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Bye-bye big society – Cameron lets the Treasury kneecap the new bank at the heart of his big idea

18/02/2011, 07:00:30 AM

by Atul Hatwal

For months now, voices within the Labour party have been cautioning against writing off the big society. Thoughtful voices that look beyond the immediate rough and tumble of partisan politics. It’s been a staple from the emerging blue Labour stable that Cameron was on to something.

With the prime minister’s speech on Monday, we finally got to see some of the detail.

While the lipstick and eyeliner turn the head, underneath the party paint, this is an LRF – a low resolution fox. Looks great at the bar, but up close, things are not so hot.  For all the allure of the pretty words, the raw material is flawed.

The commitment at the heart of the big society that will make the warm fuzziness real is the big society bank. The Tory manifesto was very specific on what this bank would do:

“…provide new finance for neighbourhood groups, charities, social enterprises and other non-governmental bodies. This will provide social enterprises with the start-up funding and the support they need to bid for government contracts”.

As the government has faced-off against the big charities about cuts to grants, the story missed by most of the media is that the big society bank is being set-up specifically not to deliver their manifesto pledge.

The charities aid foundation, a leading sector finance provider, has signalled the danger:

“We are concerned that if the funds are only made available on a commercial basis the interest rates could be too high for many charities and social enterprises…”

The operative words are “on a commercial basis”.

Over the past few years I’ve worked with many charities on their financing arrangements, several that were in the room on Monday, and one thing is crystal clear: a commercial return is impossible to deliver on most public service investments.

The consultation paper is vague on what the rates of return will be, but in the current social investment market, “commercial basis” means a minimum 25% on a typical investment. Factoring in the inherent risk associated with a sector that is feeling the full weight of the cuts and the size and financial track record of the organisations involved, this can easily head north of 40% – that’s if they consider the investment at all. (more…)

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Protest is not the preserve of the young.

17/02/2011, 02:00:22 PM

by Victoria Williams

We all know what a protester looks like. They are long-haired, middle class, vegan, university students who wear woolly jumpers and read the Guardian. Look at the comments on the Mail Online and you’ll discover that they are also “lentil munching yoghurt knitters”. And so they may be. And so what?

The stereotype has been around for decades, and, though irritating to serious political activists, it has generally been harmless enough. Until now. Now protest matters again, and so does our perception of those who participate in it. The problem with our commonly held view of activists is that, as with so many stereotypes, it is simply not correct. The faces we’ve seen at demonstrations in London and throughout the UK in the last few months have come from all backgrounds (and have sported a variety of fetching hair styles and fashionable alternatives to the knitted jumper). And while we can laugh off silly assertions about hair and fashion sense, the enduring belief that those engaging in political protest are all very young is more pernicious. (more…)

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Somebody tell the government that some disabled people are actually, er, disabled

17/02/2011, 07:00:48 AM

by Sally Bercow

The disability living allowance (DLA) is forecast to cost the taxpayer £12 billion this year, the same as the department of transport’s entire annual budget. So briefed the Whitehall machine as the government launched its public consultation on DLA reform in December (the consultation closes tomorrow).

Doubtless, the figure of £12 billion is correct, but before you rush to join the chorus of Daily Mail-minded souls and proclaim your horror, bear in mind that we spend three times more on defence than we do on disabled people (around £37 billion a year), that renewing the UK’s Trident nuclear deterrent will cost around £20 billion, that we have spent over £20 billion on the wars in Iraq and Afghanistan. I’m not saying that we shouldn’t spend those sums on defence, Trident or our international adventures (well maybe I am  – but that’s a whole different column), but the point is that it’s all relative.

So while £12 billion for disability benefit is a hell of a sum, maybe, just maybe, we spend that much because – and hold onto your hats here – there is actually a genuine need. Could it be that, with a small minority of dishonourable exceptions, the people who receive DLA really are deserving of it? That they actually rely on the help DLA provides, so that they can cover the higher costs of living, care and mobility that come hand in hand with their disability? After all, there is no evidence of widespread fraud – indeed the 0.5% (£200 million) fraud rate for DLA, while unacceptable, is nevertheless the lowest of any benefit. (more…)

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Sharia law for the City of London

16/02/2011, 03:30:59 PM

by James Watkins

When it comes to the banks, Labour often seems to tie itself in knots. Without the square mile, the finances of the country are seen to be on shaky ground. At the same time, governments around the world which took it easy on the bankers contributed to the financial morass we are in now.

