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The article by Rachel Reeves MP is a 'two fingers' at disabled citizens, and will lose Miliband the election
It is actually massively upsetting.
For many citizens, hardworking or not, Ed Miliband was finally beginning to show ‘green shoots’ in his leadership. His conference speech in Brighton was professionally executed, and it largely made sense given what we know about his general approach to the markets and State.
Amazing then it took fewer than a few weeks for his reshuffle to ruin all that.
Parking aside how Tristram Hunt MP had changed his mind about ‘free schools’ such that they were no longer for ‘yummy mummies’ in West London, Rachel Reeves MP decided to come out as a macho on welfare. She boasted on Twitter that she was both ‘tough and fair on social security’.
Rachel Reeves’ article was immediately received by a torrent of abuse, and virtually all of it was well reasoned and fair.
Yes, that’s right. In one foul swoop, we managed to conflate at one the ‘benefit scroungers’ rhetoric with an onslaught on ‘social security’.
Being ‘tough and fair’ on the “disability living allowance”, in the process of becoming the ‘personal independence payment’ is of course an abhorrent concept. I only managed to be awarded my DLA after a gap of one year, after it had been taken away by this Government without them telling me. At first, it was refused through a pen-and-paper exercise from the DWP. Then, it was successfully restored after I turned up in person at a tribunal in Gray’s Inn Road.
This living allowance meets my mobility needs. My walking is much impaired, following my two months in a coma. It also meets my living requirements, allowing me to lead an independent life.
I don’t want to hear Reeves talking like a banker but as if she doesn’t give a flying fig about real people in the real world.
For once, the outrage on Twitter, and the concomitant mobbing, was entirely justified. I had to look up again what her precise rôle was – yes it was the shadow secretary for work and pensions, not employment.
Many members of Labour were sickened. A spattering of people, would-be Councillors in the large part unfortunately, didn’t see what the fuss was about. They reconciled that ‘the sooner we face up to this problem, the better’.
The media played it as ‘the hard left of the Labour Party are upset’.
The “Conservative Home” website played it as a sign that the Labour Party were belatedly adopting the Conservatives’ narrative, but it was too little and too late.
Like Ed Miliband being booed at conference, a backlash against Reeves’ article can euphemistically be indicative of Labour’s success at ‘sounding tough’.
At yet, this is ‘short term’ politics from a national political party. The social value of this policy by Labour is not sustainable. In the quest for instant profit for headlines, it will actually find itself with no income stream in the long term.
For all the analysis with Labour marketing must have done through their ‘think tanks’ and ‘focus groups’, it is striking how Labour have missed one fundamental point. That disabled bashing in the media is not populism from the Left, actually.
Conversely, it could LOSE them votes from their core membership.
If they learn to love disabled people, they could WIN votes.
Simples.
So what’s the fuss about? She didn’t mention disability. Well – precisely. Disabled citizens of working age are known to form a large part of the population, as Scope reminded us this week in their session on ‘whole person care’ with Liz Kendall MP, so why did Reeves ignore them altogether?
Is it because she has only been in a brief only a few days? Some of us in life have taken the bullet for incidents in life which have lasted barely a few minutes.
What will it take for Labour to ‘get it’ on disability and welfare? Possibly, the final denouement will be when Labour finally realises it can’t ‘out Tory’ the Tories.
The Twitter defenders of the indefensible cite that ATOS are being ‘sacked’ – well, yippedeeeday. ATOS, who were appointed by Labour, are finally being sacked. When negotiating a contract in English law, the usual procedure is to ensure that there are feedback mechanisms in place to ensure the contract is being performed adequately? You can bet your bottom dollar that Labour wishes to do a ‘Pontius Pilate’ on that, like it does on all its crippling PFI contracts it set up for the NHS.
This is a disastrous start by Reeves, but ‘things can only get better’. It’s not so much that Rachel Reeves is Liam Byrne in a frock that hurts. It’s the issue that shooting the messenger won’t be the final solution in changing Labour’s mindset on this.
It is all too easy to blame the ‘subeditor’, but the subeditor didn’t write the whole piece. Any positive meme from Reeves, in a ‘well crafted speech’ to “out-Tory the Tories” (such as scrapping the ‘Bedroom Tax’), has been instantaneously toxified by the idea of people ‘lingering on benefits’.
The most positive thing to do was to explain how people might not be so reliant on benefits, such as work credits, if we had a strong economy.
Reeves chose not even to mention pensions, which is a large part of her budget.
Because the article was hopeless from the outset, it could not even get as far as how to get the long-term unemployed (or the long-term sick) safely back to work.
It was an epic fail.
It is, in fact, an epic fail on all three planks of Ed Miliband’s personal mission of ‘One Nation': the economy, not recognising the value of disabled citizens of working age to the economy; society, not recognising disabled citizens as valued members of society; and the political process, totally disenfranchising disabled citizens from being included in society.
It is no small thing to wish the Labour Party to fail as well as a result. But this may now be necessary, and Reeves should take the bullet for that if she doesn’t improve.
How the quiet man Ed Miliband managed to turn the volume up
For Ed Miliband, this particular conference speech was a ‘coming of age’. It’s somewhat bemusing that political journalists have described Ed Miliband as “disappointing”, or “singularly unimpressive”, but Miliband does not need to impress these people who’ve got it wrong before.
Most people will converge on the notion that David Cameron gave a horrifically dull speech, more akin to a newsreader reading out a corporate’s executive summary of an annual report. The pitch of Nick Clegg, that he could permanently be Deputy Prime Minister, was frankly risible. UKIP managed to propel Godfrey Bloom into the limelight for all the wrong reasons, in their pitch to make cleaning behind a fridge more relevant than the ‘cost of living crisis’.
Ed Miliband’s moral triumph is that he can genuinely say he is going into the election, to be held in the UK on May 7th 2015, having tried his best to piss off the key players in the print press. The BBC’s news coverage, whether it includes not reporting the National Hospital Sell-off following the Health and Social Care Act (2012), or not reporting the closure of law centres in England, or not reporting a march against NHS privatisation in Manchester involving approximately 60,000 people, has become astonishingly irrelevant.
The ‘coming of age’ of Ed Miliband politically is an intriguing one. Whilst Miliband has really struggled, initially, to convince others of the need of ‘responsible capitalism’ or indeed ‘predistribution’, he managed to produce a populist synthesis which was strikingly popular.
Phone lines are typically inundated in any radio phone-in with callers moaning about how their utility bills have shot up. The ‘free market’ has not offered choice or competition, but has become a gravy train for greedy companies.
There is not a single truly ‘free’ market. Virtually all free markets have needed some degree of regulation, to stop customers being abused.
It has become much easier to fire employees on the spot, and access-to-justice evaporated. Virtually all free markets have needed some degree of regulation, also to stop employees being abused.
Whilst then the ‘One Nation’ concept may seem a bit pie-in-the-sky, an economy and society which works for its citizens ‘for the public good’ is a worthy one. It is a bit of a stretch to make this sound like a return to 1970s socialism. It is entirely about making the State protect the interests of its citizens.
The media have long been gleeful at the personal ‘poll ratings’ of Ed Miliband being dire, but David Cameron impressed as a dodgy double-glazing salesman this week. Nick Clegg, having led his party to voting for NHS privatisation and the decimation of legal aid, has become a laughing stock with his argument that he is a ‘moderating force’.
Many people will therefore say begrudgingly that Ed Miliband had by far the best conference season. This was not because he had ‘rote learned’ a script rather than reading an autocue. This is because, whether it was synthetic or not, struck a chord with the concerns of ordinary voters not corporate directors.
The Westminster Class is clearly going to take a bit of time to readjust to the new mood music. Miliband has, whether they concede it or not, has been able to change the narrative from the deficit to the ‘cost of living crisis’.
The ‘cost of living crisis’ is a genuine one, with the cost of living outstripping real wages for the vast majority of the term of this government so far. It is shocking perhaps it is taken so long for the political class to realise that this is an issue.
This is not, of course, a rejection of the market in any Marxist sense. It is merely an acknowledgement that voters do not intellectually masturbate any more on the allegation of Labour singlehandedly bankrupting the global economy.
The bankers are the baddies, like the energy companies. They have failed to regulate themselves, and have been the beneficiaries of ineffective regulation from the State. The Unions are rapidly no longer becoming “public enemy number one”, not because there has been a sudden conversion of a mindset to valuing employees’ rights but because votes find disgusting the idea of faceless hardnosed hedgies and venture capitalists determining public policy behind the scenes.
And there’s finally the rub. Ed Miliband has managed to shove the volume up, when he was perhaps so quiet that people were wondering if he ever had anything useful to say. And he somehow has managed to make his ‘One Nation Economy’, ‘One Nation Society’ and ‘One Nation Politics’ seem relevant to many people who had previously given up on politics.
This is actually no mean feat.
Thanks to @labourmatters for correcting a factual misstatement in an earlier version of this blogpost.
Together
Ed Miliband will need to engage a different spirit in 2015, seventy years after that needed for 1945. The Conservatives have become the presentational unit of multinational corporates, and many citizens of the United Kingdom resent this. Whereas instead decades ago, the Unions could be validly criticised as ‘holding the county’ to ransom, now it is the bankers. There is no proof for any ‘trickle down’ effect, where allowing millionaires to keep more of their income and wealth benefits the county at large. David Cameron strikingly did not win the General Election in 2015, meaning that he has been reliant on the Liberal Democrats ditching any principles to vote for legislation which is clearly totally illiberal, such as secret courts. Rather than working in the national interest, the Conservatives and the Liberal Democrats have been operating entirely in their own self-interest, doggedly pursuing policies which serious commentators have long criticised for being a perfect recipe for producing economic turmoil. Members of this Coalition confront serious issues with extreme arrogance and disregard for the facts, as demonstrated by Baroness Shirley Williams and Lord Clement-Jones in the recent section 75 NHS regulations debate in the House of Lords.
