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Labour should back a co-operative rebuilding of finance

23/08/2011, 02:46:18 PM

by Peter Jefferys

Behind the noise of this summer’s events – the riots; phone hacking; Gadhafi’s fall – the great economic issues facing Britain have been largely muted. Of course had this not been a summer of scandal, war and looting, the huge losses and gains on the stock market and the dearth of growth worldwide would be much firmer in the public consciousness. People are already feeling this deep crisis through its ramifications: the rising costs of living and terrible jobs market. We are in a highly precarious position, with many comparisons made to the scale of the crisis in 2007/08 and we must pay close attention to the solutions being offered by the Government and our shadow team.

It is equally vital, though, for Labour to look beyond the day-to-day fluctuations of markets and even quarterly growth figures in order to form a vision for the future of the economy. The Shadow Chancellor has offered a sharp critique of the Government’s economic strategy, but Labour must also have a positive alternative for fairer financial services. A vision that would appeal to voters and reduce the risk of future crises – after all, financial services are at the heart of the current problems.

This is much more than simply advocating ‘banker bashing’ – short term measures of retribution on the city of London. We would do well to remember that financial services are integral to our economy and to the lives of citizens, access to credit and banking services are import right across the economy and our society. Rather, we need to think about long-term, sophisticated changes of emphasis in what sort of financial services we support.

Nowhere is this clearer than with the future of Northern Rock. Labour advocated an approach in the 2010 manifesto that would have seen Northern Rock depositors take back ownership within a new ‘Co-operative Building Society’. Re-mutualisation would reverse the failed Tory policy of allowing Building Societies to become risky shareholder owned banks and create a much safer organisation, unlikely to require a future taxpayer bailout. The Chancellor, however, has decided to flog-off the Rock with no consideration of its future business model. We have a petition to stop the sale here.

Beyond Northern Rock, we are campaigning for a greater emphasis on the role of financial mutuals – such as building societies and credit unions. Financial mutuals are member owned, rather than shareholder owned, meaning that business decisions are taken in the long-term interests of customers, rather than the short-term interests of capital. Labour did much in power to support financial mutuals, but more is needed to increase the diversity of financial services provides. Labour should support the creation of a ‘diversity index’ and corresponding diversity threshold for UK financial services, in order to ensure that such services are not dominated by a few, pseudo-monopolistic plcs.

We are also advocating a new international approach for the rating and regulation of financial products and services. Labour should support much needed reform to Credit Ratings Agencies (CRAs), the bodies which severely mis-rated financial products in the run up to the banking crisis and recently caused unnecessary woes through a downgrade of American sovereign debt, initially based on a $2 trillion miscalculation. The current business model of ratings agencies is a classic conflict of interest – CRAs rate the quality of financial products but are paid for by the same institutions that create and sell those products.

Just yesterday, the former head of Moody’s launched a stinging attack on CRAs, suggesting that there is a longstanding culture of intimidation and harassment within the companies from management to analysts, ensuring that ratings match the needs of clients (large financial institutions).

Given the failure of CRAs to adequately rate debt in the run up to the crisis and the current unnecessary pain caused to the American economy, the time is rife for reform of CRAs. The Co-operative Party advocates the creation of a UN backed mutual Credit Ratings Agency, to be funded by contributions from investors, member countries and debt issuing organisations. The mutual structure would ensure that no one funder has undue influence, giving far greater credibility to ratings issued. This is a great ambition for Labour to get behind, as it puts democracy at the heart of the international financial system.

These policies offer the basis of a co-operative vision for the future of financial services that Labour could get behind. Injecting democracy and other co-operative values into financial services would provide a positive Labour Co-operative alternative to the Coalition’s inaction and de-facto endorsement of the status quo.

