Though Cowards Flinch

I arrived at my desk this morning with a very much-needed cup of tea as I proceeded to go through the daily ritual of checking my email inbox. This is usually a pretty uneventful process, but today I felt the need to use the mug to smash my screen into small pieces.

It seems I’ve ended up on an internal Conservative HQ email list for some reason, apparently I share a name, and thus a similar email address, with one of my Tory counterparts.

The offending email is titled ‘Business groups welcome Employers Charter’, and is urging the reader to spread the good word about all the government is doing for employers.

This angered me greatly. The fight for employers rights inevitably involves removing them from, you know, the real people that they employ. But when fighting the corner of corporate entities it’s obviously clear who the enemy is.

The email is referring to the governments decision to remove rights to claim unfair dismissal for the first 2 years of employment.

Apparently denying workers the right to challenge unfair treatment is a ‘barrier to growth’ as the Prime Minister is quoted saying;

Today’s announcements on reforms to employment law are among the first conclusions of our Government-wide growth review, and highlight our determination to ensure that employment law is no longer seen as a barrier to growth

So basically, as the economy sinks back into decline, a priority for the Conservatives is to make sure you’re employer of 23 months can get up in the morning, sack you just for the hell of it, and face no legal consequences for doing so.

I don’t think anyone reading this will be surprised at the thought of Conservatives putting private profits before individuals rights, but I also feel this is a very important issue that is getting drowned out by the deluge of horrific news stories at the moment.

A persons right to seek legal redress against an employer for unfair treatment is central to good employment right’s, and one that should be protected at all costs. It’s removal is an open goal for those eager to show the people of Britain whose side this government is on.

Bad news for the spin doctors at the Daily Mail this week.

The above poll asking readers if they still supported students after this weeks “riots”, found that 63% said they did, whilst only 37% didn’t.

Nice to see the Fleet St propaganda mill isn’t as all persuasive as it likes to think it is.

I guess they’ll just have to try harder. After all, they’re pretty adept at “proving” whatever it is they feel like telling people.

But more importantly, the thought that this might have resulted in some Mail hack losing their temper, upon realising they didn’t get the answer they wanted, is extremely satisfying!

Nick Griffin has kicked this years BNP conference off with the promise of forthcoming “militancy” from his Party, in the face of protests from groups such as “Muslims Against Crusades”, during parades of returning British troops.

In his speech to a dinner at the Party Conference, Griffin said;

We are going to start attending homecoming parades of British troops, and when the Islamic militants abuse our troops and threaten them, we are going to physically stand in their way,

But more worrying I think, is the indication that such “protests” will also take place where there is efforts to construct Mosques.

The concerns are obvious.

Violence between members of the Muslim community, and BNP members trying to ferment racially motivated violence for political advancement, will pose a major threat to social cohesion wherever it happens.

Bizarrely, Griffin also says;

The British people have already shown that they are willing to start supporting the British National Party in increasing numbers

Perhaps he’s forgotten about the battering they took in May.

This could be one of two things.

It’s entirely possible that this was simply intended as a crowd pleasing rant for members of an increasingly demoralised and fractured Party. A futile attempt at lifting the spirits of a group of people doomed to fail in the near future.

But it could also be an acknowledgment that the BNP’s efforts to legitimise itself, and add a little professionalism to its electoral efforts have failed. In which case this could be the first signs of a change in strategy to something reminiscent of the National Fronts heyday. Perhaps it is an attempt  to tap into what they perceive as an appetite for a more confrontational approach, such as that which has defined the EDL.

They’re changing the logo too. Maybe there’s a full re-branding taking place?

An elected politician..

Ed Miliband will by now have received a letter from Baroness Warsi, Tory Party Chairman, and current front-runner for most irritating person in Britain.

In said letter, she has a moan about comments made by Hayes and Harlington MP, and LRC Chair John McDonnell, at this weekends Coalition of Resistance Conference in London.