Labour has been blasted for not having any policies. This changed today, but don’t expect the BBC to cover any of them well, in the same vein as how they totally ignored the changes in legal aid and the NHS the point of absolute ridicule. Labour’s idea of a “Jobs Bill”, which introduces a Compulsory Jobs Guarantee, a paid job for every adult who is out of work for more than two years, is a serious way of addressing the problem of youth unemployment. Generally, unemployment has been creeping up under this Coalition, and the only reason there are so many in employment is that they are many more with very little employment rights, doing short term contract work to try to pay the bills. There is absolutely no economic case for the tax cut for millionaires, but the political case of nudging them into voting for a discredited Coalition is quite potent. The idea of requiring large firms getting government contracts to have an active apprenticeships scheme that ensures opportunities to work for the next generation is a very attractive one, and is very much in keeping with an idea very popular in the United States of making corporates behave like ‘responsible corporate citizens’. Indeed, Ed Miliband introduced this idea to an unconvinced general public in his now famous Labour Party Conference speech of September 2010 on ‘responsible capitalism'; this was clearly before we’d all even heard of ATOS and welfare benefits, corporates and phone hacking, fires, explosions and collapses in Texas and Bangladesh.
Also, a “Banking Bill” is much needed. The aim of this is to reate a real British Investment Bank on a statutory basis, at arms length from government and with proper financing powers to operate like a bank. One of the persistent criticisms of the current government, which Nick Clegg had criticised of Labour in 2010 but subsequently totally failed to address himself, is the issue of how to get banks lending to small businesses. Project Merlin is well known, and the purpose of this intended legislation by Labour is to support small and medium sized businesses, including across the regions of the UK through regional banks. Labour intends to provide a general backstop power so that if there is not genuine culture change from the banks they can be broken up, to put in place a “Code of Conduct” for bankers, and to toughen up generally the criminal sanctions against those involved in financial crime. Furthermore, Labour’s idea of an “Immigration Bill” is very noteworthy, given how Gordon Brown was caught famously unawares by Gillian Duffy in the now famous “Bigotgate” incident. Labour intends to double the fines for breaching the National Minimum Wage and give local councils the power to take enforcement action over the national minimum wage, extend the Gangmasters Licensing Authority to other sectors where abuse is taking place, and change NMW regulations to stop employers providing overcrowded and unsuitable tied accommodation and offsetting it against workers’ pay.
There is now a crisis in social housing, not least because the Thatcher government sold off valuable social housing stock during her period of government. However, unfortunately, we can’t ‘turn back the clock’ to his very socially divisive period for the UK. The economy has become too much on the side of exploitative private landlords, and Labour intends to introduce a national register of landlords, to allow local authorities to root out and expel rogue landlords, including those who pack people into overcrowded accommodation. Labour also intends to tackle rip-off letting agents, ending the confusing, inconsistent fees and charges, and to seek to give greater security to families who rent and remove the barriers that stand in the way of longer term tenancies. Labour fundamentally does not know to what extent the UK will be recovering by the time of the General Election in 2015. The public are already sick to the back teeth of the trite “the economy is healing” pathetic PR by the Coalition, particularly since the economy WAS healing in May 2010 before the Coalition totally destroyed it. Labour’s proposed “Finance Bill” would reintroduce a 10p rate of income tax, paid for by taxing mansions worth over £2m, stop immediately the cut to the 50p rate of income tax for those on the highest incomes to reverse cuts to tax credits, reverse the Tory-led Government’s damaging VAT rise now for a temporary period – a £450 boost for a couple with children, and provide a one year cut in VAT to 5% on home improvements, repairs and maintenance – to help homeowners and small businesses. Courageously, Labour intends to put in place a one year national insurance tax break for every small firm which takes on extra workers, helping small businesses to grow and create jobs
There is a growing feeling that the economy is fundamentally imbalanced towards the interests of shareholders in fragmented oligopolies, rather than the concerns of the general public. Labour wishes to introduce a Bill where it would abolish Ofgem and create a tough new energy watchdog with the power to force energy suppliers to pass on price cuts when the cost of wholesale energy falls. This would be a very popular move with many in the general public, not just traditional Labour voters. This legislation would require the energy companies to pool the power they generate and to make it available to any retailer, to open the market and to put downward pressure on prices, and force energy companies to put all over-75s on their cheapest tariff helping those benefiting to save up to £200 per year. The railway industry is another fiasco of the utterly discredited privatisation doctrine of the Conservatives. Labour intends to apply ‘strict caps’ on fare rises on every route, and remove the right for train companies to vary regulated fares by up to 5 per cent above the average change in regulated fares, and to introduce a new legal right for passengers to the cheapest ticket for their journey. Finally, many members have become increasingly irritated by the propensity of the Conservatives to call pensions ‘welfare payments’. Labour now has concrete plans to tackle the worst offending pension schemes by capping their charges at a maximum of 1 per cent; and to amend legislation and regulation to force all pension funds to offer the same simple transparent charging structure so that consumers know the price they will be paying before they choose a particular scheme.
So finally we are getting a sense of the direction of travel of Labour, and this is in stark contrast to the hapless ipeptidude and incompetence of the Liberal Democrats, UKIP and the Conservatives.
What will a Miliband-Thatcher brand achieve?
Characterising the leadership of Margaret Thatcher is difficult. The problem is that, despite the perceived ‘successes’ of her tenure of government, her administration is generally accepted to have been very socially divisive. For many, she is the complete opposite of ‘inspirational’, and yet listening to current Conservative MPs talk there is a genuine nostalgia and affection for her period of government.
What can Ed Miliband possibly hope to emulate from the leadership style of Margaret Thatcher? Thatcher’s early leadership can definitely be characterised as a ‘crisis’ one, in that full bin liners were not being collected from the streets, there were power blackouts, Britain was going to the IMF to seek a loan, for example. However, the crisis now is one which does not have such visible effects. Miliband can hope to point to falling living standards, or increasing prices due to privatised industries making a profit through collusive pricing, but this is an altogether more subtle argument. A key difference is that people can only blame the business models of the privatised industries, not government directly. Whether this will also be the case as an increasing proportion of NHS gets done by private providers is yet to be seen.
It is perhaps more likely that Thatcher’s leadership, in the early stages at least, migth be described as “charismatic”, involving both charisma and vision. Conger and Karungo famously described five behavioural attributes of charismatic leadership. They are: vision and articulation, sensitivity to the environment, sensitivity to member needs, personal risk taking, and performing unconventional behaviour. In a weird way, Thatcher in her period of government can claim to have provided examples of many of these, but it is the period of social destruction at the time of closure of coal mines which will cause doubt on sensitivity to the environment. While ‘Basildon man’ and ‘Ford mondeo’ man might have been looked after, apparently, ‘Easington man’ was clearly not. A ‘One Nation’ philosophy promoting one economy and one society might not be a trite construct for this, after all. The problem is that ‘Basildon man’ has himself moved on; the ‘right to buy’ is the flagship Tory policy epitomising independence, aspiration and choice for the modern Tory, as resumed by Robert Halfon, but there is ultimately a problem if Basildon man is not able to maintain mortgage payments, or there is a general dearth of social housing.
In a way, looking at the failures of Thatcher’s leadership style is a bit academic now, but still highly relevant in reminding Miliband that his ‘political class’ cannot be aloof from the voters. It is a testament to the huge ‘brand loyalty’ of the Thatcher brand that there are so many eulogies, and one enduring hagimony from the BBC, to Thatcher. Jay Conger provides a way of understanding how charismatic leadership is to be maintained, and the “Poll Tax” is symptomatic of Thatcher’s failure of these aspects. Conger identifies continual assessment of the environment, and an ability to build trust and commitment not through coercion. Miliband likewise needs to be mindful of his immediate environment too: his stance on Workfare disappointed many members of Labour, causing even 41 of his own MPs to rebel against the recent vote, and upset many disabled citizens who are members of Labour. What happens when charismatic leadership goes wrong can be identified clearly in the latter years of the Thatcher administration. These include relatively unchallenged leadership, a tendency to gather “yes men”, and a tendency to narcissism and losing touch with reality. I still remember now (and I am nearly 39), the classic, “We have become a grandmother” and that awful Mansion House spectacle when Mrs Thatcher proclaimed that ‘the batting had been tough of late’ whilst maintaining a quasi-regal ambience.
I personally disagree with the notion that elections are won from the ‘centre ground’, particularly because I conceptually do not find the classification of ‘left’ and ‘right’ helpful (especially if you, like me, wish to embrace “One Nation Labour” with genuine goodwill). To use the market analogy, I think it’s like making an offering which looks and functions like an iPod, but which has some of the features missing; you might as well buy the real thing. A more sensible strategy for a competitor to the incumbent is to offer something really disruptive; in other words, something which offers some of the good qualities of the current market leaders, but which adds useful value. Ironically, enough time has passed since the airbrushing of socialism from the mainstream UK political system occurred with the advent of New Labour for Ed Miliband to give this another go. You can argue until the cows come home, and many mere mortals who are management theorists have given it a go, about whether charismatic leadership needs both charisma and vision. Despite Denis Healey’s famous doubts about whether Ed Miliband has charisma, it seems that Fraser Nelson has latterly judged Ed Miliband to be quite personable. Certainly, Ed Miliband to come close to becoming a charismatic leader himself needs to have an extremely clear vision. He may have to “think the unthinkable”, and make an unrealistic promises such as a NHS which is ‘comprehensive, and free-at-the-point-of-use’ (still miraculously, though, in the current NHS constitution). However, to borrow George Osborne’s phrase, “there is a debate to be had”, about whether the deregulation of markets under the Conservatives and New Labour did lead to a climate which encouraged the global financial crash to spread to the London markets. There is also a debate to be had about the ‘market failures’ of privatised industries. Sure, nobody is wishing ‘Thomas Cook’ to become a state-owned travel agent, or you to wait a month to have a phone line fitted by the State. But this is to present outdated, prejudiced, ‘Aunt Sally’ arguments. There is a debate to be had instead about whether we wish certain national services, like utilities or railways, to be fragmented, at relatively high prices, and where there is clearly a substantial benefit to shareholders and corporate directors but little benefit to consumers. Nobody wants to see the Unions ‘holding the country to ransom’, but it is a triumphant failure of Tony Blair and New Labour that this demonising malicious memes have been allowed to remain alive almost forty years on. Nearly all people, instead, firmly believe in the idea of democratic representation, and this has now become vital in abuse of the workforce by certain employers. We hear stories all-the-time of powerful corporates using ‘zero hour contracts’, and it is this Government which has seen the dilution of employment rights of workers and employees (reduced eligibility for unfair dismissal claims, and a lower quantum of award.) And, finally, there is a debate to be had about what exactly underlies the ‘maximum number of people in employment’ claim; is it for example an increased number of part-time, flexible workers who are under-employed, or is it an artefact of migrant workers from Eastern Europe who are doing temporary jobs in the UK?
