British politics
I had this on Labour Uncut a few weeks ago. I think events since have justified my argument.
Public debt, said to be the consequence of Labour largesse, is the problem for the governing parties, and aggressive cutting the medicine. Labour contends that this remedy is too tough to close the deficit. As we recover from a global shock of 1929 proportions, slower cuts are required for strong enough growth to generate the tax revenues needed to achieve deficit closure. Lack of growth, as well as the deficit, is the problem targeted by Labour.
Are these well-established positions shifting?
Not as far as Labour is concerned. Some twitching can, however, be detected on the government side.
First, John Redwood wants an improved growth strategy. This is echoed by Liberal Democrat Mark Littlewood. This doesn’t mean the Tories and Liberal Democrats are about to concede, as Labour has protested, that they have no growth strategy. Since the formation of the government they have argued that the deficit needs to be addressed to retain the favour of bond markets and so control upward pressure on interest rates. They prefer this monetary stimulus to greater fiscal support. Yet the comments of Redwood and Littlewood are not insignificant. They acknowledge that the resources of the shrunken state could better target growth.
Second, Norman Lamont has stressed that the government is battling the headwinds of a global crisis. Osborne has long sought to frame our economic problems as being wholly the consequence of Labour profligacy. Lamont may have carelessly forgotten this script or his comments might indicate that the Tories want to start to get some excuses in.
Third, George Osborne has flagged the “flexibility” in his plans. This isn’t a policy shift, but a change of emphasis. The automatic stabilisers of tax and benefits were never removed by him. The treasury might also define “trend growth” to create wriggle room on the extent of cuts needed to eliminate the structural deficit.
Osborne’s commitment that Ireland would be the only eurozone member he would bail out was shattered, as was always probable, in Portugal. His officials must have briefed him that Greek default now seems inescapable. Fireworks will follow, probably knocking our economy still further off course. So much so that Osborne may resort to the Lamont defence.
With this, the chancellor’s pretence that the deficit is entirely caused by excessive Labour spending and nothing to do with global conditions would be nakedly exposed. While this would be a significant concession to Labour, half of voters now blame Labour for the cuts, as compared with a quarter attributing them to the government implementing them. Osborne’s acknowledgement that the UK is not an island would help. But probably wouldn’t be enough in itself to reverse these numbers – especially if Osborne gets traction behind a subtler Lamont defence.
The simple version of this defence is a global crisis. The more subtle and accurate one is a European malaise. The euro’s principles “have proved unworkable at the first contact with a financial and fiscal crisis” (Martin Wolf) and the currency zone “is looking very much like a system that amplifies shocks rather than absorbs them” (Ken Rogoff). Swathes of southern Europe are unable to generate the growth they require to manage their debts within the eurozone. This isn’t sustainable. Either consolidation into a currency and fiscal union occurs or bits of the struggling south must break away.
Eurozone leaders have not confronted this choice squarely. The economic interests of the UK are best served by having them do so before this dilemma overcomes them. However, Osborne potentially has a tenable political position even if our economic interests are not so protected. While the shocks triggered by Greek default may destroy his economic projections, he will shift his account of the economic problem to the European variant of the Lamont defence. It won’t have worked. It will have hurt. But it will be Europe’s fault as well as Labour’s.
The bond markets and the polls will then give their verdicts on this argument. The markets will want Osborne to hold fast to plan A. As the pain accompanying this plan deepens, the polls instead might indicate an increased sympathy for Labour’s slower cuts. Labour should not, however, seem to be willing this grim scenario.
Labour should be building on the criticisms of Redwood and Littlewood and spelling out how smart policy can secure faster growth. We should also be getting ahead of the debate on the euro. Ed Balls ought to demonstrate that he is capable of leading in Europe in a way that Osborne has not. Then any deployment of a European-flavoured Lamont defence would be followed by Labour contrasting the paucity of Osborne’s response to that of Balls.
Margaret Thatcher and Ronald Reagan were right-wing, obviously. But they were coherent, courageous and possessed of certain irreducible beliefs. And not wrong about everything. Sarah Palin is, in contrast, clearly incoherent and vapid. Andrew Sullivan once described her as the “reductio ad absurdum” of Reagan’s conservatism. Palin, basically, manifestly is nuts. The reluctance of the American right to acknowledge the self-evident contrast between Thatcher and Palin is indicative of their estrangement from reality. If the Republicans select her as their presidential candidate, reality will surely, finally, file for divorce.
The latest issue of Progress magazine indicates agreement between me and Richard Angell on primaries for Labour Party parliamentary selections.
