Grassroots « Labour Uncut

Labour must hope that Cameron and Osborne do not have Merkel’s political nous

03/12/2013, 07:00:45 AM

by Callum Anderson

On Thursday, George Osborne will give his penultimate Autumn Statement before the 2015 general election. It is likely to be a highly political Autumn Statement. But whilst most of its content has yet to be leaked (at least at the time of writing), save for the likely rolling back of green levies – an attempt by the coalition to tackle the “cost of living” crisis – there is still scope for the prime minister and the chancellor to create huge problems for Ed Miliband and Ed Balls, if they can demonstrate that they are beginning to understand the economic concerns of voters, and shift to the centre ground.

Hopi Sen has already entertainingly set out how Osborne and the Conservatives could steal a march on the two Eds on the ‘cost of living crisis’. Increasing the minimum wage above inflation each year for the next five years, subject to the advice of the Low Pay Commission; raising the tax free personal allowance by £500 each year, and thus lifting millions of people from the burden of tax; reintroducing the 10p tax rate temporarily, benefitting all full-time workers on the minimum wage; and announcing an immediate cut in domestic energy bills, funded by a tax on overseas buyers of expensive property, are just a few measures that would leave the Labour hierarchy scratching their heads as to how to respond.

Indeed, such a strategy has been expertly executed by Angela Merkel, the German Chancellor, since she was elected in 2005. Her Christian Union party (CDU) – Germany’s conservative party – has been the lead partner in the previous two coalition governments: first with the Social Democrats (SPD) between 2005 and 2009, and second with the Liberals (FPD) between 2009 and 2013, and is set to enter another Coalition with the SPD within the next month.

Ms Merkel has been particularly adept in not only keeping the CDU resolutely on the centre ground of German politics, but also shifting the balance of responsibility disproportionately to her junior coalition partners. For instance, during her first term, Ms Merkel astutely took advantage of the unwillingness of SPD members to enter a coalition government with her own CDU to, in the first instance, solidify the “Hartz” labour market and welfare reforms of her SPD predecessor, Gerhard Schroeder, as well as ensure that both parties shouldered the responsibility for the substantial austerity measures taken in response to the 2007-08 financial crisis.

Likewise in her second term, Ms Merkel has been, perhaps too successful, in allowing the FDP to shoulder much of the blame in the slow response to the Euro crisis of the last few years. I say too successful because the FDP, who have traditionally had more in common with the CDU than any other party in the German parliament, crashed at the federal elections in September to such an extent that they have no seats for the first time since 1945.

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Sunday review on Thursday: The not-the-London-Labour-mayor hustings

28/11/2013, 01:14:49 PM

by David Butler

When is a husting not a husting? When it is a Progress Campaign for a Labour Majority event on winning in London. That all the invited panellists, including the curiously absent Sadiq Khan, are considered potential nominees for Mayor of London was just pure coincidence.

The event was less a tale of two Londons (or One London Labour or whatever today’s vogue is) but of two de Blasios. David Lammy and Diane Abbott sought this mantle both through reference to New York’s Mayor-elect and through the language and policies on offer. Lammy provide a toned down version of de Blasio’s message, whilst Abbott raised the rhetorical and policy stakes, offering a clear left-populist platform. This, and her potential support from the remnants of Ken’s old machine, makes her a serious contender within a party and electorate to the left of the national norm. Even Andrew Adonis and Tessa Jowell, neither of whom particularly fit the de Blasio mould, referenced “two cities” and “One London” respectively.

However, in many ways, it felt like a London housing policy seminar that happened to have a different title. Both Abbott and Lammy announced support rent regulation, albeit with Lammy obfuscating by calling for “fair rents”. Lammy subsequently redeemed himself with an eminently sensible proposal to build housing on the Green Belt. Jowell warned about the impact of the mansion tax on “asset rich but cash poor” families, a rather surprising move in the circumstances; worrying about those who do well out Britain’s over-inflated housing market should not be high up her priority list. As expected, Adonis had the more innovative ideas proposing to explore shared equity schemes and a “housing bank” to take a stake in future developments in order to prevent land banking.

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Chile not Venezuela shows the way for the left in Latin America

20/11/2013, 05:21:12 PM

by David Butler

It is a rather remarkable sign of a country’s recovery that the daughter of a victim of the former military regime and the daughter of a member of the former military regime can face off against each other in a peace, fair and free election.

So it was in Chile on Sunday. As the votes were came in, the centre-left candidate for president, former president Michele Bachelet was brought to be brink of victory with 47% of the vote. She will face Evelyn Matthei, who got 25%, in the second round but this is little more than a formality at this stage. Her Nueva Mayoria (New Majority) coalition have won 65 seats in the lower house (with 95% of the vote counted) on the brink of the four-sevenths majority need to enact major policy reforms. This electoral victory and the progress that occurred under twenty years of centre-left rule by Concertacion are worth celebrating.

