Miliband has, I’m afraid, got his reaction all wrong.
Had anyone from Labour HQ actually bothered to read the single piece of research behind the proposals, they’d have realised that it simply doesn’t say what everyone, in all parties, wanted it to say. As I have set out in detail, the research doesn’t prove that minimum unit pricing will reduce binge drinking, and it acknowledges that very clearly in the main report:
The elasticity matrices [the method used in the research] on their own are not sufficient to reveal the likely behaviour of the population to price changes, since these also depend on the preferences for beverage, drinking location and price point that the different sub-groups exhibit. However they do form a useful starting point for analysis, and can be compared with existing results from the literature. (p. 50)
This acknowledgment, and the other deep flaws in the research, will be set out in consultation responses (including the one I submitted), and the Tories will simply point to those responses to explain their u-turn. It doesn’t matter that the Tories’ real motivation for dumping the pricing proposal has nothing to do with the evidence, but is driven by a mix of electoral calculation and fear of taking on the Right of the part. By May, the narrative already being set out by David Davis - that the research doesn’t stack up – will have been firmly established.
Thus, by effectively coming out in support of minimum unit pricing, Labour is getting itself on entirely the wrong side of the debate. In a month or two, when the final government response to the consultation is published, Labour (and the SNP as a side effect) will be painted as the illiberal nasties who do don’t give a hoot about evidence but just want to punish the poor, while the Tories will have positioned themselves as the reasonable party, who consulted on the idea, listened to public opinion, and then took a mature, evidenced-based decision not to proceed.
In short, Labour is going to cop it on this one. Miliband may have had some fun today at PMQs, but the Tories will have the last laugh, as Labour is tarred with the very ‘authoritarian’ brush Miliband had worked so hard to avoid. The key lesson is that when Labour priorities media management over actual policy import, it does so at its peril. It should already know this, from the time it abandoned sound immigration policy in order to look tough, but maybe this time around it’ll learn…….
Richard Angell, Deputy Head of Progress party-within-the-party, had written an interesting column during the week on how Labour parliamentary candidates are selected. This might sound dull as ditchwater, but the process is actually a pretty key variable when it comes to what kind of person we end up getting to represent us in parliament.
Richard, who runs Progress’s member-only selection training, claims that:
the way in which ‘org sub’ has set about implementing changes – massively increasing the cost and more than doubling the time potential candidates need to spend in the constituency they hope to contest – are likely to make it easier for full-time politicos – whether they be ‘Westminster village’ thinktankers and aides to frontbenchers or trade union officials – and harder still for others to stand for Labour.
There are a number of problems with his ensuing argument.
First, there’s the decidedly worrying assertion that the extension of the selection period from four to eleven weeks means that:
it will not be a level playing field, as those who work for an MP, a think-tank, or trade union, are given all the time off they need to campaign.
Really? I’m not certain your average taxpayer, who generally foots the bill for those working for MPs, would be too pleased to hear that. Put simply, if that is happening, it should stop immediately. Likewise with trade unions. And the idea that people working for think-tanks can simply take paid sabbatical for an eleven-week period ignores they fact that think-tanks - like any other business – have to generate income in order to survive. As it happens, I know a think-tanker who is running for selection, and the idea that he can simply drop his work commitments for nearly three months looks a little absurd.
Then there’s Richard’s argument that needing £1,000 for 3 leaflets (in a 300 member ward) will militate against working class candidates. This is rubbish. First, many working class candidates will have some support from a union branch. Second, and more important, it doesn’t need to cost that much. As a councillor in a ward with 1,000 houses I produced a quarterly newsletter of eight to twelve pages for many years at no more than than around £150 per year all in, using an old Riso printer and buying the paper from Makro. No, it wasn’t glossy, but it was effective. I think Richard is simply assuming the Progress-style glossies are a prerequisite for a successful campaign, when in fact clearly low-cost materials can be just as effective with the right content (as Richard himself acknowledges with his DVD anecdote).
The most important flaw in Richard’s argument, though, is this:
Crucially, those going for selection will get the membership list – and the expense of an all-member mailing – before the party draws up a longlist, let alone a shortlist. This makes the cost of entry very high for some, with no guarantee of getting to make your case directly to the membership. The additional complication of supporting nominations makes the process more likely to favour insiders and ‘chosen sons’.
