Peter Kenyon

Devolution - the budgetary challenge for Labour to seize

How can Labour Party leader, Ed Miliband, possibly regain the electoral initiative in just six months? As avid readers of this blog will know, I have trying to make the case for a different way of formulating the UK national budget.

Here's my latest form of words:

Labour Party action following Scottish referendum – the budgetary challenge

Preamble

The outcome of the Scottish Referendum rejecting independence has inspired debate about devolution of powers from the Westminster Parliament. This resolution suggests a ways Labour Party members and their existing elected representatives can shape a settlement pending resolution of the wider constitutional issues. In particular it aims to address the aspirations of those seeking a fairer, more equal and prosperous society.

Resolution

This branch:

1. recognises the need to reunite the United Kingdom within a new devolved framework of government

2. considers that current UK national budget making arrangements divisive, top down from Westminster, and, therefore, inconsistent with such devolution

Therefore:

1. calls on the Labour Party leadership to adopt an inclusive approach to UK national budget making to encourage a national sense of purpose while at the same time enabling devolution of powers from the UK government

2. calls on Labour's leadership to invite Labour leaders in Scotland, Wales, London, and throughout local government to join in a new process of preparing revenue and capital budgets for FY 2015/16 and beyond

3. further proposes that these budget plans are coordinated between Labour's elected representatives to highlight issues that will need to be addressed by an incoming Labour chancellor of the exchequer after the General Election

4. opposes rigid adherence to Tory/LibDem spending plans in FY 15/16 as currently proposed by the Labour leadership

Labour mini-reshuffle: stuck with Balls, job for Trickett

Minor changes to the Labour Party frontbench were announced earlier today following the resignation of Jim Murphy to muddy the water in the Scottish Labour Party.

The main news which did not form part of the official announcement was that shadow chancellor of the exchequer, Ed Balls, remains in post. What was significant was the appointment of Jon Trickett as keeper of the radical runes in the Office of the Leader of the Opposition.

A more conventional report of these events can be read on the New Statesman's blog The Staggers here

If that job for Trickett is going to make a real contribution to boosting seriously flagging party morale, then he needs to set a number of tasks for Balls that keep the radical agenda rolling.

Top of that list must be Growth4All versus austerity-lite. As set out out by Balls, Labour is committed to apeing ConDem public spending plans for the first year in government, ie 2015/16. There is a miserable and heart-chilling logic to this. Public expenditure settlements for FY15/16 will have been announced before the next General Election, along with the ConDems last throw (hopefully) of the budgetary dice with tax bribes to the electorate so outrageous that even the most gullible will realise they are being conned.

Balls' job is therefore to show his economic wizardry by feeding the party doorstep lines to reawaken electoral passion for Labour. It won't come from more of the same, austerity-lite.

Trickett could usefully get up to speed on pre-election inclusive budgeting (admittedly, still very nerdy at the moment), planning for living wage implementation, and setting timetables post-election for transferring tax and spend powers to local authorites, and lifting borrowing restrictions on devolved nation, regional and local government spending on infrastructure, especially housing.

This may seem a tad radical, but that we are told is why Trickett was appointed.

Time for action.

 

Ed Miliband must rue day he scrapped shadow cabinet elections

How could the leader of the Labour Party end up being shackled to his shadow Chancellor of the Exchequer? Ed Miliband must rue that early decision after his election to scrap the annual shadow Cabinet elections. That was supposed to give him the freedom to choose his own team. Instead it looks as though he threw away an opportunity to test the popularity of his frontbench team with Labour MPs.

Of course, this is not the first time that a Labour Party leader has been lumbered.  But at least you might plausibly argue that in those heady days back in 1994 former leader Tony Blair had a deal with Gordon Brown. Together they were seen to be ready for government, and won.

Today, Ed Miliband is in a very different space. He is stuck with an economic spokesman who wasn't his first choice, and whose policies are indistiguishable from the ConDem coalition's. Most Westminster old hands would, and if asked will, argue that it is too late to do anything about it now. Well may be it's too late to sack Balls. But there is no reason why Miliband should not be making policy announcements publically that have support in the party and oblige Balls to comply.

Over the past month I have been posting occasionally, mainly on the theme of devolution and the little discussed role of UK budget-making in fuelling calls for transferring powers from Westminster and Whitehall. My article in the latest edition of Chartist inspired the cover cartoon by Martin Rowson - Balls and chain.

Yesterday, I attended an event at the University of Westminster organised by The Democratic Society, Involve, democratise and the university's own Centre for the study of democracy. Entitled 'Developing the space for a public conversation about democratic reform', this chat about a chat was the stuff consultation nerds get off on. But as the breakout sessions got going and discussion became more focussed, I realised here was a ready made opportunity to advance the idea of inclusive UK budget-making.

It took the Scots nearly 20 years to recover from an abortive referendum on devolution in 1979, when the majority in favour was less than the 40% of the electorate necessary to succeed. Today, no-one could doubt the appetite for democratic reform in Scotland with a massive 84.5% turnout, the highest in any election in the UK since the introduction of universal suffrage in 1918, nearly 100 years ago.

