Friday, 24 February 2012

Part-time Parliament a loopy idea

This week Jack Straw proposed abolition of the European Parliament. Richard Howitt MEP, Chair of the European Parliamentary Labour Party (EPLP) and speaker at this weekend's 'Social Europe: Worth Fighting For?' conference gives his response.

Oh Jack. You are and have been a great servant of the party and I have always forgiven that the European Union isn't your favourite dish. But you only needed to ask some of the politicians in your own generation to know that returning to a European Assembly of national politicians replacing the directly elected Parliament would be completely loopy.

It was tried in the 1970s and the logistics of MPs undertaking their parliamentary duties at home, travelling and trying to engage in joint work with counterparts from eight other countries proved unworkable. It was why direct elections were first agreed for 1979.

The politicians of that era I have talked to, speak with affection about the bars and nightspots of Strasbourg, but not of any political achievements in going there.

And that was before the European Parliament had full legislative powers, now incorporating 27 countries, and meeting 44 weeks a year, (far more than Westminster). Unlike the Commons division lobby, the European Parliament votes on 800 policy proposals and 10,000 amendments in each parliamentary year.

If the aim is to build trust in European institutions, a part-time Parliament is the last thing we need.

Indeed the impact of abolishing Europe's directly-elected Parliament would be to reduce scrutiny of legislation and of EU spending, lessen visibility and remove the very people the Eurosceptic press can never justifiably brand as "Eurocrats." In British public opinion, it would have the very opposite impact to the one you propose.

Parliamentary democracy is a fine and noble thing. It builds public support by bringing political debate and decision-making in to the open, and by giving citizens the chance to be the ultimate decision-makers through the electoral process. This is the case throughout the world and has to apply to Europe.

But there is a narrow Labour Party point to all this too.

Labour Euro MPs constantly strive to serve our constituents effectively and we must always be prepared to be self-critical on how we can do better.

But Labour in Government - the government in which you proudly served - too often failed to put the case for Europe, and fell in to the trap of claiming credit for European achievements for itself and blaming Europe for the things that go wrong.

But the days of the party treating its MEPs as the embarrassing aunt are long-gone.

The new generation of Labour politicians from Ed Miliband to Douglas Alexander, Emma Reynolds to our own leader Glenis Willmott, all appreciate that Labour has to do better on Europe as on other issues than limiting solutions to those from within the Westminster bubble.

Jack, it was a privilege to serve in your team as Labour's Foreign Affairs Spokesperson in Europe, when you were an outstanding Foreign Secretary.

But I recognise that perhaps one job that is beyond me is to be able to change your own views on Europe.

Richard Howitt MEP is Chair of the European Parliamentary Labour Party and Labour Member of the European Parliament for the East of England.

E-mail: Twitter: @richardhowitt

Thursday, 23 February 2012

Millande? Hollaband? Why Labour must get off the sidelines on Europe

Fabian Society General Secretary Andrew Harrop writes for Next Left ahead of this weekend's Social Europe: Worth Fighting For? conference

With the European right rallying behind Nicolas Sarkozy for the upcoming French presidential election, Ed Miliband must now move Labour away from the sidelines and offer similar support for socialist candidate Francois Hollande.

As politicians on the European right, buoyed by a period of centre-right ascendancy across the EU, have been campaigning together to secure austerity Europe, the left has, in contrast, been fragmented. As a consequence the burden has fallen on the grassroots to emerge as the sole vehicle to oppose the right’s vision of enforced austerity. Instead of the centre-left political parties articulating an effective opposition across Europe, it is in the indignados of Madrid, the Occupy movements and the anti-cuts protests in Brussels, London, Rome and Athens, rather than parliaments where the real opposition has emerged.

This is no more obvious than here in the UK where the Labour party has seemingly adopted a position of pragmatic Eurosceptism. Ed Miliband seems to be content to look on as the Tory right tear chunks out of David Cameron, while judging the issue far too toxic to actually make a serious comment on.

This is simply not good enough. With the centre-right coalescing around a shared vision of austerity, Ed Miliband must put himself at the forefront of an 'alternative to austerity', allying with leaders like Hollande who are willing to espouse the same policy. To succeed this must incorporate an economic message – propounding the need for investment in jobs and growth not just budget cuts – but also champion European policies defending strong social rights and welfare.