Ed Miliband has often many times remarked about his thoughts have been ‘shaped’ by Margaret Thatcher, despite the fact he is very clear he disagreed with many of the views of Thatcher. We need, however, a frank discussion of where Britain goes from here. Frankly, a pig with a rosette could have won certain Labour seats in Scotland, but those days are over. Labour’s membership started to go into decline from around 2002/3, long predating the fall in membership after the Iraqi war. The ‘paying of respects’ to the late Baroness Thatcher has allowed some Tory ideology to go unchallenged, such as the importance of the Unions in society, or the failure of privatised industries. However, what Ed Miliband can hope to emulate is a precisely articulation of a vision. Miliband has to prove that he is the right person for the right times (2014/5), like Blair, Thatcher and Cameron/Clegg might have been. If Labour is to be given the honour of a mandate in 2015, it needs to have an extremely clear idea of what it hopes to achieve, and for whom.
If the Labour frontbench pull any further stunts like today, they don't even deserve a 'hung parliament'
It is thought that part of the reason that Ed Miliband was so keen to pursue ‘press regulation’ was that this was the first topic where there was a sense the public were on the side of victims. Miliband has not shown the same passion for the privatisation of the NHS, for example. On the other hand, today, the anger on Twitter and Facebook was really ferocious. To give you some idea about what sort of country this is, this was not even considered newsworthy enough to be included on the BBC news website. Opposing workfare was not a question about playing politics: it was very much about the lives of real people, morality and justice. The result of the vote of the second reading of jobseekers bill (aka “workfare” bill) was 263 vote for, and only 52 vote against. Labour MPs were asked to abstain.
Some MPs did make a “principled stand”, like John McDonnell.
Members of Labour are genuinely seething. Owen Jones is correct to flag this up as a “red alert” for Labour:
This one episode in itself has blown up “One Labour”. Sunny Hundal has written a very elegant blogpost here about how the ‘concessions’ over Workfare can’t really be considered concessions in the scheme of things. To understand why this has dramatically driven a ‘coach and horses’ through ‘One Nation’, you have to consider what Ed Miliband had sold “one nation” as. It was an idea where the economy couldn’t be divided into private and public, but where everyone had a part to play, including Unions and invested bankers, provided that there were “no vested interests”. Consequently, this meant society pulling in the same direction, in other words no division between rich and poor, North and South, unemployed and employed, disabled or non-disabled, etc. Why “one society” is clearly ‘left wanting’ is perfectly clear to witness as disabled citizens continue to feel uncomfortable with the welfare reform, and continue not to be inspired by Liam Byrne’s perceived lack of concern about their plight. Finally, it depends on a political process which we can all trust in. However, the last few days has seen shabby behind-the-scenes political manoeuvring which Labour in its old days of ‘beer and sandwiches’ could only have possibly had dreamt of; with party leaders up to 4 in the morning, with ‘interested parties’ such as Hacked Off.
Shiv Malik explains extremely well how this workfare situation evolved, in his article from today:
“Labour is expected to support the Department of Work and Pensions (DWP) in speeding a retroactive law through parliament that will overturn the outcome of a court of appeal judgment and ensure the government no longer has to pay £130m in benefit rebates to about a quarter of a million jobseekers.
The law has been hastily drafted by the government in response to last month’s ruling from three appeal court judges in favour of science graduate Cait Reilly and unemployed lorry driver Jamieson Wilson.
The court found that Reilly, who had been made to work unpaid in Poundland for weeks; Wilson, who was forced to work unpaid for six months, and up to 231,000 other benefit claimants had been unlawfully punished over the last few years because the government had failed to give them more than a few lines of regulatory information about the schemes they had to take part in.
In a move that has upset campaigners and activists, the parliamentary Labour party said it was likely to abstain from any vote expected on Tuesday and was pushing for concessions – including an independent review of the benefit sanctions regime – in return for allowing the jobseekers (back to work schemes) bill to be rushed through parliament at “lightning speed”.”
The situation is now an ugly one. The economy is about to enter a triple-dip, and Labour is still not trusted on the economy. Despite a perfect Keynesian narrative, people blame Labour for waste and profligacy, and there is no sign of this mistrust shifting. The current Coalition government have legislated for the privatisation of the NHS (all experts now agree it is a privatisation which is now experiencing difficult regulatory problems such as how to deal with ‘creamskimming’ aka ‘cherry picking’). John Healey was politically impotent in stopping the advance of the Bill through parliament. Labour implemented in its tenure a programme of PFI and now Trusts are saddled with debts from this ‘off ledger accounting’ at uncompetitive competitive rates – some hospitals will have to go into ‘managed decline’. Some Foundation Trusts, having been awarded ‘foundation status’, have had to declare themselves bankrupt, and it is generally conceded that setting up these hospitals was a convenient way of repackaging the NHS suitable for privatisation exactly like had happened in Spain.
Labour members have a right to be angry. Decisions like today show evidently that Labour is not afraid to ignore its key values or its core members. It has widely been advanced that the best that Labour can hope for in 2015 is a ‘hung parliament’, but this will be disaster with a ‘more of the same’ recipe for a stagnant economy, and a continued march of the privatisation of the NHS. Presumably Miliband will have to conclude his painfully protracted policy review at some stage, but his lack of concern about poor employment rights amongst workers has been conceded as nothing short of disgusting. We now have a maximum number of people in employment with no job security at all. Also, through the backdoor, this Government made it much easier to sack people, as George Eaton elegantly explains in the New Statesman:
“”While the Commons noisily debated press regulation, MPs elsewhere in the House quietly signed away workers’ rights. On a delegated legislation committee (a backdoor means of sneaking through contentious amendments), nine Conservatives and two Liberal Democrats voted to reduce the consultation period for collective redundancies from 90 days to 45.
At present, employers planning to make 100 or more redundancies are legally required to consult with trade unions and other employee representatives for this period to help minimise the impact and seek alternatives to job losses. Unite cites the example of Jaguar Land Rover, which proposed making over 1,000 staff redundant in 2009 but later avoided any job losses after identifying £70m of savings during the consultation.
The reduction to 45 days, based on a proposal in the infamous Beecroft report, means fewer companies will now adopt this enlightened approach. As John McDonnell, one of the seven Labour MPs who voted against the measure (only 18 MPs can sit on the committee), noted: “We know that the reduction to 45 days means that the opportunity for consultation is hopeless. It will not happen and will be meaningless. There will not be the time for the employees to work with the employers to look at alternative plans for that company.””
Liam Byrne is an influential member of the Shadow Cabinet. Nearly all of us are no longer “loving it”. It is a tragedy that many voters will not be able to turn to their MPs to stand up for their real-life concerns (though hats-off to Grahame Morris, John McDonnell and Ian Lavery who all voted “no” today). It had been a fairly safe bet that Labour would be in a “hung parliament”, but now, having clutched onto defeat from the jaws of victory, Labour could even look set to experience a resounding defeat, and they will have only themselves to blame. Some remnants of New Labour ideology clearly haven’t been excised from the Labour front bench; consequently we should be careful now.
The legal case for "the living wage"
It’s actually very bold, and fits in completely with the “One Nation” philosophy of Ed Miliband and Labour. It could even be one of the first Acts to be proposed by a Labour government in 2015/6, and has profound implications.
The “living wage” has a focus on the wage rate that is necessary to provide workers and their families with a basic but acceptable standard of living. It is an hourly rate set independently and updated annually, and calculated according to the basic cost of living in the UK. Employers currently can choose to pay the Living Wage on a voluntary basis; the UK Living Wage is calculated by the Centre for Research in Social Policy, but the London Living Wage is calculated by the Greater London Authority. This minimum standard of living is socially defined (and therefore varies by place and time) and is often explicitly linked to other social goals such as the fulfilment of caring responsibilities.
Uniquely for opposition policies, the Living Wage enjoys cross-party support, with public backing from the Prime Minister and the Leader of the Opposition. That said, the main beneficiary of the living wage is the Treasury, and this is obviously critical for it to be implemented at a time of austerity (but so was the £2bn NHS reorganisation). Financial gains from the living wage will arise from higher income tax payments, higher national insurance contributions and reduced spending on in-work benefits. This has a number of important implications.
On a visit to Islington in north London last year to discuss how Labour councils across Britain have succeeded in implementing the living wage, Ed Miliband described the living wage as an idea “whose time has come”. “The next step is to help more people, including workers in the private sector, have the dignity of earning a living wage. This is one way we can begin building a One Nation economy where prosperity is fairly shared, because it is only by coming together that we can succeed as a country.”