This conveniently ignores why the nominations process has been reintroduced. Obviously I can’t speak for the sub org on this, but I assume it is so that candidates get a chance, in more informal settings, to discuss local issues with members, and learn what their priorities might be, not least so that come the shortlisting this can be reflected in their interview. It seems to me perfectly reasonable that, come the longlisting, those doing the listing should consider thee extent to which local members and other parts of the labour movement have been convinced enough by the candidate that they then offer their nomination. To suggest that engagement with members and unions is simply a bureaucratic impediment is, I am afraid, something of an insult.
More generally, there is an assumption underlying Richard’s piece which requires challenge. This is that MPs are some kind of supremely talented breed, and that to fill a seat we need to catch the net nationwide for the brightest and the best – the clue is in the way Richard’s reference to “the time potential candidates need to spend in the constituency”. But as I’ve set out previously, the job of an MP is really just not that difficult - and the salary is broadly commensurate with the skill set needed for the job – and, we really don’t need to shop around nationally to get good candidates in place. I could name at least a dozen people in my own constituency who would make very good local MPs, most of them from working class backgrounds. While I’m not against people coming up from London to pitch in if they so wish, any move which makes it easier for local candidates who are already in (or at least close to) the constituency, should be welcomed.
Ultimately, Richard’s piece is a contrived defence of the status quo: MPs as overlords of their constituencies rather than servants of it. The NEC sub org committee has delivered a small victory for those who’d like to see candidates able and willing to engage with the genuine grassroots, and to do so in ways which favour working class candidates – such as knowing the local patch - over and above the glossy professional CVs and skills required to sell yourself to the party hierarchy.
The big news of the day for econo-geeks is the letter from the Head of the Office of Budget Responsibility to Cameron, rebuking him for his false assertions over the impact of austerity on growth.
In the longer term, though, I don’t think will be the most signficant lie in Cameron’s speech. I think this will be:
This deficit didn’t suddenly appear purely as a result of the global financial crisis. It was driven by persistent, reckless and completely unaffordable government spending and borrowing over many years. By 2008, we already had a structural deficit of more than 7 per cent – the biggest in the G7.
No source is given for this 7% assertion, but as far as I can tell* it comes from the 2012 IFS Green Budget which says:
Our estimates, based on the OBR’s latest official forecasts, suggest that the apparent ‘hole’ in the UK’s public finances that has opened up since the March 2008 Budget – that is, the additional structural borrowing that is now forecast to persist in the medium term, over and above what was forecast in the March 2008 Budget – equates to 7.5% of national income (or £114 billion in today’s terms) (p.51).
This does not, of course, say what Cameron appears to be claiming. In fact, we get the actual estimated structural deficit figures for 2007/08 further down the same page:
In 2007–08, total PSNB stood at 2.4% of national income. Since, at the time, the Treasury thought that the UK economy was operating slightly above its productive potential, underlying structural borrowing was estimated to be a slightly higher 2.6% of national income. The larger output gap** now estimated by the OBR implies that structural borrowing in 2007–08 in fact stood at around 3.5% of national income [my emphasis].
The reason I think this apparent lie is more important than the one about the austerity effect is that it looks like it’s going to be the main one used to beat Labour with. As the next election approaches the Conservatives will realise they are unable to defend their own record on the economy, and will need to rely on the “mess Labour left us in” narrative which served them well early on.
The general ’worst in the G7′ structural deficit accusation is not entirely new – it dates back at least to the ‘emergency budget’ in 2010 ( see p.8, although no figure is given there, just a reference to an OECD report, in which I’ve been unable to find the assertion backed up). However, it has not been used again until recently, and this firming up of a (false) figure appears to be a conscious attempt to resurrect it. Further, the 7% figure is important because it allows the Conervatives to claim it is the highest since the war, whereas in fact the IFS report makes clear that it was higher twice under the Major government:
A structural deficit of 3.5% of national income in 2007–08 would have been the highest level since 1995–96 (when it stood at 3.8% of national income) but still far below its previous peak of 5.5% of national income in 1992–93.
