soon be over. That’s why they keep making tiny announcements about parking on the drive or stop and search. They are trying to create the illusion of being busy, and we should be ridiculing them.


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