Background
The concept of the “living wage” has roots in various cultural, religious and philiosophical traditions. The modern UK Living Wage Campaign was launched by members of London Citizens in 2001. The founders were parents in the East End of London, who wanted to remain in work, but found that despite working two minimum wage jobs they were struggling to make ends meet and were left with no time for family and community life. In 2005, following a series of successful Living Wage campaigns and growing interest from employers, the Greater London Authority established the Living Wage Unit to calculate the London Living Wage. The Living Wage campaign has since grown into a “national movement”, and Ed Miliband has often talked about how he wishes Labour to be seen as a movement and not just a political party. Local campaigns began emerging across the UK offering the opportunity to involve many more employers and lift many more thousands of families out of working poverty. In 2008 the Centre for Research in Social Policy funded by the Joseph Rowntree Foundation began calculating a UK wide Minimum Income Standard (MIS) figure. In 2011 Citizens UK brought together grass roots campaigners and leading employers from across the UK, working closely with colleagues on the Scottish Living Wage Campaign inparticular, to agree a standard model, for setting the UK Living Wage outside of London. At the same time, following consultation with campaigners, employers who support the Living Wage and HR specialists, Citizens UK launched the Living Wage Foundation and Living Wage Employer mark. Since 2001 the campaign has impacted over 45,000 employees and put over £210 million into the pockets of some of the lowest paid workers in the UK.
The rationale for the living wage clearly merits scrutiny. It has much popular support, and thus, as far as Labour and the Unions are concerned, consitute a clear “vote winner”. In a recent article in the Telegraph, a newspaper not known for its significant Labour sympathies, Jeremy Warner described that, “the potential negatives from such a policy are almost too numerous to list – surging inflation, higher immigration, rising unemployment, a growing black economy, and so on. These alone might appear to kill the idea stone dead. Yet all these adverse consequences could quite easily be countered, and it is a fact that the great bulk of internationally competitive business in Britain already pays living wages. It is in the low-skilled, service areas of the economy that the problem largely lies.” Interestingly, Heller Clain (2007) (J Labor Res (2008) 29:205–218) had previously argued that living wage legislation produces statistically significant differences in poverty outcomes (but that minimum wage legislation does not), with empirical evidence, and provided a clear argument concerning costs and demand how this is most likely to have arisen.
“Beyond the bottom line: the challenges and opportunities of a living wage” (IPPR)
A critical development has been the publication of “Beyond the bottom line: The challenges and opportunities of a living wage” by the IPPR, authors Matthew Pennycook and Kate Lawton (20 January 2013). This provided much detail, with The Living Wage Foundation having already established three critical functions of theirs. It offers accreditation to employers that pay the living wage, or those committed to an agreed timetable of implementation, by awarding the ‘Living Wage Employer’ mark. It also provides advice and support to employers implementing the Living Wage including best practice guides; case studies from leading employers; model procurement frameworks; access to specialist legal and HR advice. Finally, it provides a forum for leading employers to publicly back the Living Wage. We work with Principal Partners who bring financial and strategic support to the work.
Does it need an Act of parliament?
The National Minimum Wage Act 1998 created a minimum wage across the United Kingdom. It was a flagship policy of the Labour Party in the UK during its 1997 election campaign, and is still pronounced today in Labour Party circulars as an outstanding gain for ‘at least 1.5 million people’. The policy was opposed by the Conservative party at the time of implementation, who argued that it would create extra costs for businesses and would cause unemployment. The Conservative party’s current leader (and Prime Minister), David Cameron, said at the time that the minimum wage “would send unemployment straight back up”. However, in 2005, Cameron stated that “I think the minimum wage has been a success, yes. It turned out much better than many people expected, including the CBI.” It is now Conservative Party policy to support the minimum wage.
Indeed, “the living wage” has some prominent supporters.
The IPPR indeed argue that are clear reasons not to legislate for a statutory living wage including the fact that the living wage should not be seen as a replacement for the minimum wage. It there is argued that the minimum wage is based on an empirical judgment about employment effects and is agreed through a social partnership model, allowing a mandatory, statutory approach. However, the living wage reflects standards of living and prices and does not take account of employment effects. Advancing the living wage therefore requires an incremental approach, which can also bring wider benefits by mobilising low-paid workers who lack traditional forms of representation. The question for policymakers is the extent to which the state can support a campaign rooted in civil society.
The IPPR instead recommended that government amends the UK corporate governance code to require listed companies to publish the proportion and number of their staff paid below the living wage, and legislate for this if necessary. This indeed is a very sensible idea, if Ed Miliband and Labour include it as part of a raft of measures in corporate governance which could encourage ‘responsible capitalism’, which thus far has been lacking regulatory teeth. It’s possible that “the living wage” is in fact a practical mechanism of delivering “predistribution“, the thesis articulated elegantly by Professor Joseph Hacker but which people dare not mention in polite public. As part of Labour’s policy review, the party is considering ways to make the rate, which is more than £1 higher than the legal adult minimum wage, the new norm. Listed companies who do not pay the living wage could be “named and shamed” through new corporate governance proposals, and Whitehall contracts could be limited to firms that pay their workers at the new hourly rate. This would be entirely in keeping of the description of a “moral economy” advanced by Jon Cruddas discussing rebuilding Britain, a “new Jerusalem“: “Markets require reciprocity for efficiency and productivity. Together they establish trust, relationships and a sense of stewardship at the heart of transactions. It is a moral economy that can be expressed through co-operative and mutual forms of ownership, and internalised in the culture of business through employee involvement in the governance of firms. In return for their commitment to the company, employees can have a voice on salary levels, improving productivity and business strategy.”
There are though, some might say, good reasons why living wage legislation should enter the statute books in some form, corresponding to the passing of any laws in our jurisdiction. These are namely to protect an individual from harm including employment exploitation, to contribute towards a framework of the rules needed for a society to live and work together, to ensure an enforceable mechanism through which justice can been served, to “punish” people as necessary, and to maintain social order (such as prevention of poverty). It is obviously important that any laws we introduce are not incompatible with European laws, and the current indications are that the “minimum wage is (not) always incompatible with EU procurement rules. There are however obligations to treat all bidders equally, fairly and transparently and in a non-discriminatory way in any procurement process.” Specifically, the European Commission has provided clarification on the issue in 2009, stating that living wage conditions “must concern only the employees involved in the execution of the relevant contract, and may not be extended to the other employees of the contractor”. However, this perspective is to treat law as an administrative process, free from social values and judgments, as discussed by LJ Laws for example in the context of human rights. By enacting a formal law on the living wage could be a strong signal that the law is not merely an error-corrective mechanism for market values, what Prof Michael Sandel at Harvard calls ‘markets mitigating governance’ as a technocratic process done through cost benefit analyses, but that the law is in fact designed ‘for the public good’, encouraging citizenship, civic values and solidarity. Sandel conceptualises this striving for the public good as a necessary reaction to the approaches of Thatcher, Reagan and indeed New Labour, which had generated a sense of ‘market triumphalism’, but points out readily that under such administrations this had had a destructive effect on rich and poor people living further apart in society. This indeed can be easily seen in the UK with the rich becoming even richer.
One Nation Economy
Trade unions are still a significant part of the culture of UK, not least because they serve to protect workers and employees against scrupulous employers. In the trade union movement, UNISON has had noteworthy success in offering practical advice about how citizens can “win the winning wage”. Ed Miliband has made it no secret that he does not wish to see a divide between ‘private sector’ and ‘public sector’, in that we all contribute to one unitary UK economy. This has been reflected in how Miliband has provided hints about trying to make trade unions also relevant to the public sector. Encouraging a ‘living wage’ could be a way of getting more people involved in the Union movement, which Miliband has openly warned should not be seen as the “evil uncle” of Labour. The IPPR report indeed cites: “The greatest successes in securing the living wage have been made through bottom-up processes of organising and campaigning. These processes have sought to involve low-paid workers directly in the struggle to improve their own wages, as well as building broader alliances with a diverse mix of unions, faith organisations and community groups.”
As the forerunner to a ‘one nation economy’, local and regional initiatives have consolidated a number of improvements in pay for nearly 45,000 low-paid workers. In addition to the nine local authorities that have been formally accredited as living wage employers, a growing number of private sector employers have introduced living wage agreements including Barclays, KPMG, Deloitte, Linklaters and Lloyd’s of London. More widely, living wage initiatives have reshaped social norms around wages and in-work poverty and have refocused attention on the role that decent pay above the national minimum can play in raising living standards, alongside remedial redistribution through tax credits and in-work benefits. This, alongside the fact that a national minimum wage has already been acted in the UK, is significant when noted with an observation from Heller Clain 2012 (Atl Econ J (2012) 40:315–327) about how experiences of implementation of the “living wage” in the US: “Ceteris paribus, the strength of the community sentiment in support of living wage legislation may be lessened, where the state government has already adopted policies aimed at raising the incomes of the working poor. For example, there may be less motivation to enact living wage legislation where the state has already enacted a statewide minimum wage higher than the federal level.”
There are clear benefits which have been experienced by adopters of “the living wage”. An independent study of the business benefits of implementing a Living Wage policy in London found that more than 80% of employers believe that the Living Wage had enhanced the quality of the work of their staff, while absenteeism had fallen by approximately 25%. A major economic rationale is that paying UK workers a “living wage” would save the Treasury more than £2bn a year by boosting income tax receipts and reducing welfare spending, according to a joint research by the Resolution Foundation and the Institute for Public Policy Research. They found gross earnings would rise by £6.5bn if employees were paid a living wage – an estimate, above the statutory minimum hourly rate, of what workers must earn to meet basic needs. There is, additionally, a much wider elegant narrative at play here. It has been recognised by anyone other than George Osborne and his colleagues that ‘underconsumption’ has been a major factor in why the UK economy has been failing latterly (parallel with decreased levels of tax receipts, even predating the current financial crash). Indeed, starting with Malthus and Ricardo in the nineteenth century, economists had long debated the viability of ‘underconsumption’ as a cause of cyclical depressions. This is now recognised in the economic press, for example “the increasing attention to consumer demand among businessmen merged with a related trend in economics: the rise of institutional economics … A key element, though, was the conviction that economists needed detailed, quantitative, empirical studies of consumer behavior (sic) and existing markets, encompassing everything from focused psychological or sociological analyses to expansive, aggregative surveys of household income, prices, and family expenditures.” (Stapleford, Labor History, Vol. 49, No. 1, February 2008, 1–22)
The IPPR are mindful that many small and medium-sized firms are likely to struggle with the costs of implementing the living wage if a significant proportion of their staff are low paid. They recommend the government should explore using the architecture of City Deals to create ‘living wage city deals’, drawing forward future tax and benefit savings from paying local government workers the living wage and devolving this money to support private sector businesses in transitioning to the living wage. So far, two thirds of employers reported a significant impact on recruitment and retention within their organisation. 70% of employers felt that the Living Wage had increased consumer awareness of their organisation’s commitment to be an ethical employer.