The Fabian Society’s Social Europe conference this weekend will focus on these rights which the centre-right consensus in Europe has identified clearly as an obstacle to the small-government, fiscal discipline answer to the financial crisis. In Greece, the enforced budgetary cutbacks have targeted the minimum wage, working time regulations and the pushed for the introduction of a more ‘flexible’ job market. In France, Sarkozy has talked about the need to relax the 35-hour week and to pay for removing social charges on businesses paid for by an increase in that least-progressive of taxes, VAT. In the UK, right-wing Tories like Liam Fox talk about relaxing constraints on business, a message woven closely together with the endless Conservative diatribes about Brussels red tape.

This race to the bottom will help no-one in the long run. There is growing evidence from the UK and abroad that government spending cuts are fundamentally harming growth, producing fractional growth figures for successive quarters. Nor is there any substantive evidence showing that cutting back on employees’ rights and making it easier to hire and fire, produces genuine growth in jobs. Both Ed Miliband and Francois Hollande have spoken convincingly about the need for a more responsible capitalism, this message must be a key part of this.

These are problems that are taking place on the European scale and merit a response from a united left in Europe. It is simply not credible for Ed Miliband and Ed Balls to propose their economic alternative in the UK, while ignoring the wider European context. Sooner or later, they will have to get off the fence.

There are still a handful of tickets available for 'Social Europe: Worth Fighting For?' - to get yours please visit the Fabian Society website 

Thursday, 16 February 2012

Meeting the Growth Challenge

Fabian Society General Secretary writes for Next Left as the Fabians launch a new publication  "The Economic Alternative, following on from January's New Year Conference 2012. You can read the full report on the Fabian website here

Leaf through the Office for Budget Responsibility’s (OBR) November 2011 forecast and it is plain that any post-2015 government that wants to bring public debt under control will need to take hard fiscal decisions. So Ed Balls’ announcement at Fabian New Year Conference that the party would not reverse coalition tax rises or spending cuts should it return to power in 2015 may have been controversial, but it shouldn’t have come as a surprise. If anything Balls is being too optimistic. The chances are that as chancellor he will have to do more than accept the status quo he inherits and actually cut spending or raise taxes for himself.

That’s because George Osborne has stealthily pencilled in £20 billion of cuts for after the next election to complete his deficit reduction plan. This number is itself based on GDP projections that could be far too optimistic, as the effects of austerity and the eurocrisis combine. The detail is impossible to call this far from an election, but Labour’s shadow treasury team need to reckon on a fiscal squeeze of at least the scale Osborne has in mind, even if they choose to close the gap more slowly.

Labour will need to make a stand, however, on the question of how to close the post-2015 fiscal gap. George Osborne says that after the next election he will act only through tax cuts. On the OBR’s figures, that would leave the share of economic activity in the public sector below its post-war average. In other words, the chancellor is covertly planning to ‘overshoot’ his commitment to bring public spending back under control. This confirms the left’s suspicions that his real agenda is to reduce the state’s share of the economic pie for good.

If Labour wants to stop this structural shrinking of the state, it will need to set out an alternative, where tax rises, not spending cuts, are the main post-2015 route to deficit reduction. Since the debacle of the 1992 shadow budget this has been dangerous terrain for the left. But Labour needs to get used to the idea that ‘tax rises’ v ‘spending cuts’ might have to be a defining issue of the 2015 election. Better to prepare the ground now than pretend the choice will go away.

That dividing-line is some way off, however. What about the here-and-now? For the time being Labour needs to do much more to set out the ‘economic alternative’: what it would do if it were in power today.

Where I quarrel with Ed Balls is not over his realistic stance on the public finances post-2015. It is that he is not balancing this message with a radical short-term programme proportionate to the scale of the economic troubles we face. Had Balls set out a truly ambitious growth plan alongside his fiscal realism, he might be having much less trouble explaining his alternative both to the public at large and to allies within the left.

So what should be the key ingredients of an immediate plan for growth? First, Labour should champion a state investment bank. The idea is simple: sell tens of billions of pounds of long-term bonds at today’s astonishingly low interest rates and use the proceeds to capitalise an arms-length investment bank which can then lend for spending on infrastructure, business growth and house-building.

Second, Labour should make the running on short-term tax cuts to show that stimulus does not just mean public spending. The priorities for cuts should be employers’ national insurance (to create jobs) and highly visible tax cuts or cash-back for low and middle income groups (to get the tills ringing).

