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Why Labour should fear the blowback from its war on business

15/04/2014, 11:22:40 AM

by Samuel Dale

During his doomed leadership contest David Miliband said Labour could not afford to go into the 2015 general election with no business support.

One year ahead that election and that is exactly what is happening. Labour is at open war with business with signs it is about to step up the offensive rather than build bridges.

The list of proposed interventions into industry is dizzying with almost every major sector targeted.

I’m told Labour is planning a policy blitz on no fewer than eight sectors ahead of party conference later this year. It is part of an ambitious agenda to significantly boost consumer rights and hand power back to consumers and away from huge corporations. 

Ed Miliband positions himself as US President Teddy Roosevelt breaking up monopolies and boosting competition. His modern incarnation has been called many names from pre-distribution to progressive austerity or socialism with no money. In 21st Century Britain let’s see what Miliband is actually proposing in your crucial industries.

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Where now for Labour on pensions?

11/04/2014, 11:12:39 AM

by Samuel Dale

It has been a chastening month for Britain’s pensions industry as regulators and the government have finally cracked the whip on its excesses.

In a series of policy announcements the government has launched a self-proclaimed “full frontal assault” on the industry. Pensions providers have entered the realm of banks, energy firms and politicians with a special place of distain in British hearts.

To tackle the problems, the government has ripped up the existing rules on annuities in the Budget sending insurers’ share prices south. It has imposed a 0.75 per cent cap on pension charges from next April and imposed full transparency of all costs.

And in a further blow to the sector the Financial Conduct Authority is launching a review into close-book pension funds to make sure savers are being treated fairly. Again, this sent insurers’ share prices tumbling.

No one can seriously accuse the government of bowing to vested interests in the pensions industry. They are at open war.

Former chancellor Nigel Lawson tells me the pensions industry is “the most powerful in the land” and he found it difficult to take on so this is no mean feat.

For Labour this creates a major political headache. Shadow pensions minister Gregg McClymont has been one of the most effective opposition ministers. He has a superb command of his brief and has made the political weather on pensions regularly.

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Respect for Tony Benn is right, completely rewriting history is not

10/04/2014, 02:00:16 PM

by Kevin Feeney

When any controversial public figure dies, it is both normal and entirely natural for their followers and those inspired by them to whitewash their image a little in an effort to smooth out their rough edges.

Like most of those within the Labour Party who were rather less enamoured of the legacy of the late Tony Benn than other colleagues, I was entirely prepared to overlook the rather telling gaps in his more sympathetic obituaries. It was fine that they passed over his views on Mao, fine that they ignored his practical impact on Labour’s electability in the 1980s, fine that they left unquestioned his own claims as a tribune of democracy.

These were eulogies in the heat of the moment after a figure who they admired had passed on; the time for full and balanced reflections was later. Equally fine were those seemingly obligatory lists of “Issues where they were right” which we expect with any such figure; Benn certainly many of those, from Mandela to gay rights.

Except after a while, I started noticing something else creeping into that last list in Benn’s friendly obituaries. Owen Jones celebrated him not only for all of the above but also for ‘calling for peace talks when it was controversial to do so’ in Northern Ireland; praise he has reiterated in more than one place. It may be no surprise for Jones to rewrite history in such a manner, but less stridently left-wing voices have done so too; the editor of one prominent Labour website claimed that the presence of Gerry Adams and Martin McGuinness at Benn’s funeral was a ‘reminder of the difference he made’ as though this were a positive thing.

Indeed, “Northern Ireland” has begun inexplicably to seep into several lists of the man’s positive contributions. These claims cannot be allowed to endure unchallenged; nor can they be allowed to become part of that acceptable list of “good things” we all agree Benn stood for.

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Budget 2014 preview: Increasing the personal allowance is the wrong priority for low earners

19/03/2014, 10:00:11 AM

by Simon Bartram

Today we can expect a lot of boasting from Conservatives and Lib Dems about how they have raised the personal allowance, as if that is a faultless defence against any accusation that the poorest are being hit the hardest.

For the 2013/14 tax year, individuals earning less than £100,000 did not pay tax on the first £9,440. This personal allowance is set to rise to £10,000 for 2014/15, saving basic rate tax payers £112 (20% of £560), and Nick Clegg is pushing for the allowance to be raised still further to £10,500 for 2015/16. The extra £500 increase, this is estimated to cost the Treasury £1 billion.

Since personal allowances have rocketed from £6,475 to potentially £10,500, this must surely be one of the most recognisable changes that the coalition has enacted, and it is a one which they ceaselessly flaunt to demonstrate their egalitarian credentials.