One Nation Society
It’s clear that the arguments for “the living wage” are not just economic, as discussed above, but also are profoundly relevant to a sense of soldiarity and “civic duty” inherent in a “one nation society”, Living wage initiatives grounded in forms of community organising seek to increase the bargaining power of workers who lack access to more traditional forms of representation such as through trade union structures. It furthermore can easily be argued that, beyond their ability to lift wages and living standards, living wage initiatives have the potential to empower low-paid workers, many of whom lack voice and power in the workplace and in wider society. Many living wage initiatives, both in the US and UK, have sought to mobilise low earners directly rather than campaigning on their behalf, by organising workers and communities through a process described as ‘community organising’ or ‘community unionism’. Indeed, here in the UK, the Living Wage campaign was launched in 2001 by parents in East London, who were frustrated that working two minimum wage jobs left no time for family life. The causes of poverty are complex and in order to improve lives there should be a package of solutions across policy areas. The Living Wage can be part of the solution. Over 45,000 families have been lifted out of working poverty as a direct result of the Living Wage.
This is fundamentally a point to do with “cohesion” of our society. It has been patently obvious that New Labour failed monumentally on “inequality”. in its quest for market triumphalism, described above. There is a sense of Ed Miliband ‘righting a wrong’ here, in addressing the societal problem of inequality, and if Miliband can achieve this he will have succeeded in a crucial area where Blair had failed.
Conclusion
Boris Johnson appears superficially laid the groundwork for “the living wage” in London, but credit that the overall Conservative-led admininstration has led the way on employment justice can only massively dampened for a number of diverse reasons. The cross-party support is described above, but it is conceded that, in the US, “a larger population and greater local support for Democratic presidential candidates are significantly linked to a greater likelihood of adopting living wage legislation and a greater speed in adopting living wage legislation.” (Heller Clain, 2012) And yet, the “living wage” may not be necessarily partisan, although one has no idea what the Liberal Democrats wish to advance following June 2015, and would nicely fit into the framework which Ed Miliband has already provided. I expect it will be a major, if not the, major campaigning issue for Labour in 2015, and could be one of the first things an incoming Labour government would legislate for in some form. The monumental research of IPPR, the Living Wage Foundation, numerous corporates and the trade unions will have contributed greatly to the success of this initiative, as will have Ed Miliband of course.
I think I know where Ed Miliband is going with this one
Ed Miliband in his last ever hustings for leadership of the Labour Party, in 2010, admitted that he didn’t want the Unions to be seen as Labour’s “evil uncle” which had to be kept locked up in the attic. And yet, some people in Labour have felt that Labour would rather not mention the Unions, still terrified by the intense propaganda of “the winter of discontent” even now. Ed Miliband is at pains to state that members of the Unions contribute to part of the income of the Unions, rather than the Unions per se, and indeed following the audit trail of donations of the Unions is currently much easier than looking up how the major private equity shareholders of private and public limited companies have donated to the Conservatives. Ed Miliband has stated a number of features of the “One Nation” he has in mind, saying that there is no divide between “public” and “private”, or “north and south”, and this notion of inclusivity is opposite to the ‘dividing lines’ which have been drawn between employed and unemployed, or disabled and fully abled, City and the rest of the UK, for example.
Last year, it was clear that the protests in London against austerity were not a “damp squib” as described by David Cameron. In fact, the country’s biggest union, UNITE, launched a new membership scheme shortly thereafter “to ensure those pushed to the margins of society can benefit from collective power”. The unique offering of this Unite’s new ‘community membership’ is that it offers the unemployed, students and all those not in employment the opportunity to become part of one of the most powerful forces for equality in the country. For just 50p per week, community members will have access to financial and legal expertise, as well as the support of up to one and a half million fellow members when standing up for their local services. A further feature is that community members will be developed as ‘community activists’, bringing together people across their locality who have felt left down or excluded by politics to ensure that they too have a voice at a time of economic turmoil and social change for the nation. This is especially meritorious given the millions of voters who have felt themselves excluded by a widening “democratic deficit”. For the “one nation” philosophy to really succeed, Ed Miliband will have to combine an ideology with some sort of framework and regulation. Far beyond calls for a “responsible capitalism”, Miliband could push for a “one nation market”, and this is where a radical rethink of the rôle of the trade unions and yet another review of corporate and banking governance come in. This can all be worked up in a philosophy of ‘one nation economy’ and ‘one nation society’.
Increased regulation of the energy retail market, for example, could see caps on energy bills and a relief for consumers, but will not in the long-term decentralise electricity distribution, or create greater retail competition to break up its supply. This does not involve a return to ‘tax and spend’, and involves the dreaded ‘P’ word which nobody dares to mention for obvious reasons. In an echo of Michael Sandel and the “public good”, public policy should instead seek to grant “the many” the power to take hold of such markets and indeed open up the opportunity for communities and smaller groups to enter in. The country has of course made previous attempts at ‘rebalancing the economy’, though probably not in the sense of Sir Mervyn King in his speeches of 2009 and 2010. The “Report of the committee of inquiry on industrial democracy” (1977) Cmnd 6706, also “the Bullock Report” for short, was a report proposing for a form of worker participation or workers’ control, chaired by Alan Bullock. The idea was seen by some as a way to solve the chronic industrial disputes and to enhance participation of employees in their workplace. This Committee of Enquiry into Industrial Democracy had been set up by the Labour government of Harold Wilson in December 1975, in response to the European Commission’s Draft Fifth Company Law Directive which sought to harmonise worker participation in management of companies across Europe. This report was not unanimous, as a majority report it was signed by Bullock and as members of the committee: three trade unionists, two academics and a city solicitor. The authors of the reply to this report conceded that, if more people are able to influence decisions which closely affect their work, the more effective will that involvement be.
Company law has failed to narrow the divide between the wages of workers and employees and their directors; in fact, the income and inequality gap have got worse. Last year, nearly 60% of the shareholder vote went against WPP’s remuneration report at its annual general meeting, including those held by Scottish Widows, Standard Life and Co-operative Asset Management, marking one of the biggest revolts of the “Shareholder Spring” so far. CEOs constitute a very strange market: excluding those with the potential to become leaders and including only the incumbents distorts prices. The failure of shareholders to influence the running of a company, except in extreme situations, has caused the ratcheting up of CEO pay over two decades to the point where millions are the norm and those paid less than tens of millions feel cheated. The median pay of FTSE 100 CEOs rose 10 per cent last year, according to Manifest/MM&K, the advisory groups. Meanwhile, investor returns have been completely uninspiring – the 10-year total return of the FTSE 100 is 5.5 per cent a year, with WPP at 5.4 per cent. It is unsurprising that Labour will wish to look elsewhere for a system that works, including a German-type “co-determination”. Its advocates say it is a win-win scenario emphasising better information flow of shop-floor knowledge to the very top of the company, fewer workdays lost due to industrial conflict compared to other countries, smoother implementation of changes legitimised by a more diverse board, and a general contribution to the common good through democratic structures. Trade unions bargain with employers to get better pay for members. Trade unions campaign on particular issues, for example low pay, discrimination and bullying. Trade unions argue that they can help you if you have a problem at work. Research shows that union members in the UK receive higher pay (on average 12.5% more), better sickness and pension benefits, more holiday and more flexible working hours than non-members.
Some people join in order to feel part of a wider community at work. Others join because they believe in giving employees a collective voice and making sure workers and not just employers and senior managers benefit from the success of an organisation. This current Coalition, with Conservatives and Liberal Democrats components pushing and pulling in different directions, has been discussing whether it should be ‘easier’ to hire and fire people. It is known however that workplaces are safer where there is a trade union—recent studies show that organisations that have trade union health and safety committees have half the injury rate than those that manage safety without unions. The UK labour market is already one of the least regulated among comparable nations. This immediately makes predictions of any significant employment effects from further deregulation implausible. Also nations with much higher levels of regulation have been at least matching and in some respects exceeding employment performance in the UK and other low regulation countries for some time. Meanwhile the exemplary low regulation economy, the United States, has registered an abysmal employment performance at least since the turn of this century. The idea of lower regulation as a route to employment growth is therefore a particularly hard sell these days.
In England, the steepest falls in union membership came between 1979 and 1998, when unions were affected by a series of legislative changes which included ending the closed shop – an agreement under which employers agreed to hire union members only. Since then, numbers have been pretty stable. It can be argued now that unions “haven’t kept up with changes in the economy”, particularly in terms of the shift from manufacturing sectors to other sectors such as technology. While industries that have traditionally been highly unionised, such as manufacturing and engineering, have declined, workers in new and growing industries in the private sector have not sought union membership. Even in education, there is a growing workforce consisting of independent freelance contractors, who can be fired at the drop of the hat. The possibility remains that citizens merely consider the Unions irrelevant, in that there is not a long history of union participation in that sector, and individuals can be convinced about the benefits of access-to-education, or legal protection. This Coalition, whether it was explained to the general public or not, has embarked on a “roll-out” of outsourcing the State’s functions to an oligopoly of private and public limited companies. The chief purpose of the Health and Social Act (2012) was to allow a much larger number of private companies doing the functions of services in the NHS under the NHS branding. Yet, they are still all private companies. You only need to look at the tensions of UNISON at Circle Hinchingbrooke to see how a dysfunctional relationship with the Unions is neither productive for profitability nor cohesion of society. Adverse union influence is much diminished in the private sector, with fewer members and far fewer working days lost to industrial action compared with 30 years ago.