Third, a significant job-creation scheme is now essential – say a guaranteed job for everyone unemployed for 12 months. But this must be funded, be it through taxes on the rich or spending cuts elsewhere. That’s because arguing for fewer or slower cuts overall (as opposed to different spending priorities) is now counter-productive. The reason for saying this is partly political: Labour needs to convince people that its support for Keynesian stimulus is not simply motivated by pro-state ideology. There is also little point in putting off cuts when horrific spending decisions are inevitable, sooner or later. Why call for delay only to store up problems if Labour regains power?

But there are other more fundamental reasons; the left might not like it but it has to accept that governments need to retain the confidence of the bond markets. Osborne is now more-or-less following Alistair Darling’s original profile for deficit reduction, not through choice but because he has so mishandled the economy. To be credible the timescale for balancing the budget can’t be extended very much more or the markets will begin to believe the eventual end-point has been abandoned. For the same reason, they need confidence that any stimulus will be truly temporary and it’s easier to turn off the tap on one-off bond sales or time-limited tax cuts than public service spending.

A big public sector stimulus is necessary but not sufficient to kick-start growth. Many UK companies and households have very healthy balance sheets (corporate cash reserves and expensive homes) but they don’t see enough reasons to invest or consume. Others, who would normally be seen as credit-worthy, can’t borrow in today’s climate or are put off trying. A key element of the state’s response to the crisis should be to devise ways to facilitate or incentivise private spending by those households and companies not over-exposed to debt.

Tuesday, 14 February 2012

Social Europe: Worth fighting for - The Results

Ahead of our ‘Social Europe: Worth Fighting For?’ conference on 25th February the Fabian Society conducted a membership survey on the EU to find out if the views of our traditionally pro-European membership have shifted.

The results, in many ways, were as expected. Our membership remains overwhelmingly pro-European but, in tune with the country at large, our members are also starting to move further towards the Eurosceptic side of the argument. This is especially the case when questions about widening the UK’s involvement with the project and of democratic accountability are asked. This is underlined by eight out of ten Fabian members believing the EU lacks democratic integrity and only one in five being able to name all their MEPs.

First the good news for our pro-Europeans, a North Korean-esque 94 percent believes that the UK should not only remain part of the EU, but that we as a people benefit from continued membership. EU-led changes such as relaxed border controls, free trade and even the single currency were all cited as reasons for optimism about what the project has accomplished.

When asked about which policy areas should see deeper integration with our EU partners the picture becomes more mixed. There is clear support for deepening our ties when it comes to tackling climate change (78 percent), employment rights (70 percent) – surely a victory for Trade Union campaigning there - and security and defence (64 percent).

The most important issues for Europe to cooperate on
There was less enthusiasm, but still a majority, for home affairs. A signal that, while Fabians see the benefits in areas where we are already integrated, increasing numbers are wary of deepening ties. 53 percent wanted more integration on issues like social affairs such as health and 54 percent on crime and justice, a 20 point gap from our top rated issues.

The real Achilles heel for the European project continues to be what anti-EU campaigners call the ‘democratic deficit’ in its institutions. When asked if it was thought voters had enough power over the EU an astounding 78 percent said no. As if to underline this point we asked how many of our members knew who all their MEPs were and only a paltry 22 percent could name them all (56 percent said some and 22 percent said none).

Given that Fabian members are both very engaged politically and overwhelmingly pro-European these are shocking numbers and questions about Brussels democratic element have to be seriously asked.

Do you know who your MEPs are?
Our MEPs lack of cut through isn’t a new phenomenon and there are questions for all of us who work in politics. A quick straw poll of the Fabian office revealed just one staff member who could name all his MEPs (a far lower percentage, it has to be said, than Fabian members managed), and he previously worked for an MEP.

Without a recognisable public face the charge of ‘faceless Brussels bureaucrat’ becomes impossible to refute, and easy shorthand for any anti-EU campaigner looking to score cheap points in a debate. The EU can’t dissolve the electorate and elect a new one so it needs to look at itself and work out the fairest (and most engaging) ways of making decisions in future. Without it even our Fabian pro-Europeans will continue their drift towards Euroscepticism.

You can view the full survey results here

There are still a few tickets available for "Social Europe: Worth Fighting For?" on Saturday 25th February. Visit the Fabian Society website to get yours today.

