Labour: Is It Really ‘Anti-business’?

In the closest and most hotly-contested election for a generation, politicians are going to throw a lot of mud at each other. The Conservatives and their supporters have mastered this art very well: they believe that if they take a line and repeat it often and loudly enough, it will become the prevailing view, even if there is little evidence to support it. They’re trying that now. By screaming that Labour is stuck in a ‘seventies mindset’ and is ‘anti-business’, they hope to undermine Labour’s economic credibility.

To be fair, Labour is fighting on its most radical manifesto for a generation. Vested interests have a lot to fear from us. Labour has committed to break virtual cartels that exist in energy and transport markets; crackdown on corporate tax dodgers and exploitative zero-hours contracts; control speculation in land and housing and a large uprating in the minimum wage.

Will these measures cost businesses? Only those who are bad corporate citizens. Good businesses already pay fair taxes and wages. Good businesses add value to our economy through innovation and hard work, not profiteering. Good businesses welcome real competition.

Labour is a vibrant, democratic political movement and we exist to serve the people of Britain, not the CEOs and shareholders. Except in the City of London, people have the vote, corporations do not. Our aim should not be to prioritise business over other concerns for the sake of it (or, as with the Conservatives, because Monaco-domiciled businesspeople have given us large donations) but to help business as partners in the British economy. Labour has every interest in helping business create British jobs, innovative new products and services and drive investment. And that’s exactly what the next Labour government will do.

Would an anti-business party commit to keeping Corporation Tax rates at the lowest in the G7 economies? (Rates that are too low, in my opinion) Would it slash the business rates that are crippling small enterprises? Would it fight so hard to keep Britain in the European Union citing ‘trading benefits’? Would its Business spokesman introduce the Small Business Saturday campaign?

Every businessperson from the start-up entrepreneur to the billionaire shareholder has nothing to fear and everything to gain from a Labour government as long as they are committed to social responsibility and playing by the rules.

These are the people corrupt interests want you to imagine when they throw claims about ‘anti-business’ approaches around. They don’t want you to think of HSBC, which was caught hiding its clients’ money from billions of pounds of tax liabilities (and then given a ‘get out of jail free card’ from the same Tory ministers who say we can’t afford extra NHS funding). They don’t want you to think of Amazon, which has been shameless in its abuse of employment rights and tax regulations. And then there’s Rupert Murdoch, who has been allowed to do more or less as he likes because of his ownership of four national newspapers. Ed Miliband has so far been very bold in making that point, but the attacks on him from those with interests in this rotten section of the business world are only going to get fiercer as polling day approaches.

As the attacks intensify, Labour must not waver. Some figures from the old days of New Labour have called for ‘concessions’ and a more moderate tone. In other words, they call for abandonment of some of the more radical proposals. I think that would be a huge mistake.

British politics today is a world away from the scene that existed 20 or even 10 years ago. Today, the electorate has become tired of leaders who are too scared to act to end injustices inflicted by the wealthy and the powerful. It is all too easy to criticise the problems created by modern capitalism. But empty words and bland generalisms will no longer cut it with the voters. They want a government that is not afraid to act. I hope Labour is bold enough to be that government.

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This Isn’t 1992, Mr Cameron

The Conservative Party is well aware that the next few weeks will be a rare opportunity for them to smash through Labour’s somewhat thinned poll lead (currently 7-10%) before the Opposition gets its house back in order next month.  The Conservative Party knows that time is running out for it to regain the initiative, with the General Election now barely 20 months away. The Conservative Party understands that it has an unpopular record in Government and an unappealing vision for their second term, and so will have to lean heavily on negative campaigning to win.

Not that I’m opposed negative politics outright- I’m in the Labour Party, after all- but I do think that the point of going into politics should be the realisation of a vision of a community, nation or world that is improved in a meaningful way. Politicians should aim to inspire first, and attack opponents second.  I think failure to do this is a major factor in the disillusionment of many with British politics: 1992 was won on the basis that Labour couldn’t be trusted with power; 1997 on how terrible the last Tory government was; 2001 and 2005 on the claim that the Tories are evil; and finally 2010 on the spurious claim that New Labour dragged the country into recession.  We haven’t got a problem as acute as that in the US in which it seems an election cannot be won without spending billions of dollars on highly personal attack ads, but negative politics in any form will have a corrosive effect if it dominates the national consciousness for long enough.

