Steve Barrow, currency strategist, Standard Bank, in the FT:
[I]t’s the financial markets that have the power to strain governments and so bring about change, not the unions and the electorate.
Well, at least we know where we stand.
Just like Steve Barrow, then.
(h/t: my old mate Garry)
(Guest post: What follows is a reaction to Liberal Conspiracy’s Blog Nation conference and subsequent blogging from veteran Leftie and journalist Kate Belgrave)
Way back in 2006, when we all had jobs and Tony Blair was standing down as leader very slowly, I talked to two older guys (a couple of the people that Carmen D’Cruz referred to so charmingly as ‘lessers’ in a recent column) about the reasons why they’d had enough of the Labour party. The party had lost several hundred thousand members by that point and was kicking the bucket before our very eyes, just like the Lib Dems are now.
As longtime grassroots Labour members, the two men were concerned about a very specific sort of Labour treachery.
They said that the party was abandoning the working class, because it was playing fast and loose with public services (we were at a John McDonnell for Leader meeting talking about the privatising of public services and outsourcing of public sector jobs). One of the men gave his name as Bob Mitchell (not the well known one). Originally from Battersea, he’d left home at 14 and gone straight to work in a munitions factory. After that, in peacetime, his job had been installing telephones.
‘Everything Blair has handled has been bad,’ he said. ‘Schools, hospitals, power.’ He felt that the government had prioritised finance for the Iraq war over public services.
The other guy was Patrick Clifford from Queens Park. He’d been a welder for British Rail for 25 years. ‘I never wanted Blair. He’s worse that Thatcher.’ He was absolutely clear about the point of public services, and the agenda of anyone who trifled with them. ‘Everything that was for the working class has been taken away. Health, education, even water. Those things were for us.’
There was much dialogue at the Blog Nation conference about the role that personal accounts from so-called ‘lessers’ can play in the fight against public sector cuts. I propose that we start by using the ones above (and for more see below) to make a simple but signal point; that surely, surely, no leftie needs telling that our governments destroy public services to attack the working class.
Certainly that’s how the working class themselves perceive it. It follows that no socialist in his or her right mind (there are still a few) would so much as share a cab with a Lib Dem now, let alone poke around in that party’s Tory-driven budget for common political ground. The Lib-Dems in government are essentially propping up Tory cuts.
Enough of my small views: let’s get to the anecdotes that we want the political class to hear. Let’s hear from real, live people who have used and contributed to public services, and watched their lives go to pieces as the rules of provision have changed, often to squeeze a few pounds more out of welfare budgets, or to make way for private housing developments or for any number of a hundred other bad reasons.
There’s the Fremantle careworkers. Their salaries, terms and conditions were destroyed when Barnet council outsourced care services to the Fremantle trust. Fremantle’s hardline approach appeared to yield thin fiscal results. Budget problems continued and Fremantle’s partner, Catalyst housing, ended up in arbitration with the council over demands for millions of pounds in extra funds.
‘I said [to management] – how do you expect us to be able to cope [with these cuts]? What [management] said is that you have to do extra hours to make up your pay. But what about the quality of our life – our daily life?’ –Fremantle careworker Lango Gamanga, 2007.
‘As far as I’m concerned. I worked hard. I came here all those years ago and I worked hard and then I got more leave and more wages. I’m 48 now. I don’t want to go back to how I was when I was 30… we’re not asking for a pay rise or anything like that. We’re just asking for what we had.’ –Fremantle careworker Sandra Jones, 2007.
‘The whole notion of carework is being derailed. I wouldn’t recommend going into the care sector now. It’s not just the loss of terms and conditions. It’s the whole working ethos. It feels a bit like a warehouse.’ –Fremantle careworker and union convenor Carmel Reynolds, 2007.
The first picture in a photo-essay on this story can be found here; there’s a button underneath to scroll through the others.
Or there’s the Sheltered Housing tenants in Barnet. I interviewed a series of elderly such tenants who faced the loss of their onsite wardens when Barnet council (famed for their failed Icelandic investments to the tune of £27m) looked to recoup a comparatively small amount (£950,000, later reduced to £400,000) by eliminating the role of warden.