John noted, that when the formation of a Government requires its participants to blatantly ignore one of their key election pledges, people have little other choice than to utilise their democratic rights to protest.

It’s a simple concept and is nothing new. If votes don’t deliver, then people will find other ways to make their voices heard. Democracy would be completely meaningless if disappointment and submission were a requisite.

But Baroness Warsi doesn’t seem to like this concept. As she says;

A member of your party, John McDonnell MP, has been quoted in the press suggesting that he is involved in a ‘programme of resistance’…

People resisting their government? It’s an outrage I tell you! This kind of thing would have never happened in Stalin’s Russia.

I mean how dare an elected representative of the people seek to organise against measures which he feels will adversely affect those he represents. Something clearly needs to be done about it.

So far, it is unclear what Ed Miliabnd will have to say about this, but if I was advising him, it would be something along these lines;

Dear Mrs Warsi,

I note that you are displeased about comments made by the elected Member of Parliament for Hayes and Harlington John McDonnell, and indications that he may be involved in opposing certain measures currently being pursued by your government.

Not being an elected Member of Parliament, I can forgive you for not properly understanding the requirements of the job.

Due to what you obviously perceive as a bizarre constitutional covenant, opposition MP’s are actually not required to agree with the government.

Some political theorists have even suggested, that they should in fact oppose the course of action being pursued by the government of the day. Perhaps when that course of action being pursued is contrary to the mandate upon which they obtained their position.

As such these elected representatives, may from time to time voice the concerns of those who do not agree with their government.

While representations via the House of Commons are commonplace, political activities outside of Parliament are not forbidden.

John’s observation, that ignoring students concerns leaves them “no other alternative” than to protest, could only possibly be construed as a criminal offence if you are stupid, or have been ingesting some kind of narcotics.

The Member from Hayes and Harlington seems to be doing his job in representing his constituents. I assume that enough of them may share his concerns, based upon the assumption that they agreed with his position enough to vote for him in May.

So, I will in fact be congratulating John McDonnell for a job well done, instead of reprimanding him as you suggest. In what is no doubt a futile attempt to turn members of the Labour Party against each other.

I thank you for your letter, and would like to ask you not to make such stupid comments about this countries political process again,  that is until someone has elected you, and conferred upon you the same responsibilities enjoyed by John McDonnell.

Yours Sincerely,

“Red Ed” Miliband.

One can wish, no?

Paul has already given us a fairly detailed account of how Labour should respond to the Tories decision to bail out their fellow, axe wielding friends in Ireland.

My response is somewhat more simple. Minimalistic even. But as the Tories have proven in recent times with their highly effective, hard-hitting message over the deficit in Britain, it’s the simple message that often makes the biggest impact politically.

So if I was Ed Miliband this Wednesday, I would have two very straight forward questions for the Prime Minister and his sidekick (Osborne, not the other one);

• I thought we were “on the brink of bankruptcy”? And I also seem to remember something about their being “no money left”? Doesn’t giving £7bn to a foreign government, that has grossly mismanaged its economy, kind of disprove this central tenet of the Cameron/Osborne narrative that has underwritten this governments entire agenda so far?

• Isn’t government intervention to save the economy a bad idea? If not, could we please be reminded what exactly the last government got so horribly wrong during the financial crisis, whilst the current occupants of Downing St sat on their hands?

I imagine that George Osborne has been losing some sleep over this. I’m sure giving £7bn to another country, whilst preaching austerity at home certainly wasnt top of his to do list. But if his dreams of an export led recovery in Britain are to be realised, then the last thing he needs is further deterioration for one of Britain’s major export partners. Not to mention the money that banks such as RBS have tied up in the Irish economy. Quite a pickle eh?

Any government intervention in Ireland could be a major hiccup to the Tory narrative on the economy.

