Monday, 25 January 2016

You can't trust Labour on the economy (updated since originally posted 15 months ago) Part 1

As the general election campaign for 2017 has now started in earnest, I have been locked away trying to understand the outcome from the Margaret Beckett report on why Labour lost the last election ( ). Now, whether you believe the report or not is entirely up to you. However, even without the additional analysis being included, one thing can be said with certainty – voters did not trust Labour with the economy. This has been borne out by my own un-scientific research – i.e. speaking to people on internet forums and social media. It is one of the most repeated phrases I hear and read from a whole spectrum of people. It is one of those "truths" that has become so because it has been so oft-repeated.

There will always be a subset of people who, no matter what can be proven, will decide that they will blindly vote Conservative. We have the same people in the Labour party and that is absolutely fine. People vote for their own reasons. If you are one of those people who hate the Labour party and will never look at evidence with a view to changing that position don’t read this. Use the time to do something useful – read something else, make a cup of tea, look after your children, speak to your life partner. That is fine. But I did want to consider that individual central tenet – that people did not trust Labour on the economy, and therefore wouldn’t vote Labour. I am going to try to extrapolate that too – should they trust Labour on the economy now or in the future.

In order to split this down we probably need to think about two things – firstly what is a “good” economy and what does that look like? Secondly, why should we trust a party? If we can answer those two, we should be able to put together a fairly strong case one way or the other. Just writing those two questions down outlines a whole host of problems, but let’s try and answer them.

What is a “good” economy?

So, the real difficulty with this is that there is not, and can not be a single definite answer to this. There are some broad areas of understanding, but nothing that we can concretely say “that right there is your answer”. Each individual will necessarily have their own view on this – and it will be coloured by their upbringing, their view on how the world works and what is important to them. We are after all a country of approx. 60 million single issue voters – that single issue being “what is important to me”.

From my perspective then (as a socialist) there are a number of measures of what makes a good economy. The key one is that the national economy should be measured on how that is used to provide a wellbeing for those people involved in and covered by the economy. A good economy would be one where: 
  1. any growth in the economy benefits those who work for it;
  2. it provides opportunities for everyone to participate and add to the economy whilst;
  3. providing a reasonable level of protection from external shocks to the national economy and individual shocks through changes in circumstance

I don’t pretend this is the only answer. There are other things that we could look at - a key one being how the economy is used to look after members of society in need. There are I am sure many issues that this doesn’t address. As we will discuss, some of these items might even rub against each other in different directions. Lots of people would argue that some of those goals are impossible whilst we live in a capitalist system. It is the system we have at the moment and nobody has yet convinced the British public to rally together to change this system for an alternative one. Additionally there are some huge topics that I have left out – the Private Finance Initiative (PFI and PF2 which are the same thing) are a massive burden on this country. However, political parties of all hues are currently wedded to continue delivering them, so they don’t provide a difference between how they are treated. This is a massive topic and the subject of so much unknown and unknowable that it has its own Nobel Prize. To expect me to do justice to it in a blog is probably asking too much. Even with the simplified items above I am going to split this down into a couple of (hopefully easily digestible, probably completely incomprehensible) blogs to not completely frazzle people.

Should we trust a party to deliver?

The next question should then be: How do the last Labour administration and the current (including the coalition years) Conservative government stand on each of those measures? And how do we believe a Corbyn government would stand against those measures? Whilst this may be a little unfair (every government in waiting is brilliant until it gets in), we need to recognise that a Corbyn government would be very different to a Blair / Brown government. 

Well the first measure mentioned above on economic growth and fairness really requires two parts to it – one is a growing economy, and two that the benefits of that growth are shared amongst the actors within it. Whilst there are a range of indicators for a growing economy a useful one is GDP per capita. This shows the value of the outputs of an economy shared equally by the population of that economy. For the UK, this shows the following output (taken from ).