Therefore, Ed Miliband has a golden opportunity to establish a narrative which is entirely consistent with a “one nation economy” and “one nation society”, and would be able to combine his pet interests of predistribution and responsible capitalism with a recognition that the Unions are not the “evil uncle”. Instead, this omnishambles Coalition has become dependent on a series of accountancy stunts to maintain a Ronseal veneer of skill. A number of months ago, parliamentarians and those campaigning against work-for-your-benefit schemes noticed that people doing unpaid work experience – a growing band of people – could be classified by the ONS as employees of companies. This meant that although they were on government training and employment schemes, they were actually being included among the statistics for 25 million plus employees. And how was George Osborne able to pull his deficit “rabbit” out of the hat so unexpectedly in the Autumn statement 2012? First, he added the expected £3.5bn receipts from the 4G mobile spectrum auction – even though it’s yet to take place. Second, he included the interest transferred to the Treasury from the Bank of England’s Quantitative Easing programme (worth £11.5bn), despite the Institute for Fiscal Studies warning him that it would call into doubt his credibility. The country is sick of these pathetic manoeuvres, as it openly enters a triple-dip, and Osborne lobbies the entire population on how our cost of borrowing is totally unrelated to the downgrading of credit rating due to flatlining growth (honest). A secret weapon had been to discredit the Unions, even toxify them, and to portray basic employment rights as an act of selfishness of people who wished to contribute to the society or the economy. Ed Miliband is coming warm to building the sort of society he wishes to take further. Cognisant that a baboon could have won in 1997, he has the chance to set an agenda for a generation after the Conservatives had declared themselves unfit to govern, and after the Liberal Democrats had lost all credibility entirely. Widening Union membership to the private sector, and producing an architectural framework for ‘one nation’ and ‘one society’ where some people do not clearly benefit at the expense at the others, could be an incredible thing to achieve.
"One Nation" economy, "One Nation" society, and the Unions
Ed Miliband in his last ever hustings for leadership of the Labour Party, in 2010, admitted that he didn’t want the Unions to be seen as Labour’s “evil uncle” which had to be kept locked up in the attic. And yet, some people in Labour have felt that Labour would rather not mention the Unions, still terrified by the intense propaganda of “the winter of discontent” even now. Ed Miliband is at pains to state that members of the Unions contribute to part of the income of the Unions, rather than the Unions per se, and indeed following the audit trail of donations of the Unions is currently much easier than looking up how the major private equity shareholders of private and public limited companies have donated to the Conservatives. Ed Miliband has stated a number of features of the “One Nation” he has in mind, saying that there is no divide between “public” and “private”, or “north and south”, and this notion of inclusivity is opposite to the ‘dividing lines’ which have been drawn between employed and unemployed, or disabled and fully abled, City and the rest of the UK, for example.
Last year, it was clear that the protests in London against austerity were not a “damp squib” as described by David Cameron. In fact, the country’s biggest union, UNITE, launched a new membership scheme shortly thereafter “to ensure those pushed to the margins of society can benefit from collective power”. The unique offering of this Unite’s new ‘community membership’ is that it offers the unemployed, students and all those not in employment the opportunity to become part of one of the most powerful forces for equality in the country. For just 50p per week, community members will have access to financial and legal expertise, as well as the support of up to one and a half million fellow members when standing up for their local services. A further feature is that community members will be developed as ‘community activists’, bringing together people across their locality who have felt left down or excluded by politics to ensure that they too have a voice at a time of economic turmoil and social change for the nation. This is especially meritorious given the millions of voters who have felt themselves excluded by a widening “democratic deficit”. For the “one nation” philosophy to really succeed, Ed Miliband will have to combine an ideology with some sort of framework and regulation. Far beyond calls for a “responsible capitalism”, Miliband could push for a “one nation market”, and this is where a radical rethink of the rôle of the trade unions and yet another review of corporate and banking governance come in. This can all be worked up in a philosophy of ‘one nation economy’ and ‘one nation society’.
Increased regulation of the energy retail market, for example, could see caps on energy bills and a relief for consumers, but will not in the long-term decentralise electricity distribution, or create greater retail competition to break up its supply. This does not involve a return to ‘tax and spend’, and involves the dreaded ‘P’ word which nobody dares to mention for obvious reasons. In an echo of Michael Sandel and the “public good”, public policy should instead seek to grant “the many” the power to take hold of such markets and indeed open up the opportunity for communities and smaller groups to enter in. The country has of course made previous attempts at ‘rebalancing the economy’, though probably not in the sense of Sir Mervyn King in his speeches of 2009 and 2010. The “Report of the committee of inquiry on industrial democracy” (1977) Cmnd 6706, also “the Bullock Report” for short, was a report proposing for a form of worker participation or workers’ control, chaired by Alan Bullock. The idea was seen by some as a way to solve the chronic industrial disputes and to enhance participation of employees in their workplace. This Committee of Enquiry into Industrial Democracy had been set up by the Labour government of Harold Wilson in December 1975, in response to the European Commission’s Draft Fifth Company Law Directive which sought to harmonise worker participation in management of companies across Europe. This report was not unanimous, as a majority report it was signed by Bullock and as members of the committee: three trade unionists, two academics and a city solicitor. The authors of the reply to this report conceded that, if more people are able to influence decisions which closely affect their work, the more effective will that involvement be.
Company law has failed to narrow the divide between the wages of workers and employees and their directors; in fact, the income and inequality gap have got worse. Last year, nearly 60% of the shareholder vote went against WPP’s remuneration report at its annual general meeting, including those held by Scottish Widows, Standard Life and Co-operative Asset Management, marking one of the biggest revolts of the “Shareholder Spring” so far. CEOs constitute a very strange market: excluding those with the potential to become leaders and including only the incumbents distorts prices. The failure of shareholders to influence the running of a company, except in extreme situations, has caused the ratcheting up of CEO pay over two decades to the point where millions are the norm and those paid less than tens of millions feel cheated. The median pay of FTSE 100 CEOs rose 10 per cent last year, according to Manifest/MM&K, the advisory groups. Meanwhile, investor returns have been completely uninspiring – the 10-year total return of the FTSE 100 is 5.5 per cent a year, with WPP at 5.4 per cent. It is unsurprising that Labour will wish to look elsewhere for a system that works, including a German-type “co-determination”. Its advocates say it is a win-win scenario emphasising better information flow of shop-floor knowledge to the very top of the company, fewer workdays lost due to industrial conflict compared to other countries, smoother implementation of changes legitimised by a more diverse board, and a general contribution to the common good through democratic structures. Trade unions bargain with employers to get better pay for members. Trade unions campaign on particular issues, for example low pay, discrimination and bullying. Trade unions argue that they can help you if you have a problem at work. Research shows that union members in the UK receive higher pay (on average 12.5% more), better sickness and pension benefits, more holiday and more flexible working hours than non-members.
Some people join in order to feel part of a wider community at work. Others join because they believe in giving employees a collective voice and making sure workers and not just employers and senior managers benefit from the success of an organisation. This current Coalition, with Conservatives and Liberal Democrats components pushing and pulling in different directions, has been discussing whether it should be ‘easier’ to hire and fire people. It is known however that workplaces are safer where there is a trade union—recent studies show that organisations that have trade union health and safety committees have half the injury rate than those that manage safety without unions. The UK labour market is already one of the least regulated among comparable nations. This immediately makes predictions of any significant employment effects from further deregulation implausible. Also nations with much higher levels of regulation have been at least matching and in some respects exceeding employment performance in the UK and other low regulation countries for some time. Meanwhile the exemplary low regulation economy, the United States, has registered an abysmal employment performance at least since the turn of this century. The idea of lower regulation as a route to employment growth is therefore a particularly hard sell these days.
In England, the steepest falls in union membership came between 1979 and 1998, when unions were affected by a series of legislative changes which included ending the closed shop – an agreement under which employers agreed to hire union members only. Since then, numbers have been pretty stable. It can be argued now that unions “haven’t kept up with changes in the economy”, particularly in terms of the shift from manufacturing sectors to other sectors such as technology. While industries that have traditionally been highly unionised, such as manufacturing and engineering, have declined, workers in new and growing industries in the private sector have not sought union membership. Even in education, there is a growing workforce consisting of independent freelance contractors, who can be fired at the drop of the hat. The possibility remains that citizens merely consider the Unions irrelevant, in that there is not a long history of union participation in that sector, and individuals can be convinced about the benefits of access-to-education, or legal protection. This Coalition, whether it was explained to the general public or not, has embarked on a “roll-out” of outsourcing the State’s functions to an oligopoly of private and public limited companies. The chief purpose of the Health and Social Act (2012) was to allow a much larger number of private companies doing the functions of services in the NHS under the NHS branding. Yet, they are still all private companies. You only need to look at the tensions of UNISON at Circle Hinchingbrooke to see how a dysfunctional relationship with the Unions is neither productive for profitability nor cohesion of society. Adverse union influence is much diminished in the private sector, with fewer members and far fewer working days lost to industrial action compared with 30 years ago.