But it was the result of a conversation that started decades earlier.

Ed Miliband has barely six months to salvage his party's electoral fortunes in Scotland, and with it the prospect of securing a majority of seats in the Westminster Parliament. Holding him back is his shadow chancellor and formal rival for the Labour leadership. How can he conceivable capture the national imagination at this late stage?

Well, Miliband prides himself on standing up to vested interests, and there can't be a bigger one around the shadow cabinet table than the Balls/Cooper combo. I suggested devolution offered Miliband the chance to escape Balls and chain here. But weeks have elapsed and all that is on offer is a England Devolution Act transferring control of a modest £30billion to local and regional authorities. That style of hand-me down politics fuelled Scotland close to voting Yes to independence.

What is needed is a fresh approach to UK budget making - an inclusive one in which revenue and capital needs are worked out by local leaders and then shared UK-wide with a view to reaching a consensus about the national budget. Participatory budgeting could be added to broaden involvement. All it requires is leadership.

Devolution: a constitutional or budgetary issue?

Amid the furore over the Scottish independence referendum, aren't we all overlooking one of the underlying issues driving tensions between the UK government and all other tiers of government, namely, the way in which uk national budgets are formulated?

Brief exchanges with comrades elsewhere in the country led me to formulate a resolution for my local Labour Party branch which hopefully will be debated later this week.

It reads:

Labour Party action following Scottish referendum

Preamble

The outcome of the Scottish Referendum rejecting independence has inspired debate about devolution of powers from the Westminster Parliament. This resolution aims to encourage debate about ways in which Labour Party members and their existing elected representatives have at their disposal today to shape a settlement to meet the aspirations of those seeking a fairer, more equal and prosperous society, pending resolution of the wider constitutional issues.
This branch:
1. notes commitments by Labour Party leader Ed Miliband to enable greater devolution to Scotland and local government
2. recognises the need to reunite the United Kingdom within this new framework
3. considers that current UK national budget making arrangements are inconsistent with such devolution
Therefore:
1. calls on the Labour Party leadership to adopt an inclusive approach to UK national budget making to encourage a national sense of purpose while at the same time enabling devolution of powers from the UK government, consistent with the UK's international and EU budgetary commitments and obligations
2. calls on Labour's elected representatives at all levels of government to exercise leadership by acquiring and develop the skills to prepared revenue and capital budgets for FY 2015/16 and beyond
3. invites them to coordinate their efforts prior to negotiation with an incoming Labour chancellor of the exchequer with a view to reaching a consensus about a national UK budget designed to enable Growth4All
4. while recognising the constraints on the next Labour government arising from five years of mismanagement by the Tory/LibDem coalition, opposes rigid adherence to Tory/LibDem spending plans in FY 15/16 as proposed by the current shadow chancellor Ed Balls MP
5. calls on Labour's elected representatives on the ALC, ALG, National Policy Forum, and the Clause V Committee to vote for the inclusion of the above measures in Labour's 2015 General Election Manifesto.

As this is my first post for over nine months, I doubt it will attract much interest, but I think, over the next week, it may be worth unpicking why I'm less interested in the constitutional convention route, than reflecting on how centralised budgetary power is (ab)used by UK governments. With Labour leader Ed Miliband in thrall to his (second choice) shadow chancellor, Ed Balls, easing the resulting tensions appears impossible unless confronted. The affiliated trade unions have demonstrated by their posturing at Labour's National Policy Forum in Milton Keynes in July, they can not undertake that role. It is now up to Labour Party members, especially those who are elected representatives to take up the struggle. Budgetary power must be devolved. Who votes for what in the Westminister Parliament is a sideshow in comparison.

After your Budget response, Ed: a zero-based budget for the Labour Party?

Now here's a teaser for Budget Day. By tradition, the Leader of Her Majesty's Loyal Opposition - I jest not - will deliver a scathing critique of the Chancellor of the Exchequer's Budget Speech.

If a fraction of the effort that will have gone into drafting and honing those headline watering phrases were applied to the Labour Party's own budget, then I would venture to suggest a Zero-based Budget would create waves.

The Labour Party's National Executive Committee meets next Tuesday.

Budget deficit management - a City of London Labour Party issue

My Labour Party branch debated Labour's economic policies at its meeting on Wednesday and found official Labour Party wanting. This contemporary resolution is work in progress among those present for the discussion.

Here is the current draft:

Responsible budgetary policy, investment, growth and jobs

Conference notes the latest OECD call published on 9 September for further stimulus measures in the light of a possible global economic slowdown in the second half of 2010. In particular, Conference notes that the OECD proposed that plans to bring looming budget deficits under control through public spending cuts and tax rises "could be delayed".

Conference notes that this is consistent with the previous Labour government's commitment to tackle the budget deficit arising from reckless behaviour in parts of the global and UK banking and financial sectors.

Conference shares the concerns arising from current financial market indicators about the risks of slower growth, fewer jobs and a possible double-dip recession being much great than sovereign debt default.

