Posts Tagged ‘Dan McCurry’

Today Ed Miliband started to re-frame the economic debate

14/02/2013, 05:22:58 PM

by Dan McCurry

Thank god Ed Miliband has finally got a handle on our economic offer. Today he laid out a new narrative built around a “living standards” message with some good policy detail in the 10p tax pledge. He previewed the new approach at PMQs on Wednesday where he said that come the 2015 election, people will be asking “Am I better off now than I was 5 years ago?”

It’s about time, we really need this new, sharper approach.

On Tuesday night, I was speaking at an event by Pragmatic Radicalism where a number of people presented ideas for Labour economic policy and the audience voted for their favourite. My pitch was this:

“Even though we are right and they are wrong, we acknowledge that the Conservative party have a far more coherent economic policy than Labour. I believe that an economic policy of massive intervention, with massive stimulus, through massive infrastructure spending, should be presented with massive confidence by a leadership who will then stand their ground and defend their policy.”

Whenever I get up to speak at these kinds of events, I naturally imagine that my thoughts will be received with the kind of rapturous joy they deserve. Ahead of this event, my fantasy included the image of Amanda Ramsay in full Grecian toga, sprinkling rose petals in my path, as I stepped down from the podium to a roar of applause.

In fact my pitch provoked the question, “how will we afford it?” I had to patiently explain to these ignoramus’ that the £400 billion of quantitative easing was wasted on government bonds when it could have been spent of building schools and hospitals. We should be campaigning that future QE be spent on tangible investments in the real economy rather than delivered as helicopter cash to the banks and pension funds.

This policy response is difficult because people don’t understand where money comes from. Conversely, the Tory policy response is simple. Reduce the debt.

(more…)

Facebook Twitter Digg Delicious StumbleUpon

We are witnessing the march of the zombie jobs

04/02/2013, 03:11:56 PM

by Dan McCurry

We now have an explanation for why unemployment hasn’t soared in the worst recession since the first World War.

It seems that the banks are keeping failing companies afloat rather than calling in their loans, for fear of damaging their capital base and failing to comply with regulations. It is this priority of the regulators that has had the perverse effect of bunging up the unemployment market and creating a million zombie jobs.

Before you think this is a good thing, recognise that productivity is supposed to improve during a recession, instead it has slumped, causing long term damage. Meanwhile the unemployment has only been delayed. Sooner or later the banks will be forced to call in their loans. At that point, the zombie companies fold, and the workers become unemployed.

When I was working for a retail chain called Wilding Office Machines in the early ‘90s recession, the board decided to start, and then lose, a price war with Dixons. A man called Charles Wigador had built a fleet of salesmen selling mobile phones to businesses. Phones were changing from being bricks to pocket sized devices that consumers could buy, but there were no retail shops to supply them. When we were about to go bust Charles bought us out, all 120 shops, staff and head office, for a mere £100k.

For us, overnight the recession ended and we were on the cutting edge of a new business, and Britain was at the cutting edge of mobile phones. Within a couple of years, Charles sold out to a small company called Vodafone for £17 million.

If George Osborne was in charge at the time, Wildings would have been kept alive as a zombie company and Vodafone would not today exist as the largest phone company in the world. George Osborne promised the “march of the makers”, but the British economy today can best be described as the march of the zombies.

(more…)

Facebook Twitter Digg Delicious StumbleUpon

Tackling racism is important but we can’t just see minorities as eternal victims

25/01/2013, 11:04:21 AM

by Dan McCurry

When I was a child, a lad in our street threw a stone through the window of the first Bangladeshi family to move into our street. We were rounded up by the local vicar and taken around to the family, and they gave us biscuits and lemonade, and made friends with us. Other Bangladeshi families arrived over the next few years, but they didn’t get their windows smashed.

More recently, I did some community work on the Boundary estate, near Brick Lane. One of the issues was the relations between the new middle-class white residents and the existing Bangladeshi community.  Leila’s cafe and shop, which sold organic food, had her windows smashed by the local Bangladeshi teenagers. Her response was to make friends with them, and these days they treat Leila with great respect, because they all want jobs in the cafe.