Therefore, Ed Miliband has a golden opportunity to establish a narrative which is entirely consistent with a “one nation economy” and “one nation society”, and would be able to combine his pet interests of predistribution and responsible capitalism with a recognition that the Unions are not the “evil uncle”. Instead, this omnishambles Coalition has become dependent on a series of accountancy stunts to maintain a Ronseal veneer of skill. Discussed in a brilliant article by Shiv Malik, a number of months ago, parliamentarians and those campaigning against work-for-your-benefit schemes noticed that people doing unpaid work experience – a growing band of people – could be classified by the ONS as employees of companies. This meant that although they were on government training and employment schemes, they were actually being included among the statistics for 25 million plus employees. And how was George Osborne able to pull his deficit “rabbit” out of the hat so unexpectedly in the Autumn statement 2012? This was addressed in an equally superb article by George Eaton. First, he added the expected £3.5bn receipts from the 4G mobile spectrum auction – even though it’s yet to take place. Second, he included the interest transferred to the Treasury from the Bank of England’s Quantitative Easing programme (worth £11.5bn), despite the Institute for Fiscal Studies warning him that it would call into doubt his credibility.
The country is sick of these pathetic manoeuvres, as it openly enters a triple-dip, and Osborne lobbies the entire population on how our cost of borrowing is totally unrelated to the downgrading of credit rating due to flatlining growth (honest). A secret weapon had been to discredit the Unions, even toxify them, and to portray basic employment rights as an act of selfishness of people who wished to contribute to the society or the economy. Ed Miliband is coming warm to building the sort of society he wishes to take further. Cognisant that a baboon could have won in 1997, he has the chance to set an agenda for a generation after the Conservatives had declared themselves unfit to govern, and after the Liberal Democrats had lost all credibility entirely. Widening Union membership to the private sector, and producing an architectural framework for ‘one nation’ and ‘one society’ where some people do not clearly benefit at the expense at the others, could be an incredible thing to achieve.
The author should like to acknowledge a recent podcast discussion on which this blogpost was based in the @Gdnpolitics series, featuring @guardian_clark and @georgeeaton.
Ed Miliband's speech to the Fabian Society: full text #fab13
Fabian Society Annual Conference: Next State is taking place today Saturday January 12th and this year’s special guest is Ed Miliband. It is being held at the Institute of Education, 20 Bedford Way, London WC1H 0AL. It has been fully sold-out.
The chair of the Fabians is Jessica Asato, @Jessica_Asato, also PPC for Norwich North.
The full programme is here on the website of the Fabians.
This is the text of Ed Miliband’s speech, which is clearly built around the three major planks of Labour’s ongoing policy review: the economy, society and political process.
It is great to be here at the Fabians.
Today I want to talk to you about the idea of One Nation.
The idea of a country which we rebuild together, where everyone plays their part.
It is not an idea rooted in Fabian pamphlets.
Though I bow to nobody in being an avid reader of them.
It is not an idea either rooted in academic studies of Sweden or any other country.
Though as some of you know, again I can talk at length about these subjects too.
It is an idea rooted deep in British history.
Because it is rooted deep in the soul of the British people.
Deep in the daily way we go about our lives.
Our relationships with our family, our friends, our neighbours.
We know this idea is a deep part of our national story because we have so many different ways of describing it.
“All hands to the pump.”
“Mucking in.”
“Pulling your weight.”
“Doing your bit.”
And every day we see it at work in our country.
On Christmas Day, I helped out somebody down the street from me who makes Christmas lunches for elderly people in the area living on their own, it’s that spirit.
The same spirit we saw last year in the Olympic Games.
Now because this idea is so much part of who we are as a nation, of how we think of ourselves, all politicians try to embrace it.
But its real potential, and what I want to talk about today, comes when we understand the deeper lesson for the way we run our country.
Turning this spirit of collective endeavour, of looking out for each other, from something we do in our daily lives, to the way our nation is run.
That is what One Nation Labour is about.
Taking the common decency and values of the British people and saying we must make it the way we run the country as well.
And why does this idea – the idea of One Nation – speak so directly to the state of Britain today?
Because we are so far from being One Nation.
While a very few people at the top are doing well, so many people feel their prospects diminishing, their insecurity rising.
They feel on their own.
Not part of a common endeavour.
You know, a young woman came up to me recently and told me she had decided to go to University in Holland because she said she couldn’t afford to do so in Britain.
Believe it or not, to a government minister her departure will seem a success because if more people leave the country it will help them meet their net migration target.
But it doesn’t feel like a success to me to have talented young people fleeing abroad.
In Britain that young woman doesn’t feel part of a country where she can play her part, she feels on her own.
And it’s not just our young people who are finding it so hard to do their bit.
There are so many people across Britain who want to play their part but don’t feel they can.
Those running small businesses are struggling just to keep their business afloat in the face of rising energy bills and banks that won’t help.
They don’t feel part of a Britain we rebuild together, they feel on their own.
And then take all the people struggling to make ends meet, to pay the bills, doing two or three jobs, they feel on their own with nobody on their side.
So what do so many people in Britain have in common today?
They believe the system is rigged against them.
They believe that the country isn’t working for them.
And you know, it’s not that any of them thinks Britain owes them a living or an easy life.
All they want is a sense of hope, they want to believe there is a vision for a future we can build together.
And that is why One Nation is such a powerful idea right now: because it is about our country and what it faces.
Can David Cameron answer this call for One Nation?
This week shows yet again why he can’t.
What did they call it on Monday?
The Ronseal re-launch.
But what did we discover?
The tin was empty.
And they have no vision for the country.
And what have we also seen this week?
The appalling attempt to denigrate all those who are looking for work.
To pretend that a Bill that hits 7 million working people is somehow promoting responsibility.
And all the time an attempt to divide the country between so-called scroungers and strivers.
To point the finger of blame at others, so people don’t point the finger of blame at this government.
Nasty, divisive politics which we should never accept.
It should be the first duty of any Prime Minister to be able to walk in the shoes of others.
This week he has shown he just can’t do it.
No empathy.
And no vision either.
So my overwhelming feeling in looking at this government is simple:
Britain can do better than this.
I have said what it means to be a One Nation Prime Minister.
To strive always to walk in the shoes of others.
But One Nation tells us more than that.
It tells us that we need to bring the country together so everyone can play their part.
And let me explain what One Nation is about in our economy, our society and our politics.
Let me start with the economy.
One Nation Labour is about reshaping our economy from its foundations, so that all do have the opportunity to play their part, not just a few.
And to understand what a One Nation economy means, we need to recognise how it differs from what New Labour did and also how it differs from the current government.
New Labour rightly broke from Old Labour and celebrated the power of private enterprise to energise our country.
It helped get people back into work, and introduced the minimum wage and tax credits to help make work pay.
And it used tax revenues to overcome decades of neglect and invest in hospitals, schools and the places where people live.
There are millions of people who have better lives because of those decisions.
It is a far cry from what we see today.
We’re back to the old trickle-down philosophy.
Cut taxes for the richest.
For everyone else, increase insecurity at work to make them work harder.
In other words, for the 99 per cent: you’re on your own.
Sink or swim.
For the top 1 per cent: we’ll cut your taxes.
We don’t need a crystal ball to know what this will mean, because the last two and a half years have shown us.
Business as usual at the banks, squeezed living standards, a stagnating economy.
No plan for rebuilding the British economy.
But the One Nation Labour solution is not to say that we need to go back to the past, to carry on as we did in government.
One Nation Labour learns the lessons of the financial crisis.
It begins from the truth that New Labour did not do enough to take on the vested interests and bring about structural change in our economy.
To make it an economy that works for the many not just the few.
From the banks on our high streets to the City of London to the big energy companies.
Now, New Labour did challenge the old trickle-down economics by redistributing from the top.
But again it didn’t do enough to change our economy so that it grew from the middle out, not from the top down.
One Nation Labour is explicitly about reshaping our economy so that it can help what I call the forgotten wealth creators of Britain.
The millions of men and women who work the shifts, put in the hours.
Who are out to work while George Osborne’s curtains are still closed.
And are still out at work when he has gone to bed.
Those who have gone to university and those who haven’t.
The people who don’t take home millions or hundreds of thousands, but make a hard, honest and difficult living.
These are the people on whom our future national prosperity truly depends.
So what do we need to do today?
We need to reform our economy.
To take on the vested interests that block the opportunities for our small businesses and for all the other forgotten wealth-creators.
We need a new deal for our small businesses who have been let down by the banks.
We have to tackle short-termism in the City to enable companies to play their part to contribute to long-term wealth creation.
We have to work with business radically to reform our apprenticeships and vocational education, so we use the talents of all young people, including the 50 per cent who don’t go to University.
And we have to promote a living wage to make work pay.
That is the way that we rebuild our economy.
From the middle out.
Not from the top down.
That’s what One Nation Labour is about in the economy.
So we learn the lesson of New Labour’s successes, embracing wealth creation.
We learn the lessons of what it didn’t do well enough, reshaping our economy and creating shared prosperity.
And we recognise there will be less money around because of the deficit we inherit.
That’s why Ed Balls rightly came to this conference last year, to say if we were in government today we would have to put jobs in the public sector ahead of pay increases.
And in a way that we did not have to be under New Labour, we will have to be ruthless in the priorities we have. And clear that we will have to deliver more with less.
So One Nation Labour adapts to new times, in particular straitened economic circumstances.
And the power of the idea of One Nation also shapes the kind of society I believe in.
One Nation Labour is based on a Britain we rebuild together.
That means sharing the vision of a common life, not a country divided by class, race, gender, income and wealth.
And that’s so far from where we are in Britain today.
We can only build that kind of society, where we share a common life, if people right across it, from top to bottom, feel a sense of responsibility to each other.
Now, New Labour, unlike Old Labour, pioneered the idea of rights and responsibilities.
From crime to welfare to anti-social behaviour, it was clear that we owe duties to each other as citizens.
It knew we do not live as individuals on our own.
And it knew that strong confident communities are the way that you build a strong confident nation.
All of this is so far again from what we have seen from this government.
This government preaches responsibility.
But do nothing to make it possible for people to play their part.
They demand people work, but won’t take the basic action to ensure that the work is available.
They talk about a “big society”.
But then it makes life harder for our charities, our community groups.
But here again the answer is not simply to carry on where we left off in government.
New Labour was right to talk about rights and responsibilities but was too timid in enforcing them, especially at the top of society.
