GRASSROOTS: Osborne’s reputation for economic competence is fatally damaged. Labour must now start restoring theirs

23/04/2013, 12:13:09 PM

by Matthew Whittley

Perceptions of economic competence will largely determine who takes power in 2015. It is well-known that Labour has its work cut out to regain trust with the nation’s purse strings, but if anyone needed further proof that the economy isn’t safe in George Osborne’s hands, the need look no further than today’s economic news.

The latest figures tell us that there has been no improvement in underlying borrowing, which is has been running at almost the same level for the past two years. According to OBR forecasts, it will be around the same this year. As a result of the failure to stimulate any growth in the economy, the government is now set to borrow £245 billion more than planned

George Osborne’s main opportunity to do something about the hole he’s dug for the nation, was in March with the budget. But he blew it: the budget amounted to no more than a “do nothing” series of holding measures.

With household budgets squeezed and business lacking confidence to invest, Osborne should have prioritised growth by borrowing to invest in capital projects, rather than borrowing to finance failure as is currently happening. One doesn’t need a PhD in macroeconomics to know that capital spending has a huge multiplier effect on growth.

However, the derisory £2.5bn of capital investment promised in the budget falls way short of what is required to kick-start the economy. To put this figure in context, the Economist, hardly a bastion of Keynesianism, recommended an extra £28bn of infrastructure investment.

It should have become clear by now to him that the debt can’t be reduced in the absence of growth. The UK has grown only 0.7% since the third quarter of 2010. During that time, Japan and Italy are the only major G20 economies to have performed worse than the UK.

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UNCUT: Syria: Where is the International Brigade?

22/04/2013, 04:08:27 PM

by Jonathan Todd

There is much to enjoy and admire in the New Statesman centenary issue. I read of George Orwell taking a bullet through the throat, as he fought in the Spanish civil war. And that John Gray thinks: “For the foreseeable future, no one will rule will world”. The transition from the G7 to the G20 reflected the passing of power to the global south and talk of the G2 denotes the centrality of China and the US but maybe G-zero is more apt in a world without predominant power.

Is the sorrow of Syria a harbinger of a G-zero world that no one, whether reluctantly or otherwise, is willing or able to police? Roosevelt, unlike Hitler and Stalin, was as disinclined to involve his country in the Spanish civil war as Obama has been to date in Syria. Yet Orwell walked towards the bullets. Where are the Orwells of today? If the war in Syria is a war for rights and democracy, why isn’t the International Brigade on the frontline?

The truth is that Syria is sucking in Jihadists who don’t believe in rights and democracy, not liberals prepared to stand up for these values, which is one of various reasons why Syria is not a simple war for rights and democracy. Little is simple in Syria.

Last week Channel 4 showed a documentary by Olly Lambert, who had spent weeks living deep inside Syrian territory – with both government and opposition supporters. Both sides think that the other would exterminate them if they did not fight and that they are opposing the sectarianism of the other. Western liberals, thousands of miles from the frontline, might see their kin in those who have risen up against Assad.

But how confident can the Alawites and other Syrian minorities be that these opposition forces, largely Sunni and increasingly under the influence of Saudi Arabia and Al-Qaeda, will not extract a bloody revenge as soon as they are able? Why wouldn’t these minorities lay down their arms for a future Syria that respected their rights and gave them the vote if this is what the opposition offer?

If the UK were to arm the opposition then we would be risking these arms being used for the persecution of these minorities. Equally, weaponry from Iran and Russia is being used by the Syrian government to persecute their opposition. While such persecution is utterly repellent, it would be to succumb to Bertrand Russell’s fallacy of superior virtue of the oppressed not to be concerned about the sectarian and extremist motives of the opposition.

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UNCUT: Regional VAT, an idea for Ed Balls

22/04/2013, 07:50:07 AM

by Dan McCurry

When I was in Arizona, I kept getting overcharged in the shops. At least I thought I was, until I objected and was told that the extra 7% was the state sales tax. They weren’t including it on the price tickets, because Americans are weird. These days Arizona charges a whopping 9%, compared to Virginia at 5%, and New Hampshire at 0%. There is no strategy between these different rates. This is America. The states just do their own thing.