Olly Parker is head of Partnerships and Events at the Fabian Society

Monday, 13 February 2012

Why we need Social Europe

Ahead of the Fabian Society's Social Europe conference on 25th February, Ivana Bartoletti, Editor of Fabiana and former policy advisor to Romano Prodi government in Italy, writes for Next Left on why a social agenda must be at the heart for Europe  

European social policy comprises a variety of interventions, which take place mainly through the so-called Open Method of Coordination. The outcome is an amalgam of legislation, financial aid, cooperation and soft law mechanisms such as guidelines, benchmarking, and best practice.

In recent years, soft law mechanisms have become the preferred route to promote innovation in social policy. They are embedded in the Lisbon Strategy, which was adopted in 2000 with the aim of turning Europe into a socially inclusive and competitive, knowledge-based economy by 2010.

However, in the past ten years the idea underpinning the Lisbon Strategy — that economic and social goals must be closely connected — has been slowly abandoned. By 2005, the focus of the Strategy had shifted from considering social policy as a key factor for growth, to simply ‘growth and jobs’, without any mention of it. This didn’t happen by chance, but has been the result of the swing to the right, which has occurred in many countries over the past ten years.

Such a shift in the political agenda has become clearly visible in the way the EU has decided to deal with the current crisis. European countries, almost all run at present by conservatives, seem to believe that austerity is the only way forward to tackle the crisis. Whether true or not, this has had the effect of making citizens feel that Europe cannot provide any social protection, thus disenfranchising them; this belief can lead easily towards nationalism and protectionism.

Political and economic wisdom, as well as analysis of the outcomes, should suggest that austerity, à la Merkel and Sarkozy, does not work. A Wall Street Journal article, published in 2009 warned of the risk of EU countries entering a vicious circle of deflationary ‘beggar-thy-neighbour’ wage strategies; something which would endanger countries and lead to a spiral of poverty and lower living standards.

I am reluctant to accept historic comparisons which do not recognise the fact we live in an unprecedented time.

The process of European integration has now gone far enough that old remedies, such as currency devaluations and trade protectionism, are not viable solutions.

At the same time, solutions based on the traditional social-democratic vision of the big State are in my view outdated too, not only because resources are tight but also because big, state-led programmes have not always achieved what was hoped for.

It is within this context that Labour needs to develop a new narrative on Europe and I think the way to achieve this is by endorsing the original spirit of the Lisbon Strategy: to re-establish the social element as a key factor of growth.

Firstly, the EU is a single market, and it is in our interest to pursue a concerted social agenda among all member states. Equalising the social conditions of workers means ensuring we avoid a race to the bottom, which would ultimately affect us all. The reality is that the trend in reducing rights has already started. 

Secondly, we need to compete in the wider world. In 2006 I became head of human rights for Labour sister party in Italy, and I have since advocated that if we, as Europe, want to compete with, for example, China — a country which does not combine growth with rights — we cannot follow the same path, and would not want to.

Having recognised the importance of the social element as a key factor of growth, we can relish the challenge of developing a new social agenda in these tough times.

My argument applies very well to women: maternity rights as well as the provision of adequate and affordable childcare (topics which have always been at the very heart of the Lisbon agenda) are social priorities which will trigger growth. History shows us that removing the obstacles to women’s full participation in the labour market is a key factor for growth and the creation of wealth for households.

This is why I believe the European social agenda can give Labour the bedrock for a new narrative on Europe, so long as we restore its original spirit and we make it work in today’s tough times.

There are still a few tickets available for "Social Europe: Worth Fighting For?" on Saturday 25th February. Visit the Fabian Society website to get yours today.

Friday, 10 February 2012

Checking the blind spot - Examining violence against women

This is a guest post by Vera Baird. Vera is a member of the Fabian Society Executive Committee and Chair of the new Labour Commission on Women's Safety, commissioned by shadow home secretary Yvette Cooper.

Yvette Cooper described this Government, whose first budget took 70% of its cuts from women and 30% from men, as having “a blind spot” about women. She seems to be right when one considers, not only economics, but also plans such as the deletion of 17,000 rape suspects from the DNA database, as it becomes ever clearer to police that rape is often a serial offence.

Women’s organisations now fear that cumulatively, the Coalition’s policy, legislation and cuts are having a worrying impact on those services that work to protect women. We have found from our visits so far that these concerns are being backed up by facts from the frontline and illustrated by the experiences of the individuals we meet.