In any event, I expect to see the 7% structural deficit line to be trotted out regularly by the Tories, including by Cameron at PMQs, over the coming months. I hope Labour will be alert enough to call them out on the spot, referring to the actual figures set out in the IFS report.
* I suspect the 7% figure comes from here because it was trailed at the weekend (possibly by mistake) in a tweet from the Conservatives’ press office:
Terrible banking was cause of banking crisis. Before that happened, the UK under Labour, was running deficit of over 5% of GDP.
@citizenandreas check the Most recent IFS report on structural deficit when banking crisis hit.
** It’s also worth pointing out that measuring the output gap is a very unexact science. The figures used in the IFS report are based on OBR work, which in turn depends on a wide variety of source information to try to calculate ”the difference between the current level of activity in the economy and the potential level it could sustain while keeping inflation stable in the long term”. These sources include , for example, British Chamber of Commerce surveys of recruitment difficulties in firms. While the OBR report says that the historical analyses “appear to give a plausible representation of UK business cycle history and remain close to the range of alternative estimates”, it also notes that “[a]ny output gap estimate remains uncertain, even when it relates to the past. Similarly the estimates presented in this paper are subject to significant uncertainty and remain work-in-progress.” With these caveats, the OBR report finds that a structural deficit of 3.5% in 2008, pre-crisis, compared with the 2.6% on which the Treasury was basing its projections.
I’ve been away from the blogs a bit over the last week or so, but three posts have caught my eye.
The terrible outcomes at Mid Staffs were the logical consequence of a disastrously flawed management system that systematically forces people to face in the wrong direction, counts the wrong things, and focuses management attention on the wrong part of the job.
This is “deliverology”, as unappealing in practice as in print, otherwise “targets and terror” – the direct public-sector counterpart of the ideologically-driven, shareholder-first management model that in the private sector gave us Enron, then sub-prime, Lehman Bros, and seemingly innumerable banking scandals in their wake. Unconsciously emphasising how closely the two are related, David Cameron’s big idea for preventing more Mid Staffs was performance-related pay for clinical staff – the very thing that in the financial sector brought the global banking system to the brink of collapse.
Simon is passionate, angry, at the failure of management, but he offers no solutions.
Second, there’s Duncan Weldon, who offers us a glimpse of what that solution might be, as he seeks to wrest the ‘supply-side’ from the Right’s icy grip:
[Stewart] Wood, who has been arguing for a ‘supply side revolution from the left’ for over a year now, is correct to argue that what is needed now is essentially a three-step process. First a boost to demand, second, supply side changes to boost productivity and thirdly making sure we have the right set of institutions in place so that the gains from productivity growth are not simply seized by those at the very top of the earnings ladder.
Taking the supply side seriously is nothing new for centre-left politics. Academics write of Attlee’s ‘supply side socialism’, whilst Wilson’s ‘white heat of technology’ was essentially a programme of supply side reform. In this week’s FT Wolfgang Münchau wrote that whenever he hears talk of ‘economic reforms’ he first thinks of Willy Brandt arguing for pro-worker policy reforms rather than the current usual meaning of deregulation…..
The right policy programme now takes as its starting point the need to boost demand but recognises that we have real problems that simply increasing demand will not solve. The real significance of Ed Miliband’s recent speech, for me at least, was that vital recognition.
This is Duncan at his understated best. For “the right set of institutions”, we might read democratized control of the workplace – precisely the kind of reform I have argued is needed if quality of public services, in the NHS or elsewhere, is to improve.
For a moment, I am optimistic.
What is missing in British politics is a broad network that unites progressive opponents of the Coalition. That means those in Labour who want a proper alternative to Tory austerity, Greens, independent lefties, but also those who would not otherwise identify as political, but who are furious and frustrated. In the past two years of traipsing around the country, speaking to students, workers, unemployed and disabled people, I’ve met thousands who want to do something with their anger. Until now, I have struggled with an answer.
But if we could agree on some key principles, and avoid creating a new battleground for ultra-left sects, we could give the angry and the frustrated a home. We could link together workers facing falling wages while their tax credits are cut; unemployed people demonised by a cynical media and political establishment; crusaders against the mass tax avoidance of the wealthy; sick and disabled people having basic support stripped away; campaigners against crippling cuts to our public services; young people facing a future of debt, joblessness and falling living standards; and trade unions standing their ground in the onslaught against workers’ rights.
