Tag: Economics

Council cuts and Labour – some frank but friendly words

I have an interest in this as I’m running for Brent Council in Willesden Green. But that means the public have an interest in it too, so I’m dumping a quick thought here which outlines how I feel about cuts. Might as well clear my chest at this early stage.

Firstly, the bottom line stuff. I am committed to the Labour Party as once necessary vehicle for democratic socialism, and I will follow its rules as decided by conference, including by following collective group responsibility with any colleagues I am elected alongside at a local Government level. I wouldn’t feel the same about being elected to Parliament for a host of reasons, but they are long and irrelevant.

The flip side – though this gives me a duty to support group decisions, it also gives me an obligation to fight for my own values and for my local residents in campaigns, when candidates are selected within the party, and then within the Labour group if I am elected as a Councillor.

So there’s my caveat paragraphs. What are those values and beliefs?

While I am prepared to admit that some cuts are stupider than others, I am also fundamentally opposed to the economics of the cuts, which are the right’s ideological project and economic solution all wrapped up in one neat package. Firstly this package is unjust and misses why we have economics at all – improving quality of life. Secondly, it is also a package which has failed in its own terms repeatedly across Europe.

Ignored by campaigners: cuts are part of a right-wing political project

But despite all this context, many local anti-cuts campaigners are blaming their Councils for cuts which are centrally decided and then deliberately and carefully outsourced to Labour Councils to avoid accountability nationally. Local campaigners, understandably angry about their own local losses, repeatedly take the bait.

While I support anti-cuts and have marched many times with anti-cuts groups, I think there are several areas of strategic weakness, and despite the encouraging start of the (poorly named) People’s Assembly, the movement as a whole frustrates me.

Where the localised anti-cuts movement is going wrong

It is fragmented, has poor language, has abysmal understanding of the law & finance, and is content to abandon realism in its strategy in the hope that setting a deficit budget in tooting will begin a great global uprising against neoliberalism that is necessary to undo the cuts. While I applaud their defensive work and awareness raising, the sense of strategy is mind-numbingly parochial. It is also so distant from the scale and depth of the task ahead that it is content to sit around biting the local veins of one of the key organisations in overturning the consensus at a national level, the Labour Party.

Why? Well, as stated above, taking losses locally touches more than a nerve, and the Government have sorted the swaparoo in finance so that Councils have to be the public face of the cuts they never wanted.

But I also think as well as the good intentions, it can all go a bit conspiracy theory at times, and the underlying current is sometimes disingenuous – note, for example, how few local anti-cuts campaigners are prepared to put their own solutions before the electorate either as Labour candidates, or for other parties.

On the conspiracy point, hatred for Blairism understandably runs deep throughout the left, parliamentary and external. I know this – marching against Iraq and opposing various privatisations were some of my earliest political actions, and I stand by them. But it’s not always relevant or the way to decent strategy.

Some more radical parts of the left seem happy to abandon materialism in favour of emotionalising this hatred, and apply it more widely against Labour. They are waiting all the time for someone to step into the betrayal zone, which rests on the assumption that nobody from the Labour Party is in the same movement or moral universe as them. Actually, that’s completely untrue.

I repeatedly see people who I know have made quite left-wing decisions in private being heckled by people who barely know them at meetings for being right-wing, or involved in some plot that the accuser cant even put their finger on (but of course, if they have been elected to an Executive Committee, there must be dastardly plots – one example of where the paranoia creeps in, and people respond to it by shouting at someone innocent, whilst lacking the guts to stand for their position themselves).

One recent manifestation was someone from the left echoing the Tory line exactly by suggesting that Labour Councils were cutting harder to ‘teach people not to vote Tory’. This involves some level of self-deception, and can really only be based on an emotional refusal to give the matter any actual thought.

It’s this that bothers me, because it stops even the best within Labour and the wider left working well together.

Views on policy may or may not be legit, but the style and underlying assumptions are empty and sectarian.

Let’s be sensible?