Peter Jefferys is the policy and campaigns officer of the Co-operative party

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Revealed: Cameron supercop’s company mired in bugging and hacking allegations

19/08/2011, 09:51:43 AM

by Atul Hatwal

In the week that newspaper hacking exploded back onto the front pages, it has emerged that the company run by David Cameron’s American crime tsar, Bill Bratton, is mired in a British court case accused of illegal bugging and hacking.

Bill Bratton, a former chief of the LA Police Department is chairman of the private detective agency, Kroll. In June this year, Kroll were accused in court papers by Dr. Martin Coward, a leading city investment manager, of planting covert surveillance devices in his house in Steyning, West Sussex.

Coward claims that Kroll agents illegally broke into his property last December and hid bugs and video cameras in the kitchen and in the fireplace of his study as well as a GPS tracking device in his car.

Evidence referenced in the court papers included the surveillance devices and, most extraordinarily, a video made inadvertently by the bungling snoopers on the surveillance cameras as they were planting them.

Following the hacking allegations against Andy Coulson, these accusations involving David Cameron’s latest appointment will raise new doubts about the prime minister’s judgement.

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Labour should recover its patrician socialist streak

18/08/2011, 01:00:30 PM

by Kevin Meagher

At one time we would have known who and what to blame. Last week’s rioting and looting would be been parked at Mrs Thatcher’s door and the social and economic forces she unleashed three decades ago. We would have talked about the rioters being “Thatcher’s children”, throwing back at Tory ministers their heroine’s invocation that “there is no such thing as society” as a self-fulfilling prophecy.

Hardly anyone in Labour is making that case today. Labour politicians have, in the main, kept their own counsel this past week, content to “stand shoulder to shoulder” with the government and rattle their sabres when required. The violence has been “mindless” and the police should do whatever is “necessary” to restore order.

By raising the spectre of spending cuts and unemployment as a trigger to the disturbances, Ken Livingstone found himself a pretty lone voice. On Monday, Ed Miliband carefully tied the disturbances to his broader riffs about a lack of responsibility in society affecting those from top to bottom. Sure, he had a swipe at the government’s “gimmicks” in response to the disturbances, but his criticisms were narrowly scoped.

In contrast, David Cameron is letting it all hang out. He tells us we are witnessing a “slow-motion moral collapse”. In this analysis poverty, unemployment and spending cuts have little effect on the choices people make. This is a familiar retreat into the right’s simplistic comfort zone: bad people do bad things.

We should not be surprised. Many Tory politicians simply have no idea about the lives of those at the bottom of the pile. Why would they? In the main, they neither represent them nor socialise with them. This is when having a cabinet of millionaires begins to tell.

Given that it is Labour, in the main, which speaks for these communities, the onus is on us to articulate why what happened, and propose what can be done to avert it in the future.

But the problem is that we hardly know these rampaging young people any better than do the Tories. Truth to tell, we don’t know their parents much either. We have to go back two generations, to a time when the British working class was a recognisable and largely homogeneous bloc. As it has eroded, so, too, has our instinctive understanding of it.

First the traditional jobs went. Then social solidarity and identity crumbled. Now their offspring eschew the respectability that was once so much a part of the working class experience. As the working class broke apart to form a broader lower middle class and a group of “others”, we ended up understanding neither. It took us until 1997, before we managed to reconnect with the first: the Mondeo Man and Worcester Woman of focus group lore.

But the others? We don’t even have a proper name for them. To call them an underclass – shapeless, amorphous – does little to further our understanding. However we badge them, they do not, in the main, make sympathetic “victims”. The parade of surly, track-suited wastrels swaggering in and out of magistrates’ courts, covering their faces while flicking the finger, do little to instil a charitable concern for their circumstances. (more…)

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Politics is boring and irrelevant

18/08/2011, 07:30:09 AM

by Peter Watt

I went to Chessington World of Adventures today. While sat on the “Jungle Bus” with two of our kids, watching thousands of people enjoying an August day out, it suddenly dawned on me. Sometimes politics inspires and excites. And sometimes it just doesn’t. Right now, I think that politics is hell-bent on persuading much of the public that it is all just an irrelevance.