Such a network would push real alternatives to the failure of austerity that would have to be listened to; and create political space for policies that otherwise does not exist. Faced with a more courageous, coherent challenge to the Tory project, the Labour leadership would face pressure that would not – for a change – come from the right.
It is easier to discuss such an idea in a newspaper than put it into practice, but it is a mystery that such a network does not already exist. Though fraught with difficulties – never underestimate the ability of the left to miss an opportunity – the appetite is certainly there.
Indeed. “We should never underestimate the ability of the left to miss an opportunity.”
For here we are, with the theory and practice of managerialism in its death throes, and there goes an influential and eloquent voice on the left calling for one last concerted push against the austerity that it’s singularly failed to stop for the last three years.
So, once more with feeling………….Pouring energies into building a coalition of resistance out of the Coalition of Resistance and other anti-cuts networks is a strategic mistake of the highest order. Challenges to specific austerity measures will take place anyway, and while they should certainly be supported where it’s feasible that there might be at least some success (e.g. the bedroom tax) they don’t need any more coordinating than they’ve already got.
Instead, the undoubted intellectual and rhetorical energies of people like Owen, and the modest organisational competences of people like me, should be directed at hitting managerial capitalism where it’s weakest.
Initially, this may well be in traditional public services, where unions are still at their strongest. In the NHS, for example, we should be encouraged by and build on the great work of Gail Adams, Unison’s head of nursing, who for the second year is organising a nationwide spot-check of staffing levels*, such that the power of information is seized from management and the unions are able to go back to management and tell them what safe staffing levels are and when they expect them to be put in place.
We should be working with unions to localise this kind of approach, consciously and deliberately seeking to rip the carpet from under managerial feet, to replace ‘quality control’ with ‘professional pride’. We should be organising to revitalise and refocus our Trades Councils, the potentially crucial interface between workplaces and the wider community, which have become distracted by their own service delivery aims (if they have not withered away) at the expense of their core function. We should be organising with the NUT to build the competence and reach of social enterprises spun out of local authorities (such as Hackney), so that the most rapacious, lowest quality academy chains can bbe turfed out on their ear.
The examples go on – action in DWP to ‘safeguard’ vulnerable clients, banking union members coming together to challenge the quality of loan provision to SMEs (including the target-beating bureaucracy of making a rollover facility a new loan), unionising the childcare sector and working with local authorities to support the switch of private daycare to co-operative daycare, supporting new Foundation Trust** governors to listen to staff concerns separately from the Non-Executive Directors and then report back to the newly reformed Trades Councils, establishing professionalised local media operations through TUC start-up funding…..
In short, we should be organising to create a parallel mechanism to the Tory state, such that – come a Labour government – the state has little choice but to work WITH workers to reform the ‘supply side’, not seek to control them. No, it’s not easy, and yes, it will be piecemeal, but this should be about creating a genuine, conscious movement for positive local empowerment and accountability.
If we do none of these things, the state – whether it be a Tory or Labour government – will revert quickly to managerial type, just as it reverted to financial capitalist type soon after the 2008 crash, but this time around the targets, the controls, the sanctions, will be harsher and more random, as what Professor Gerry Stoker calls ”a strategy of governance by lottery”, first implicitly espoused by New Labour, is fully brought to bear (p.74-76). The workplace, if you still have one, will not be a pleasant place to be come the premiership of Mr Gove.
The task, As Owen notes in his article, is urgent. But Owen identifies the wrong task, while Duncan and Simon point us towards the right one.
* Declaration of interest: Gail and I go a long way back. We first used this ‘information seizure’ technique at St George’s Hospital, Tooting, back in about 1988, with reasonable effect (though I admit I was very naive about both the potential and the implications, so screwed up the final outcome).
** One small sign of managerial desperation and chaos is that in the NHS it’s been decided paid Non-Executive Directors are not sufficient safeguard against poor service, so unpaid Foundation Trust governors are to be given greater oversight over the people who are paid to have oversight over the services, while in education it’s been decided that the unpaid governors have failed and they need to be replaced by paid directors.