What follows are snippets of interviews with elderly sheltered housing tenants who faced the loss of their onsite wardens when Barnet council (famed for failed Iceland investments to the tune of £27m) looked to recoup a comparatively small amount (£950,000, later reduced to about £400,000) by eliminating the warden role.
‘The majority of people went into these flats on the condition that wardens were going to be provided. If it doesn’t happen, they have to find other arrangements. They feel so insecure… The £950,000 a year for residential wardens is peanuts to them [the council], absolute peanuts. They just spent £27m of taxpayers’ money in Iceland.’ –David Young, 78, Barnet sheltered housing resident.
‘[The warden] keeps an eye on me in case I get depressed, and when I was, he called the psychiatrist and he made sure that I was perfectly looked after. I’m not able to do anything else, because I’m not rich enough to go into a home. I’ll have to stay in the flat and make sure that nothing happens to me. I will be be terrified. I really will.’ –Shirley Shears, 66, a Barnet sheltered housing resident who has schizophrenia.
There’s the story of Helena Ishmail. Ishmail ran the much-utilised Somali support group ‘Horn of Africa’ until Hammersmith and Fulham council cut all funding to the group as part of a wider assault upon the voluntary sector.
‘I’ve been running this centre for 20 years in the borough, and dealing with the council, and they did not even tell me that they were thinking about taking all our funding. There was no time that they tried to talk to me while they must have been making that decision. They didn’t speak to us.’ (At a now-legendary April 2007 public meeting on voluntary sector cuts, the council’s cabinet ran out of the room when Ismail got up to ask council leader Stephen Greenhalgh why her organisation had been targeted).
Sophia El-Kaddah was a young women severely disabled with cerebral palsy was helped by the Hammersmith Law Centre when she took the Acton Housing Association to court over their failure to carry out agreed accessibility moderations on her flat. I did a number of interviews with people who used the Hammersmith Law Centre when the council cut the centre’s funding by 60% in 2007.
‘I signed a contract for my flat, but I couldn’t move in for eight months, because they wouldn’t carry out the adjustments. The occupational therapist [who assessed me before I moved in] said that I could move into this flat as long as the flat was adjusted for me. The Housing Association agreed to that. This flat was purposely built for a walking disabled person, so they needed to do a lot of extra work for me – things like lowering the toilet, and putting in the electric door-opener and hoists.
‘They did not do the works. I was still living with my Mum then, because I couldn’t move into my flat.’
Hazel Scully was a long-time Skelmersdale council tenant who was told in 2007 that her estate would be demolished as part of town-centre upgrade plans. She and other residents fought the proposal – their argument was that council tenants should not be shifted to less desirable parts of town to make way for private apartments for sale. Residents still don’t know if their estate will be demolished.
‘We don’t fit in. We don’t fit in with their vision of a new, updated Skem.’
How many more stories like these will be enough?
What to make of Ken Clarke’s plans for prisons? His speech later today will apparently denounce the great and growing size of prison populations, call for a focus on cutting re-offending and will imply that it’s Labour’s outdated approach which is at fault; “[J]ust banging up more and more people for longer without actively seeking to change them is what you would expect of Victorian England.”
In actual fact, the Tories have long had what one might call a ‘progressive’ (ugh, hate that word) streak on crime and punishment. In the late 1980s, prison populations under the Tories began to fall as Douglas Hurd and others tried to establish consensus around non-custodial ideas, which would see people avoid prison. But to leave the matter there is to ignore staggering contradictions on the part of the Tories.
Firstly, there’s no proposal to get rid of what has essentially become a people-herding industry of private companies, to whom a lot of services have been outsourced. Clarke’s proposition of pay by performance on the basis of re-offending avoided will not fly – as in other outsourced industries, without cast-iron government guarantees of profit, private companies will avoid sectors that don’t look profitable.
Tory rhetoric here doesn’t escape the New Labourite paradigms.
Secondly, for all this talk about prisons being places of education – a solid and welcome return of a very old liberal idea – this won’t help a great deal if there aren’t any jobs to go to when people get out of prison. With millions unemployed, and Tory plans to slash the State sector to ribbons proceeding apace – and private sector investment not yet prepared to pick up the slack – education won’t stop a slide to crime.