Labour needs to be clear that it still supports state intervention to prevent troubled banks crushing the rest of the economy, and this could be a nice opportunity to subtly remind people of the merits of action taken by Gordon Brown in the face of  financial crisis. The fun bit comes in pointing out the  inconsistencies in the Tories economic philosophy.

It seems that Ed Miliband, either through bad decision or bad choice of words, has incurred the wrath of many lefties today, after a spokesperson seemed to wobble on his previously enthusiastic support for the 50p top rate of tax.

The talking head told journalists, that the Party does indeed support the 50p rate, “for now, and for the forseeable future“.

For those who struggled with elementary english, this isn’t really the same as the promise from “Red Ed” during the leadership contest, to keep the 50p rate “permanently”.

The clarification, or revision for those of a slightly more cynical persuasion, came after Alan Johnson cast doubt over the nature of this supposedly permanent tax. This raises further concern amongst those of us who live in fear of plotting and scheming, from those who never agreed with Ed, who wish to destroy any hope of him delivering the change which he promised during the campaign.

As Ed said during the contest, the 50p rate isn’t just about deficit, but it is about “fairness in our society”. But obviously, there are those who think that taking that little extra from the tiny, tiny minority of very well off people who can afford to pay it, is the beginning of a slow drift towards electoral suicide. presumably because bankers and lawyers earning somewhere in the region of £150,000 a year suddenly became Labour’s core base of support without any of us noticing.

Many would agree with what Ed had to say. I would, and do agree with it. But I’m starting to wonder whether or not he does too.

It’s no secret that there are those in the Labour Party who were uncomfortable with raising the top rate on higher earners, and thus appearing to abandon New Labour’s pivotal covenants with the filthy rich. I remember Mandelson publicly flirting with the idea during the election, much to mine, and many of my comrades annoyance.

But this instinctive tendency of those more right leaning Labourites to cut taxes for those who probably don’t miss it so much, casts the light to another policy path, cutting taxes for the LESS well off.

And this shows the political insufficiency of the likes of Mandelson et al to those of us generally committed to advancing the settlement of lower earners in Britain. Where were the warnings against appearing tough on aspiration  when the lowest earners were having their tax rate increased?

Sadly, such prioritization of high earners would seriously bring into question, just who Labour exists to represent. A question that needs to be at the core of everything the Party does as we pick ourselves up from electoral defeat.

If we really want to reaffirm our image as the representatives of the less well off, more vulnerable members of our society and want to talk about tax cuts, then we should be talking about cutting taxes for those at the bottom end of the income scale, not those at the top.

But in my experience, many lefties, for some reason seem totally unwilling to incorporate tax cuts into their political lexicon.

Any preference for the former will only perpetuate the illogical thinking that had us removed from power in the first place. So sort it out Ed, and do it quick.

The Chancellor of the Exchequer George Osborne, will finally be announcing details of the Coalition Governments plans to cut public spending this week, in what the news has interestingly (and correctly) labelled “the largest reduction to public expenditure to public spending since the ‘Geddes Axe’”.

Sadly, the press didnt see fit to provide any further explanation of the ‘Geddes Axe’, and what its macroeconomic implications were. So, for the sake of critical analysis, lets shed some light on this infamous period of British economic history.

In the early 1918 after the end of the First World War, the Liberal-Conservative Coalition set about reducing Britain’s large public debt, in face of what was already a severe economic crisis, by embarking on a large reduction to public expenditure. Sound familiar?

The results, to put it mildly, were devestating, as the table below clearly shows (hat tip to Victoria Chick for the data);

As can be seen from the table, the first round of cuts led to contraction peaking at -8.7%, with an unemployment rate of 6%.

By the time the second round of spending cuts begin in 1921, we see unemployment reach a massive 16.9%, followed by a jump in growth the following year, before it starts to contract again.

The most telling thing about this, which I have commented on before, is the increase in the public debt over this period, from 114% of GDP, to 180% of GDP.