Last week Professor Sylvia Walby, UNESCO Chair in Gender Research at Lancaster, published a report showing the “dramatic and uneven” impact of a national reduction of 31% in funding for local gender violence services last year. Smaller organizations have suffered on average 70% cuts, whilst those receiving over £100,000 lost 29%.

Consequently, Women’s Aid have reported that up to 230 women fleeing domestic violence were turned away because of a lack of accommodation on a typical day in 2011. Eaves, which also provides refuges, has been forced to advise woman on how to minimise risk while sleeping on the streets or at Occupy camps.

Research by the Women’s Institute shows that women will be disproportionately harmed by cuts to legal aid, while Rights of Women demonstrate that 49% of current service users would not be eligible at all under the new rules, despite Justice Minister Kenneth Clarke repeating that such women will still get legal help. Violent men will not get legal aid either and, by handling their own cases at court, will get a state-sponsored opportunity to abuse their victim further by cross-examining them face to face.

A poll from training specialists, CAADA shows that, in 2011, 2 of the 8 major providers of Independent Domestic Violence Advisers, who are widely credited with saving lives, faced cuts of 100%. 3 lost 40% and 2 more will lose a quarter. IMKAAN, with six specialist refuges for Black Asian and Minority Ethnic women, is being forced to close two and reduce capacity in two more.

In Coventry, there is a 30% loss of floating support for survivors of violence. Cuts to housing benefit mean that a single woman under 35 who flees domestic abuse will only get the rent for a room in a shared property. A correspondent to our website says, “The Suzie Project in my home town has lost its funding, so we’ve had to end our group. Cutting funding to projects which support survivors of rape leave people like me feeling all alone.”

In one East Midlands ward, police identified domestic violence perpetrators and knocked on their doors on the nights when they were typically violent, to reassure their partners and deter these men. This preventive policing measure stopped because of officer shortages. Professor Walby found that 78% of perpetrator programmes had cut the numbers of clients they could assist.

Half of councils who responded to a Labour Party survey in November were reducing their street lighting to save cash. Local Government Secretary, Eric Pickles calls this “sensible,” while, on the other hand, the Police Federation said “the lighter an area is, the safer it is.”

Lighting cuts affect everyone in our communities, but Netta e mailed our website to say that it is women who are often left feeling more insecure:

“Cuts to street lighting – imposed by Suffolk Country Council - are happening here in Ipswich. Female friends … tell me [and I can confirm from having looked at a few] that it is quite scary. If you don't have a car, can't afford taxis and are used to walking around your own town in safety, it does make quite a difference having this "curfew" imposed.”

A national non-political women’s group told us that violence is the pre-occupation of its website traffic and women say that, as resources are cut back, they would not know how to leave a violent home if they needed to do. Professor Walby writes: “These cuts to provision are expected to lead to increases in this violence.” 

Half way through the Commission’s inquiry, we are beginning to understand her fears.

Professor Walby’s report, Measuring the impact of cuts in public expenditure on the provision of services to prevent violence against women and girls (February 2012), can be found here.

Tuesday, 7 February 2012

More cutbacks mean more riots?

Professor Peter Taylor-Gooby, Professor of Social Policy at the University of Kent writes for Next Left on the link between cuts and social disorder.

More cutbacks mean more riots? Many readers of Next Left might have suspected that already, but were drowned out as politicians and commentators clamoured to lay the blame at the feet of poor policing, poor parenting or simple hooliganism.

However, I've just completed a study which shows that they are the kind of response to harsh government policies which we increasingly should expect.  The work takes two sets of data. The first is a database compiled by Harvard University researchers which details social disorder in developed countries (riots, political demonstrations and political strikes). The other is the Organisation for Economic Cooperation and Development’s international database on public spending, privatisation, job security and poverty. Both these agencies are among the most highly respected in their fields.

My study puts these two sets of data together and sets them in the context of other relevant issues such as national public policy tradition or specific factors operating at a particular point in time. It shows that over a 25 year period and covering 26 countries, greater poverty, welfare state privatisation, public spending cuts and job insecurity lead to more disorder. These findings are reasonably robust in relation to different ways of specifying policies and their outcomes, different time-periods and different countries.