Yet this is a very inefficient way of targeting the lowest earners in our society, given that everyone earning up to £100,000 gains from having a personal allowance (above £100,000 your personal allowance decreases gradually to zero), and, of course, households with two earners will prosper more than single occupant households. Some of those households would already be benefiting from the tax breaks for married couples where £1,000 of the personal allowance can be transferred to a spouse.

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Tony Benn and the power of “Utopia”

18/03/2014, 01:39:29 PM

by Glenn Edwards

Last week, the country lost one of its few great conviction politicians. Tony Benn, aged 88, has served as an enduring inspiration for those on the far Left who remain disillusioned with the gradual drift of UK politics towards a neo-liberal consensus. Ever the most ferocious critic of capitalism, his view of Britain as a country surrendering itself with increasing pace to destructive market forces is familiar to most.

Unfortunately I did not have the privilege of personally meeting Benn. But I did once get an opportunity to hear him speak at the Peterhouse Politics Society in Cambridge. I wanted to ask him a question relating to an essay I was writing at the time about Utopianism in political life, and luckily I got my chance. I asked him “What does Utopia mean to you?”, a rather gentle question I thought, considering he’d just taken a bit of an onslaught from several conservative-minded students in the room.

Following on from a very heated discussion about financial incentives, my question was met with unsurprising laughter from all round- but Benn’s answer drew the most inviolable of silences.

He said that “Utopia” is often used as a dirty word to denounce ambitious and courageous thinking in politics. He said that it had become a sort of trump card against all ideas not sufficiently steeped in reality or cynicism towards human behaviour. A catch-all term to “put down progressive forces” of all shapes and colours. But, crucially, he said that it is always Utopian and idealistic thinking that “rallies people against injustice”, paradoxically bringing about the change that was previously thought impossible.

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Bullying, intimidation and walkouts – A review of Young Labour and Labour Students’ conferences

03/03/2014, 05:12:12 PM

by Cameron Beavan-King

The Labour Students conference began the Friday before last with a co-ordinated effort by several clubs, threatening disaffiliation over the issue of One Member One Vote (OMOV) for elections to the Labour Students National Committee.

In the run-up to conference, the clubs had sent a letter protesting the decision by Steering and the National Committee to block three motions asking for a further debate on OMOV at conference. However, as delegates had already voted on this issue at National Council and agreed not to discuss it until after 2015, the three motions were blocked.

This tension continued into the conference with a mass walkout by several clubs over this issue and a poorly worded motion in favour of stopping censorship and inference from National Council. The motion as a whole would have done nothing to progress their aims and was rightly voted down by the remaining delegates after the walkout.

It is important to note that the walkout was bound up in the politics of Labour students – it was led by supporters of Tom Phipps for National Secretary, though Tom did not walk out himself.

To be brutally honest, I cannot see what the walkout or the whole disaffiliation threat will achieve at all, other than dividing us in the crucial run-up to 2015.

I cannot understand what we will achieve as a divided organisation. On the back of our membership cards, it said “Through our common endeavours we achieve more than we achieve alone.”

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Was the “loony left” right?

20/02/2014, 04:46:21 PM

by Eliot Henderson

While researching the Southwark and Lambeth Labour parties of the 1970s and 1980s, I was struck by the importance of that generation of activists’ contribution to British political history. Dismissed as the ‘loony left’ by the media at the time, today the political priorities of those activists are firmly entrenched as mainstream vote winners: equal rights and representation for women, ethnic minorities, young people and the LGBT community. My findings illuminate how much public attitudes have changed in the last thirty years thanks to the interventions of those activists in the 1970s and 1980s, and help to challenge the assumption that the Labour party needs to warmly embrace neo-liberalism and pander to the popular press to win elections.

The new urban left that emerged in Lambeth and Southwark in the 1970s were political graduates of the social movements of the late 1960s and 1970s: CND members, anti-apartheid activists, feminists, Vietnam war protesters and racial equality campaigners. Events in Southwark and Lambeth in the 1980s highlight the beginning of a process that could hold the key to a Labour majority in 2015: the combination of Labour’s traditional politics of class with one of race, gender and sexuality – an old and a new politics of identity – to construct a new, inclusive political base for the party.