Some seem baffled by the possibility that debt could increase n the face of government cuts. What economists refer to as automatic stabilisers, such as drop in tax receipts, and increae in benefit payments (which Prime Minister of the day Lloyd George had helped expand), help push borrowing up during a downturn, as growth slows and unemployment rises.

So if I agreed with the Chancellor, that the most urgent task facing the British economy was a reduction in the size of the public sector deficit (which I most certainly dont!), then I would have to ask him to read his history books!

Those of us who have been labelled, rather uncreatively in my opinion, as “deficit deniers”, would probably do well to point out that it is the deficit hawks who are in denial. They are in denial of history!

The macroeconmic implications of cutting public spending during a time of downturn pose some serious political, and moral questions.

Is it a moral duty to reduce the size of a governments debt? If the answer is yes, then is it justified to leave the future genersations we seem so keen to protect from debt, with a smaller economy, in the pursuit of completing this moral duty? And is massive unemployment a price worth paying?

The Chancellor rejects the notion that his cuts will lead to a sustained increase/maintenance of the unemployment rate. He is putting all his hopes into a surge of private sector job creation, to offset the jobs lost in the public sector. In some part this will be true, but only in a small percentage, as some public sector jobs are transferred directly into the private sector, as opposed to being cut altogether.

And whilst we are talking history, I’d like to pose a question to those that support the current governments course of action. A question that is being enthusiastically discussed in the post-Keynesian community of late.

When was the last point in British economic history, that public sector retrenchment led to private sector job creation, whilst the domestic private sector is de-levereging (paying down its own debts), and growth slowing amongst our key trading partners?

For those that missed the insinuation, these are the kind of conditions we face in Britain at the moment.

As far as I’m aware, the Chancellor and his supporters, wont be able to point to such a period, because there has never been one!

But I’ve never been one to resist admitting when I’m wrong, so if anyone can put me right, please feel free to do so.

After reading this excellent pamphlet from Red Pepper at the weekend, I again got wondering about the need to explain why the cuts wont work.

We’ve devoted plenty of time on this page to attacking the reasoning behind the tightening of fiscal policy, but perhaps the time for such lines of arguments have passed. The cuts are coming now, and I think the main task in the battle ahead is going to be one of making sure that people realise how they are being negatively affected by this particular political decision.

On the doorstep during the election, I realised just how difficult it was to try to communicate a case against the cuts from an economic point of view. I don’t think the average voter was too keen on being given an economics lesson by a young chap with a clipboard whilst they were trying to catch up on Corrie.

It was always very difficult to shift the discussion from the menacing shadow of concerns about public debt, and sadly, lots of people do share the right’s list of priorities when it comes to reducing the deficit.

In my opinion we do need a strategy for communicating a challenge to the unnecessary prioritization of the deficit as a primary economic concern, but I think this will take some time to roll out in an electorate friendly manner.

But we may yet actually see a situation where this hysteria surrounding public debt could be of use to those of us who wish to challenge the cuts.

In an excellent paper that was published recently (The economic consequences of Mr Osborne), Prof Victoria Chick and Ann Pettifor, take a look at an extremely interesting dataset, showing relations between changes in public spending and public debt since 1909.

The main thesis of the paper, is that as well potential negative impacts upon employment and growth, fiscal consolidation can have upward effects on public debt.

As the table below shows, a fairly modest reduction of public spending between 1931 and 1933, led to an increase of 10% (again as a share of GDP) in the public debt;And as the next table shows,an expansion of public spending by over 10% of GDP, between 1933 and 1939, led to the public debt decreasing by 42%;

If you want to get a more detailed view of the various factors behind this data then I’d highly recommend reading the full paper, and the entire dataset can be found near the bottom.

The typical line of attack from the left, such as the one in the Red Pepper pamphlet, has focused on the cuts not working in the context of restoring economic activity.

Whilst I certainly believe this to be true, the data in this paper shows us that there is a real possibility that the cuts might not work in the context of the Tory narrative either, i.e. that the cuts are necessary to resolve, what they perceive to be, a debt crisis.