Thirdly, if the answer to the second problem is the social welfare net, then this adds a further contradiction to ‘progressive’ Conservative plans for rehabilitating offenders. Said social welfare net is to face cuts. This, I suspect was one of the key problems with Douglas Hurd’s attempt to reduce prison populations; on his watch, he wanted fewer people in prison – but as inequality rose and communities fragmented under the Tories, crime rose.
Thus the voices on the Tory Right sounded a great deal more authoritative.
Fourthly, Clarke’s proposal is aimed in part at cutting costs – he has said so himself. Apparently the new soundbyte is that sending a man to prison (£38,000) is now more expensive than sending a boy to Eton. Several academics – such as Prof. Malcom Davies – have come forward to suggest that actually leaving potential re-offenders at large (and even with continuing educational measures, reoffending jumped by 8% from 2006-8) costs more than prison.
Since a large number of these people will surely be released to unemployment, this type of false economy can be compared to the Tory false economy of slashing Labour’s job creation schemes and calling it a saving. The upshot is a lot more people claiming various types of benefits, whereas the strategic use of Labour’s funds would have allowed private industry to reduce the cost of employing someone whilst still footing some of the bill.
If the Tories are allowed their own way on the economy, coalition or no coalition, the deeply reactionary hang ‘em and flog ‘em brigade on the right of the Tory Party will not be long in re-establishing themselves – something that happened to Ken Clarke when he was last Home Secretary. As privatisation and the attempt to extract ever more labour for less pay from prison staff continues unabated, I worry to think how our prisons will end up.
This is, after all, the same Conservative Party which resoundingly endorsed Labour’s massive expansion plans – worth some £4bn – of the prison system.
The world cup is nearly over, and most Labour party members will need a new wallchart for the kitchen wall.
What better new adornment than TCF’s informative and easy-to-use Labour leadership scoring chart?
Here, then, is your week 1 scoresheet.
Click, print, browse the TCF customised weighted scoring at your leisure.
I’ll be updating it weekly from now on, and when ballot papers go out, we’ll be ready to announce the final result, telling you how you should list your leadership preferences. It’s all based on our highly socialist scientific methods, with absolutely no chance of error. By following the chart, you’re sure to get the best available leader of the Labour party, of those shortlisted.
The chart simultaneously takes the stress out of deciding which way to vote, while still capturing the nip and tuck and rising excitement of the final stages.
Candidates, their teams and their supporters are invited to submit articles to TCF for our consideration to try and improve their vital points tally.
So where are we after week 1?
Just out ahead is Ed Balls on 32.50%, with the Milibros just behind on 31.83% (Ed) and 29.17% (David). Diane Abbott trails slightly on 28.33%. Andy Burnham’s a late starter, and enters the fray next week when we’ve worked out what he’s about.
It really is all to play for.
One speaker was a James Graham, from the Social Liberal Forum. His main pitch was broadly:
We’re LibDems, and despite their being no evidence of it to date, because we’re LibDems we’ll have a restraining influence on the Tories, and this is a good thing for which you should all be grateful.
Anyway , that’s where we are, so get used to it.
Oh, and by the way, this means you have to support AV in a referendum, because that’s a good thing, and you lot in Labour had better do it if you want ever to be in government.
If I’m honest, I’d drifted off a bit after the opening statement.
However, one thing made me prick up my ears. This was when he rolled AV in with the Equal Constituency size thing, assuming no-one would notice or care.
This woke me up enough to wave my arms in the air, and when I got my say, to note that AV might be one thing, but that equal constituency size was quite another, and that it was wrong simply to assume acquiescence from Labour on this.
Someone else got up and said equal constituencies was a ‘no brainer’ to support, and that Labour had to get real about the democratic deficit it had created with its gerrymandering and blah de blah.
And so it is that I’ve had to dig out some data on the last election that I tinkered with in May, discovered some interesting stuff from, but then put to one side and forgot about.
Because the need for equal constituency size is only a ‘no-brainer’ for liberal numpties with no understanding of, or desire to engage with matters of institutional bias and the need for the left to counteract this balance as best it can. (This is a point made eloquently by Chris Dillow in relation to an earlier post of mine on PR, in which he talks of FTTP potentially being a tool of ‘Rawlsian justice’, where a seeming injustice in its own right is used to counteract greater systemic unfairness.