Significantly for contemporary debates, it's change rather than level in the various factors that seems to be most important: the rate of increase in poverty or of shifting government services to the private sector, the speed with which social spending is cut back. The UK government's social programme involves the most profound policy changes for at least two generations. It is now beginning to bite. Projections by the Institute for Fiscal Studies indicate that at least 400,000 more children will be in poverty by 2015. The reforms to the NHS and social care, the harsh cutbacks in funding for Sure Start and for local government and the policy of contracting services like the Work Programme to the commercial sector will privatise a substantial part of state services. More stringent eligibility tests for benefits and changes to employment protection in a context of rising unemployment mean greater job insecurity. The programme also proceeds at a hectic pace. The Coalition is bent not just on achieving major cutbacks, but on changing policy so that the cutbacks are embedded, making them much more difficult for the next government to reverse.

The research reported here indicates that it is exactly this kind of rapid deterioration in living standards for the most vulnerable groups and headlong privatisation that is most likely to lead to public disorder. Last summer the poorest areas of big cities experienced the most violent riots for a considerable period. This was followed by major demonstrations and the largest strikes against government policies - particularly the public sector pension cuts - since the 1980s. Similar unrest is evident elsewhere in Europe.

As 2012 progresses we will see further increases in poverty, rising unemployment, greater insecurity for those in work and more privatisation as the welfare state is cut back. This research indicates that we will also see more riots, demonstrations and strikes disrupting our cities. Again I'm sure many readers of this blog believed that it was worsening social conditions in big cities that were responsible for social unrest. When the poor have no other avenue open to them, they riot.

The recent Guardian/LSE study of the London Riots  shows how the impact of cutbacks on already deprived communities set the context for the inner-city explosion. The research reported here sets that kind of study in a larger context and shows how cutting the welfare state and increasing poverty tends to result in unrest across European countries.

The full paper "Riots, demonstrations, strikes and the Coalition programme" is available on request by emailing

Friday, 3 February 2012

In Defence of Social Democracy

Dr Kevin Hickson is Senior Lecturer in Politics at the University of Liverpool and co-author with Roy Hattersley of "In Search of Social Democracy". Here he responds to David Miliband's article in the latest edition of the New Statesman. 

 Firstly, I would like to thank David Miliband for taking seriously the arguments which were presented in my recent article in The Political Quarterly, ‘In Praise of Social Democracy’ co-authored with Roy Hattersley.  Obviously we disagree over the recent past and the future of the Labour Party, but this should be a debate over principles and not personalities.

What does David argue?  The implication is that we are being intellectually complacent - lazy even – wishing to retreat into some kind of comfort zone, reassuring ourselves while failing to do what is necessary to win the next General Election.  In fact it is the other way around, the complacency comes from David Miliband, and other Blairites in the Party who wish to have more of the same, the ‘unfinished’ Blairite agenda of the pre-2007 era.  It is this agenda which seems dated and irrelevant.  David is correct, Britain and the world have changed - we are now in a ‘post-crash’ era – but it is the older Labour values that seem much more relevant now than Blairism.

I wish to make several arguments in response.  Firstly, there is no trade-off between principles and power.  We should not think, as some on the left have done in Labour’s past, that it is better to remain in opposition so as to be ideologically pure but nor is necessary to sacrifice key principles in order to get into power.  New Labour was incredibly cautious not only in the run up to the 1997 election, which is understandable, but afterwards.  The feeling of most Labour supporters is surely one of regret.  Labour did good things in power but overall the sense is one of a squandered opportunity.  The fundamental purpose of a Labour government is to achieve greater equality.  In this New Labour failed, if indeed it ever tried seriously to do so.  Now the best hope for the Labour Party electorally is to be much more ideological.  

Moreover, we should defend the central state.  We did not argue that the state can do everything, nor is it perfect.  There is plenty of scope for constitutional reform, for more effective central-local relations and for greater international cooperation between nation-states in a more global world.  But what we should not forget is that the state is the only thing which can get us out of the economic mess and if there had been more effective banking regulation rather than championing a laissez-faire approach as New Labour did then the effects of the global banking crisis would not have been as severe as they were in Britain.  New Labour left the British economy overexposed to financial services, lacking effective regulation and an absence of active industrial policy.  This was surely the greatest failure of New Labour in domestic policy and we should never forget this.  By saying that we should find alternatives to the central state David continues to miss this crucial point.  It is the market – not the state – which should be the primary target for criticism and reform.