It would be irresponsible for me to assert that this will definitely be the case, but going off the data provided by Ann Pettifor and Professor Chick, it’s certainly a possibility.

If the cuts do lead to both poor economic performance and higher debt, the lines of attack will become much more effective. The government will quickly find themselves on the backfoot, battling accusations of economic incompetence, as well as trying to explain why their supposedly common sense approach to  tackling the public deficit has failed.

Like I said, it would be over ambitious of me to guarantee such an outcome. Definitive economic analysis is a touchy subject amongst experienced economists, nevermind someone such as myself who hasn’t even finished my degree yet. So, I guess we’ll just have to wait and see.

Update: After a couple of people pointed out that relying on figures from the 1930′s isn’t really good enough, I thought I’d add some more recent examples of similar trends.

I should probably clarify that I was just extracting one example from the Chick/Pettifor thesis, which has also been linked to.  But I suppose it would be wise to include one of the more recent trends too;

So, if we pick two more recent periods to study, we do indeed see a similar trend. I’ll take these two periods from the complete dataset from which I took the above charts. The full dataset can be found here, just go to page 21.

It’s important to note that the thesis laid out by Ann and Victoria isn’t as profound after 1976. They give some reasoning for this in the paper.

But even if it’s not quite as profound, the trend still seems to be that debt comes down as spending is increasing.

So in 1979 public spending was 22.9% of GDP and public debt was at 46% of GDP.

By 1997, public spending had been reduced to 19.4% and the debt had risen to 53%.

If we then look to 2007 before the cost of a response to the financial crisis starts to get factored in, we can see that spending was again at 22.9% of GDP and the debt had decreased to 44%.

Obviously this still isn’t definitive ground for a prediction of what effect the current governments cuts will have on the level of public debt. But it certainly provides food for thought.

David Cameron yesterday confirmed what most of us already knew to be the case. After months of telling us that he doesn’t want to cut public spending, but due to the size of the deficit, he has no choice, he has finally allowed his true feelings to emerge publicly.

If you believe in the fiscal fetishism of Mr Cameron and friends, this claim might have seemed all well and good. After all, no decent person decides to deprive thousands of employment, and attacks the living standards of millions of others unless there is a genuinely good reason for doing so.

As me and Paul have both said numerous times on this page, there isnt a good reason for doing so, but those who don’t see through the fantasy narrative of people like George Osborne could be forgiven for believing that the Prime Minister was being sincere.

Well after Cameron’s appearance in Birmingham yesterday, even those people should be able to see that his recent narrative is nothing more than an attempt to cover his tracks with some good old-fashioned PR!

One member of his audience asked;

 ”Should we cut things now and then go back later and try and restore them?”.

Perfectly understandable question, as seen as even Cameron recognises that the cuts won’t be pleasant, and will make already trying times even more so for many people. If the only reason we’re cutting spending is because of current problems (of course remembering that the PM takes no pleasure in this whatsoever… honestly), then surely when things are better, we can undo all the pain, right?

Well according to the Prime Minister, no, we can’t. In reply to the question he said;

“I think we should try to avoid that approach … people should open their minds and find new ways of doing more for less. We’re going to have to change the way we work

So there we have it. Even in better times, David Cameron believes it would be desirable to have lower public spending to that which we have now, thus confirming what most of us have believed for some time, but which Cameron has until now, not had the balls to say in public.

 That these cuts are motivated not by circumstances beyond the Government’s control, but by an ideological desire to slash social provision, and see a smaller state. Not by any current problems, their just the political cover for pushing the changes through.

It has been the Holy Grail of politics for Conservatives for many years, and yet again their desire is going to be put before the needs of millions of ordinary people.

With a long-term view of decreasing state spending like this, I dread to think what services will be left to the mercy of the market, but given the look of the Governments plans for the NHS and schools, I wouldn’t consider anything off-limits.