What you can see from this is that under the last Labour government the GDP per person was higher than it currently is at its high point. It also had a steeper growth – i.e. people were (on average) getting wealthier, faster. This changed in 2008 because of the sudden correction in the markets – caused by the banking crash. The key term there I feel is “correction”. Put simply the market growth was to some extent a myth, caused by a bubble of over-inflated house prices across the globe and reckless behaviour of banks and consumers around the world.

Can we blame Labour for this? I think there must be an element of realisation that for Tony Blair and Gordon Brown the key indicator for economic success was GDP growth. Therefore the worst excesses of the banks were missed at best or ignored and encouraged at worst. This lends to the suggestion that Labour can’t be trusted. In order for us to stick with that as a reason, we should also look at the behaviour of the Conservative party in office. If the property bubble and banker behaviour were key components of the sudden correction, then to trust the tories they would have to clearly demonstrate a different approach.  

I would say that quite clearly isn’t the case. In fact the light regulation that allowed this to happen is slowly returning. Despite the rhetoric about this at the time, the Conservative Party (funded by hedge fund managers and property tycoons ) is indeed pushing back on the regulation of the banks. Ring-fencing of banks (to protect consumers and the economy) has been watered down. There have been a plethora of new scandals SINCE the financial crash ( ) they have slowly stopped investigations and reviews into the current banking market. 

So, if you don’t trust Labour on the economy for this reason, you quite clearly can’t trust the Conservatives either. As an argument, it is nonsense. Oh, and if you think that they have at least made sure another housing bubble wont appear and burst, then forget about it ( and ) – those risks are still there. Worryingly from the above graph we can see that rather than the Tories increasing GDP per capita it has fluctuated and is falling again - and this is before the impact of Brexit takes its toll. 

The next thing to consider from any growth in the economy benefits those who work for it is that it benefits those who work for it. To me, this means that the benefits are shared in line with hard work, effort and risk. That is impossible to measure on an individual basis. It is also massively unfair when we have different starting points. Instead a good measure of how the people in an economy are benefiting, and whether it is fairly or not, is something called a "gini-coefficient". If you wish to understand the maths behind it, then it can be readily understood from wikipedia. It basically measures how fairly income is shared amongst a population. This ties in with GDP above – as it measures the income in a period, in much the same way, and then looks at how income is spread between people. There are 2 extremes – but the lower the gini-coefficient the more equally money is shared between the people in the economy. Gini is calculated as between 0 (everyone gets the same) and 1 (1 person gets all of the income). As a co-efficient it is not useful on it's own - but is useful for comparing 2 things - such as different points in time, different countries or different governments.

In order to get a fair reading on this, then we must look at not only what the gini-coefficient was but how it has changed over time under each of these governments. So under the previous Blairite Labour administration, the gini co-efficient ( ) after tax showed a gini-coefficient of 0.38 between 1997 and 2008 – this didn’t really move. Since the coalition government came to power there has actually been an improvement in income equality - the figure got lower to 0.36 up to the end of 2013/2014. This will be in large part due to the changes in taxation that was pushed through by the Liberal Democrats. 

What remains to be seen is how the changes enacted since then will impact through 2014/2015 and 2015/2016. Although if you believe that trying to cut working families tax credits and battering disabled people’s payments will make income more equal then you have really missed the point. I would expect that the gini-coefficient starts to move back out sharply. After all, the current government have tried to remove income from their definition of poverty ( ). That can never be a good sign. Whilst we don't yet have the official figures for 2015-2016 (the first year of a solely Tory government), for 2014-2015 the gini coefficient has started to move out again - that is we are becoming less equal once again.

What we can't know is how this will change under a Corbyn led Labour government. However, we can look to the policies that have been unveiled already - investment in public works to kick-start the economey, higher taxes on large corporations and wealthy individuals, higher national minimum wage, a clampdown on tax avoidance and evasion and an end to using the benefits regime to punish the disabled and these would all point to an improvement in this measure (and all measures) of inequality. In fact, his first major speech of this election campaign has been entirely rooted in sharing wealth more equally. So, if we believe that he will be true to his word, this would suggest that on my first measure there would be an improvement in both GDP per capita and how that is shared. But, what we can already say based on the available, independent evidence shown above is this - the Conservative party are NO MORE trustworthy than the last Labour Government. That isn't opinion, that is clear fact when you consider the above. So don't let anyone suggest otherwise - without proving them wrong. 