In the UK we pay 20%, and we call it “Value Added Tax”, because we’re not weird.  Imposed centrally, we apply this tax at a uniform rate across the country, but if we wanted to, we could charge different rates in different regions, while continuing to collect it centrally.

There is a potential serendipity to Labour’s economic policy, when looking at two of the main drivers of stimulating the economy in Labour’s five point plan for jobs and growth: house building and a VAT reduction.

Mass house building is firstly intended to create demand in the economy, but by solving our chronic housing shortage, we reduce our private sector rents, and thereby counter poverty. It all seems so neat that, however, there is a flaw in this strategy.

The area that needs massive house building is London and the South East, but the economy is fairly frothy in this area, so there is not much of a demand problem. Much of the rest of the country doesn’t needs housing, but does have a lack of demand.

So although there are many infrastructure projects in other parts of the country, the stimulus from house building would mostly effect the south east, which is not where it is mostly needed.

The other policy of Ed Balls is to affect consumer spending through a reduction in VAT.

The problem with VAT is that it can be fiddly. When Gordon gave us a 2.5% cut, I don’t think I’m the only one who was irritated at being given coppers in change for my coffee, and it didn’t take long before the coffee price went back up and the vendor pocketed the difference. Retail prices tend to gravitate to round numbers, meaning that VAT cuts need to be substantial to be worthwhile.

If Ed Balls concentrated his VAT cut on the regions that are not getting a house building boost, then he’d probably be able to double the size of the VAT cut. In simple terms, let’s imagine the counties in north of England have their VAT reduced to 10%.

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UNCUT: Labour history uncut: Mac the knife

19/04/2013, 03:31:53 PM

by Pete Goddard and Atul Hatwal

“The Liberals must be… destroyed,” declared Ramsay Macdonald, stroking a white cat.

Ok, perhaps not that dramatic, nevertheless it was Ramsay Macdonald’s electoral goal. Labour’s leader had a clear plan of action for 1923. He intended to show the public that Labour was a respectable party, the sort that one day might even make a serene transition into actual, proper government.

To do that, first he had to establish his party as the alternative to the Tories. In a British electoral system that only really had room for two parties, that meant the Liberals had to go.

Oddly, the Liberals didn’t seem to disagree.

They had obliged by splitting into two warring factions under Lloyd George and Asquith. True, there were now moves to broker a reunification under Asquith’s leadership, but rather than a passionate and heartfelt reunion this was an attempt to stay together for the sake of the children. It was all awkward silences and icy stares over dinner.

Margot Asquith reads a scary story for the kids, entitled, "The strange death of Liberal England"

Liberals regularly defied the whip, voting against each other on a range of motions. Meanwhile an aged Asquith seems to have given up trying to lead his party now that sticking it to Lloyd George wasn’t an available option.

It looked like Macdonald couldn’t fail.

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INSIDE: Confusion reigns over London Labour Euro-list selection as candidates dispute senior official’s story

19/04/2013, 10:59:31 AM

The fiasco over London Labour’s Euro-list selection descended into chaos  this week with candidates querying a senior official’s version of events.

On Monday, Uncut ran a piece on the grassroots revolt in London over the selection process for Labour’s European election candidates. In the article, Joy Johnson was identified as one of the key officials on the London selection panel.

She contacted Uncut to complain that her position in the process had been misrepresented. To be absolutely clear on her role in the overall selection procedure we put a question to her:

“Did you discuss the selection criteria, process or any prospective candidates with any of the other members of the panel?”

Her response was posted in the comments to the piece, “You asked did I discuss the short list the answer is NO.”

It seemed an oddly specific response. The question didn’t even mention short lists and was much broader in it’s ambit.

Subsequently, over the course of this week, Uncut has been contacted by several candidates interviewed to get onto Labour’s European short list, perplexed at Joy’s response.

Each of the candidates Uncut has spoken to has been clear: Joy Johnson did attend their short listing  meeting and took an active part in the interviews.

Speaking to Labour’s London candidates, it has emerged that the party decided its short list of European candidates at two meetings before Easter on Saturday 23rd March and Sunday 24th March. The title of the mail sent out by head office to candidates was very clear: “European Parliament selections Short Listing Interview.”

