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How Labour should respond to the Tories’ £8bn NHS pledge

April 12, 2015 1 comment

It is quite an achievement for Labour’s rebuttal specialists to have Labour coming out on the wrong side of the argument about the Tories’ pledge to invest £8bn a year in the NHS, but they appear to be managing it.

What the “but it’s all unfunded” Labour plaints sound like from deepest Lancashire is “we’re against this £8bn annual investment, even though we’re the party of the NHS”.  And if it sound like that in my Labour loyalist kitchen, expect the Tories to make a big thing of it at the launch of their manifesto.

There are two issues here.

First, how the hell did Labour’s top team not see this coming?  Even I, who know sod all about election strategy (apart from the bit about winning them), said two and a half years ago the Tory game plan would go as follows if it looked like all was lost:

the importance of the national deficit [will be] set to one side in the pursuit of the wider goal of national salvation – we may even see some form of Modern Monetary Theory brought to bear, though it is unlikely to be termed such.

So it should hardly be a surprise that the Tories are throwing ‘unfunded’ commitments at the electorate.  It seems to me that the fiscal conservatives who’ve had such an influence on Labour’s economic-credibility-at-all-costs strategy have become so convinced of the success of that strategy that they’ve forgotten other economic arguments – like the one being set out by the Tories now – actually exist.   So, while it should have been Labour arguing the case for investment in the NHS on the basis both that short term deficit is easily dealt with in a context of wage-led economic growth and that public investment in health is itself part of that, it’s the Tories who are now able to call the shots, and attack Labour for presumed failure to promise investment.

In other words, Labour’s is being strung by its own fiscal conservative petard; it can’t now celebrate the Tories’ proposals as an admission by the Tories that their previous line was wrong, because rhetorically (though not substantively) it chose to toe that previous line.

Second, there’s the question of how Labour should deal with the Tory proposals, now that its fiscal conservatives have backed the party into the corner.   Clearly, they’ve not thought that through just yet.

The solution for Labour is to argue that the Tories £8bn investment promise is a lie, and that it won’t happen.

The easiest way to evidence this is to point to the fact that, even in 2015-16 if they win, the Tories are proposing to cut £3.8bn from the NHS by quietly allocating it to local authorities, under the provisions of sections 75 and 256 of the National Health Service Act, which effectively allow ministers to ‘fund’ the NHS, but then direct any percentage of that funding its wants to be transferred elsewhere.  In 2014-15, just for reference, the ‘NHS transfer funding’, as it is generally called, was around £1.1bn to local authorities.

The £3.8bn transfer is explained by government as investment in ‘integrated’ social care, but this investment is needed primarily because of the effects of austerity on local authorities.  Projecting forward, it’s not hard to foresee that most or all of any supposed new investment in the NHS will actually taken straight out again to fund social care, especially as the savings which are supposed to accrue magically through integration fail to do so to any extent planned and hope for (pdf).

 

*The £2bn that Jeremy Hunt says has already been promised  to ‘frontline services’ in Osborne’s final budget,  and which he says is over and above the £8bn, may or may not be the same £2bn budget line which now appears as part of the £3.8bn transfer to local government above.  Either way, it’s £2bn which was to be spent by the NHS frontline, but which now isn’t.   Of course, only £.3bn of that £2bn was actually new money anyway, so it may be that this is the second bit of double counting.

 

 

 

 

Zero hour contract legislation: let’s be careful what we wish for

Today Ed Miliband has made a key promise:

We have to end the epidemic of zero hours contracts.

So today I can announce that in our first year of government after the election, Labour will pass a law that says:

If you are working regular hours, you will get a regular contract.

A legal right that will apply to all workers after 12 weeks.

This sounds great, except that it does very little to end the exploitation of people on zero hour contracts.

You see, the people most exploited by zero hour contracting are not those on regular hours, but those on irregular hours.

Ensuring that people already working regular hours get a contract that reflects that fact may be nice enough, and clarity on contractual terms is welcome (though it may come at the cost of inflexibility which is bad for employees too).   ACAS, for example, finds that most of its helpline calls related to zero hour contracting are about lack of clarity/understanding, and that many problems e.g. around holiday pay calculations are less to do with overt exploitation than poor communication.

But those most exploited under zero hour contracting are those who are called into work at short notice and must be ready to go into work, meaning that they can’t work elsewhere, and must have care arrangements in place.  As it stands – and of course we haven’t seen any legislation wording – the number of people on irregular hours may actually increase, as less scrupulous employers seek loopholes around does and what doesn’t constitute regular hours.   Even at best, today’s commitment from Miliband don’t seem to do anything to protect people on irregular hours.

As I’ve said previously, zero hour contracts are not of themselves exploitative, and many employers (including me) have used them for years while retaining perfectly good relations with employees; indeed, at my place I’d say they even enhance relationships, because staff can and do shift their hours by informal ‘just get on with it’ agreement.   Rather, it is the way they are used by certain employers that is exploitative, and the best way to tackle that is not by legislation, but by increasing worker bargaining power through unionisation (though tackling the employer incentive to employ people part-time in order to avoid national insurance contributions would also help).