As one wave of migration gives way to another, similar tensions occur. Today is a different world to the 80s, bananas are no longer thrown at black players on the football pitch, but as socialists, we still hold some of the views that were developed in different times. These views are outdated.

It would be difficult to imagine the socialist movement mobilising to defend the Shoreditch web designers in Leila’s organic cafe. The Labour party are not going to arrive en masse to chant “fascists out!” at the Bangladeshi teenagers, even though the many issues are the same, just a different time and place.  Why is that?

There’s an experience I had as a teenager that is worth recounting here. It was rather like when Huckleberry Finn asked the question, “What’s a feud?” In my case, I asked “What’s Paki bashing?” I was told, “Aw, it’s brilliant. You get tooled up, then go about with your mates till you see one, and everyone shouts out “Paki!” He runs, and you all leg it down the street after him, and you catch up and….”

(more…)

Facebook Twitter Digg Delicious StumbleUpon

The return of the confidence fairy could spell trouble for Labour

16/01/2013, 10:12:44 AM

by  Dan McCurry

The stock market has historically been a good barometer of future economic activity. It tends to be 6 months ahead of other indicators, representing the daily confidence of company bosses, either in their own investing, or in the conversations they have with institutional investors. However, the stock market has often been a poor tool for the policy maker, since it is so volatile that it is difficult to see the wood for the trees.

The FTSE100 recently broke through the 6,000 barrier. This may be volatility, but a comparison to the bond market may provide clarity.

UK gilts have been unusually expensive in the last few years. So expensive that a 10-year gilt yields less than inflation. This is partly a distortion caused by QE, but it is also indicative of capital preservation. Fear has governed the markets.

However, gilt prices have been falling recently, and the fall appears to correspond with the rise in the stock market. Are investors leaving safe-haven assets and returning to stocks? Are we witnessing the return of the confidence fairy?

(more…)

Facebook Twitter Digg Delicious StumbleUpon

Ed’s right on integration and the need to speak English, but we need practical policies to make this a reality

28/12/2012, 10:11:03 AM

by Dan McCurry

Today, Ed Miliband promised that in 2013 we will see some concrete policies that define what being a one nation party means. Good. We need them. There are many areas the detail is necessary, not least on integration.

Before Christmas, Ed made a good speech on the subject. He struck the right notes in a measured manner, acknowledging the benefits migrant communities have brought to Britain while stressing the importance of the basics such as everyone speaking English. So far, so good.

Now we need to explain what this means in practice. For those that can’t speak English, what will we do?

A practical example. In my experience, if I can’t understand my Bangladeshi client, when I’m filling out the legal aid form, then I just pass them the pen and ask them to fill in their own details. In the box marked “place of birth”, quite often, they will write, “London hospital, Whitechapel”.

Born in this country, but with language skills so bad that they cannot be understood when speaking their own name and address, the issue is lack of exposure to the English language, during the early years, before the age of three. Without good English, their life outcome will suffer considerably, yet this someone who was born in this country.

Thankfully, these days it is less and less frequent for younger Bangladeshis to suffer from this problem. They are so surrounded by English speaking aunts and uncles that the issue no longer arises.

However, it is tragic for the Bangladeshi community that it wasn’t until the third generation, that the majority of the community could speak the language of the nation of their birth fluently. And it remains a major issue for many in the first and second generations of the community.

Ed Miliband says that Labour made mistakes by believing that these things will sort themselves out. People used to say that integration will happen naturally with the generation born here. But that was wishful thinking. Many who were born here, were held back before the age of three, by the problem that they were expected to solve by virtue of being born here.

(more…)

Facebook Twitter Digg Delicious StumbleUpon

Why isn’t Labour shouting about the success of the future jobs fund?

19/12/2012, 07:00:19 AM

by Dan McCurry

There was an interesting piece in The New Statesman by Rowenna Davis last week that examined the DWP report on Gordon Brown’s future jobs fund. Under this programme young unemployed people were given a guaranteed 6 months work at minimum wage and the DWP evaluation has found this policy had a net benefit to society, for each young person enrolled, of £7,750.