18 months ago I blogged that:
“Should not the party consider establishing indicators of being a community of shared belief - e.g. a monthly GC, constituted branches, a certain proportion of constituents as party members and some level of voter ID over a defined period – and if these indicators are not satisfied then a primary selection is enforced? Assuming party members wish to retain control over selections, such a system would incentivise CLPs to be genuine communities of shared belief, which is what all party members wish to see.”
Richard writes similarly in the current Progress magazine in a piece entitled Making the most of primaries:
“We should introduce the requirement that, if the constituency party has not ensured that at least one per cent of the Labour vote at the last election are party members, and the candidate selection takes place within a year of the general election, then the decision is thrown open to a primary … This would incentivise us as members to ask people to join, ensuring the party is outward looking and ready to win. It would encourage us to reach out and – if this is not being done – then local people win a greater say, hopefully resulting in more support for a candidate and, in turn, more members.”
If Richard and I agree, it is surely case closed.
I wrote this for Labour Uncut today.
The financial crisis was unprecedented and complex. But the left’s interpretation of it tended to be straight-forward. Banks and bankers were bad. Government and politicians were good. Government saved the banks from themselves and would stimulate economies. This enlarged role for government made a “progressive moment” inevitable. Yet government is now being scaled back and the left is out of power across Europe.
The left must move beyond its misconceptions to recover. While Labour’s plans to close the deficit concede limits to government’s size, George Osborne was much quicker than Gordon Brown to acknowledge such limits. The lesson of the debate on the deficit during and after the general election is that the left cannot be abashed by fiscal reality. It must confront it squarely. This is a lesson that Barack Obama might now reflect upon as debate in the US on the size of government moves to a similar place to that in the UK in the six months or so prior to the general election.
Reluctance to acknowledge limits on government’s size indicate how little the third way shifted the left’s gut instincts. The girth of government is still too readily taken as a virility symbol of leftism. This is in spite of government sometimes being a shackle upon the people the left exists to empower. Of course, government isn’t always so. Often it is a saviour and liberator. But to only see these aspects of government is not to see the full picture.
Jim Larkin, a pioneer of the Irish trade union movement, said: “The great only appear great because we are on our knees. Let us rise”. Government keeps people on their knees when it pays people to do nothing while others work ever harder, penalises people for its mistakes in miscalculating tax credits and loses personal data on a grand scale. From the rural payments agency, characterised by late payments, to the learning and skills council, with its abrupt termination of 144 college building contracts, the catalogue of failing public institutions is considerable. It hasn’t gone unnoticed. Almost half the voters in the south believe that public spending under Labour was largely wasted and did not improve services.
They may not be wholly justified in this view, but it forms an important part of the present context. Within which, the notion, taken as given by much of the left, that the public would welcome an expansion of government in a “progressive moment”, was always flawed. The failings of the public sector under the last government, whether perceived or genuine, rolled the pitch for the aggressive bowling with which Osborne has dismissed the “progressive moment”.
The MPs expenses scandal, by encouraging cynicism about public service, also assisted this pitch rolling. No appeal to a revitalised Keynesianism or other reasoned argument could hope to override the emotional resistance to an argument from politicians in the aftermath of this scandal, and the long-term decline in trust that the scandal compounded, that said “let us have more of your money and control of your lives”. Which is what the argument for a bigger role for government within the “progressive moment” amounted to.
This isn’t to say that the public didn’t feel, and do feel, disgusted by bankers and let down by banks. It is to say that the left needs to acknowledge that people feel similarly about politicians and government. And understand why people feel so and act upon this understanding.
These feelings about banks and government seem consistent with the argument of a Labour party discussion booklet, Small Man, Big World, written by Michael Young in 1949. This was, as his later collaborator Peter Willmott summarised, that the large institutions of modern society tended to ignore the interests of ordinary people, who suffered collectively as a result. Ordinary people see banks and government, for the most part, as such large institutions. Fred the shed and an MP’s subsidised moat are closer in the public mind than the political class might like to admit.
The left’s recovery in the UK depends upon Labour’s ability to disassociate ourselves with these large institutions and to become realigned with ordinary people. This emphasis should be central to our attitude to banking reform. It should also be so fundamental to our approach to government that Labour comes to be synonymous not with more government, as in the flawed “progressive moment” thesis, but with a wholly different kind of government. This requires, as Patrick Diamond argues, moving beyond the Westminster model to change the state and citizenship.