Last night, we contacted Joy Johnson with this information and her stance appears to have evolved.

“There was a meeting to decide on candidates who were to go forward for interview. I wasn’t at that meeting. I didn’t discuss the list that went forward for interviews. As for the weekend you mentioned…I was at that meeting…As part of the interview process there were discussions to get to the final list that would then go out to party members” (emphasis added)

The new position is that Joy Johnson did attend short listing meetings, she did interview candidates and then did discuss with her colleagues on the panel which candidates would be on Labour’s European short list .

Confused? Many are.

It seems that when faced with the initial question from Uncut, rather than simply give a full answer, Joy Johnson opted to parse. But she got confused between the long listing (sifting candidates before interview) and short listing (interviewing candidates to make Labour’s short list of European candidates).

For someone who was Ken Livingstone’s former director of communications, it’s an astonishing way to deal with the media.

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GRASSROOTS: We should have the courage to legislate for a Living Wage, not just campaign for it

18/04/2013, 05:08:34 PM

by Prem Goyal

It has become a bit of an easy game for cynical journalists to say that Labour’s leadership talks about abstract ideas like pre-distribution and responsible capitalism that are somehow too hard for people to follow. What nonsense. I don’t much like either of the phrases, but I think the ideas themselves are both simple and compelling.

Ed’s offer to the country is rooted in good old fashioned common sense: instead of taking action ‘after the fact’ to try to fix inequality, let’s build social justice into the economy at every level. It might be easy to caricature as the language of the seminar room, but it is basically just another way of saying that prevention is better than cure.

The most effective form of prevention against the most extreme forms of inequality is full employment – and the best vaccination against in-work poverty is the living wage. That’s why Ed Miliband made it such a feature of his leadership bid and did significant follow up on the details late last year.

Right-wing ideologues, of course, claim that any intervention in the market distorts it and, in the end, hurts the economy. This argument, that the market finds its own perfect equilibrium between pay, the number of jobs and the demand for goods, ignores today’s reality: low pay employers are effectively getting a public subsidy for bad practice, in the form of tax-payer top ups to their workers’ wages through the benefit system.

The IPPR and the Resolution Foundation have estimated that a universal living wage would save the Treasury £3.6 billon from the bill it currently foots to help those on poverty pay to make ends meet. Over fifteen years in business I’ve worked in New York, Tokyo, London and Zurich for some of the biggest companies in the world and I can honestly say I’ve never met a business person who would think, when looked at like that, that they could reasonably ask the public to subsidise their profit margins while their staff struggle to survive.

The truth is, the living wage works for everybody: employee, tax-payer and employer alike. Independent research for the Living Wage Foundation has found that 80% of employers giving the wage and 75% of the staff receiving it feel it improves their work. As the Tories continually fail to understand when they attack ‘lazy Britain’ and endorse erosions of employee rights, better pay and conditions improve morale and productivity. Further, plenty of living wage employers felt it strengthens their brand by encouraging consumers to see them as an ethical firm.

My own company, GMC, pays all its staff a living wage and is applying to be on the official list of Living Wage firms. Financial companies, retail outlets and legal firms are joining a long list of councils, including my own Southwark borough council, and a growing number of universities.

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UNCUT: The last few weeks have shown politics at its worst: tribal, divisive and ugly

18/04/2013, 07:00:22 AM

by Peter Watt

Sometimes politics is a noble and even beautiful pursuit where words can capture a moment and inspire.  Just think of Martin Luther King on the steps of the Lincoln Memorial in 1963 or any one of a number of Churchill’s wartime orations.

Then there are political decisions that become once in a generation moments that end up uniting most of the country like the decision to go to war in 1939 or to create a National Health Service in its aftermath.

Other decisions remain more controversial but can still be seen as being decisive moments like the decision to join the EEC, the privatisation program of the 1980’s or the second Iraq war.  The point is that over the years politics has mattered because it involved inspiration and decisions being taken that mattered even if they were opposed.

But in the last few years it has felt that politics has mattered less and less.  Partly this is because the world has changed so that politics seems to have less influence than say global big business or the seemingly uncontrollable economic forces.

And partly it is the advent of the information age where the internet and social media has fragmented the sense of a shared experience.  The reality is that you can set your “virtual preferences” so that you can simply block that which is of little interest or irrelevant.