I fear that Labour, by moving down the legislation route in an understandable pre-election bid to look tough on labour market injustice, may not only be creating for a rod for its own back when it comes to implementation.   It may also be doing a long-term disservice to low-paid workers by acting as what the Economist has called (in relation to minimum wage legislation) a “proxy union”.

What I mean by this is that, while the introduction of minimum wage a) did not create unemployment (as claimed by the right); b) may have pushed other non-minimum wages up (pdf), it also removed at one fell swoop a key raison d’etre of trade unions, arguably contributing to decline in membership.*  In turn, this has arguably fed into less active trade union representation in the workplace, and greater worker vulnerability in the face of those employers who are deliberately exploitative around contractual terms (I’m differentiating here from exploitation as an essential feature of capitalism).

Would Sports Direct have introduced its zero hour contracting in the first place if there had been stronger workplace representation?

As we look forward to another round of legislative protection from a new Labour-led government, we should be careful what we wished for.

 

* Until 1985, the British trade union movement opposed (pdf, section 2.3) the introduction of a statutory minimum wage.  What remains under-researched is whether they were right to do so.

 

 

 

 

Categories: Labour Party News, Law

Community organizing: five years on

March 31, 2015 Leave a comment

Back in the early 2010s, community organisation was all the rage.   Now, you have to look quite hard for the traces.

On the Conservative side,  the back of a fag packet promise by Cameron, five years ago today, of 5,000 full-time, professional organizers, quickly became  500 paid organizers and 4,500 volunteers.  This month, the interim evaluation by the consultancy arm of New Economics Foundation and IPSOS-Mori quietly released what is probably one of the worst pieces of evaluation work I have ever seen*, suggesting strongly that they know no-one is going to take much notice of their findings now, and that they may as well just get a junior staff member to batter out some rubbish and send the invoice.  I don’t imagine the full evaluation in June will be much better, given that all the primary data collection has been done.

On the Labour side too, it’s as though we’d never had Movement for Change.  Over at Labourlist, the editor Mark Ferguson’s calls for a “return to – and full embrace of – the model pioneered by Arnie Graf”.   That someone at the heart of the Labour party machine should be saying we’ve left community organising behind may come as something of an embarrassment to the directors and high profile national steering committee of Movement for Change Ltd, including one David Miliband, who according to their most recent accounts (to March 2014) spent getting on for £0.5 million on  trying to organize change in communities.

So what went wrong?

As far as the Tory plans are concerned, it’s fairly straightforward.  The whole project became null and void the moment, in 2011, that they passed the delivery contract to Locality rather than to Citizens UK (previously London Citizens).  Locality, a merger of the Development Trust Association and the British Association of Settlements and Social Action Centres, were seen as a safe pair of hands, who could be trusted to steer clear of anything that might vaguely resemble challenge to existing power structures.

Thus it has proved.  Locality’s delivery programme has involved getting existing Voluntary and Community Sector (VCS) second tier organisations (e.g. Councils for Voluntary Service) to host the appointed community organizers, and as a result organizers have tended to slip into the ‘facilitation’ model already used by these organisations, and the community organizer funding has largely simply replaced, or part replaced, streams of funding that have been cut since 2010 (notably from local authorities cutting their grant)**.

When it comes to Movement for Change, things have been better, but results are still disappointing.   The model adopted eschews the formal structures of the VCS in favour of a more overt campaign & challenge focus, and there have been some isolated but very worthy successes, although the question of whether these local victories would have happened anyway in the absence of a support organisation is valid.  £0.5m a year on the company infrastructure looks like a lot of deadweight, and arguably the money might have been better spent on other party activity.

For Movement for Change, the problem seems to be opposite one from the one faced by the Tories; while the Cameron model has failed because resources were simply sucked into existing, staus quo-preserving structures, Labour-style community organization is not taking off at scale because it doesn’t draw on or feed into existing structures in the Labour party, or more importantly, in the labour movement.   This isn’t surprising when its key UK instigator is Arnie Graf, who promotes the power of enhanced consumerism within capitalism, rather than greater direct control over what is (co-)produced in the way of public services, and whose key role within the Labour party is to develop ‘community organisation’ as a clever marketing and voter ID add-on, rather than a good thing of itself.

As a result, there is no sense that the Movement for Change will ever punch bigger than its weight and begin to have anything other than occassional, isolated success driven by people would probably have driven it anyway.

So where from here for Labour?

For myself, I roundly reject Mark Ferguson’s call for a return top the Graf model of community organization.  To do so is to ignore why its failed to date.  Instead, the labour movement needs to start re-thinking what exactly its organising focus and power is – and that’s around delivery of services and products rather than their receipt – and then start to re-engage with existing party and union structures, especially Trades Councils but also through newer insitutions such as NHS Foundation Trusts, to ensure that the correct kind of change is pushed through at both local and wider level.  Lots more of that coming up on this blog.