The writer contacted Ed Miliband’s office to ask for a view from the leader’s staff, only to be told that, “it still does nothing for those people who are in work on benefits.”

I see Ed Miliband as a man who has a great conviction that there is something deeply wrong and unjust about the system. He desperately wants to find the answer, but can’t quite put his finger on it. It’s as if it’s there, but just out of reach. It’s good to have a leader who wants to make a real difference, rather than aspiring to coast through a term in office. However, he does sometimes look like he is chasing rainbows at the expense of doing the job.

Rowenna’s experience tends to chime with a suspicion I’ve had in the past. I have an image in my mind of all the people around Ed Miliband desperately biting their knuckles, with the intense hope that they can find the answer, if only they can think deeply enough.

(more…)

Facebook Twitter Digg Delicious StumbleUpon

We need to take action on the tax shirking oligarchs of the internet

07/12/2012, 07:00:20 AM

by Dan McCurry

Rather like in ancient Rome or the end of the Soviet Union, the sudden expansion of the internet has produced a small number of oligarchs controlling a huge amount of industry.

It was only a matter of time before the moral and ethical questions began to pile up. Initially, they destroyed traditional industry with little or no objection from policy makers or the public, as this was a new and super-efficient way to market goods and services, and we must not stand in the way of progress.

But then the abuse allegations began to mount. Google is accused of using its search engine to guide traffic towards its own services rather than that of its rivals. Amazon is accused of using its dominance to bully publishers. Apple dominates downloads of music and other digital content, creating questions on the state of competition.

Then we discovered that Google and Amazon were using their ability to cross borders unchecked as a tool to avoid tax, and therefore have an unfair advantage over the existing competition.

In fairness, the multinationals invented the rules that the internet giants appear to be feasting on. Starbucks claims to make no profit due to the huge amounts of royalties it has to pay to its subsidiary in low-tax Luxembourg. The royalties are for the right to use its own logo.

Maybe Starbucks should drop serving coffees and stick to its core business of charging customers for a napkin with the logo on. The customer can sit down at a table, with their logo embossed napkin and stroke it for 20 minutes before leaving? Their position is so absurd it’s no wonder that after a modicum of public scrutiny they have volunteered to pay more tax.

(more…)

Facebook Twitter Digg Delicious StumbleUpon

George Osborne is all slogan and no strategy

03/12/2012, 07:00:29 AM

by Dan McCurry

Their economic policy is from the 30s,

Their health policy is from the 40s,

Their education policy is from the 50s.

The electorate may be in the present, but the Tories are not.

They’re all old money, and no new blood,

More horse riding, than commuting,

More tractor, than hatchback,

More bone china, than chip wrapper,

The strange thing is that they could have been quite good. The most brilliantly targeted message to have emerged from politics in recent times, was George Osborne’s, “we’re all in this together”

In just five words it encapsulated teamwork, fairness and duty, in order to overcome our problems. But it was a slogan, rather than a strategy. If it were a strategy, then they wouldn’t have increased taxes for the poor and decreased them for the rich. If they had been fair to all, then this government would not be the architects of omnishambles, they would be the builders of Jerusalem.

It’s quite baffling that they came so close to being a successful government; that the strategy was right there in their hands, but somehow they just couldn’t follow it through. The problem is that they only have experience of their own narrow clique. They seem to have little or no experience of the world outside of Westminster and Bullingdon.

(more…)

Facebook Twitter Digg Delicious StumbleUpon

A gift from Alastair to George

13/11/2012, 07:00:00 AM

by Dan McCurry

The funniest line of George Osborne’s letter to Mervyn King begins with the words, “As you are aware, my predecessor agreed…”

The predecessor is Alistair Darling and the letter concerns the £35 billion of interest payments, or coupons, that would have been paid on the gilts bought up by the Bank of England, under the policy of quantitative easing (QE).