Of course, this is only one measure, and I will look at the others in my next blog. An absolute key one is what state the economy and public finances are left in. This is another area where many believe what they are told in the media - that every Labour government bankrupts the national coffers if it is allowed to do so. But is this really true? Well, hopefully I can answer that point in my next blog. 

Friday, 15 January 2016

How to face the UKIP challenge

          Never one to step back from a challenge me. I recently got myself embroiled in a debate (well, I say debate, I was providing arguments whilst ‘kippers were sharing faked up images from Tommy Robinson) on twitter. The disagreement was over UKIP policies. I actually had to think on this – do I know their policies well enough? Do I understand them? We certainly can’t assume that we have enough liberal people in the country that UKIP can’t be a threat. Maybe I am doing them a disservice – and there is more to support than denigrate.
So, the challenge is twofold. One, I have set myself is to review and consider their manifesto. After all, they might be a party that we face at the next election (unless they crumble in the run up to or the aftermath of the EU referendum). Two, how do we see off their challenge? They themselves feel that they are a direct challenger to Labour in working class areas (although, you know, only when they aren’t faced with a democratic vote of the people of an area like in Oldham West and Royton).
Certainly, in specific instances, UKIP do sound like they have some compelling arguments and ideas. Patrick O’Flynn came across as the least rabid right-winger on Question Time on Thursday 14th January 2016 . Although I would urge caution – the other right wingers included Camilla Long, Kelvin Mackenzie and Nick Boles, so Genghis Khan may have appeared reasonable in that company. He certainly gained some praise for the housing policies he espoused.
As the last formal document expressing policy for UKIP, I got hold of a copy of their 2015 manifesto which comes with a handy back of a fag packet economic assessment of their tax and spending plans – provided by CEBR. This is marked up as “independent”. Now, if anyone has ever bought a house, you know that there is no such thing as independent. Whoever pays the bill calls the shots and gets the report they want. I couldn’t quite find the details of the independent person who had paid for this report. I am sure UKIP will help explain how this was done independently. So in the interest of fairness we will assume it was performed independently.
I will be honest, there is probably too much to wade through in one sitting – even if you enjoy blogging as much as I do. So I can going to focus on specific areas. What got me into this conversation was the explanation of UKIP housing policies, so we should look at
                The main thrust of the UKIP argument is really strong. A really sensible proposal. An absolute acceptance that there is a massive shortage of social housing, and that it has been caused by housing sell offs during the 80s. In order to combat that, they have a number of different planks to their housing strategy.
  •                 Bringing 280,000 houses back in to use by charging 50% additional council tax for homes left empty for 2 years.These are houses which the owners can already afford to own, and leave standing empty whilst paying council tax on them. How much difference will an extra £500 per year make? This would not have anywhere near enough of an impact. (Rating – not effective)
  • Incentivise building of 2.5million houses on Brownfield sites at a cost of £1.75billion over 5 years. Really, looking at this, I initially believed this to be reasonable. However, the devil is in the detail. To build 2.5million houses would require all of the sites to be redeveloped. Even UKIP have admitted their incentives would only cover 30% of sites – so a basic assumption would be an extra 750,000 houses built over the 5 year period on top of where we are now. So that would still make it a win – if the technology genuinely exists to achieve this. (Rating – appears possible)
  • Releasing long held dormant land from local and central government.There are no costings for this, or how much impact there will be from this – it is a completely uncosted, result free fudge (Rating – space filler)
  • Reduce the pressure on housing waiting lists by not allowing foreign nationals to access social housing until they have been here for 5 years, working and paying tax. This is the biggest plank of their proposal, and seen as the biggest issue, so I want to consider this in more detail.I think here we see the real thrust of UKIP and what they want to achieve. 