Chile’s GDP per capita was both higher and grew quicker than the Latin American average for the most of the period of between 1990 and 2010. Obviously not all responsibility belongs to the centre-left government, but they proved themselves good stewards of the economy and invested in areas neglected by the Pinochet dictatorship. Chile was not badly affected the wave of recessions sweeping the world in the late 2000s, thanks to measures taken by Ms Bachelet.

The unemployment rate under Concertacion varied between 6 and 9% for most of the period. Whilst the recession saw a spike up to 11%, the rate has dropped rapidly to its current level of 6%. Inflation has generally remained within the central bank’s target range of 2-4%, ensuring that people enjoy price stability. Yet, there are challenges that remain: the weakness of physical infrastructure and the need for economic diversification away from the copper exports as a fuel of growth are headaches that need to be soothed in the medium-term.

As noted above, the Chilean economy is relatively dependent upon copper, which make up three-quarter of their exports. A sharp fall in the price in 2008 caused this sector to shrink in values. However, the centre-left government had invested in assets using revenues from the cooper boom in the early 2000s and were able to moderate the impact of the downturn. A truly counter-cycle fiscal policy almost unique amongst commodity exporting countries, according professor Jeffrey Frankel of Harvard university. This is has ensure that Chile’s public debt remains at a manageable 9.5% of GDP. Bachelet herself introduced a fiscal responsibility bill in 2006 to further enshrine principles on which this prudence was based. Despite this fiscal conservatism, the governments of Concertacion were able to raise spending on social security and education.

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Britain needs to have a grown-up debate on immigration

19/11/2013, 06:50:50 PM

by Callum Anderson

Marks & Spencer. Selfridges. EasyJet. Tesco. Know what these iconic British brands have in common? That’s right, they were all established by immigrants. Immigration has always been one of those issues that has never quite completely left the consciousness of British politics. However, over the last ten years, the issue of immigration has become more nuanced: unfortunately the standard of debate has not.

One Nation Labour must begin to not only tackle the right of the Conservative party and the reactionary media (I think you know who I mean), but also the legitimate concerns of citizens, some of who have become concerned with the scale of immigration. There are two vitally important elements that we, as a country, must consider: the first is to decouple race from the immigration debate, and secondly, that economic and social considerations must both be taken into account when devising policy.

But first, let’s take a look at the facts. Britain has undoubtedly benefited from immigration. Almost all Brits, regardless of background, glowed with pride at the country’s diversity displayed during the opening ceremony at the London Olympics. Whether it be through literature, cuisine, music or sport, Britain continues to lead the way in welcoming, and assimilating (although sometimes slowly) new immigrants. And the evidence shows that immigrants more than pay their way.

Recent research by the Centre for Research and Analysis of Migration (CReAM) has showed that between 2001 and 2011, European Economic Area (EEA) immigrants made a net fiscal contribution of £22.1 billion to the UK public finances, whilst non-EEA immigrants made a net contribution of £2.9 billion. In other words, immigrants contributed far more in taxes and economic output than they took back in benefits. This is to be compared to us natives, who cost £624.1 billion during the same period.

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If copying the German model is as the answer, Labour doesn’t understand the question

11/11/2013, 11:09:16 AM

by David Butler

Jonathan Wilson’s masterpiece on football tactics, Inverting The Pyramid, sets out how success on the pitch regularly came through great managers innovating with formations and strategies. But this success was often fleeting; Alf Ramsey’s “wingless wonders” quickly reached a nadir in failing to qualify for the 1974 World Cup. Other teams absorbed the successful strategies and modified them, sometimes completely overhauling them. This drove change in the game as teams sought new marginal advantages. Those who sought merely to directly copy and not innovate themselves were left trailing in the dust. This is the danger that deifying a single system brings, from football to economics, and why we should go beyond Germany in thinking about a new capitalism.

Germany acts as a lodestar for those in the vanguard of Milibandism. This is not a new phenomenon on the left; in a speech in 1980, Denis Healey praised the social market as a middle path between Bennism and free market right. For Will Hutton in the mid 1990s, it offered a post-Thatcherite path for Britain. Now, once again, Germany is supposed to point the way towards developing a “supply side of the left” and the transformation of Britain into a European-style social democracy.

Importing individual economic institutions is difficult enough, let alone copying large sets of institutions from a single economic model. In labour-management relations, for example, there are sizeable differences between our island home and the continent. Continental unions are traditionally less adversarial towards management and this enables more consensual institutions to flourish.

The historic conservatism of the labour movement towards their internal structures makes the prospect of Continental-style unionism a dim one. This is not a land without hope; USDAW and Community have been successful in gaining localised victories and engaging (often younger) new members.