People at Chessington were probably worrying about rising utility bills, that it costs a small fortune to fill up the car and how their weekly food bill just keeps creeping up. They may be worried about their job or how they will pay for Mum’s care. But I bet that hardly any of them thought that politicians had the answer. And I thought all of that, when I should have been enjoying the stomach churning delights of the ride.

If I think back just over my lifetime, there have been some pretty exciting and inspirational periods. Margaret Thatcher remains a figure of hate for many on the left, but there is no doubt of the extent to which she dominated the political scene. Who can forget the sense of something important having happened when she stood on the steps of Downing Street reciting St Francis of Assisi? Over the next ten years she took on and beat the trade unions; liberated the Falklands; played her part in glasnost and changed the direction of the British economy. Whatever you thought of her, you knew that with her in charge politics mattered, the battles between the parties were keenly felt, emotions often ran high and she seemed to inspire adoration and hatred in equal measure. (more…)

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David Cameron is a second rate Ted Heath

17/08/2011, 12:00:04 PM

byJonathan Todd

I’m not the first person to compare David Cameron with Ted Heath. Iain Martin has made this parallel. Martin asked last year whether Philip Ziegler’s biography of Heath had been read in Downing Street.

“It should be. Ted Heath was a relentlessly pragmatic Tory leader who had poor relations with his party in Parliament and in the country. He began in government seemingly fixed on a clear course of reform and modernisation. But then he hit stormy waters and, lacking an ideological compass that might have helped guide him through, was blown over. Having failed to build good relations with his colleagues, he had no reservoir of loyalty on which to draw. When Margaret Thatcher emerged he was sunk.”

Heath, though, did have an objective for his government. He wanted to pacify the trade unions and draw them into a corporatist national project that would make us less like the US and more like France, not simply through being part of the common market, but also in terms of industrial policy and organisation. While one might have misgivings about this, it seems a more substantial project than whatever the defining purpose of Cameron’s government is. (more…)

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Labour’s riot response: wrong on tactics, wrong on strategy

16/08/2011, 02:00:27 PM

by Rob Marchant

It was a mere few days ago that we were praising the willingness of a reinvigorated Ed Miliband to make hard decisions. The dumping of the shadow cabinet elections. The explicit non-backing of an unpopular strike. And most striking of all, two occasions on which he had gone out on a limb against powerful interests, his sure-footed handling of the parliamentary debate on phone-hacking, which finally had Cameron on the back foot, and his determination to adjust the representation of unions in party decision-making. Though the endgame of both is still uncertain.

It seemed like Labour had things all sewn up for the summer recess. We could look forward to a renewing summer break and a gentle trot into conference season, enjoying the first truly glad, confident morning of the Miliband leadership. How quickly events can intervene.

Labour’s political response to the riots has shifted from a neutral position of non-partisan solidarity, to one which is tactically wrong. And, worse, it is strategically wrong. (more…)

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Which side are you on: us, or them?

16/08/2011, 09:11:52 AM

by Dan Hodges

And now we get the fight-back. The backlash against the backlash. The reaction to the reactionaries.

As ever, the left is in the vanguard. We need to pause. Avoid a knee-jerk response. Keep things in perspective.

When the riots first exploded across our communities the political class was united in its response. Shock. Horror. A desire for the perpetrators to be caught and punished.

But now that brief, intuitive, consensus is vanishing. The political battle lines are reforming.

The response of the right is emotional and authoritarian. Use Wembley stadium to incarcerate the rioters. Block social networking sites. Throw the miscreants onto the streets.

The response of the left is logical, and measured. We must not exacerbate the social problems that underpin the disturbances. We must avoid tactical ripostes like the military and water cannon that many experts say would only inflame the situation. We must ensure that our cherished civil liberties do not vanish amid the flames of Tottenham.