Labour Councillors that have been elected all depend on Labour voters from last time round, not Tory ones. These people are also disproportionately hit by cuts. It would be bizarre even for a careerist to choose to hurt them in this way.

If you can’t see this and appreciate that it means that Labour Councils are not necessarily in bad faith, I don’t think there’s much point in me or anyone else trying to have a political conversation with you, because logic on the points under debate is clearly not what matters.

My local Council has been told it has to find tens of millions worth of spending to get rid of over the next year.

If it’s about showing anyone anything, it’s about Labour Councils trying to find ways to avoid this costing lives, and using it as an example. Tory Councils are not being cut, and won’t have to even bother trying.

Focus: a ‘pragmatic’ left approach to Labour locally

If I am elected as a Labour Councillor, I won’t be promising a Poplar rates rebellion (a legal relic), or to hand over my budget to DCLG (the legal present), which will hurt the vulnerable, but without remotely stoking up any kind of dissent on a national level.

Instead, I will be pushing for Labour’s economic policy nationally and internationally not to concede to the cuts agenda, and pushing within the Labour Party for the Council to find ways of innovating out of cuts (a similar strategy to that used by that pragmatist Ken Livingstone and the GLC, rather than that pushed at the time by John McDonnell and Ted Knight).

I will undoubtedly take part in political demonstrations and perhaps non-violent direct action.

I will push to build a national anti-cuts movement.

I will fight at a community level so concerns about priorities are born out and people are at least listened to, even if they don’t get what they are after.

And to make all of that a relevant possibility, I will be ignoring the poorly reasoned ‘Blairophobia’ and fighting for a Labour government.

That’s better than letting former coalition Minister Sarah Teather off the hook for voting for cuts to our Council budget, which is something that in my view our scattered anti-cuts campaigners in my Borough and others allow to happen far too easily.

Tony Blair is gone, and those of us to the left of him have new challenges altogether to deal with. Let’s stem the bleed locally, get this lot out nationally, and make sure we replace the whole lot with something more participative, more democratic, more egalitarian, and more sustainable.

If I want my Borough to look more like that, I need a new government as an absolute minimum, and I see the fight against the cuts in that context.

Posted on by Tom Miller 2

The Tories and low pay

Matthew Hancock MP’s article on ConservativeHome is worthy of a little thought and debate. It’s welcome to see a Tory MP talking about the idea of siding with the low paid, bearing in mind that so much of the point behind what their organisation does is detrimental to them.

The Tory Party has steeled itself and committed to a programme of austerity which goes beyond simple cuts. Like most Thatcherite policy, it appears to be based on one single premise: the recipe for regaining national competitiveness is to raise incentives to inequality, and more importantly to raise the rate of exploitation for workers.

What’s meant by the rate of exploitation? Essentially, more work at less ‘cost’, that is to say, less cost to capital. It does of course cost workers more (and arguably also costs more to the wider economy – a tangent I’ll avoid here).

This is part of the reason it’s interesting that Mr Hancock raises the spectre of low pay. One would naturally assume that low pay would in fact be a policy aim. The idea of making it easy to fire workers at the drop of a hat is a key plank of his party’s policy offer, and seems aimed at increasing productivity through the use of fear of punitive action, for example. Reductions to benefits also fit this programme in theory – the whole prospectus is based upon the idea that reducing benefits is more likely to force more people into low paid work (thus increasing the rate of competition in fighting for scraps among those souls at the bottom of the pay scale).

There was of course a time when Tories believed in a ‘One Nation’ ‘consensus capital’ model. Unions were consulted. Increasing pay at the bottom was seen as a good thing – boats rising with the tide of prosperity. They actually understood that fulfilling the desire of the poor to consume (and thus realistically aspire to a more comfortable, fulfilling and healthy lifestyle) was good for economic growth as a whole.

