Wednesday, 18 January 2012

I get knocked down...

There’s a wingman trick for picking up girls. Your mate goes over and hits on the woman you like, preferably acting in the most drunken, clumsy and annoying way possible. At the critical moment, you ride to the rescue with cries of, “Is this man bothering you miss?”. If you’re really good, your mate can fake swing at you, allowing you to knock him down. Instant Prince Charming.

For over twenty years now, this has been the relationship between the Trade Union movement and the Labour Party. In order to woo that special class of swing voters in marginal seats, the Labour Party has orchestrated a series of fights with the Unions, as choreographed as the WWE. Whether this was on keeping Thatcher’s anti-union legislation, Clause 4 or privatisation, again and again the Union movement has allowed itself to be hit on the nudge-nudge, wink-wink understanding that it was necessary for our mate to get the girl. This week, we took another hit.

Ed is playing the same old game, hitting his friends because we have nowhere else to go. The message is the same one the Coalition gives to the working people of this country, “Sit down, shut up and pay the bills.” In both cases, those paying had nothing to do with racking up the debt.

From the Blairite squeals one wouldn’t think they’d wielded absolute power for 13 years. Still sulking about failing to get Lawrence Wainwright David Miliband elected they’ve spent much of the last year and a bit declaring it’s all over. That because the party for a moment doubts their leadership (which never got us as many votes as Major in 1992) we are delusional. Now many good things were done during Labour’s time in office, from the Human Rights Act, to Freedom of Information to equalities legislation which helped some of the most marginalised people in our society. But if the discussion is economics, then who got us into this state? I don’t recall ‘the brothers’ demanding we spend a decade in government with Nigel Lawson’s tax bands in place. I can’t remember general secretaries being consulted when Tony decided to pour out £20 billion in the deserts of Iraq and the steppes of Afghanistan. I’ve read my history, but I can’t recall any Trade Union charter declaring its “destiny” to save the global banking system. Odd how money can be found to save Fred Goodwin’s pension, but not that of a teacher. Indeed, when one is pressed to think of what policies New Labour adopted from this mythical Union playbook, they all seem to be strangely popular. Minimum wage, the 50p tax rate, Surestart, so secure the Tories find it politically impossible to get rid of them.  

If you don’t care about the working people of this country, at least beyond a patronising paternalism, there is a party for you. If you don’t want to actually help people, but want to pretend you do to ease your middle-class guilt, you have a party for that as well. Sam Adams put it better than I could.

"If you love wealth more than liberty, the tranquillity of servitude better than the animating contest of freedom, depart from us in peace. We ask not your counsel nor your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen."

Now, I wouldn’t go quite that far. Labour has always been a broad church, and is stronger for it, and we should welcome ideas from all sides.

But if you are the masterful strategists who told us you had abolished boom and bust, that the banks could regulate themselves, that the Iraqis would treat us as liberators, that Afghanistan would be a functioning democracy, that ditching the 10p tax rate wouldn’t be noticed, that the Euro was our future and manufacturing was irrelevant... then a period of silence on your part would be welcome.

Tuesday, 17 January 2012

Turnaround is fair play

Anthony Wells, pollster king, has been defending the decision of YouGov to ask whether Ed Miliband was 'too ugly' to be PM. As the person who handles YouGov's polling for the Sunday Times, it will ultimately have been his decision to run the question. Indeed, he may even have come up with the idea.

Of course, he does have a point that how much we trust someone often is linked to physical attractiveness. And who do we need to have trust in more than pollsters?

Which begs the question, Anthony Wells, hot or not?

“If freedom is to be saved and enlarged, poverty must be ended. There is no other solution.”

Some would say quoting Bevan is a cliché. I prefer to think of it as kitsch. Either way, the man nailed the message Labour has forgotten. The welfare state, at its heart, is about freedom. Forget the perks of the barons in Magna Carta, forget the privileges of the London merchant class in the Bill of Rights, it is the creation of the welfare state that stands as the true testimony to British liberty.

Freedom is a concept the Labour Party has too often ceded, allowing a certain faction of the Conservative party to claim it. Not since Orwell called Socialism, “justice and liberty when the nonsense is stripped off” has it properly enunciated its claim to be a protector of the rights of the individual. Yet in handing over this ground Labour has gained nothing, and lost much. It is seen simultaneously as too strong and too weak. Over the New Labour era, the party seemed to take the view that, rather than counter the assertion it was too compassionate (or soft depending on your viewpoint) by arguing for the fundamentals of our social contract, it would do it by a series of bizarre acts of repression. Rendition, detention without trial, the DNA database, ID cards, ASBOs, a whole litany of laws designed to prove it could be harder than the Tories. It was as if any act of social justice had to be balanced in the books with some restriction, to prove the party weren’t a bunch of hippies.