For many in Labour, there seems to be no centre-left vision or school of thought other than to accept the model of banking we have now – while maybe taking another look at regulation. But as recent events demonstrate, even this seemingly pragmatic approach is a risk too far and is one which led Gordon Brown to call for “markets with morals”.

As for the government, with Vince Cable seemingly out of the picture in pushing for fairer bank terms to small businesses, all we now have left is a threadbare deal with the banks from chancellor George Osborne. This has the non-binding target of £190 billion for lending being a gross amount, not net. So it is very possible that, as businesses repay their loans and others have credit withdrawn, the gross target is met, but net lending declines. (more…)

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On the campaign trail in Barnsley, Tom Watson finds a new voter group: the Ed Miliband Tory

16/02/2011, 07:00:16 AM

by Tom Watson

While holding my tie in his clenched fist, Benjamin Wegg-Prosser once described me as “that Prescottite” who tries to be a “hard man of the soft left”. No, I never understood what he was on about either. It was late. We were young. Ish.

In so doing, Benjamin was unwittingly demonstrating that labels are usually unhelpful. Sometimes though, they help the non-activist understand the complex world of UK politics. And, even more occasionally, they help a politician understand UK politics.

If ever I were allowed to define myself, it would probably be as a “Kempian pragmatist” – a follower of the former MP, Fraser Kemp. Fraser’s phenomenological approach to life gives him the rare ability to sniff change in the air. He can feel the faint pulse of a political tremor before it reaches the clipboards of the opinion pollsters, those who write the reports that land on the desks of the people who sit behind them in newspaper offices and political party head quarters. (more…)

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Cable has capitulated to the City. It doesn’t have to be this way.

15/02/2011, 01:01:41 PM

by Dan Cooke

What does Vince Cable have in common with Eric Pickles, Michael Gove and George Osborne? Oh, and Ed Miliband and Ed Balls too? Answer – they are all cursed by the iron law that their careers, like all political careers, will end in failure (or, at least, will be seen as a failure, whatever reasoned protestations to the contrary their future selves might make).

So, as renewed rumours have surfaced this weekend that Mr Cable is contemplating resignation when the independent commission on banking inevitably fails to deliver the radical restructuring he has called for, perhaps he should be sanguine about the harsh judgment that will, if he does so, be pronounced on his contribution to politics.

It is clear now that his resignation will be less a “nuclear” explosion for the coalition than the detonation of an ideological neutron bomb – devastating for his own influence, but leaving Tory and orange book values intact. Following the limp conclusion of “project Merlin”, maintenance of the status quo on bank structures would indeed be a sad anti-climax to the expectations fostered when Cable declared himself co-equal with the chancellor in banking policy.

It would represent a further blow to Cable’s reputation among former admirers after a miserable list of disappointments: his role in the tuition fee betrayal, the self-inflicted loss of responsibility for the Sky deal, the daily complaints that his department has no strategy for growth and its scrapping of regional development agencies (described by Mr Cable, as “Maoist and chaotic”, but allowed to pass all the same by this secretary of state). (more…)

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Volunteering’s a means, not an end. Charities should get elected or get stuffed.

15/02/2011, 09:13:48 AM

by Dan Hodges

Private Eye editor, Ian Hislop, was once asked for his view on  an upcoming libel case involving Mohammad Al Fayed and Neil Hamilton. “I hope they both lose”, was his response. I’ve got the same feeling about the unfolding debate about the “big society”.

There are times at the moment when attempting to analyse  British politics feels a bit like analysing the Mad Hatter’s tea party:

“’Have some wine’, the March Hare said in an encouraging tone. Alice looked all round the table, but there was nothing on it but tea. ‘I don’t see any wine’, she remarked. ‘There isn’t any’, said the March Hare. ‘Then it wasn’t very civil of you to offer it’, said Alice angrily”.