                So let’s agree some basic facts. Using the latest data I can find, around 8 million foreign nationals abide in the UK at the present time. If we assume they are in family groups of 4, that means they require about 2 million houses. Of those 43% own their own home and 39% rent privately . That leaves approx 18% in social housing – that would mean a reduction in the social housing stock of 360,000 houses. There are 4 million social houses in Britain out of a total of 23 million.
So, as a very rough estimate, that means that migrants (of all types) take up 8.7% of housing, and 9% of social housing. I don’t have any better figures, but let’s assume 50% of migrants have been here less than 5 years. That means actually, this would free up about 4.5% of social housing – but push this into private rented. This would simply mean higher private rents (more people after fewer tenancies). What are social housing rents now set with regards to? Private rents. So rent will go up for everyone, and the only people who will benefit are PRIVATE LANDLORDS. 
Alternatively, this approach could mean we have fewer migrants at all. This would seem to follow the general thrust of the UKIP arguments in other areas – where they wish to reduce immigration.  Many might think this is a benefit to us. Of course, it would mean the end of the NHS, as 11% of all NHS staff are foreign nationals - rising to 26% of doctors. So, yes, cheaper housing, but an NHS that can not cope – without enough doctors. So irrespective of any question of morality, that would be a massive loss to the country.
(Rating – higher rents paid by EVERYONE in the private sector OR no NHS – you decide).
So, there you have it, the UKIP housing policy laid bare for all to see. One potentially good idea, two soundbites and one policy so monumentally dangerous we could never enact it (that is even if it was compatible with the law, which I am not sure it would be). My worry is that like a lot of their other policies, what initially sounds straightforward is really an absolute disaster waiting to happen. This is why we need to fight UKIP – and this is how we need to fight them. By challenging their catchphrases and soundbites and making them admit the dangerous policies that follow behind. 