The new right – revolution within capitalist politics

When the shocks of the 1970s sealed the deal of profit declines through the 1960s, many Tories seemed to resort to a tacit acceptance of some of the main tenets of Marxism. Some hallmarks are:

1) Innovation will not be enough to drive the growth of the future. Companies have now reached a ceiling of maximum return (illustrating what Marx labelled as the tendency of the rate of profit to decline). Companies now require subsidy via cuts in taxation and cheap selloffs of national assets if there is to be a healthy private sector.

2) The other source of growth is more difficult to attain, but involves squeezing more out of workers for less in return – hence cuts to out of work benefits, destruction of the influence of unions, use of the reserve army of labour to hold wages stagnant, legislating to increase casualisation, precarity, and thereby what we might call ‘labour market flexiblity’ – or more cynically, ‘things which make it easier to pay us less’.

3) The biggest benefits of these kinds are more attainable at economies of scale for developed, finance capitalist ‘big business’ than for shopkeepers. Empower ‘big business’.

4) The combination of the elements above makes it necessary to break from the Conservative political tradition of ‘One Nation’ ‘consensus politics’, and therefore given the emergent contradictions driven by lower rises profits, capital must attack labour directly and poltically.

All of these are assumptions of Thatcherism, but also themselves based on the observations of Marxism, in the sense of the domestic economy at least. It might be worth adding a fifth point that everything directly productive must be outsourced to low wage economies under authoritarian regimes, e.g. China, and a sixth about the strategic objective of totally gutting social democracy / creating a hegemony of the New Right – both of which shore the whole thing up.

What does this mean about Tory views on low pay?

In short, everything. It leaves us asking questions about the likes of Mr Hancock and the ‘liberal conservative’ wing of the Tory Party. Where are they, politically?

In my view, what looked like a victory for the Heseltine / Clarke tradition of the Tory left in the election of David Cameron was nothing of the kind. It was actually the nail in their coffin. They have now been effectively been replaced with drys who dress as wets, backed up by an insurgent Tory right who see it as their job to seal this deal, and are a lot more perceptive than they make out. As they see it, the Tory Party as a whole has succeeded in gutting Labour – they are now on a mission to rid the Tory Party of its genuine left.

I suspect that part of Matthew Hancock’s motivation is in the utterly transparent ‘strivers v skivers’ wedge that Cameron aims to drive into Britain’s working class as a whole. The idea that Tories are pro-pay is a useful one, because it actually cements in place the proxy-attacks on it they are making by trying to replace workers with welfare claimants who will work for less, or if forced, completely gratis.

This is, of course, nonsense – which is exactly why it needs some diversionary rhetoric.

But secondly, maybe Hancock actually believes what he is writing?

Capitalism is always stronger when the link between effort and reward is stronger, at every level of the income scale. That’s why, in the past, I’ve railed against rewards for failure for the highest paid. Now we must deliver rewards for success for the lowest paid.

This is out-and-out Wilson style social-democratic reformism. It would have been just as at ease in the party of MacMillan or Eden. But the same rhetoric, in justifying the attack on welfare claimants, is part of what is helping to completely throttle that tradition.

Tories on the genuinely moderate wing of their increasingly extreme party are stuck in a confused mental eddy in wider history, and their number is tiny.

They want to move with what they seen as a One Nation style Cameron Conservatism, that actually means delivering better lives for the targets of austerity, whose impoverishment is necessary for austerity to work – the ‘nasty medicine’ that ‘the patient’ ‘must take’.

The offer of a Tory left including Cameron’s platform is completely false – an inherent lunacy. Cameron and the so called moderates of the Conservative Party owe so much more to its inverted-Marxist right than they do to its paternalist left.

If Tories like Hancock (or indeed Heseltine or Clarke) genuinely want a capitalism that raises living standards at the bottom, it would have been necessary to kick up a much bigger stink in a much more organised and factionalist fashion, a long time before now. His article, which is serious and worthy of consideration by conservatives, will amount to little more than a murmur. Sadly, it is a day at the office.