Or, with apologies to Lewis Carroll:

“The prime minister announced, with a flourish, his ‘big idea’. ‘Our purse is empty. But do not worry. The voluntary sector will shoulder the burden’. The volunteers looked up with a start. ‘But we can’t. You’ve taken all our money as well’, they cried. ‘Taken your money’? replied the prime minister, ‘But I thought you were volunteers’? ‘We are’, they responded, ‘and we expect to be well paid for it’”.

Perhaps my analogy is a touch harsh. Our nation’s voluntary and charitable sectors are not the equivalent of Mohammed Al Fayed. And no one is the equivalent of Neil Hamilton. (more…)

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A centrist critique of David Marquand’s annual compass lecture

14/02/2011, 03:30:28 PM

by Jonathan Todd

The chair of last Thursday’s annual Compass lecture, Neal Lawson, closed proceedings by asking the speaker, David Marquand, to return in 10 years time, when Marquand will be 86 years old, to reflect upon developments in the intervening period. He also expressed the hope that at this time the respondents to Marquand’s address would be the most powerful people in the land: Ed Miliband as prime minister; Caroline Lucas as chancellor; Francesca Klug as home secretary; and Evan Harris as health secretary.

Earlier, Lawson had praised Marquand for arguing that, as social democracy will never reach its final terminus, the journey towards social democracy is more important than conceiving of its end. “The goal is nothing; the movement everything”, quipped Eduard Bernstein, the grandfather of social democracy, over 100 years ago.

Lawson would doubtless claim that much more openness and collaboration between parties of the left is part of this journey. But his imaging of the 2021 cabinet indicated where he wants this to be heading. It may cause people to wonder what exactly the parties of Miliband, Lucas, Klug and Harris stand for if they agree on as much as Lawson believes. (more…)

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As we celebrate new Middle Eastern democracy, let’s not forget the old one

14/02/2011, 12:00:33 PM

by Michael Dugher

When interviewed this morning on the Today programme, the Israeli deputy foreign minister, Danny Ayalon, said he “very much applauded the Egyptian people” but he warned that the “uncertainty” in Egypt created vulnerabilities for Israel and the wider region. Yesterday, on BBC One’s Andrew Marr show, quartet envoy, Tony Blair, described the events as a “pivotal moment” and urged the West to engage with supporters of democracy and help countries evolve and move in the right direction. Significantly, he said that progress could unblock the Middle East peace process and be of “huge benefit”.

This cautious, yet hopeful, outlook comes after William Hague’s tour of the region last week. I was in Israel at the time and Hague’s ill-judged intervention, where he seemed unwilling to back the Egyptian pro-democracy protesters, while at the same time calling Israel (the only democracy in the region) “belligerent”, was viewed with a mixture of despair and resignation. Hague’s inept and insensitive comments reinforced the perception, wrongly in my view, that the UK and Europe have slid into a position of hostility towards Israel and therefore are unable to play their part as honest brokers in the peace process.  Regrettably, Hague’s intervention can only serve to diminish the UK’s influence in the region. (more…)

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Canny Harold’s lessons for the two Eds

14/02/2011, 07:00:16 AM

by Kevin Meagher

Clem Attlee may be lionised as a great prime minister. Tony Blair revered as an election winner.

But you need to cast a backward glance to the swinging sixties and sagging seventies to see that it is Harold Wilson (Labour leader between 1963 and 1976, serving as prime minister for eight of those years) who has the most to teach Eds Miliband and Balls.

For Ed Miliband, Wilson’s successor-but-seven, there are three main lessons to be learned.

The first is in managing the party. This was no mean feat back in the 60s and 70s. Wilson led during the golden age of Labour dissent. He had to contend with a cabinet containing some of the hugest egos British politics has ever produced: Crossman, Jenkins, Healey, Callaghan, Castle and George Brown.

Wilson sat pre-eminent amid this mass of turbulent, squabbling, brilliance; partly, it has to be said, through the involuntary tactic of being distrusted by just about everyone.

But Wilson used talent effectively. His Gaitskellite chancellors: Callaghan, Jenkins and Healey – each loathed Wilson and were all strong potential replacements; yet Wilson co-opted their brainpower and political brute force for the good of his governments. (more…)

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