 

* There isn’t space here for a full review of how bad this evaluation is, but  from the first wholly incorrect paragraph onwards it is almost laughably poorly written.   My favourite laughable bit is the juxtaposition between page 3 and page 5.  At page 3 we are told, a little surprisingly:

Community organisers have no agenda, and do not lead or do things on behalf of people.

By pages 4-5, we are told that ‘leading other people’ is a key skill of community organisation, and that evidence of the programme’s success lies in the fact that community organizers were 10% more confident of this skill after their residential course.   (It is impossible to say what the “% Confident (8-10 out of 10 )” applied to the bar chart at fig 1.1 may mean).

**  This is pretty well what I predicted five years ago today:

So it’s almost certain, if this programme were to ahead, that it would be calling to a great extent on funds already disbursed by central and local authorities to provide all the staff who already have a role  very similar to the one now envisaged as utterly new and innovative by Cameron.  Has he never heard of Councils for Voluntary Service, for example, or enquired as to what they might do?

…..

More specifically in terms on what the community organizers will or won’t do, there is the question of just how combative and challenging to existing structures will they be permitted to be under their new contracts.  The concept of hidden state power through the depoliticization of the notion of community will not, of course, be unfamiliar to most readers of this blog.

 

 

 

 

 

 

 

The labour movement’s post-election battleground: Part I of II

1  Introduction

Back in January, I was invited by Left Futures to provide a response to a post by Trevor Fisher.  Trevor considers Labour a lost cause when it comes to austerity. This is his conclusion:

The objective of the austerity movement is to destroy everything that Lloyd George and the political consensus that we have known for the last 90 years. A co-ordinated response can defeat the political objective of the neo-liberals to set up a new anti-state consensus.

So why is it not happening? The Labour Party cannot be changed in the near future. It has embarked as New Labour on a Titanic style voyage into the ice field, at high speed. Labour is part of the problem, not part of the solution. It is time to look for lifeboats. The solution has to be a people’s movement against austerity. The existing work of the People’s Assembly has to be boosted.

Trevor’s analysis is not, of course, an unusual one.   The idea that a Labour government will simply be ‘austerity-lite’ is now almost a mantra those who consider themselves left of Labour (within or outside the party).   Here are just a few examples expressing, in varying ways, anger or hopelessness or (in Sunny Hundal’s case) simply incomprehension at Labour’s purported plans to mimic the Tories in government.

Trevor’s analysis – like most others in this vein –  incorrect , for three main reasons:

  • Labour is part of the solution to the problems brought by five years of austerity, because it is actively planning for investment in public services;
  • The existing work of the People’s Assembly is, while impressive in many ways, misguided;
  • The idea that the best way to respond to the neoliberals’ anti-state consensus building is to support a return to the pre-2008 public service infrastructure of late capitalism is itself regressive.

In this essay, I present an alternative strategy for labour movement activism, which I contend takes us beyond these common errors of analysis by the Left. In part I, addressing the facts around Labour’s actual planning for government, before moving on to how and why so many people have misunderstood what Labour is about.   In part II, I look in details at what might be done for, by, with people like Trevor – no doubt a solid member of the labour movement, but who’s only recourse at the moment is another round of meetings and rallies calling, loudly but vainly, for the people to rise up against austerity.

2  What’s really being planned

Labour is seeking to portray itself as a party committed to ‘fiscal discipline’, and its central economic policy is now that it will never spend what it cannot save elsewhere.  I think this is a misguided strategy born of a narrow-minded elite in the Labour party, panicked by Tory control over opinion polls in 2001-12 (see section 3), but it is too now late to change that messaging in the 60-odd days to the election.

Behind the scenes it is different.  Labour HQ has calculators in the office, and they know perfectly well that they cannot make the cuts that the current profile suggests without collapsing parts of essential public services, and they know that this will cost them electorally; the new rounds of cuts will have to start to affect those beyond the vulnerable (e.g. social care eligibility) who to date have suffered more than other when their comparatively expensive needs have stopped being met, but who only vote once, and in relatively small numbers, so have been a calculated electoral write-off for the Coalition.

With a number of decent thinkers and planners – notably Jon Cruddas –  having fought a behind-the-scenes rearguard action against the fiscal conservatives, Labour is quietly planning to sustain and develop provision by borrowing/investing “off-balance sheet”, through mechanisms like the British Investment Bank (with an NS&I deposit) [1], which the Tott report commissioned by Labour makes clear is aimed at public services as well as SMEs, and through the development of ‘internal borrowing’ from Pension Funds [2], and through allowing local authorities to bring forward spend from later years in a five year cycle, effectively allowing them to borrow from themselves. [3]  This is in addition to the existing prudential borrowing regime, which is likely to see greater use in an environment where local authorities are not so afraid as they are currently about what comes next from the centre.