In Lambeth, this new urban left coordinated a vibrant local and national opposition to a Conservative cuts agenda under the leadership of the controversial but charismatic council leader, Ted Knight. Policies targeting inequality, poverty, racism and sexism through investment and positive discrimination united the large immigrant communities in the centre of the borough with the predominantly white working-class north, along with some sections of more affluent Norwood and Dulwich to the south. With no support from the Labour party leadership and the intense scrutiny of an antagonistic press to deal with, the rate-capping struggle of the 1980s was a rough and ready affair for the Lambeth left. One council meeting in July 1985 even had to be adjourned for 20 minutes after Conservative councillor “Dicky” Bird put Labour councillor Terry Rich in a headlock. Yet despite the overwhelmingly negative publicity, Lambeth residents nonetheless voted to increase the number of Labour councillors from 32 to 40 in the local elections of 1986, proving that a manifesto based on concepts like social justice, investment in deprived areas and positive action to end discrimination and redress inequality could unite voters in a diverse constituency.

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We need to get real about the cost of ageing

20/02/2014, 10:42:48 AM

by James Beckles

In Britain we face a challenging future with an increasing population and one that is ageing rapidly. Statistics show that one in six of the UK’s population are over 65. Britain’s older people have made momentous strides to make Britain the place it is today with its diversity, modernity and liberal sensibilities. But our public services in health and social care, two areas many older people are dependent on, face a catastrophe of over burden and under-funding if this Tory-led government continue to strangle public spending and investment in health and social care.

We have heard this government’s hollow promises about protecting the NHS, yet their Health and Social Care Act 2012 has begun the process of privatisation and gutting the National Health Service by private firms; who are cherry picking the best parts and providing very little in patient satisfaction and care. Cameron, his Lib-Dem allies included, have shown a blatant disregard for the health and well being of the general public and it’s most vulnerable people.

As a former Care Quality Commission (CQC) compliance inspector I saw first hand how the failures of health and social care can lead to poorer health outcomes for older people, whether it was a late diagnosis for a treatable condition or the lack of regular contact with health professionals. All this was because the professionals in health did not speak to the ones in social care. There were no formal links and this affected older people significantly. There were examples of good care of course but this was few and far between.

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Forget Teddy Roosevelt, LBJ’s public service reforms show Labour the way to do more with less

27/01/2014, 05:24:10 PM

by Rich Durber

Ed Balls’ speech over the weekend announcing that Labour will aim to run a surplus by the end of the next parliament raises significant questions about public service reform. No matter whether you viewed the pledge as necessary political positioning or not, to make it a reality the next Labour government will need to significantly reform the state, without more money to spend.

There has been much talk in Labour circles over the past few days of Theodore Roosevelt. Commentators and activists alike have been debating the merits of ‘trust busting’ since Ed Miliband’s speech on banking reform. While the Roosevelt comparisons are certainly a fitting parallel for Ed’s plans to reform the private sector, it is less clear thus far what the party’s plans are for the public sector.

This has not always been the case. When he launched his campaign to be leader of the Labour party Miliband declared: “we need a new way of thinking about the state…We need to show we are the people who can reform the state to make it more accountable and give power away.” After Ed Balls’ speech it is clear that this strand of thinking will need to be revisited.

In doing so perhaps it is a different American president, Lyndon Johnson rather than Roosevelt, from whom Labour should draw inspiration. As fifty years ago this month he showed how the state can extend opportunity, even while reducing spending.

It was January 1964 when Johnson used his first State of the Union address to declare “unconditional war on poverty in America”. The chief weapons in that war, Johnson said, would be “better schools, better health, better homes, better training, and better job opportunities”. Its aim was “to help each and every American citizen fulfil his basic hopes…for a fair chance to make good”.

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NICs currently penalise 3.4m of the lowest paid workers. This must change.

27/01/2014, 12:51:14 PM

by Joe Anderson

The rise in zero-hour contracts since 2010 is well-documented. The ONS estimates that the percent of people in employment on zero hour contracts has increased from 0.57% in 2010 to 0.84% in 2012. Ed Miliband is therefore right to call for a ban on their exploitative use. What, however, has not been often discussed is how the National Insurance system inflicts extra hardship onto workers on zero-hour and many other flexible contracts.

Unlike income tax, class 1 National Insurance contributions (NICs) are calculated on a weekly—rather than annual—basis. Whilst this may seem like a subtle difference, it has profound effects for those whose earnings vary significantly on a week-by-week or month-by-month basis, such as those on zero-hour contracts.

The class 1 NIC primary threshold in 2013/14 is £149, meaning employees earning over £149 in a given week are liable to make NICs. Yet, a significant number of people earning less than £7,775 per year (the annualised equivalent of the weekly primary threshold) will still be compelled to pay NICs. The reason for this is because if they earn more than £149 in any week (or £646 in any month, if paid monthly), they will be required to pay NIC, regardless of their annual income.

To illustrate the perverse effects of this anomaly, consider our conjectural protagonists, Jack and Jill.

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