The agreement struck by the Labour chancellor, is that the treasury would not make coupon payments on the gilts, since it would be pointless for the treasury to pay interest to the Bank of England (the state to pay the state).

The reason the letter is amusing is that Osborne won an election on the promise to reduce the deficit at spectacular speed, but has spectacularly failed to do so. However, he has done a good job of blaming his predecessor for his own failure. In this letter he has been forced to admit that his predecessor has delivered a £35 billion gift to the public purse.

All this means that George Osborne must be tremendously happy. You can picture him getting out the bunting in number 11 Downing street. He’s probably kissing a photo of Alistair Darling at this very moment. There must be a proper spring in his step.

All of his efforts to remove Britain’s debt mountain have failed, but then this one policy of Alistair Darling has delivered a massive contribution to the effort.

In all, one third of the UK’s total debt has been bought up by QE. I can only presume that George will immediately take the air waves to thank the previous administration for their brilliant policy.

Without inflationary pressures, the Bank of England can sit on the gilts in perpetuity. This means that next year and the year after, the Treasury will receive a further £35bn in gifts.

The inflationary pressure expected by the policy has been marginal. Paul Krugman explains this by pointing to the lack of demand in the economy. Few workers are demanding higher wages at present. They are mostly just clinging onto the jobs they’ve got. Shopkeepers aren’t seeing the shelves empty at such a rate that they wish to increase their prices.

It may be that once growth returns there will be too much money swirling around the economy. If that were the case, then inflation would be a prospect. The bank would respond by returning the gilts to the market and the treasury would resume making coupon payments. If that were the case, then the benefit would have been temporary, but much appreciated none the less.

However, the people who do sums on this type of thing tell us that there isn’t too much money in the economy. If they are right then there will be no inflationary pressures once growth returns. At that point, if he wanted to, the Bank of England governor could strike a line through a number on a ledger, and the gilts would no longer exist. More likely he would simply allow them to expire, according to their stated lifetime.

All of this must be music to the ears of George Osborne. You can imagine him, with the prime minister and his cabinet mates, drinking a toast to Alistair Darling and sharing a warm glow of affection towards the Labour party.

We feel a warm glow back. Good luck, George. This one’s on us. We look forward to seeing you thank us publicly.

Dan McCurry is a Labour activist whose photographic and film blog is here.

Facebook Twitter Digg Delicious StumbleUpon

We all owe the state for the lives we lead and tax is how we pay our fair share

02/11/2012, 02:00:03 PM

by Dan McCurry

I’ve completely changed my mind, thanks to Peter Watt. I used to agree with Peter’s position, that taxation is a necessary evil, not a automatic right of the state. Then I read his piece, on tax, Labour must remember: “it’s not our money stupid, it’s theirs, and I’ve since reversed my position completely.

This is part of a wider debate about whether the state creates private business, that began with a gaffe from Obama. “If you’ve got a business, you didn’t build that. Somebody else made that happen.”

It was a gaffe, but the rest of the quote made sense of what he meant. “There was a great teacher somewhere in your life. Somebody invested in roads and bridges. If you’ve got a business—you didn’t build that.”

The debate re-emerged in this country during the party conference season. Miliband had described a Tory tax-cut with the visual image of David Cameron writing out £40k cheques to his mates. At the Tory conference Cameron responded, “When people earn money, it’s their money.   Not the government’s money: their money.  Then, the government takes some of it away in tax”.

Previously I was very much in agreement with David Cameron on this one, but reading Peter’s article got me thinking. If it were the case that the state acts as a hindrance to wealth creation, then why do millions of enterprising and ambitious young people, from the developing world, risk their lives to enter the western world every year? Surely if our top heavy state was standing in the way of business, why don’t they stay in their own country and make their fortune there?

As Obama pointed out, we have an infrastructure allowing fast and smooth transportation, as well as an advanced rule of law. We have an educated and healthy population who are available both as workers and as consumers. The state provides conditions that allow enterprise to flourish.

(more…)

Facebook Twitter Digg Delicious StumbleUpon