Both reactions have been instinctive. Both have broadly gone with the grain of prevailing sentiment within their respective political movements. And I suspect that both have proved instructive to the broader public.

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Reframing immigration: Ed’s clause four moment?

15/08/2011, 01:31:58 PM

by Kevin Meagher

I had never heard of Maurice Glasman until a year ago. Now this “radical traditionalist” frontman for the blue Labour movement seems to be everywhere.

To his friends, he is the exponent of a viable new politics for Labour, drawing on earlier, non-statist traditions of social solidarity and reciprocity and rejecting New Labour’s fetish for market solutions and, most controversially, the commodification of labour through a decade’s worth of mass immigration.

To his opponents, however, he is a nostalgic blowhard peddling a backwards-looking Labourist version of the big society to a party desperate for any crumbs of intellectual coherence.

Friend or foe alike can agree, however, that Glasman does not mince his words, particularly about immigration. Accordingly, he reckons Labour “lied” to the public about the scale of immigration that the party presided over in government. He warns that Britain must not become an “outpost of the UN”, instead focusing on the welfare of its own workers first, revising the EU’s free transfer of people to that effect. (more…)

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Both left and right should look into their hearts after the riots

15/08/2011, 08:16:41 AM

by Jonathan Todd

The world has looked perplexed upon the UK this week. Not standing up for justice, but reduced to”violent consumerism“. Clapham Junction isn’t Tahrir Square. We don’t need the international media to tell us something is profoundly wrong after such a debilitating implosion.

We did it to ourselves and that’s what really hurts. Whatever we call this – a Jacquerie (Gabriel Milland), an intifada of the underclass (Andrew Neil/Danny Kruger) – it’s a self-inflicted wound that must rank as one of our country’s darkest episodes in my 31 years. We don’t need to weigh the grief against the miners’ strike (a civil war in which both sides, at least as far as they were represented by Arthur Scargill and Margaret Thatcher, were wrong), Hillsborough (a football match where 96 people died) and 7/7 (mass murder of Britons by Britons) to know this is a bleak and pitiful watershed.

Over a longer horizon than my lifetime, however, the past week might seem less exceptional. Many times in the past, such as in 1780, 1816 and 1936, London saw riots arguably more violent and sometimes just as ostensibly inexplicable as now. The persistence and power of our capacity to descend to disorder and glory in anarchy should be taken as a lesson from this week.

This sits ill, though, with the vaguely whiggish sense of history defaulted to by much of the left. We like to think we’ve progressed since 1780. And, of course, in lots of ways we have. Many people have blackberries now, for one thing. 1780 was no less bloody for want of blackberries. The importance of the state’s capacity to uphold law and order is as fundamental now as in 1780 or in 1651 when Thomas Hobbes wrote the Leviathan.

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Sunday Review: Visions of England, by Roy Strong

14/08/2011, 12:00:19 PM

by Anthony Painter

In the aftermath of urban riots in the US in the 1960s, president Johnson set up a commission under Otto Kerner to review root causes and recommend responses. On top of recommending hundreds of billions of dollars of government expenditure and conclusively blaming poverty and inequality for the riots, the report hit the headlines with its conclusion:

“Our nation is moving towards two societies, one black, one white – separate and unequal”.

What is more: white institutions were to blame for this state of affairs. Not surprisingly, President Johnson ignored it. Ed Miliband should be careful what he wishes for in asking for a public inquiry into this week’s riots. What England’s riots do warn, however, is that the modern English experience is not the same for all. Roy Strong’s new elegy for England, Visions of England, presents an idealised version of the nation. What we saw across England over a few days was a terrorised England. One is England as a dream; one is England as nightmare. Neither feels real.

Sir Roy Strong’s English idyll is passionately bonkers. He asks us to choose an England of pastoral tranquility. Constructed around the iconography of artists, writers, monarchs, and religious thought, Strong would have us revelling as modern John of Gaunts of Shakepeare’s Richard II. This is a blessed plot and it should be revered. (more…)

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