The contributors to The Purple Book and those associated with ‘Blue Labour’ share a commitment to extreme localism.  David has re-emphasised that belief in his article this week.  However, what is striking about this commitment is how pointless it is as a response to the major issues of the day.  Few, if any, banks are based locally – perhaps they should be but they are not.  It is incredibly difficult to see how effective economic regulation can be achieved by greater localism.  Similarly, David wants to decentralise public services but at the same time fails to explain how this can do anything other than exacerbate the postcode lottery in welfare that Labour has historically sought to diminish.  Greater powers can and should be given to local government but this also requires a compact between central and local government.  The ‘big society’ is an attack not only on central government but also local authorities.  An essential task for Labour is to defend the state, both central and local.

In the week that David chose to write his article Ed has effectively tapped into the sense of unfairness felt, legitimately, by the British people against astronomical bankers’ bonuses.  We should have the confidence in our traditional values, not because we wish to retreat into our comfort zone but because they are both right and popular with the electorate.

You can read Roy Hattersley and Kevin Hickson's original article "In Search of Social Democracy" in Political Quarterly here.

Farewell Huhne...

Natan Doron is a Senior Researcher at the Fabian Society

In Winter 2012 I had the pleasure of sitting opposite Chris Huhne at a Fabian Society Environmental Policy Network dinner. He quoted Trotsky and poked fun at the Big State Fabians. In the main though he spoke as someone who was on top of his brief, understood the scale of the challenge and most importantly, had the gravitas to stand up to George Osborne in cabinet. However you look at it today is a bad day for the battle to avoid the worst effects of dangerous climate change.

Because in 50 years, no one (except perhaps Paul Staines, Harry Cole & hardened Lib-Demologists) will care about Chris Huhne’s driving offences. They will however, care about what the UK did to show radical, innovative and effective leadership on the challenge of shifting our energy portfolio to a more sustainable place. This does not mean Huhne should be excused, but rather that the political debate needs to focus now on getting the right person for one of the (if not the) most important brief in Government.

A wealth of research from the Fabian Society’s Environment & Citizenship programme shows that in an age of creeping scepticism and uncertainty on climate, the public need and expects a Government that shows strong leadership on climate change. This was something that, despite his faults, Chris Huhne understood. That’s why Huhne was right to push for increased ambition in Durban when everyone had written off the chances of any deal at all being made.

As the Fabian research makes clear, the public see the Government as a legitimate voice on issues of climate and they want a framework of policy initiatives that ensures everyone is involved in efforts to reduce the climate impacts of behaviour. This Government needs to understand the importance of rules and regulations in sustaining co-operation: ‘nudging’ in itself is not enough.

The coalition is increasingly making a mockery of its self-awarded greenest government ever title. This only maximises the level of expectation on the incoming secretary of state. Ed Davey has a hell of a job on his hands to fill the boots of Huhne and to make sure we don’t fail future generations by sacrificing the stability of our climate at the altar of Osbornomics.

Wednesday, 1 February 2012

Boris' "75p moment"

Fabian Society General Secretary Andrew Harrop (@andrew_harrop) takes a look at Boris Johnson's council tax cut

Boris Johnson’s announcement of a 1% cut in the City Hall component of Londoners’ council tax has been met with astonishment verging on ridicule (see Labour AM John Biggs’ “onion argument”). It reduces the average household payment by the staggering figure of £3.10 per year. At a time when people across the capital are coping with squeezed incomes, Boris’ pledge to cut the tax liability of London householders by less than a penny a day seems almost satirical.

In a typically grandiose press release issued by the Mayor’s Office, Johnson describes his “pride” in “taking this step towards easing the burden” and in an interview with the Evening Standard lauds this as “the end of an era where arrogant politicians showed contempt for London taxpayers”.

But how can we reconcile this soaring rhetoric with the measly reality?

Readers with long memories will perhaps be reminded of the furore that greeted the 1999 budget when Labour announced its 75p weekly increase in the state pension. Attacked vociferously by Conservative opponents and questioned by older people’s groups, no-one could realistically say this was the Labour government’s finest moment of political management. Fast-forward almost ten years and Gordon Brown embarked on his ill-fated abolition of the 10p tax rate, prompting dismay on all sides of the House of Commons.

At the root of the problem in those two cases was the same division between rhetoric and reality. To struggling pensioners the stark reality of a 75p per week increase jarred with the overblown statements of ministers. The abolition of the 10p tax band clashed with Brown’s promise to “ensure working families are better off” and deeply damaged his credibility. Both served only to reinforce New Labour’s association with spin and dissimulation.