Unite have attempted engagement through community organising and launching a credit union. Business too would have to modify its approach towards labour relations. One only needs to look at the behaviour of Ineos and Unite at Grangemouth to see that there is a long path to walk before Britain will achieve more cooperative labour-management relations.

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Is the cost of living distracting Labour?

08/11/2013, 03:46:31 PM

by Renie Anjeh

Ed Miliband has finally set the political scene alight and he should be praised for it. It has been several weeks since Miliband announced the energy price freeze policy in his conference’s speech, putting an end to the party’s reticence about future policies.

In spite of attacks from the Tory press (and a recalcitrant New Labour grandee), the policy didn’t look particularly socialist but it became popular. I am not sure whether an energy price freeze will actually work but the public love it!

80% of the public back the policy leaving the Tories on the backfoot. Honourable one nation Conservatives, such as Sir John Major and Robert Halfon, have sought to address their party’s problem by calling for a windfall tax on the privatised utilities to fund measures to reduce utility bills (as suggested by Labour’s Manifesto Uncut). Fortunately for the Labour party, their wise advice has fallen on deaf ears and a coalition split has emerged over green taxes.

However, despite of Ed Miliband’s laudable attempt to shift the debate onto cost of living, the party is still not where it needs to be if it wants to be certain of a majority in 2015.

Labour’s lead is beginning to shrink with just eighteen months to go until the general election. One poll saw our poll lead over the Tories cut from 11% to 6%, even though the party has announced its new popular policy.

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Britain needs to be at the heart of a reformed European Union

07/11/2013, 05:10:55 PM

by Callum Anderson

“Geography has made us neighbours. History has made us friends. Economics has made us partners, and necessity has made us allies. Those whom God has so joined together, let no man put asunder.”

That was president Kennedy addressing the Canadian parliament in 1961. However, to me, those words also hold particular resonance with Britain’s relationship with the European Union. As is well known, the prime minister has already made a commitment to giving the British people a referendum on British membership of the EU in 2017. The argument is set to be intense: I’d like to set out why Britain must retain its EU membership.

If Britain wants to be prosperous in the 21st century, it must engage not only with countries such as China, India and Brazil, but also with EU members. But what has the EU achieved during Britain’s membership? It has continued to maintain the peace, helped to bring down the Berlin wall and the iron curtain, and welcomed new states from across Central and Eastern Europe into the EU family. Moreover, hundreds of thousands of Britain’s take advantage of our EU membership every year.

According to Eurostat, the EU’s independent statistics office, 711,151 UK citizens lived in other EU countries in 2011, whilst the British Council has stated that 9,095 UK students participated in the ERASMUS programme, the exchange programme allowing young Britons to study in other EU countries not only free of tuition, but with the help of a grant from the EU. Moreover, without the EU, British workers wouldn’t have a range of protections that they take for granted including, but not limited to: a maximum number of working hours, guaranteed breaks and protection against being forced to work long hours.

Britain and the EU are, like it or not, bound together economically. Now, there are many who say: “If only Britain left the EU, it could simply join the European Free Trade Area, thus maintaining the current economic ties, whilst freeing itself to seek free trade deals with other countries – most notably the Commonwealth countries, the United States and China.” Sounds good, right? Well, if anything ever sounded too good to be true, then this is it.

First, it is important to note that a little over half of the UK’s trade is done with the EU; it just makes no sense to leave an economic trading bloc which we are so dependent on. Were we to just leave (almost certainly in controversial circumstances), than whilst it is unlikely that we would be economically cut off, it would be too dangerous to assume that countries such as France and Germany would allow British businesses to enjoy the same advantages of market access, as it does now.

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Small can be beautiful when it comes to the state

05/09/2013, 01:44:19 PM

by Paul Connell

It’s not meant to be easy being a lefty. If it were, everyone would be doing it.

Being so at the moment is as testing of stamina as ever. In the face of a global financial crisis that has demonstrated the truth of just about every criticism of capitalism ever made, the alternatives we are offering, or being offered, seem scant.

Ed M and every other European mainstream socialist party leader must be casting nervous glances at France where electoral victory has soured so quickly that le pauvre Hollande has managed to pass from glory to ignominy without passing through indifference. He is paying the price of disappointed expectations, curious as he didn’t actually raise any except not being Sarkozy, on which he has done quite well. There’s that and there is the Mori-Ipsos poll of generation Y which suggests a strong rejection of welfarism in the shape of redistributive tax and benefit policies by the electorate of the future.

Let us leave aside for the moment the question of the contribution of public spending to current economic woes (answer – not much). Let’s just acknowledge that there isn’t going to be the money for a large scale regeneration of state-run services anytime soon and people aren’t going to vote for a party proposing it. Back to the future won’t work. Labour has to plan for government without a commitment to expanding the state.