The condition for this investment from these sources is that as far as possible what is spent should create ‘downstream savings’, and it is from the “what should have been spent” pot that government, including local government and freed-up health economy organisations, will create the return for investors.   It will be, to a significant extent, a welcome foreshortening of the Social Impact Bond process developed and tested over the last 10 years, but which has proved to be bureaucratically difficult in the absence of political will.

A key unanswered question at the moment is to what extent these non-traditional routes to borrowing for investment will replace normal borrowing.

NS&I is not a bank and cannot simply create money for investment, so will presumably be constrained by the amount invested in NS&I, currently around £105bn [4].  While there is some good practice emerging around the use of Local Government Pension Funds to fund public spending where there is clear social value, to date these investments have been limited to capital schemes where the rate of return back to the Funds has been easy to determine because income streams are produced by the investment.  It is more difficult to persuade Pension Fund trustees, who must abide by their fiduciary duties [5] to protect those funds, to invest in ‘social infrastructure’ which creates savings downstream, as these savings must then be converted into returns [6].

My current view is that these non-traditional routes will not replace traditional deficit spending to the extent needed, though that it’s a good start. Given this, the further, vital question arises of what level of investment need can feasibly be packaged as social investment (and therefore open non-traditional funding) rather than simply additional spending on public services [7].  In any event, and as I go on now to explore, this is a question which the Left should be addressing for its own sake.

3  The two orthodoxies

What I have set out above may be the quiet reality of preparation for government, but it’s one known about by very few people in the labour movement, largely because of the strategic decision by Labour’s strategists (on which more below), to avoid challenge to the prevailing ‘deficit fetishism’, and instead to try and gain power by focusing on other policy areas e.g. the NHS.

This strategic decision requires a commitment to cost-neutral spending promises i.e. any spending commitment must be paid for by cuts/savings to other areas of current spending.  In order to know what’s really being planned, it’s necessary to a) talk to people closer to the actual development work (which I’ve done); and b) read the whole of policy documents, not just the summaries (which I’ve done).

In the absence of wider understanding of what is really being planned, most actors and organisations who self-identify as Labour and/or the Left have split into two broad ‘orthodoxies’, with a seemingly unbridgeable divide between them.

On one side of the ‘fault line’ are those who say an incoming Labour-led government must be ‘realistic’ about the public finances, and cannot therefore afford to reverse Coalition cuts, and those who subscribe what I will refer broadly to as the ‘anti-austerity movement’, who think a Labour-led government’s first duty is to reverse the cuts and reset public financing and public service to circa 2009.

Both sides are wrong, as I shall go on to set out, because establishing why and how they came to be so wrong, and what impact this wrongness has had to date,  is essential if the labour movement is to bridge the divide (which I address in part II).

The realist orthodoxy

The ‘realists’ are wrong for fairly obvious macro-economic reasons.  There’s no need here to go over now fairly established consensus that fiscal consolidation didn’t work, and that the way to boost growth (and pay down the deficit sensibly) is through a wage-led recovery, with a major lever for this being public investment.  The ‘realist’ support for fiscal consolidation and continued austerity has never been driven primarily by economics; calls for fiscal prudence have largely (from about 2011-2 onwards) been about a political messaging that Labour ‘can be trusted’ with the public finances, and the view (actually a self-fulfilling narrative) that the British public will never be able to conceptualize standard Keynesian economic management as anything other than spendthrift.

This is evidenced most clearly in Anthony Painter’s [8] at times excellent (2013) Left Without a Future: Social Justice in Anxious Times.  In a book devoted to ideas about how a future Labour government can create a more socially just society in times of continued fiscal restraint, Anthony sets out the need for that fiscal restraint in just a few short paragraphs (pp. 75-77), some of which are in themselves arguments against restraint.  All of the reasoning is contestable, especially the notion that “two or three years of very low growth, barely moving deficits and political impotence” might lead to a real danger of default (p.76), [9] but in any event he lets the cat out of the bag when, after this short justification he reveals its post-hoc nature:

It was in response to this debate that Cooke et al. [Anthony is one of the al.] wrote In the Black Labour: Why Fiscal Conservatism and Social Justice go Hand-in-Hand which was published in 2011 and created something of a stir in Labour circles.  Its core argument was that a reputation for fiscal responsibility was fundamental to any party aspiring to national leadership (p.78)

The realists’ economic rationale, then has never been anything much more than cover for short term electoral strategy, forged at a time when many in the Labour elite were concerned about the intractable opinion polls, which continued to show that the Coalition’s strategy of blaming a worldwide financial crisis on profligate public spending by Labour, was working remarkably well.  At that point, it made sense to this fairly small group of insiders, close to or within the pressure group Progress, that Labour should simply adopt a ‘balancing the books’ approach, because the battle for what economic common sense looks like had been lost. [10]

In their view, this was much more important than the longer term real-world impact of commitment to the In the Black doctrine largely, I suspect, because they simply didn’t consider real word impacts on the more vulnerable in society as being of themselves, important [11], even though it was clear by then that they, along with lower paid public sector workers themselves were facing the greatest direct burden of public sector cuts [12]