Could this be Boris’ “75p moment”?

It’s certainly a lame-duck policy. It offers hardly any relief to Londoner’s struggling in these straightened economic times. If it is, as the Evening Standard asserts, an attempt to “trump” Ken Livingstone’s Fare Deal campaigning, Boris has played the wrong card.

In last month’s YouGov London mayoral poll, only 13% of those polled thought that Boris Johnson “was in touch with the concerns of ordinary people” (in comparison with Ken Livingstone’s 40%). A headline-grabbing announcement that promises so much but delivers so little for Londoners will only exacerbate this.

At best it is naïve, at worst it smacks of desperation.

Baby steps towards responsible capitalism?

The past week has seen Sir Fred Goodwin lose his knighthood and RBS chief executive Stephen Hester surrender his £973,000 bonus. Headline grabbing events by their very nature, questions are now being raised as to whether we are witnessing the first steps towards responsible capitalism or symbolic gestures merely equating to the public being thrown a bone?

First rearing its head at the embryonic stage back at Labour’s party conference, the “responsible capitalism” agenda is one which seems to be sticking. Once again, much like 2011’s “squeezed-middle”, opportunistic Tories, recognising the resonance the issue has with the public, have leapt aboard the bandwagon. With this, a movement has pushed the agenda into the public consciousness. But perhaps it has only been in the past week when the concept has become a reality.

Spurred on by Sir Philip Hampton’s rejection of his £1.4 million bonus, on Monday Stephen Hester, RBS chief executive, caved into growing political pressure when faced with the possibility of a Commons vote and yesterday, with a frightfully cold evening looming, news outlets across the nation switched focus to Fred Goodwin’s “de-knighting”.

From an optimist’s perspective, one could argue that these are much more than empty gestures. Perhaps, The rebirth of accountability. And, with defiance towards unjustifiable bonuses and rewards taking their first scalps, you cannot help but think a precedent has been set for other CEOs, chairmen and executives to follow. But to be positively bleak, do we live in times of optimism?

With growth stagnating, unemployment at its highest rate since 1996, welfare reform threatening many of the most vulnerable in our society, this is hardly the time to count the odd million saved or a knight of the realm forfeiting an honour as wins. To take the less joyous path and reluctantly embrace pessimism, these somewhat positive events do not seem so significant in the cold light of day.

When it comes to real reform, where the agenda of responsible capitalism will ultimately succeed or fail, we will see whether there is real merit to the argument. Despite the term’s popularisation, in reality we find a contrasting picture. No truer than with regards to the Vickers Report, which advocated much needed regulatory reforms of banking. In December, this was tellingly confirmed to be off the table until the latter end of the decade, inexplicably being scheduled for 2019. In both a political and banking sense this is light-years away. And in all honesty, who knows what the future will bring? By 2019, the economy could be growing and the yesteryears of turmoil could be long forgotten, only for future generations to once again be blighted by further recessions.

With this in mind, in spite of the fanfare surrounding “responsible capitalism”, you cannot shake the feeling that far too many remain proponents of the notion that big business is impossible to regulate. Jonathan Bartley, writing last week for the Guardian, suggested that “responsible capitalism” is an oxymoron much like “well-mannered war”. While, this may be too cynical, there is a point here. A point perfectly articulated by gestures such as those seen in the past few days. Responsible capitalism has to mean more than simple pact mentality retribution and bonus blocking, to put it simply the idea must avoid being devalued, avoid becoming “responsible capitalism lite”.

To steer clear of such a fortune, we must be wary of finding ourselves in a rut, or continuous chain of events, where every now and again the public mood is defused with a token appeasement. Rather pressure must keep mounting, focus must not waiver and courage must form the basis of our approach.

Unquestionably, Ed Miliband has seized the initiative in the past week, and doubters must surely recognise the Labour leader’s growing ability to pick the fights worth fighting. As with Murdoch and NewsCorp, Ed has understood the public mood and capitalised to appear both earnest and true on his words concerning responsible capitalism.

The party must continue to walk this path. While, the much needed reform is scheduled for long into the political future, a future in which Labour hopefully once again form a majority, Labour and the left can still be influencing the debate now. Pushing a coherent agenda clearly defined by its goals and undeterred by nonsensical claims of angering big business. The message is clear, the public want action, Labour can and must deliver this.

This is a guest post by Kenneth Way