I am thus disappointed, but not angry, that the Conservatives will be adopting a very similar election strategy to theirs in 1992. The overriding theme of theirs is that a Labour Government would hit voters heavily in their pockets. Instead of ‘Labour’s Tax Bombshell’, they have launched this website, ‘Cost of Labour‘, which generates an astronomical figure that Labour would supposedly cost you, based ona few questions on your lifestyle, if they came to power.  I strongly recommend giving it a whirl, but don’t supply your real email address, unless you want to be showered with Tory propaganda emails! Now, I could rant about how they have intentionally misinterpreted Labour’s policies and how other figures were based on New Labour plans that will never be implemented, but I don’t have to. You know the facts already. What this website has illustrated to me is the fatal error of the Right in assuming that the economy is a zero-sum world.

In a fiscally conservative view, the economy will grow at a certain rate regardless of whether a government spends 40% of GDP (the average for western European states) or 25% of GDP (a little lower than the figure in Bush-era America). In their eyes, the public sector can only consume, rather than grow, a nation’s wealth. No value is placed on social goods or investment in people. In short, they advocate false economies. For example, failure to provide a good education to deprived children limits a country’s skills base, increases poverty and crime, and ultimately leads to higher unemployment. £1 shaved off tax bills in 2005 will could easily cost a country £10 over the following few decades, while wasting volumes of human potential in the meantime.

So if the Conservative Party claims that the cuts needed to avoid a 2% rise in Council Tax are justified, we need to make them think again.

 

Will Osborne Listen Now? [Spoiler Alert]

economic step decline ahead

Economic Steep Decline Ahead (Photo credit: Leonard John Matthews)

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The past 72 hours have been eventful in the British political scene. Not only have the Tories made an historic pledge to hold a referendum on our country’s membership of the European Union by 2017;  a parliamentary motion backing Votes at 16 was passed by an impressive 2 to 1 margin (Stephen Williams MP is confident that he will be able to pass legislation by the end of the year); Labour has announced radical plans to improve health and social care services; A-level qualifications are to be overhauled; and the long overdue Bill legalising same-sex marriage has been published. These are all important topics that I would wish to discuss at more length at a later point, for today the economy is the pressing issue.

This morning, the Office for National Statistics released its preliminary GDP figures for the last quarter of 2012.  The news is dismal: Britain’s economy declined by a further 0.3%, meaning that we are three months away from entering a triple-dip recession. Yes, our nation’s recovery from the 2008 financial crisis is even slower than that of the Great Depression of the 1930s.

For as long as I have been politically aware in any meaningful sense (though I do recall being about 7 years old and remarking to a friend that I preferred Tony Blair to the then Tory leader Michael Howard because Blair “wants to spend more money on schools and hospitals”. What distant, prosperous times!) the economy has been stagnant or contracting, with the exception of the short-lived recovery left behind by Gordon Brown. We have endured almost six years of falling living standards and prosperity, with the Coalition Government being responsible for the latter two recessions. I barely remember a time when our public services were secure, when unemployment wasn’t so widespread, and when we had a popular Chancellor of the Exchequer.

Nick Clegg, the Liberal Democrat leader, conceded yesterday that his government had cut capital spending too quickly. Nationwide, Keynesian economists all yelled at their television screens, asking why the hell he didn’t recognise the fact at the time. But any relief one might have felt, picturing the Coalition abandoning plan A for the disaster that it is, was quickly banished. For on the same day, the real second most important man in the Government, George Osborne, told the World Economic Forum that “cuts must continue”. Even the monetarist IMF, as I have written about before, disagrees with Osborne on this, having urged a stimulus package should the economy fail to grow in 2012.