And it was too sanguine about the consequences of rampant free markets which we know can threaten our common way of life.
Learning from our history, One Nation Labour is clear that we need to do more to create a society where everyone genuinely plays their part.
A One Nation country cannot be one:
Where Chief Executive pay goes up and up and up and everybody else’s is stagnant.
Where major corporations are located in Britain, sell in Britain, make profits in Britain but do not pay taxes in Britain.
And where at the top of elite institutions, from newspapers to politics, some people just seem to believe that the rules do not apply to them.
To turn things round in Britain, we all have to play our part.
Especially in hard times.
We are right to say that responsibility should apply to those on social security.
But we need to say that responsibility matters at the top too.
That’s the essence of One Nation Labour.
It shares New Labour’s insight about our obligations to each other.
And it learns the lessons of what New Labour didn’t do well enough, ensuring responsibilities go all the way through society from top to bottom.
And what does One Nation Labour mean for the way we do our politics?
It starts from the idea that people should have more power and control over their lives, so that everyone feels able to play their part, not left on their own.
New Labour began with a bold agenda for the distribution of power in Britain.
And it stood for a Labour party not dominated by one sectional interest, but reaching out into parts of Britain that Old Labour had never spoken to.
Inviting people from all walks of life to join the party and to play their part.
It wanted too, to open up our system of government and oversaw the biggest Constitutional changes for generations, including devolution to Scotland and Wales.
The contrast with this government is clear.
The way they operate, the high-handed arrogance of their way of doing things.
They cannot claim to be opening up politics.
And they certainly cannot claim to be rooted in the lives of the British people.
But once again we have to move on from New Labour, as well as from this government.
Because although New Labour often started with the right intentions, over time it did not do enough to change the balance of power in this country.
That was true of the Labour Party itself.
Of our democracy.
And of our public services.
By the time we left office, too many people in Britain didn’t feel as if the Labour party was open to their influence, or listening to them.
Take immigration.
I am proud to celebrate the multi-ethnic, diverse nature of Britain.
But high levels of migration were having huge effects on the lives of people in our country.
And too often those in power seemed not to accept this.
The fact that they didn’t explains partly why people turned against us in the last general election.
So we must work to ensure that it never happens again.
And what is the lesson for One Nation Labour?
It is to change the way that power and politics works in our own Party right away.
That is what you will be seeing from One Nation Labour in 2013.
Opening up in new ways.
Recruiting MPs from every part of British life: from business to the military to working people from across every community.
Seeking support in every part of the United Kingdom, across the South of the country as well as the North.
Building a party that is dedicated to working with people to help them improve their own lives—even before government.
So for example, Labour Party members going to door to door offering people practical to help switch energy suppliers and cut their bills.
Creating a policy-making process that enables people directly to shape our policies so that they reflect their own concerns.
Jonathan Primett from Chatham wrote to us recently, complaining about rogue landlords at a time when the private rented sector is growing fast in our country.
Today I want to respond to him.
Britain is in danger of having two nations divided between those who own their one homes and those who rent.
If we are going to build One Nation, people who rent their homes should have rights and protections as well.
That’s about rooting out the rogue landlords.
Stopping families being ripped off by letting agents.
And giving new security to families who rent.
So we will introduce a national register of landlords, to give greater powers for local authorities to root out and strike off rogue landlords.
We will end the confusing, inconsistent fees and charges in the private rented sector.
And we will seek to give greater security to families who rent and remove the barriers that stand in the way of longer term tenancies.
That is a real example of how a One Nation Labour Party, by opening up our politics, is responding to the new challenges that the British people care about today.
One Nation Labour is also practising a new approach to campaigning—through community organising—which doesn’t just seek to win votes but build new relationships in every part of Britain.
For example, taking up local issues from high streets dominated by betting shops to taking on payday loan companies.
And, of course, a One Nation Labour government should open up too.
If devolution to Scotland and Wales is right, so it must be right that the next Labour government devolves power to local government in England.
And reforms our public services so that the people who use them and the people that work in them, feel as if they have a real chance of shaping the way they operate.
That’s the way to ensure we can all work together, to rebuild our country, with everyone playing their part.
That’s what One Nation Labour is about.
It learns the lesson of New Labour’s successes, seeking to reach out to parts of Britain that Old Labour ignored.
It learns the lessons of what it didn’t do well enough, of where New Labour left people behind.
And it recognises that in 2013, as the world has changed, politics has to change with it.
I talked about it in my Labour Party conference speech a few months ago about why I came into politics.
It was because of my personal faith.
A faith that we are better, stronger together than when we are on our own.
A faith that when good people come together they can overcome any odds.
For me, that’s what One Nation Labour is all about.
This faith isn’t unique to me.
It is deeply rooted in our country.
One Nation Labour is different from the current government.
And from New Labour and Old Labour too.
It will take on the vested interests in order to reshape our economy in the interests of all.
It will insist on responsibility throughout society, including at the top so we can build a united, not divided, Britain.
It will strive to spread power as well as working for prosperity.
We must build One Nation.
It is what the British people demand of us.
And, together, it is what we can achieve.
Ed Miliband uses his "Future That Works" speech to repeat his 'one nation' theme
Ed Miliband will give the following “Future That Works” speech to repeat his ‘one nation’ theme. The speech does not cover faults in the political process, which is an aim of Labour’s reformulation of policy, neatly epitomised by #plebgate and George Osborne’s train ticket fiasco yesterday. That is for another time perhaps. The speech however emphasises two particular strands of the ‘one nation’ theme, corresponding to the policy review underway by Jon Cruddas: the economy, and society.
Despite the BBC aiming for ‘balanced coverage’, which appears to give prominence to the austerity alliance and the views of the Taxpayers’ Alliance in showcasing their policy for low income tax, the case made for the economy is a good one. It is possible that more people are in employment, but the consensus is that this is supported by flexible, part-time work with little job security. The productivity of the UK has actually flatlined, and seasoned experts have now agreed that a financial stimulus should have started a few years ago. As it was there was no Keynesian stimulus, economy, and the main material fact is that the economy is now in recession, whereas it was recovering albeit in a fragile way in 2010. Borrowing is up, because growth in the overall economy is so poor; this is money which cannot be spent on supporting the disabled in their living, or the living wages of teaches or nurses. There is very weak evidence for ‘trickle down economics’ – there is virtually no evidence that individuals who are paid excessively are not passing this down to employees and workers. In fact, they have actually benefited from a lower rate of income tax (50p band), which Labour failed to implement throughout its last entire period of government. The second version of Beecroft, dubbed ‘shares-for-rights’, has been a direct attack on employment rights; if a new startup is failing, shares in it will be worthless, and one wonders what the limit might be for trading basic rights in the workplace? Could such a policy one day culminate in staff being offered money for basic health and safety rights in future? While the government is able engineer domestic law, watering down the rights of workers, they will not be able to get out of European law so easily.
Ed Miliband refers to cutting ‘too far too fast’, and this indeed is entirely consistent with his previous message. It is impossible for Miliband to specify what cuts will be necessary in 2015, given that the economy is in a much poorer state than the one inherited in 2010. Labour has previously stated that it would not have cut so many frontline staff in the police, for example, but it is frustrating for Labour that it is not able to give reassurances to those in the public sector. However, Miliband has thus far set out an argument that ‘vested interests’ will not have a dominant rôle in policy, and he has been at pains to establish that members of trade unions do not provide more than about 40% of overall Labour Party funding.
A society where no sector has extreme dominance is the second thrust of the reformulated Labour policy. However, Ed Miliband knows that it is going to be extremely hard for the society to be rebalanced without the economy being rebalanced, and it may be difficult to achieve all of Ed Miliband’s political aims through a single economic strategy. Such a strategy might be predistribution, but Ed Miliband will find it hard to introduce a fairer, redistributive tax system, without loud claims that he is ‘punishing’ wealth creators. It is, actually, however extremely unlikely that CEOs with very high incomes will simply leave and go abroad, as they have ongoing commitments here in London and the rest of the country (such as mortgages, free from ‘mansion tax’). Such CEOs are often placed by multi-national companies, and if a multi-national company wishes to maintain a presence in the UK, which still represents a formidable market (whether for Starbucks, Coca Cola or Vodafone), a multinational company will have no difficult in finding replacement for such CEOs who wish to emigrate.
The full text of this speech is as follows:
“People have come here from all walks of life, from all parts of our country.
Young people looking for work, construction workers, nurses worried about the NHS and off duty police officers worried about cuts to frontline services. People from every corner of Britain.
So many people have the will to work, the ambition to work, but cannot find a job. They do not think that Britain owes them a living. They are not asking for the earth. They just have a simple request. They want a future that works for them.
And what did the Government say? They told us austerity would help our economy grow. But our economy has not grown. It has flatlined.
They told us ‘we’re all in this together’. But now they are cutting taxes for millionaires, as they raise taxes on everybody else, including our pensioners.
They told us the gain would be worth the pain. But even after the cuts, the pain, the tax rises, borrowing is not falling – it’s rising. They are even failing the one test they set themselves.
And the reason they are failing is that they’ve got old answers. The old answers that just don’t work. They really believe that trickle-down economics and a sink or swim society is the way to get Britain working.
They really believe that everybody else has got too many rights at work and if we make it easier to fire them, our economy will succeed.
Of course, there will still be hard choices.
“With borrowing rising not falling today, I have said that whoever was in government now would have to make some cuts.
I do not promise easy times. But I do promise a different and fairer approach.
This Government has shown us self-defeating austerity, by cutting too far and too fast, is not the answer.
And let me tell you one cut I would never make: I would never cut taxes for millionaires while raising taxes for everybody else.
You don’t build a successful country with sink or swim.
You do it by building One Nation.
One Nation is a country where we give hope to our young people again.
One Nation is a country where those with the broadest shoulders always bear the greatest burden.
And One Nation is a country where we defend our great institutions, like our National Health Service.”