The part of the Tory Party which actually wants low-paid workers to do better speaks from history’s landfill. The worst part? They never even realise they are there.

Pay is stagnant. Living costs are up. Tory policies have exacerbated and encouraged this ongoing process. Usually, they have done so as a deliberate political objective – however nicely Cameron sells it all.

I won’t go into Labour here, but in my view only a well organised and modern workers movement can create a context for reform, now. It could do with allies in Parliament.

Posted on by Tom Miller

Price us in

The problem with property

One of the ideas that Tony Blair originally built his platform on is one that was quickly abandoned, but that I felt a profound empathy for – the stakeholder society. I think it’s something from Labour’s 1997-2001 term that really needs resurrecting as a notion.

So I was glad to read Laurie Penny’s latest NS blog post, in which she talks about the dearth of accommodation for young people.Being a young bloke of an overdraft persuasion, I have also seen a lot of the stuff she is talking about. I have luckily until this point just managed to escape it myself, though at one point this involved living in a guy’s loft, complete with spiders and old books. She is being accurate.

One of the commenters raises the point that house prices tend always to rise above inflation, and that property is concentrating in the hands of the older generation, but also in the hands of extortionist buy-to-let landlords, consolidating an ever greater number of properties and amount of space within an ever smaller group of hands.

In essence, these people are using Thatcher’s principle of freedom of exchange to the exact opposite of what Thatcher’s declared ends where. They are creating a no-property owning democracy in which few people have a stake in where they live, but landlords have ever greater power coupled with a disinclination to actually spend any money on providing decent accommodation for their tenants.

Some might see this as a throwback to a 1970s situation, where we all rent rather than buying. That’s OK, isn’t it?

This idea is very unhelpful. The system of rent as existed in the 1970s took place against a context, one of enormous investment in housing and urban planning, begun by Bevan in the late 1940s and continued by both Labour and Tory governments in their Butskellite, pro-Beveridge incarnations. This was capped with the often correctly derided brutalise tenement and tower block builds of the Wilson government – but it is worth remembering that these usually replaced slums or similar housing.

And the large amount of people living in council property at least had a democratic recourse – someone to take responsibility, whether they did it well or not.

These conditions mean that the situation now is actually quite different from a move back to 1970s style housing allocation. It is actually much more like the 19th century, and I don’t really need to explain why.

The point that I’m making is that the concentration of property in fewer hands is leading to higher pricing in both the rented and owned sectors, and that it is leading to worsening conditions in the rented sector, held back only when government regulates properly and efficiently – something that cuts to local authority grants and rate capping is going to severely impair. Ownership is important. The slums are gradually returning.

What for those of us who want to escape this by buying? Well, there is a general shortfall of supply, and a legacy of thirty years which makes things difficult. Take, for example, the fact that the government is now to look at CPI rather than RPI when making decisions on fiscal and monetary policy, excluding house prices. Their inflation will now make no difference to any judgements the government makes about wider economics. Gordon Brown was just as guilty of this particular convenience,  failing to allow the Bank of England to take house prices and rents into account when making decisions about interest rates.

Consequently, as a result of these benign political conditions set against the economic fact – that our country is highly dependent on property transactions – two classes are emerging outside the traditional distinctions we base on our relationships with production. We are building a rigid class system which is also based on our ownership of dwellings or tenures.

Potential answers

One of the things that impressed me about Ken Livingstone was his earlier commitment that all new build housing in London should be subject to a 50% affordability quota. I am glad that Oona King has also backed this commitment. That’s all very well to do locally, but there also needs to be market motivation for building houses, i.e. demand. If we’re talking about private builds, the demand has to be what I, being a pedant and non-economist, call ‘substantive demand’*.

Investment in the private sector is at historically low levels, and it was a long time prior to the crash that anyone influential realised or conceded that there wasn’t enough housing about. Cynically, I would suggest that perhaps the middle classes weren’t too hot on there being enough housing, as it would reduce desperation and leave the market at a natural balance, rather than inflating it. This would create a middle-class anti-feel-good factor.