This all took place back in 2011-12.  Since then, Labour has, within the constraints it imposed upon itself by its commitment to no extra borrowing, brought to bear two broadly effective electoral responses to the Tories (while also playing Lib Dem Whack-a-Mole for light relief).  First, they have managed to articulate (in the Hall sense) the continued incompetencies [13] of the Tories in government with their elite background and narrowness of outlook (‘out of touch’ being the common phrase).   Second, they have managed to side step the Tories continuing lead on ‘economic competence’ by focusing on how improving figures at a national level of not translating into feelings of security and hope for the future amongst ‘real’ people.  You could even argue that Labour has managed to articulate all of these together, so that people think they are insecure and lacking in hope because Cameron is posh.  This has the added advantage of being true.

This is a good thing in the short term, and it is why a Labour-led government remains the most likely outcome despite a continuing poll lead for the Tories on economic competence.  The downside, though, is that what does or does not constitute fiscal responsibility – whether investment is actually better than  austerity – has become a taboo area within Labour, at least in public.  When Ed Balls committed to budget surplus in January 2014, leading In the Black Labour proponent Hopi Sen was simply able to tweet that the debate had been won.  To a large extent, he was right, although he underestimated the rearguard action that was mounted (see Part II for more details).

The effect of this, understandably, is that many of those who understand what actually fiscal responsibility is have now come to regard Labour as cowards and traitors.  A good case in point is Howard Reed, a decent economist, who penned White Flag Labour for Compass as early as January 2012 [14].

It could of course be argued that people like Howard should have spent a little more time looking at the kind of investments, set out above, which Labour is planning behind the scenes, rather than just the press statements, and that to effectively turn away from engagement with Labour over what it is getting right because it’s not getting everything right is actually very unhelpful to us all; indeed, this is pretty well Simon Wren-Lewis’ recent argument.

For myself, I don’t think such a blame game is helpful in the long run either; while I’ve tended towards it myself in the past, on reflection I think it’s more honest to hold myself to account for not having helped organise the forces of anti-austerity well enough back in 2011-12, not least because learning from what went wrong then is important for the new battle we face after the election.

I’ll come to this in detail on Part II, but the point to stress here is that many on and to the left of Labour attached themselves to the anti-austerity movement – to the extent that some former Labour activists are now standing against Labour in the general election – not because of actual pro-austerity policy from Labour, but because the fiscal conservatives within Labour, themselves driven by narrow political considerations rather than economic ones, created an environment in which plans for investment have remained largely hidden from view (e.g. in the IPPR Condition of Britain report (June 2014), the media and Labour’s own coverage of which failed to notice/deliberately declined to mention the chapters on innovative investment).

The anti-austerity orthodoxy

The ‘anti-austerians’ are wrong because simply returning public sector financing to the levels it enjoyed in the mid- to late 2000’s, without further consideration of how public services should be reformed, will be an utter disgrace, and a betrayal of ordinary people who depend on those services.  Yet this is apparently what is being proposed by an anti-austerity ‘movement’ backed by public sector unions who, understandably enough, are keen to defend their members’ terms and conditions in the narrowest sense of the term as best they can, but who appear to have rejected any responsibility they ever had for the quality of service provided.

The sad truth is that the quality of many public services has declined hugely in the past 20-30 years, and the pace of decline has increased, not simply because of the cuts but because of the way public servants do their work.  Journalist Kate Belgrave, for example, has recorded the transition of what we used to call employment services from a relatively harmless bureaucracy to a vicious institution which actively dehumanizes benefit claimants, and in which specific targets for inflicting misery on the already poor and powerless are implemented without challenge by trade unions.  In the NHS and care sector, the scandals at Winterbourne and at Mid-Staffs did not arise directly from public spending cuts or from privatisation, but from a decline in service standards which set in long before the Coalition came to power.

There are two main reasons for the decline in the quality of public services, and they form a duality.  First, the growth of managerialist ideology, itself a corollary of neoliberal economics, has created which are target- rather than value-driven, and in which every level of management holds the next one down accountable for reaching targets (often now called ‘outcomes’) while often preferring not to know how they are achieved.   Only last week, when earning a living tendering for a public sector contract (for a social enterprise) I was told by a senior manager that with the contract in question there was ‘no room for quality'; this was said with no hint of surprise.

Second, there has been a massive de-professionalization of the public services workforce.  Initially this de-professionalization was a conscious outcome of managerialism [15], as trade union and professional association concerns for the maintenance of quality were pushed to one side as impediments to competition-driven progress, but 30 years on most unions and associations simply no longer see it as their job to concern themselves with the quality of the service they offer to their fellow citizens; their sole role,  as they now see it, is to defend the terms and conditions of their members [16].