So what does the election data tell us about the fairness or otherwise of equal constituency sizes?
Consider these points, established from a bit of excel-based battering of the results data provided by the Guardian.
1) The Tories won 306 seats, Labour won 258.
2) The Tories got 10, 683, 258 votes. Labour got 8,601,349 votes.
3) Average turnout in seats won by the Tories was 68.3%. In seats won by Labour, it was 61.2%.
4) If Labour had gained its total vote figure on the basis of the Tories’s turnout (in places they won), they would have gained 9, 558, 670 votes in total across the country, about 950,000 up on the figures they actually did win.
5) If then this hypothetically increased balance of Tory/Labour votes were used to adjust the number of seats won, the Tories would have won 297 seats to Labour’s 267.
6) The balance of power for a coalition would have been with Labour, and life would be very different now.
Now of course this is all very broad brush, based on an excel crunch which took me about 20 minutes late one night. (Let me know if you really want to see the workings, especially if you want to number crunch further, and I’ll email it to you.)
I simply want to make the point that all is not as clear-cut as James Graham and his mates would have us believe.
The key question we need to ask is why voter turnout in ‘Labour win’ seats was 7% lower than in ‘Tory win’ seats. The standard liberal perspective will be that some voters simply decided to exercise their free will, and did not vote Labour in seats won by Labour, whereas Tory voters were more inclined to vote.
But the other, more persuasive argument is indeed that of Chris Dillow: that there are institutional forces which militate against people in poorer areas exercising what is a legal right, but which they do not feel entitled or empowered to exercise. This is more to do with life opportunity, education, hope, and a sense of self-value than it is to do with whether different political parties are any good at ‘getting out the vote’.
Of course there are many other considerations when it comes to debating constituency size, not least the inadvisability of constituency equality gaining primacy over identified locality (e.g. the absurd recent idea for a constituency covering part of the Wirral and part of Liverpool, with a 1.2 mile estuary in between).
More importantly, there’s the question of voter registration, and the need to take not just registered voters but all possible voters into account when determining constituency size.
What we shouldn’t do, though, is simply ‘let this one go through’ as a minor adjunct to the AV issue, when it is clear that what may have been gained for Labour through constituency size differentials is only, arguably, a counterbalance to the inbuilt social injustices of parliamentary democracy.
The cards are stacked far enough in the right’s favour. We don’t need to give them any more aces.
Not one they organise themselves. For the big one that’s footie, and for the small it’s got something to do with outer space and ninja skills with bananas.
I mean a game the teachers organize. It involves the four edges of the playground representing places or positions. It might be North, South, East, West or some other grouping. When the teacher shouts out a place, all the kids have to run that way.
It’s more complicated than that, and I don’t know all the rules, but that not important. What is important is that the game is all about learning to listen to specific instructions, maybe increasingly detailed, and in an increasingly competitive environment as some kids lose out and have to go and sit down somewhere. Sanctions or exclusions for not obeying quickly and correctly are part of the game, and the winner is the one who’s best at meticulous and prompt obedience.
I think Phillip Blond may have seen the game too, and got on to Cameron about it being the best way to keep the proles under control.
In the Blond/Cameron version, the country is the playground, and the proles rush up and down it according to the increasingly detailed instructions. Some fall out of the game because they can’t cope with the instructions, and the game becomes increasingly fraught as people chase the few winner positions.
The five basic code-named calls from Cameron and his disciplinary assistant are as follows:
IDS: Run down south where all the jobs are, leaving behind all your family and friends.
House : Run back up north, because we’re cutting your Local Housing Allowance in places where it’s more expensive to live, and you really should have thought about that before moving.
Big Soc: Run back to wherever you came from last time, or maybe the time before, and join a compulsory neighbourhood assosication to protect yourselves from all the bloody ‘migrants’ who followed the IDS call. This bit can get violent if you’ve been punished earlier in the game.
Osbo: Run back up north or maybe south this time to look after your family, who should be really important to you and who now necessarily face an uncertain future what with all the cuts to essential welfare services and are a bit more likely to die quicker
Jail: Proceed directly to jail for failing in the game and not having a job, or anywhere to live. (If you’re a pregnant teenager, the relevant call is not ‘jail’ but Tom Harris in honour one of the inventors of the game’s original version.)