If the conundrum is to be solved, at a certain level, public housing needs building, not just in London but in most towns, beyond the level of demand that those on lower income scales can realise.

Plenty of other things can be done to tackle rising house prices as evidenced by the new Priced Out campaign. Another excellent idea (yet again from Ken Livingstone) is that of local authorities or devolved bodies regulating limits to rents in certain properties. This could be done on the basis of council tax brackets or mosaic codes, as an example. It has to be admitted though that this is a remedy  and not a cure – the only cure is more houses. One of the things that has annoyed me about Oona King’s platform is that she seems to see no reason as to why public investment in housing is necessary. Perhaps she would need to be mayor to find out that very few firms are interested in investing at the moment, 50% affordability target or not. More would be great, and I would certainly not oppose it. But we live in the here and now.

The housing crisis in London would remain while she blankly stares on in illogical and profoundly ideological distaste for anything financed through democracy and taxation. Instead she should be fighting rate capping and seeking to provide managed public investment as an incentive for local building businesses to get something done while employing people at the same time. This also applies in other urban and suburban environments, not just London.

*Demand as conventionally understood by neoliberal/Chicago School economists, i.e. private demand backed up by capital, rather than actionable by social need or backed by state capital.

A way out? Price us in

Would middle class property owners be able to soak all this up?

Truth be told, not initially. But as Laurie’s article points out, there will only be so much their kids will put up with – people of my generation. And as for the parents themselves, it is surely they who suffer most from a generation of people who basically can’t afford to move out unless they can also afford to get married (also unlikely). With better wages for young people this would work out (i.e. if they kept up with house prices and rent). But I have already explained above why this won’t happen. Further, the coalition’s program of cuts will significantly cheapen Labour as the ration of jobs to people goes down, especially in the those economic areas where young people work.

The result?

A once in a century situation where many parents live comfortable in home ownership (especially if they work in the private sector), but they have to live with their 29 years old kids who won’t get off the Xbox or meet a nice young man.

Does that really work for anybody?

Despite being a left-winger, I see now problem with home ownership and think Margaret Thatcher was right to promote it. It is preferable for people of all social classes to own housing, take pride in it and maintain it themselves, not be subject to whims and evictions of landlords etc. etc.

I could go on for ever. I also see no problem with the thoroughly natural urge of all human beings to better their circumstances, and think this needs nurturing, not squashing.

My problem is that the current market operates without any regard to community responsibility, or sustainability. Many markets do this if natural, geographical or political conditions promote monopolisation or imbalance. Moreover, it is not the fault of markets, and essentially abstract entity, if they want to eat everything. By their very nature, they want more and better, as soon as possible.

But they want all this at the price of any consequence, like a bullying, obese child, who sees in his friends a lifetime supply of lunch money if he can only devour the entire contents of their shared canteen fast enough.

Politicians of both parties have felt trapped by aspirant middle class people, especially in the South East, into turning a blind eye to the kid. The kid needs regulating.

Many property owners’ sense of self-worth links heavily to the value of their properties. Their worries are at one with the market.

This is pessimistic, but there is a way out. By the time their kids are in their thirties, still live at home and still can’t afford anything, it will be time to think twice. These kids will also have essentially middle class morals, and will feel intensely frustrated by the collective political efforts of their parents’ generation to cut them out of aspiration.

Frustration is at the root of all progress.

Politicians might as well realise this now and get to work on the solutions. There was some good stuff talked about with regard to this when I was on the exec of the Young Fabians, but the truth is that nobody has turned it into a really big issue, and there is significant disagreement within the Labour movement about what needs to be done.

Like most solutions, the policies that end up being adopted by everybody, just like council housing, equal pay, the NHS, right through to gay marriage, will in all likelihood first be suggested by those people in the Labour Party who are widely regarded as nutters.

Disablist implications of that term not endorsed or encouraged, by the way.

Let’s start a conversation.

Posted on by Tom Miller 2