In my own profession, nursing, such a view of a trade union role has become institutionalized to the extent that when the Francis report recommended that the Royal College of Nursing (RCN) be formally split into a ‘trade union side’ and a ‘quality of provision’ side, there was barely a murmur of protest from the RCN.  Even more revealingly, Francis did not even feel the need to recognise a possible role for Unison (the other main union/professional association for nurses) in ensuring or campaigning for quality of care.

The now endemic failure of the labour movement to care about the quality of services they provide damages it, of course; while would the non-unionised public support public servants’ industrial action in defence on terms and conditions if those same public servants don’t seem to care about them?

The anti-austerity movement is, frankly, an anachronism.  Its calls for a return to 201o spending, in the absence of proper reform, are in their own way as a regressive as the ‘realists’ call for continued austerity.   Now, I know to my cost [17] that such a bald statement, while perfectly defensible, is likely to be unhelpful to efforts to develop consensus around how a more progessive ‘post-austerity’ Labour might be organised for and won.  So let me be clear, even at the risk of repetition:  the vast majority of people who would now, if asked, hold to the anti-austerity orthodoxy position critiqued here, will be decent Labour (and ex-Labour) activists, members or supporters.

The fact that they support what I call an anachronistic position public services is not something for which they should be blamed, because the primary faults lies with a) a trade union movement which has overly narrowed its functions; b) those within the Labour party who, for the reasons set out above, have stymied a proper debate within the Labour party about what public service reform should and can be about [18].

There’s one more point to make about the anti-austerity movement as it’s developed to date, before I move on to how I think its members/supporters should think about the post-election period, and one which connects to those proposals.  This is that, while the anti-austerity movement has achieved precisely nothing of what it set out expressly to achieve, a good deal has been achieved as an unintended consequence.   While the primary ambition of retaining jobs and services by forcing councillors to spend up reserves then pass illegal budgets remains a pipe dream, the organisational and personal links forged at local, city and regional level, between grassroots trade unionists, service user activists and others such as engaged journalists and those who might self-define as anti-capitalists has been a very positive development.   As I’ll go onto suggest, it is through the emergence of an updated form of the Trades Council, properly allied to the appropriate power structures within the Labour party, that an effective working class post-austerity movement stands the greatest chance of success, and the fact that such organisational links have already been forged, even in a losing cause for now, offers promise.

Conversely, should the current anti-austerity movement move in the opposite direction, away from the Labour party power and resource that will make it effective, both it and those within Labour who believe in good quality public services and wider institutional development towards democratic socialism stand to be marginalised and alienated from each other even further than they are at the moment.

3  Developing a post-austerity movement

This is what I’ll turn to in part II.  I’ll argue that, while these two camps of orthodoxies currently seem poles apart, not least because of personal animosity and mutual name calling on both sides (and I’ve been guilty of that two), there  exists a substantial common ground between the two around which ideological and, more importantly, organisational consensus can be built.   Such a consensus, I will argue, might be built around seven core ideas, to which many can subscribe.  These are

i) that public services should have investment in human beings at their foundation;

ii) that such investment is as worthwhile, or more worthwhile, than capital investment, and that the ‘rate of return’ problem can be overcome;

iii) that public services are best when truly co-designed and co-produced, and that modern trade unions and trades councils have a key role to play here;

iv) that the institutional developments which allow for co-production will be most successful where they develop at a local level;

v) that while public service quality can be improved through intelligent, co-designed investment, such developments can and should act as a bridgehead to similar labour movement developments in the wider economy;

vi) that in order to facilitate all this, the Labour party will need to go beyond its Refounding Labour initiative and either open itself up to genuine labour movement direction, or risk becoming an irrelevance;

vii) that the window of opportunity after the election will be short, because if the two groupings described don’t coalesce organisationally around common interests, existing power interests 0 notably the narrow ones of the existing narrow trade union leadership and the Blairite right, will re-exert their power, and threaten the long-term future of the labour movement itself.

 

 Notes

[1] Of course this borrowing is already happening via NS&I, via the Coalition’s 2.8/4% fixed term bonds for people aged over 65.  As, Chris Dillow points out, the other word for this is corruption, because of the particular choice of investor, but that doesn’t mean that using the NS&I as an investment mechanism is in itself a bad thing.

[2] Tott’s report indicates this form of borrowing can be even cheaper than conventional borrowing through the sale of bonds by the government’s Debt Management Office

[3] This is not likely to be introduced in year 1 of a Labour government, as local Public Accounts Committees may be a condition of such an internal investment mechanism (see Chapter 10 of IPPR’s June 2014 Condition of Britain report, which was effectively a Labour party report (a fact later confirmed by the Charities Commission, who reprimanded IPPR for being too overtly political.

[4] NS&I does not manage its own funds (and sadly, ATOS manage NS&I).  The funds are passed over to the National Loans Fund managed directly by the Treasury, where it is already used to fund roughly 10% of public borrowing.   There would presumably have to be a change in this arrangement if a proportion of NS&I funds were to be allocated direct to a British Investment Bank.