Tuesday, 12 January 2016

The Tory playbook, never changing

            Junior Doctors have been on strike today, for the first time in over 40 years. 1975 was the last time that they urged for a strike to stop the government arbitrarily changing pay and conditions for economic reasons.  Not many people (certainly in my generation) would consider junior doctors (or any professionals) to be left-wing strike-happy firebrands and with good reasons. When this is why they are striking it makes reading some of the headlines and lead articles in the tory press truly amazing. Quite amazingly, the BBC seem to be falling for the same act that Jeremy Hunt has been playing his entire career.
            It is really amazing that the BBC are still not caught up with this one. However, you have to ask whether the BBC are really focussed on reporting the news correctly at the moment. With Laura Kuenssberg and the Daily Politics show openly admitting to arranging a Labour resignation live on air in order to embarrass Labour – with the PM amazingly aware of it AS IT HAPPENED, you have to wonder how partisan the BBC is. Certainly a lot more than it was.
            The playbook the conservatives and Jeremy Hunt MP are using is remarkably well worn. There are a number of steps and stages to it. In fact, it was really honed in the 1980s by Margaret Thatcher and Lord Bell. So why is it so successful today? Probably because it is so simple and also quite hard to refute at any individual point in the process.
1. Set the press agenda.
This means controlling the topics of conversation and the tone of conversation from the outset.  Really, you need to have the press in your hand to be able to do this. So for example, having the vast majority of print media owned by Tory supporting families helps.  You might for example think that this is a case of politicians and medical experts disagreeing about what safe patient care looks like and how to deliver it? If so, you might be tempted to land on the side of the medical experts? But if the only headlines you see are:
Doctors' strike is unnecessary – Hunt (BBC)14 minutes ago
Junior Doctors told to GO BACK to work as hospitals buckle amid first strike in 40 years(The Express)
            Well, that might, just might give you a different view of the whole situation. One where Junior Doctors are actually striking for the sake of striking. None of those headlines identify WHY the strike is happening – because that is what Junior Doctors want to talk about. That is their agenda. So no matter what, it needs to be kept out of headlines and articles. In order to do this during the miners strike as another example, Margaret Thatcher moved Tim Bell (who had been her most trusted media advisor) to the National Coal Board to tell them how to do this.  It also plays into the second part of the strategy, which is:
2. Villify your opponents
            It is really important that you are seen as the reasonable side in the conversation – and that the other side can be painted with some base allegations. The lower and meaner the better. So for example, was a great smear campaign. It allowed the press to identify completely unrelated items and link them back to the story. Now remember, this is a story about junior doctors worrying about patient safety. So instead, if you can link it to their greed and avarice, then you can turn the public against them.
            Again, the Tories and the right wing press have fantastic form for this in the past. Who can ever forget or forgive The Sun when the tory government of the day needed to blame somebody other than the Police for the Hillsbrough disaster? Exactly the same script – make the people on the other side of the argument seem base and less than human.
3. Never be wrong, admit nothing, ever
            Again, this can only be done if you have a friendly press, which luckily for the Tories they do. I will give you an example of what that means in the current issue. If you search for the latest news stories, they all cover (for variation) that Jeremy Hunt wants to talk to the BMA, and that they are refusing to be involved in talks.
            The truth is that in November of last year the BMA asked Jeremy Hunt, through NHS England and the Department of Health back to the negotiating table at ACAS. It took 3 weeks for him to agree – and only once there was sufficient political intelligence to say that not talking was making the government look bad. Just think about that for a second. His only reason for going back was because of pollsters and social media. He has now turned that round – and claimed that it is the BMA who are not talking. He also ignores the fact that the negotiations at ACAS are ongoing.
4. There are lies, damn lies and statistics
            And nobody can call you out on them in an interview. But numbers sound incredibly convincing to a public who don’t have facts and figures to hand. A good example would again be from the Hunt’s interview with the BBC today. He openly stated that
“and at the moment we have an NHS where if you have a stroke at the weekends, you're 20% more likely to die. That can't be acceptable.”
Wow. Who could argue with that? Well, apart from the fact that it is not ENTIRELY accurate. I don’t even know where he got his statistics from, but it is really easy to refute. For example - clearly tells us that the thing that makes you 35% more likely to die is that the NHS doesn’t fund enough nurses. Or says that we can’t attribute it to a lack of junior doctors. But the assertion is out there – and people will remember a statistic.  For many, they won’t even try – much easier to just accept. After all, would a government minister tell an outright lie? By the time it is found out it is too late because the other side have been demoralised by
5. Cut off their support / divide and rule
            Firstly by the steps above, but also ensuring that the media report how little support they have. The trick is to make your opponents feel ostracised and alone. It is the same trick that school bullies use – make sure the weak kid feels like they have no friends. Hence, NHS England and the DH trumpeting that 39% of junior doctors went to work today. Again, the Hunt has touted this as
            “I'd like to thank the junior doctors who ignored the BMA national advice and did go back to work. And I think that shows the values of the vast majority of junior doctors. “
            That is – “the normal ones worked, you are the outliers, you are the lonely few”. What it actually shows is that some junior doctors are not in the BMA, and that other junior doctors are delivering emergency care – ie being reasonable and putting patients first.
So, how can we beat them?
            This is a tried and tested method that has been used over and over again – Miners strike, Hillsborough, Firefighters, Police and now Junior Doctors. But we have a real opportunity now to stop them – and to win this fight. We now have the tools to counter act their ownership of the media through the use of social media. Do a search for #juniordoctorsstrike right now and see how much support is still there.  We can refute spurious claims instantly by reference to the internet and point out their lies quickly. They can no longer lock us into our homes with newspapers and stop us supporting each other. We know what their playbook is going to be. It is the same every time.
            But we need to be disciplined, and we need to be calm. Whilst social media, the internet and our ever increasing connectedness allows us a chance to fight, we must show restraint and not go barging in, and being shown as “thugs”. Ask the cybernats how that worked out for them. We need to be balanced, stay on message and understand what we are fighting against. That requires not only co-ordination, but calm heads. I hope this is the first time we can use them, and that it can become our playbook.