Sunny is in triumphalist mood, and thinks Labour’s fiscal conservatism has had its day:
The UK’s AAA downgrade wasn’t just a nail in the coffin of Osbonomics, it was also a much-needed kick in the groin to those on the right of the Labour party who thought opposing austerity was political and economic madness……Let’s not forget Black Labour – who published a pamphlet in 2011 saying Labour should ‘place fiscal conservatism at the heart of its message‘. How’s that working out for you guys?
Sunny is also completely wrong.
Labour’s fiscal conservatives are not quiet now because they know they have lost the argument. They’re quiet because they came out in 2011, won the argument hands down, and have gone home, put their feet up and relaxed for a bit with a nice glass of red. They simply don’t need to engage with people like Sunny (or me) because we don’t count.
Sunny needs to take a look beyond the media-heavy environment which he now inhabits, and see what’s going on when it comes to the Labour’s policy formulation.
Progress, the real party within the Labour party, is hosting regional events around the country to debate “the options and choices the party will face” if it comes to power in 2015. But fiscal expansion is not even on the table as an option:
An incoming Labour government in 2015 will not be able to countenance such increases in spending. Instead, the challenge of closing the deficit and tackling some of the long-term fiscal pressures the country faces will require some tough choices and radical thinking if Labour is to bring about progressive change.
(When I asked Progress if they’d set up an event in my area, they declined, pleading lack of resources. But look at it from their side. Why go through the hassle of being challenged by a nobody, especially a nobody who might be able to construct a coherent case against the parameters imposed on the debate?)
Similarly, Labour’s favourite think-tank, IPPR, argues its case for childcare from a determinedly fiscal conservative perspective; there will be no overall increase in spending:
Investment in childcare will help boost the employment rate, ease living costs for families with children and reduce child poverty. But finding the necessary funding will involve some difficult calls: should Labour seek to freeze child tax credits and child benefit or reform wealth taxation to generate additional revenues?
Everywhere you look, Labour is apparently preparing its own form of austerity: a little looser round the edges than the one that emanates from the Tories’ ideological drive for a smaller state, perhaps, but still very firmly in the fiscal conservative mould.
To what extent the In the Black Labour crowd (one of whom is from the aforementioned IPPR) are the cause of Labour fiscal conservative turn, or simply a reflection of a what was already developing, is an open question. I tend to think they have been the beneficiaries of (Dowding’s) systematic luck, whereby their “social location” made it more likely that what they wrote just the right nerve at just the right time within the just right bit of the party.
As for Sunny, he needs to get out more. First, he thinks people hate him for his “nuanced” approach to interventionism, when in fact the decision-makers didn’t even notice he wanted a say. Now he thinks he’s won the argument, when the argument was won months ago without him even being there.
Geroge Eaton at the New Statesman says Labour needs an answer to Osborne’s charge that it would “borrow more”:
If [Labour] wants to continue to attack Osborne on this territory it will need a much better explanation of its own approach. Without explicitly declaring that it would borrow for growth (and explaining why), the party merely reinforces the impression that borrowing is always and everywhere an economic ill.
Fair enough, but George Eaton doesn’t go on to say what this explanation should be. So here’s my version:
George Osborne is a cretin who doesn’t understand the basics of what borrowing actually is. He thinks borrowing is something to do with some kind of international gentleman lending club, who will lend to us only at exorbitant rates unless the Tories promise to keep on bleeding the poor.
But that’s not what it is (even if the equally cretinous BBC says so).
The latest Bank of England figures show that 70% of borrowing is from ourselves.
At least Vince Cable’s Special Advisor understands the basics. Back in 2010, Giles Wilkes sought to bring some cmmon sense to the hysterical debate about borrowing:
“All we get [from increased government borrowing] is a shifting balance between private and public assets and debts, in the absence of a massive international imbalance. Which means we can always afford to resolve either private or public indebtedness with a political solution, if we are brave enough.”
Labour is brave enough. George Osborne is a coward as well a cretin, who apparently fails to understand that when he announces grand though probably unworkable plans to get pension funds to invest in infrastructure, he’s actually only talking about borrowing from the same institutions as invest in government bonds anyway.
There you go. George Eaton. Job done.