[5] The key obstacle to pension fund investment in social infrastructure has long been the fiduciary duty on trustees to maximise financial return to members, which has been taken as overriding all other factors and led pension funds to invest ‘safely’.  While there has been some movement towards a wider understanding of what members’ interests are, so as to allow invest in social and environmentally sound activities, and while there has been some very good local innovation in local government pension fund use, the recent Law Commission guidance remains very conservative in its approach, and there is still some way to go before we see a real rise in social investment by this route.

[6] Even when it comes to capital infrastructure, Osborne’s grand 2011 proclamation about tapping pension funds has so far turned out to be a damp squib, and Labour will need to re-energise this.

[7] I have been seeking to ‘crowdsource’ more extensive research, including a quantification of how far these new mechanisms will fill a more traditional borrowing gap.

[8] In my view, Anthony Painter is by far the best of the movers and shakers in the realist orthodoxy camp, and his Left without a Future (2013) is certainly worth a close reading.  While it is ultimately let down by the ill-conceived parameters of continued ‘tough choices’ Anthony provides for himself (as set out above), it is insightful both about how ‘investment’ should be seen in its widest sense, and in the need for the development of a range of new institutions aimed at delivering social justice (though I disagree with how his implicit suggestion around who should be responsible for designing these institutions, a matter on which I touch on in part 2 of this essay).  As I shall also set out in part 2 ,   it is to Anthony and some of his like-minded colleagues at RSA and IPPR, as well as to people like Jon Cruddas, that the (ex-austerity) labour movement will need to reach out to if it is to develop a truly effective post-austerity movement in the shortest time possible.

[9] Aside from the invalid short-shrift that Anthony gives to what he call the “ultra-Keynesian” argument – that there is real no barrier to deficit spending as long as it takes place within a functional economy – the other policy idea he dismisses all too easily is that of engineering inflation at around the 4-6 % level through quantitative easing (not the same, I should stress as deficit spending/investment on public services/infrastructure).

[10] That is not to say that countering the Tories credit card imagery was ever easy.  Such a metaphor fits neatly with Lakoff’s concept of the two central metaphors contesting the grounds in US politics:  the strict father vs. the nurturing father.  In these terms, it might be argued that Conservatives currently have the upper hand because the strict father metaphor has a hold, and it may be that Labour has to deliberately develop nurturing metaphors of its own as a way to ‘sell’ investment as a social good rather than a profligacy.

[11] I remember well Hazel Blears castigating me in a CLP meeting for being too focused on the needs of the poor and the vulnerable.

[12] Of course, cuts to public spending also have indirect effects on the same group, by sucking money out of local economies and delaying recovery, and the weighting of cuts towards deprived areas has made this even more significant when it comes to regional inequalities.

[13] To blow my own trumpet for a second, I’ll add that I was amongst the first to advocate an opposition strategy of focusing on the details of incompetence, and it was my research around the maladministration of the Regional Growth Fund which created the ammunition for an early hit of this kind on Cameron at Prime Minister’s Questions.  Unfortunately, while there have been other successes, the strategy was never deployed consistently.

[14] Howard Reed did engage with my reading of Labour’s investment plans, although he suggested I was over-optimistic.   Richard Murphy declined to engage, and continues to hold the view, reflected in Trevor’s Left Futures piece above, that Labour is Tory-lite.

[15] This is a conventional leftwing view. It is arguable that the legitimation of managerialism actually started earlier than this, and is as much a product of the socialist response to technological innovation in mass production as of neoliberalism.  As Peter Hain notes in his new book, Tony Crosland’s The Future of Socialism is marked by a dismissal of GDH Cole’s proposals for a modern ‘guild socialism’, on the grounds that these are incompatible with mew technologies and mass production.   While Hain seems happy to take Crosland at his work, my own view is that the side-lining of the whole guild tradition is at the roots of today’s mega-unions’ compliance with de-professionalization, especially in public services.

[16] There are vestiges of the old commitment to public service quality.  Ironically, in the face of what came next from the PCS, in 2011 the union asked election candidates to sign up to a pledge heavily focused on the quality of public services.  By 2012, that emphasis appeared to have been lost, as the Workfare programme was critiqued not for what it did to people on benefits, but solely for the effect it had on the workforce.

[17] When the Liberal Conspiracy version of the first part of this two part post appeared, I was called a wide selection of unpleasant names for my supposed treachery, but there was little or no actual counter-argument.  While that’s unimportant in itself, I accept that the provocative tone I adopted in the piece was more about my self-righteousness than any attempt to help forge a better strategy for opposition.

[18] That is not to say that there has been no debate within mainstream Labour about what ‘proper’ public service reform should look like.  The Progress pamphlet Reform in an Age of Austerity (February 2014), for example, is actually quite good on some of the crucial aspects of reform – particularly that it will need to be ‘relationa’ and personalised, but like the IPPR report Condition of Britain (see above) it remains hampered by the self-imposed fiscal straitjacket, within which these worthy ideals are mostly undeliverable.