Of this necessity let us construct a virtue. Where, after all, is it written that socialism means a big state, generous benefits or “something for nothing?” Lots of places, in fact, but let’s leave that as a rhetorical question.

Having spent the best part of the last 30 years working in the UK public sector at local government, civil service and voluntary sector levels, I experienced periods of austerity and spending booms. Clearly, periods of plenty were more enjoyable than the thin years but it wasn’t as simple as big spending= good, low spending = bad.

When Labour got back in in ‘97 and after the brief reign of Queen Prudence, we had an explosion of czars, rollouts and initiatives, followed by a breathless rush to delivery. Delivery of what? Not results but evidence of results. Local Authority departments became machines for recording performance indicators.

Take one example, school exclusion. It had been well established that children excluded from mainstream schooling were at higher risk of low attainment, early parenthood, criminality and substance misuse. Evidence based policy dictated that kids should not be excluded. So they weren’t. Some great work went into keeping difficult kids in school and supporting teachers to keep them there. Some, inevitably, were just too difficult. So, many no longer went to school but, with a bit of imagination, could be found another designation for their status and the excluded box didn’t have to be ticked. Success!

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Labour’s compulsory jobs guarantee offers hope for the long term unemployed

28/08/2013, 11:44:33 AM

by John Stephenson

Prior to 2010, Tory commentators often protested in harmony with tabloid headlines denouncing New Labour’s welfare policies as weak. In retrospect it is often acknowledged that the party’s work capability assessment was poorly designed and allowed people to take advantage of state hand-outs. Individuals in genuine need of incapacity benefits were often shunned on to job seekers allowance, leading to a toilsome cycle of temporary work while the support they needed was overlooked.

However, on the back of the coalition’s failures over unemployment and in the midst of pressure to reveal further policy proposals, Labour’s compulsory jobs guarantee offers a real alternative to the Tory-led government’s strategy to get people back to work.

Under the scheme, Labour would guarantee every adult who has been unemployed for a period of 24 months or more a work placement, with an aim to eventually reduce this time period over the long-run. Such an approach is regarded by many economists as being superior to a standard liberal economy, so long as political considerations – such as the wider ramifications for the disabled and the ratios between public and private sector employment – are carefully controlled.

While the policy would undoubtedly be costly – coming at a fee of around £1 billion for the taxpayer – there is plenty of room for manoeuvre within the current chancellor’s budget. For instance, the party are keen to stress that such funds could be acquired by reversing the coalition’s decision to stop tax relief on top earners’ pension contributions being limited to 20%, a move which is said would save the government around £2 billion.

Senior figures within Labour, such as Ed Balls and Liam Byrne appreciate that work should pay more than benefits as a matter of principal. However, the proposals indicate that benefits would be capped according to geographical location, taking into account the higher living costs associated with areas such as London and Manchester.

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NHS: demotivating workers risks lives

30/07/2013, 02:05:52 PM

by Sarah Rabbitts

On Thursday 11 July, the axe of Jeremy Hunt, the Tory Health Secretary, fell on yet another A&E. In an impromptu announcement to the House, Hunt confirmed cuts to Trafford General Hospital which even took Kate Green MP by surprise. The Independent Reconfiguration Panel (IRP), Hunt explained, had finally chosen to downgrade Trafford A&E services to an urgent care centre that will be closed from midnight to 8am everyday.

Labour supporters will always be protective of the NHS. Labour created it in 1946, and it’s one of the most formidable successes of a British Labour government. It’s an even greater success if you look at the backlash Obama faced enforcing public healthcare in the US – despite being popular in his first term.

However, this is not just about protecting something that Labour established. The issue is that reducing the wrong healthcare services puts people’s lives at risk, and no one in Britain really wants to live in a country in which we invoice the under-privileged £150,000 for cancer treatment because they can’t afford healthcare insurance. That’s the reality if we don’t protect the NHS.

Under this government, Lambeth’s funding has been cut by 45% in total. This is damaging local authority provided services, like social care and leisure – the services which help the council keep people healthy and out of hospital. In addition, the government has scrapped minimum nutrition standards in schools leading many “free” schools and academies to feed their pupils junk worsening a health crisis that’s already putting a burden on our NHS.

Lambeth’s NHS specific budget cuts have inevitably lead to longer waits, fewer nurses and midwives. In addition, Hunt approved the closure of Lewisham Hospital’s A&E, despite a passionate local campaign. This is now putting massive pressure on King’s College Hospital in Lambeth, who are accepting more patients.

I have advised a number of companies on employee engagement during periods of organisational change. I’m confident that taking away annual salary increases and intensive training will de-motivate workers and will probably jeopardise employee performance in the NHS, and inevitably patient care. Recent reports, for instance, that Healthcare Assistants are being trained with DVD tutorials are also worrying, especially if it is right that these workers will be expected to take on greater responsibilities.

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