There is no contradiction between the two men’s public views yet, as Nick Clegg did not urge more capital investment in the present. But rather than appearing confident and capable, the Coalition’s economic team look increasingly incompetent the longer they maintain this disastrous economic policy. Nevertheless, we must try to live in hope, so I outline my Five Point Plan for the Coalition to implement Plan B in a way that is semi-compatible with their right-wing ideology. They will not listen, but here is my constructive offering combining sensible policies and perks for the Tories’ friends:

  • Cut National Insurance by 1p for employers and employees, and instate a 10p Income Tax band between £9,000 and £12,500. This is a major tax break for their corporate pals, and it is a several hundred pound tax break for almost every earner. The tax savings will directly boost demand and thus investment,
  • Provide state finance for a mass home building programme. As construction is the most effective stimulus that can be provided, imagine the potential benefits of the state using its low borrowing costs to bankroll investments by parasitic landlords and property developers.
  • Expand HS2. I am aware that the Tories hate public transport, but if they could build railways through Labour constituencies it would help in keeping the plebs off the privatised roads.
  • Invest more in the sciences. If the state then finds out it is the owner of the patent of a perpetual motion machine, it can then sell it at a reduced cost.
  • State-funded chauffeurs for everybody paying the 45p tax rate. Just go down to the job centre, grab an oik and give it a suit and car keys, then pay it the minimum wage to act as a doormat for the upper class. Everybody wins!

Alternatively, we could ask the Government to resign and allow us to elect a government that knows what its doing. It’s your call, Messrs Cameron, Clegg and Osborne.

 

Ed Miliband, Now In His Third Year

Ed Milliband MP speaking at the Labour Party c...

Ed Milliband MP(Photo credit: Wikipedia)

This weekend, the Labour Party begins its third annual conference with Ed Milband as its leader. Labour in 2012 is almost unrecognisable from the recently defeated party of 2010. So the question I shall examine in this post is: how far has Labour advanced?

I am, as anybody who has being paying any attention to this blog will have noticed, a socialist. I am not an Old Labour dinosaur, but I would want to see the Left reject the neo-liberalism imposed by Blair in favour of a real ideology of progress, equality and opportunity for all. This was not what any of the candidates for leadership two years ago were offering, but some candidates were a lot closer than others:

  • David Miliband. Remember him? By far the most right-wing of any candidate, and also the most arrogant (and this probably lost him an election that he could easily have won). How could anyone find his endorsement of heartless spending cuts and derregulation inspiring?
  • Ed Miliband. He was my second preference, and his victory restored my dwindling faith in the party.
  • Dianne Abbot.  A rather nasty candidate of the “fake left”. She criticized other politicians for sending their children to grammar schools, and then sent a child of hers to the elite (private) City of London Boys School, citing her “West Indian ethnicity” as justification for this shameless hypocrisy.
  • Ed Balls. Another fake leftie. He’d make grand statements about the need to be more radical, and then come up with very little policy to back it up with.
  • Andy Burnham. By far my favourite candidate, but excluded from a lot of media coverage. Policies such as a Living Wage and a National Care Service  demonstrated his social responsibility, and he had a sensible deficit reduction strategy. Sadly, he was narrowly beaten into 4th place.

We all remember Ed beating David by 0.7% in the final round. And the trade unions being blamed for electing the “wrong Miliband”. In fact, it was trade union members who had 33.3% of the votes, and their votes are heavilly diluted as it is. And throughout his first year, Red Ed couldn’t do anything right. He spoke of the “future of capitalism” and observers rushed to declare how “nerdy” he was. He warned of another recession being created by Osborne’s Plan A (or “The Diabolical Plan”, as I like to call it) and he was lampooned by economists for wanting “irresponsible” boring plans. He earned a 7% lead in the polls and was condemned as failing to be popular enough! Indeed, 12 months ago there was dark talk of David challenging him for the leadership. How very different the political scene is now.

Labour is the party most trusted on the economy. Miliband is more popular than Cameron. Labour has a 14% lead over the Tories in many polls. But how much of this has Milband earned, rather than benefited from reaction against an ailing Government?

He has been unsatisfactorily vague an many areas of policy, and it is fully apparent that he is no radical reformer. However, much of what we have seen is encouraging, and shows that he is questioning some of the worst aspects of free-market capitalism. He is being far too cautious in his answers, but the very fact that the questions are being raised is an important first step. Take the energy market as an example. The political consensus has long been that state interference would be disastrous, and Milband has set out plans to strengthen regulations and open wholesale trading to control price rises. Yes, its a bit weak, but it shows that he does care about the living costs of the majority. And once Labour is back in touch with the 99%, the pressure for real progress will become irresistable.

Miliband is very much like Ted Heath. He will make a good, moderate Prime Minister, laying the foundations for political change, but will become the forerunner of the real groundbreaker. Onwards history marches.