Given the obvious conflict with the recent narrative, Cameron’s comment needs to be pushed in the Tories faces time and time again. We need to make sure all those who may have at first believed the half arsed PR line being spun to us in recent months, see this travesty for what it really is. A bunch of rich boys making the less well off suffer so they can get their own way.

After some lengthy, booze fuelled discussions over the electoral reform issue this weekend, it became clear to me that the Shadow Cabinet’s decision to try to derail the Bill for an AV referendum, may be totally inadequate.

The argument is sound, the Shadow Cabinet supports a referendum on AV, it was in our manifesto, to oppose AV would be hypocritical and opportunistic, and would rightly invite criticism. However, proposals to gerrymander electoral boundaries in favour of the Conservative’s was not in our manifesto, and opposing that is in no way opportunistic. 

In my opinion the government is trying to get members of the Tory back benches to support a Bill they’d love to never see on the floor by throwing them a little sweetener in, along with a promise to ensure the bit they don’t like will never pass in a referendum.

The Lib Dems involvement with the Coalition is literally completely dependent upon this referendum. If they can’t even get some movement on electoral reform they are going to feel the wrath of their activists and other core supporters. David Cameron knows this, so he is keen to prevent any rebellion on his own benches over this bill.

It seems like the Shadow Cabinet’s strategy is to either completely derail the bill with the help of unhappy Tory’s, who think that reducing the number of MP’s isn’t enough to earn their support for a proposal that could very seriously backfire on their own party. As the guardian piece points out, if we had AV in the ’97 election, the Conservative Party would have been reduced to a miserable Parliamentary presence of 65 seats!

I think this is flawed, but I may very well be wrong, so feel free to set me straight if you think this is the case.

If the Shadow Cabinet wants to preserve its support for AV, but oppose the gerrymandering, then the only way to do so would be to amend the bill accordingly, and gain support from Tory’s who have indicated that they may rebel in order to pass it.

Obviously this isn’t going to happen. The Tory rebels want to stop the whole thing not the gerrymandering aspect, which most of, if not all of them are in favour of. So the only possibility for a succesful obstruction from a Labour-Tory alliance in the house, would be complete opposition to the bill.

Could Labour deflect criticism of opportunism if this were the case? Most likely yes, the argument would be that we support AV, we never said anything about cutting MP’s. If the coalition genuinely wants to make some progress on this issue then they shouldnt be tieing in controversial amendments that upset the possibility for cross party support.

Benefits and drawbacks of such a strategy aside, it may not even be possible. Even with the 45 or so Tory MP’s rumoured to be ready for a rebellion, the Coalition would still be likely to succeed in passing the bill, albeit narrowly. Would it be worth looking like an obstacle to reform for a fruitless attempt at halting a key Coalition proposal?

One thing that could possibly succeed doesn’t seem to have been considered. Maybe the Labour benches could throw in an amendment that would really put the Lib Dems on the spot, asking them to show once and for all what they consider more important. A seat at Cameron’s table, or the one thing that they’ve wanted for as long as anyone can remember?

Why couldnt someone put forward an amendment, that would give us a vote on some form of PR, instead of the AV that Nick Clegg himself called “a miserable little compromise”? 

If the Lib Dems actually thought their precious electoral reform was more important than staying in the Coalition, then combined with support from Labour, Plaid, the SNP and the Greens Caroline Lucas, then such an amendment could pass. 

I’m not sure if I’ve overlooked some technical issue with such a proposal, after all, I’m no expert on Parliamentary procedure, but it seems pretty sound to me. The Lib Dems would either have to split the Coalition, or vote against their most cherished legislative aspiration. Lib Dem activists already loosing sleep over the current arrangements would surely see opposition to such proposals, as a means to retaining a small element of power as the final straw?

So, is it a plausible strategy? Could such an amendment be put forward? If it could, then I would have to say this would be a much more interesting, mischievous course of action for the Labour front bench!