Young wrote his pamphlet four years after drafting the most celebrated manifesto in Labour’s history. However, the enactment of this manifesto made him concerned about the implications of a centralising bureaucratic state. The left’s failure to grasp this insight, even after 60 years, explains the faulty expectation of a “progressive moment”. Our ability to now run with this insight will determine the strength and speed of our recovery.
I wrote this recently for Labour Uncut.
“Pause, listen, reflect and improve”. That’s what David Cameron and Nick Clegg said they were going to do on the NHS bill. Most people know what these words mean. Cameron and Clegg don’t seem to, though.
The only thing that Clegg now reflects upon is how he can shore up his position as Liberal Democrat leader. With Chris Huhne and Tim Farron, two would-be assassins, both playing to his party’s gallery, he has reason to be worried. He sees the NHS as he now sees everything else: through the prism of his anxiety. For the NHS to relieve this, he needs to come to be seen as the man who saved it. The restorer of sanity subsequent to the Andrew Lansley-induced madness.
He wants “substantial, significant changes” to Lansley’s proposals. But the extraction of compromises is the least of the barriers standing in the way of him being re-born as Mr. NHS. He needs to explain away no Liberal Democrat MP voting against the bill at either first or second reading. Perhaps his MPs followed their whip because they thought the whole thing a Liberal Democrat idea. After all, that’s what Clegg argued not so long ago and, as John Redwood reminded Today listeners, the proposals are consistent with the Liberal Democrat manifesto.
Having broken promises on tuition fees and the depth and speed of cuts, Clegg’s attempt to reposition himself on the NHS bill is supremely opportunistic. Labour needs to expose this manoeuvre for the shallow gesture that it is. Only we have consistently opposed this bill and advocated workable reform in the NHS. The Liberal Democrats must not be allowed to steal our clothes.
Such theft would not be without risk for the prime minister. No government u-turn of such proportions can be without risk for its leader. It is indicative of the pickle into which he has allowed things to descend that Cameron now seems set to open this opportunity up to Clegg, particularly when his personal empathy with the NHS was central to his attempted detoxification of the Tories. Cameron may no longer be the man who loves the NHS if Clegg becomes the man who saved the NHS. It may make the “Thatcherite” label start to stick better on this somewhat Teflon prime minister.
We cannot allow the NHS debate to play out in terms of the politics between the governing parties. We need to make ourselves central to it. Ed Miliband’s speech to the RSA was helpful in this regard. It confirmed that we favour reform that works, not sticking our heads in the sand of the status quo. Our use of Commons debates can further assist.
Miliband is fond of saying “I get it”. The public needs to know that he gets the need to raise NHS productivity to maintain service standards in the context of the cost increases associated with society’s ageing. Obviously, real people don’t speak like this. But they don’t take NHS spending commitments alone to be virility symbols for the extent of a politician’s love for the NHS. They know that what is done with the money matters as much as the amount of money. And they also know that the country isn’t sitting on a bottomless pit of resources to devote to public services, and that tough choices, therefore, have to be made.
People are also worried about their own care and that of relatives, particularly the elderly and young. They want politicians to speak to these worries. But in ways that they consider realistic, given what they understand about the pressures on public expenditure.
The NHS in Cumbria shows that Labour reform works. It now shows that the facts on the ground are changing, even as the Lansley reform is supposedly paused. North Cumbria university hospitals NHS trust is to be taken over by or merged with another trust. This is because the current management has concluded that it cannot meet the strict financial criteria set to achieve the foundation status that the NHS bill requires it meet by 2014. This could well remove control of Cumberland infirmary in Carlisle and West Cumberland Hospital in Whitehaven from Cumbria – a curious form of localism. Try telling the 9,000 signatories on a petition organised by Labour MPs Tony Cunningham and Jamie Reed to maintain services at West Cumberland that the NHS Bill is paused.
Cumbria isn’t an isolated case. At PMQs recently, Labour’s Debbie Abrahams pointed out that the inception of cluster PCTs, which precede the GP consortia, including the Greater Manchester cluster PCT, was brought forward from 1 June to 3 May. The perception that significant swathes of the Lansley reforms are proceeding apace, irrespective of the pause that is meant to be in place, is encouraged by reports that the 50-strong “listening panel” set up to review them is stuffed with “yes men and women”. And, as the focus of the NHS is distracted, waiting times are rising.
Labour’s ground battle is to resist local changes brought about by the non-pause of the Lansley reforms. Labour’s air battle is to stop Clegg becoming the man who saved the NHS and Cameron being someone who gets the NHS. The war will be won when our policy review shows that not only does the government not have the right reforms, but that we do.