But politics itself also has to bear some responsibility.  In recent months, in addition to being seen as irrelevant, politics has also been ugly.  And that ugliness will have served to further drive a wedge between them-and-us; between the tiny band of political warriors and the majority more interested in fuel prices, the security of their family and Gangnam style on YouTube.

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UNCUT: Naiveté is a weakness in all walks of life but in politics, it’s deadly

17/04/2013, 02:08:49 PM

by Rob Marchant

Major political events which blow all other news out of the water, such as the death of Margaret Thatcher, tend to do two things. First, they make us take a step back and take stock, to ponder the grand historical sweep of things; and second, they give us a little time to do so, as the normal scheme of things is largely suspended.

So far, Miliband is having a “good war”: his Thatcher tribute speech was widely thought to be very good and, in any event, the fact that his opponents cut taxes for the well-off a fortnight ago is surely helping his approval ratings. His party is still solidly ahead of the government, although arguably still more down to the latter’s failure than Labour’s conspicuous success.

But politics is about people. About personalities. As we do the stocktaking, we now know much more about Miliband and his leadership style than we did back in 2010. As critical friends, do we not have the right – or rather, the obligation – to comment, if we think that there are weaknesses in the approach? We do.

Last week, various leftists were justifying their rapacious criticisms of Thatcher by the “two wrongs make a right” technique: recalling equally harsh words spoken by Tories on the death of Michael Foot, that same year as Miliband’s accession.

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UNCUT: For pity’s sake, stay at home tomorrow

16/04/2013, 07:00:32 AM

by Ian Stewart

For the past week those of us who remember the 1980s have been in our own ways reliving them. It has been neither a pleasant nor edifying spectacle to watch friends and family tear lumps off each other over the legacy of the frail old woman who died at the Ritz. Facebook accounts are now covered in the detritus of real life as well as online friendships wrecked by casual or bombastic posts that reopened the wounds long thought healed.

To watch a crowd of idiots vandalise my local cinema – which by the way was showing the excellent Spirit of ’45 – and then break the windows of the bastion of Thatcherism that is Brixton’s Banardos shop defied all logic. I mean, Foxtons – I understand that, but Banardos? Please explain?

I still cannot forgive or forget Mrs Thatcher and her government – not for the miners, nor for Corby, nor for letting the free market rip in such a way that highly skilled industrial jobs in my home town were butchered (Lowestoft men built the Virgin Atlantic Challenger that won the blue riband – using state of the art plasma welding – then were left on the scrapheap). I doubt that Germany, Holland or Norway would have done the same. Eastern Coachworks shut down, north sea oil and gas money frittered away, leaving behind an economy reliant on food processing plants and moving away as the only serious option if you have ambition.

What I also cannot forgive is the fact that ever since 1990, every single succeeding government has attempted not to alter the Thatcher consensus, but simply to give it a “human face”. Up until the great crash Major, Blair and Brown had all seemingly achieved this – balancing social spending with deregulation, further privatisation and tax cuts for the rich.

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GRASSROOTS: We do not need to divide the country to get through difficult times

15/04/2013, 06:49:16 PM

by Helen Godwin Teige

Ed Miliband came to Bristol on Saturday, so I, my husband. our two toddlers and my sister went along to see Ed and listen to what he had to say. He did an ‘on the stump’ speech and answered questions from members and non-members who had gathered in the busy St Nicholas Market in Bristol.

I am pretty sure Ed won some votes for both himself and the Labour party on Saturday. He took questions on everything from mental health, vocational qualifications, and the bedroom tax to legalisation of drugs and Trident. Bristolians are an understated bunch but they know what they are interested in and we felt Ed answered each question well; he listened, gave real and honest answers and didn’t sound as policy light as the press are desperate for him to be.

He was here on the back of the local elections but there were key things that he mentioned that I think Labour need to drill down into and build deeper policies

1. Mental Health

The stigma of mental health needs to end. The increase in dementia cases means this is on the agenda in a big way but mental health affects all ages and  is a vast subject requiring more research, treatment and occupational health. We need to take the lead in accepting people with mental health problems and ensuring their place in society is understood and valued.

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