As the Globe and Mail reported 562 arrests of those protesting the summit, the G20 leaders released their final communique. It represented a victory for those like Merkel and Cameron who were pressing for deficit reduction to be the key aim. The final communique stated:
Sound fiscal finances are essential to sustain recovery, provide flexibility to respond to new shocks, ensure the capacity to meet the challenges o aging populations, and avoid leaving future generations with a legacy of deficits and debt. The path of adjustment must be carefully calibrated to sustain the recovery in private demand. There is a risk that synchronized fiscal adjustment across several major economies could adversely impact the recover. There is also a risk that the failure to implement consolidation where necessary would undermine confidence and hamper growth. Reflecting this balance, advanced economies have committed to fiscal plans that will a least halve deficits by 2013 and stabilize or reduce government debt-to-GDP ratios by 2016.
We see the opposing views of Europe, China and the USA in this summary. Presumably Chinese and US pressure led to the
There is a risk that synchronized fiscal adjustment across several major economies could adversely impact the recover.
Whereas the European right seems to have won the conclusion
There is also a risk that the failure to implement consolidation where necessary would undermine confidence and hamper growth. Reflecting this balance, advanced economies have committed to fiscal plans that will a least halve deficits by 2013 and stabilize or reduce government debt-to-GDP ratios by 2016.
How achievable are these aims?
Can they half deficits by 2013?
When considering individual economies there is always the possibility of reducing deficits by exporting more, but for the whole world this does not apply. How can the whole world reduce deficits in the midst of a recession?
It can only do it if the private sector as a whole, world wide, saves less. And how can this happen?
The most obvious solution — to sharply raise taxes leaving the wealthy of the world with less money to save — seems to have few advocates, so we are left with three other courses of action.
- The most likely initial scenario, the budget cuts of Cameron, Merkel etc plunge the economy of Europe at least into a much deeper recession as a result of which millions of newly unemployed stop making payments into pension schemes and bring down the level of saving.
- The next alternative is that private firms start borrowing on a large scale to finance new investment. This is not impossible, but is unlikely until the private commercial sector has improved its liquidity.Companies have to go through a period of saving to do this. The savings of the private sector must balance state borrowing, so what is happening is that firms are offloading their debt onto the state as the borrower of last resort. Once they have shifted enough debt onto the state, and if world demand looks buoyant, they might then start borrowing to invest again. But this requires governments across the world to go on borrowing until private investment picks up. If they immediately start to try and cut the rate of borrowing and even try to run down the total level of outstanding debt by 2016, as the communique states, the whole process stalls. The communique implies that the private sector is to become a net-borrower from the state sector by 2016 — an extraordinary unlikely prospect.
- The one plausible and progressive mechanism mentioned is to expand demand in the surplus economies.
Surplus economies will undertake reforms to reduce their reliance on the external demand and focus more on domestic sources of growth. This will help strengthen their resilience to external shocks and promote more stable growth. To do this, advanced surplus economies will focus on structural reforms that support increased domestic demand. Emerging surplus economies will undertake reforms tailored to country circumstances to:
• Strengthen social safety nets (such as public health care and pension plans), corporate governance and financial market development to help reduce precautionary savings and stimulate private spending;
• Increase infrastructure spending to help boost productive capacity and reduce supply bottlenecks; and
• Enhance exchange rate flexibility to reflect underlying economic fundamentals.
There is blatant hypocrisy here. Surplus economies are supposed to be expanding domestic demand, but Merkel, the head of Germany with the 3rd largest trade surplus is determined to retrench rather than step up domestic demand. In effect the pressure on surplus countries is addressed exclusively to China. There is no doubt that were China to put in place really large scale social democratic reforms, then domestic demand there would rise, with significant expansionary implications for the whole world. But for now, China’s trade surplus continues to grow, contra the declarations of the the communique. The sorts of changes that the communique asks for in China actually require a change in the political balances of forces towards the working classes in China. The fact that Hu Jintao was willing to allow even this much to go into the communique, along with the successes of the recent strike wave in China, indicates that this internal change may be beginning to happen.