This ‘triangulation’, pioneered by Bill Clinton’s Democratic Party, served Labour well electorally, but it did them great damage ideologically. Trading the allegiance of the liberal-left for the fickle favour of The Sun was bound to become a problem at some point, but the greater issue was to accept the premise that the welfare state is an emotional indulgence. Forgive us the effeminacy of schools and hospitals, we promise to do proper manly stuff like build aircraft-carriers and abolish trial by jury. The problem is that if you allow the welfare state to be justified only as a luxury, justified by compassion, rather than a necessity, justified by freedom and justice, you open the space for its regression and, ultimately, its abolition. For if this is merely a state run charity, why not simply have charity entirely?

This assault upon state provision has been flattered as ‘The Big Society’. Yet it also masks a parallel battle. Recent government actions; Iain Duncan Smith’s welfare reforms, Nick Clegg’s talk of alarm-clock Britain, the notion of withdrawing benefits from those involved in anti-social behaviour, all of these have challenged the old notion of universalism. The language of the debate is not ‘all in this together’, but the notion of the deserving, and the undeserving, poor. It is not enough for Labour to label objectors to what remains of the post-war consensus as the rich and out of touch. If that were so it would be easy. The resentment comes much more from those at the bottom, those who feel they get no benefit from working hard.

As Ed Miliband and others have pointed out, the settlement we now rely upon is born of a wartime economy and the immediate aftermath, where the problem of long-term unemployment, it was believed, had been solved. Everyone would contribute, and so everyone had a right to assistance when they fell on hard times. National Insurance was just that, a state-run insurance policy upon which you claimed, not as a beggar asking for alms, but as an equal party in the contract.

Charity is the opposite of this, and reveals a fundamental, political discordance about who the state should help. If the welfare state is not to be universal, and Labour moved away from this with means-testing, tax credits and other reforms, then we must decide the target. Should the state be giving resources to those who need them, or those who deserve them? And, perhaps more importantly, who gets to make that decision?

Each according to his ability

The spirit of capitalism, we are always told, is risk and competition. One man on the stock-market floor betting his own money and wits against the crowd, the steely eyed industrialist willing a factory into life, strong, determined, and risking his own livelihood for reward. The justification for the massive rewards is the massive risk that you lose everything if you make the wrong judgement.

This has never been the case, but the events of the last four years have shown perhaps the most egregious contradiction between the alleged principles of Western capitalism and its practice. Traders and bankers did not risk their own money, but ours; our pension funds, our sovereign wealth, our savings accounts, and lost. And instead of throwing them into prison, we agreed not only to take the losses, but to keep them as filthy rich as they were accustomed. And now the poor need to pay, even if they don’t have the ability.

Beyond this, the crisis has shown just how bad debt is. To be in someone’s debt is to be in their power. Sovereign debt is giving away our democracy to the money markets. However, there is another way, a truly capitalist response. There are many people who have done very well out of the last thirty years. They have been perfectly happy to take the positive results in personal wealth. Let them take the negative in personal debt.

The idea is elegantly simple, especially through the happy coincidence that the UK’s debt of £900 billion is bang on 10% of what the Office of National Statistics valued its total wealth, £9 trillion. We will put aside for a moment the government’s ludicrous tendency of saying Britain is bankrupt when its assets are ten times its liabilities. Every UK citizen over the age of 18 would take responsibility for a proportion of the national debt according to their personal wealth. No-one under 18 caused this mess. The bottom 2% of households, with negative wealth, did not cause this mess. Indeed, the bottom 50% of this nation own only 9% of the total UK wealth of around 9 trillion. So, of our total debt of around 900 billion, we will claim responsibility for 9% of its debt, around £81 Billion. Take away the 6 million children, and we have an average personal debt of £3375 each. For those of us in the bottom 50%, that is a sizeable sum of money, but that would scale from nothing for those with no assets, to the middle household in the UK, with wealth of £204,000, taking on debt of around £20,000. Again, this is a large amount of money, but remember they don’t have to pay the lump sum up front, just the interest. At an interest rate of, say, 1.5%, that would be an annual payment of £300 a year, far less than Gideon Osborne’s VAT raise cost the average household. Similarly, those older people who have merely had their family home rise in value could spend the rest of their days there, and the amount would simply be deducted from their estate when they pass on.

So what of those at the top? To get into the top 5% of households in Britain means you have assets of £4million, so they pay £400,000 towards deficit reduction or, as I said, the interest of just £6,000 a year, a term’s school fees at St Paul’s. The Duke of Westminster would be on the hook for around 700 million, but considering he made £250 million last year I’m sure he won’t find that too onerous.

This would be a proper distribution of the losses. Those that crashed our economy would have to pay the bill. This might make them less inclined to crash it in the future. More than that however, the £49 billion currently spent on debt interest becomes free to plug the structural deficit. Free of the threats and whims of international financial markets, a truly radical economic reformation of this country could ensue.

It would not be easy. Innovation and hard graft will always be necessary to make the world better for the next generation. Labour creates wealth, and it will always be needed to do so. This paying off of the national debt would be the beginning of a process to use the vast wealth of this country for the benefit of all its people, and to preserve it for future generations. The dispossessed reclaiming what was theirs.