 

 

Are some Labour votes bad for Labour?

January 2, 2015 Leave a comment

Chris Cook, one of the few centrist media people worth taking seriously – largely because he is open to new ideas and data – tweets surprise at a Neal Lawson column, in which the latter suggests that New Labour’s key failure was its success in getting votes from the rich.

I well remember crunching my way up gravel drives past BMWs in Enfield the day Stephen Twigg ousted Michael Portillo – oh, how we cheered later that morning. But in hindsight the wrong people were voting Labour.  The tent was too big and you spent the next 10 years trying to keep the wrong people in it: the very rich, for example. What meaningful project includes everyone?

And I’m surprised at Chris’s surprise.  Has politics really become a PR exercise to the extent that for even one of the better commentators, the idea of different material interests, served by different political parties, seems ridiculous?

This is not to say that Lawson is entirely correct in his equating Enfield gravel-pathed residence and BMW ownership with a set of interests that only the Conservative party can meet.  Many of those people had very valid reason to vote Labour in 1997, given the manifesto promises made (and quite well fulfilled) around state education, just for example.  For myself, I prefer the Tory/Labour constituency dividing lines drawn up 80-odd years ago by RH Tawney, who argues convincingly for the inclusion of “brain workers” in the development of socialist democracy oriented towards socially useful work, while the capitalist owner of the means of production can only ever be on the other side of the political gain line.

But Lawson is right to say that when a political tent is too big, too inclusive, then political direction can be (and was) lost, not least because it is the very visibility (and openness to metaphoric description) of opposing interests which helps maintain that direction (cf. UKIP’s progress in relation to visible immigration).

Indeed, the principle of material interests in political opposition to each other has to be accepted if the votes of, let  us say, the self-employed and small business owners, are to be properly contested by one the one hand, a Tory party claiming them in the spirit of capitalism (without the capital for the greater part), and a Labour party which can and should argue that in the early 21st century self-employment is often imposed, and that many small business owners actually manage* – sometimes heroically – to operate within a cut-throat supply chain environment while still maintaining a viable moral economy in relation to their employees and clients.

Those votes are worth fighting for and actually, yes, they may be better votes than ones from the very rich.

 

* There’ll be more on this in coming posts, especially around how legal structure has become more important in policy than the reality of work norms, not least as I count myself as one of these small business owners, although one without too much need for heroics.

HM Drucker on the decline of Labour in Scotland

December 15, 2014 Leave a comment

On Facebook, Dave Osler poses the question about Labour’s plummeting support in Scotland:

Generations of international relations students have studied the ‘who lost China?’ debate that took place in the US under the Truman administration. I think pol sci majors in future will equally argue about ‘who lost Scotland’ for the Labour Party. Does the blame lie with Labour’s Westminster leadership, largely oblivious to social trends beyond north London? Or is it the fault of the management team at the branch office itself?

I don’t currently (though I will presently) have much to add to conventional wisdom here, but I think HM Drucker’s warning from 1979, in his Doctrine and Ethos in the Labour Party may be instructive:

Since Labour’s ethos emanates from a specific past one may ask what the implications of this task are for the future…….Labour cannot be simpliciter a party of the future.  Such a possibility may be available to a radical social democratic party.  It is not possible for the historic Labour party.  The attempt by Crosland in his The Future of Socialism (happy title) (1956) to condemn Labour’s tendency to cling to the principles of its past is futile.  Any attempt to redefine goals for future action must always be seen to be strictly consonant with the past.

A second implication is that Labour’s support can be eroded by a general change of consciousness.  If the ties of class-consciousness are weakened, then Labour is threatened.  If Labour comes to be seen as an increasingly middle-class organisation, it could lose its support even if its supporters remained class-conscious. ….Class consciousness, as a historical fact, is obviously endangered by changes external to it.    Gaitskell saw prosperity as one such threat. Nationalism is another – one whose power is more real in the 1970s than would have been foreseen in the late 1950s.  As Scottish and Welsh working people have come to identify themselves as Scots or Welshmen first and workers second, Labour loses their support to nationalist parties.  As this happens, one witnesses an exchange of one past for another as the new choice comes to appear more vivid.  If in future elections Labour loses parliamentary seats as a result. it will be paying a high price for the loss of class-identity (p.39, my emphasis).

More to come from me on what this means for Scottish Labour’s response to this now seemingly inevitable loss.

 

The Rise of the SNP: a warning from history

October 25, 2014 Leave a comment

As Labour unravels in Scotland and Glasgow slides SNPwards, a note from fairly recent history:

It seems likely that if, or when, Nationalism becomes powerful in the large cities of Scotland or Wales it will have to face problems similar to those faced by the Labour party at the moment. Thus, while Nationalist parties may bring many of the working classes back into political activity in the short-run, the long term effects may be even greater disillusion (p.135)

Barry Hindess (1971), The Decline of Working Class Politics, Granada Publishing Ltd: London

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