Conference rejects the Conservative – Liberal Democrat coalition's assertion that the budget deficit must be eliminated within five years. Conference recalls how the 1945-50 Labour government managed the creation of the National Health Service, nationalisation of rail, coal and steel and other major welfare reforms. This was despite UK government borrowing being three times higher (proportionally) after World War II period than after the recent global banking crisis.

Conference further notes that some banks and financial services companies are still paying excessive bonuses.

Conference therefore resolves :

1. that responsible budget management should be linked mainly to economic cycle conditions with a view to optimising the chances for growth in both the public, private and third sectors and to maximise job prospects as the appropriate means of reducing the budget deficit arising from irresponsible banking practices

2. taxation policy should encourage fair pay based on a living wage, as well as aspiration; but penalise greed

Freezing personal allowances shows Darling unwilling to risk public finances

Twittering about the Budget yesterday I expressed my disappointment about the absence of any further move towards fairer taxation. I failed to pick up on Chancellor of the Exchequer (CHX) Alistair Darling's not referring to personal allowances explicitly.

Inevitably, the Tories and the right-wing press have seized on this omission quite cynically as another example of a 'stealth tax'. Personally, and with the benefit of hindsight, Darling missed a trick by failing to pre-empt that line of attack. This account , for example, in his interview with Sky News helps put the record straight.

But Mr Darling told Sky News he had not changed his income tax policies since announcements he made months ago.In December, he froze the personal allowances limit because inflation - which it normally follows - was negative. The retail price inflation rate is now 3.7%, which the Tories say hits workers in the pocket. Mr Darling said it would cost the taxpayer £2bn to increase the personal allowance limit again."It is a nice political device (by the Conservatives) but it is frankly a piece of nonsense," he said."If that really is the Tories' policy ask them how they intend to pay for it."

So the facts are that under the usual rules, personal allowances for the financial year 2010/11 would have been CUT. Instead, Darling decided to leave them unchanged. Rather than a tax giveaway with what wriggle room was available, Darling chose to cut debt and concentrate tax changes in ways that will aid growth in the real economy.

What has not been picked up by the opposition parties or the right-wing press were the measures targeted at small and medium sized businesses, and the entrepreneurs that run them. These are  aspirational people on whom we depend for wealth and hence job creation in the private sector. But that's Tory stealth politics. They wouldn't want to reinforce Darling's message to business - you are better off sticking with/switching to Labour. Would they? Reviewing the content of his speech there was far more for them than Labour's core vote. Which suggests to my that my instantaneous assessment was not too wide of the mark:

No doubt this is budget for growth, employment opportunity with debt under control.

Time to get out on the doorstep.

Labour: greater than the sum of its parts

Budget Day today is the Labour Party's opportunity to show convincingly how it is different from the other two mainstream political parties. That's not just me writing but the message of the second editoral in today's Guardian newspaper.

The buzzword inside Labour's ruling circle is renewal, but it is hard to see what this means, other than a hoped-for election win. The party is not renewing in any visible way. Its manifesto seems cloudy and unoriginal and its political base narrowing.....

Today's budget, and the election campaign that follows, are a chance to show it is still greater than any of the factions that form its parts.

Hear, hear!

Labour Party: winning strategy - forget the sofa, take to the streets

Labour's prospects of clutching victory from the jaws of defeat appear to be diminishing according to most recent opinion polls, just when the latest economic indicators suggest the country has been saved from the worst ravages of recession thanks to Labour policies.

Whether a slide from 'sofa government' to 'sofa electioneering' as reported in today's Guardian is going to help reinforce Labour's message of 'A future fair for all' depends on how important personality is with the electorate, as opposed to its policies - past, present and future.

Next week's budget is much more likely to seal the campaign in the minds of voters. Chancellor of the Exchequer Alistair Darling has an opportunity to set out Labour's strategy to deliver that future. To be successful, he has to deliver a means of achieving fairer income distribution and income tax collection, and affordable housing - on a far greater scale than currently planned. Given the fragile state of recovery, but effectiveness of policy to protect jobs and homes, there is wriggle room in the public finances as today's public borrowing figures for February illustrate. He also faces a difficult judgement call re the fuel tax escalator, Labour's green credentials and the electoral impact of a £1.20 litre of fuel at the pumps.

The dividing lines between Labour and Tory couldn't be clearer. The banking crisis would have been cataclysmic under the Tories. Forget recession, we would be in deep depression by now if Messers (sic) Cameron and Osborne had had their way. But that is very much a minority message. Most of us prefer not to think about how bad it could have been. Reassurance can be found in what has happened in the last 18 months, and in particular what is emerging now from official data.

In the meantime, Labour's programme for the next five years is still being shaped by manifesto coordinator, Ed Miliband. Online endeavours have failed to achieve levels of participation, openness and transparency needed to change the zeitgeist. Though there are signs of increased interest in volunteering and membership, David Blunkett's dream of raising an additional £10 million for Labour through small donations still, sadly, appears just that, a dream.

Labour could have managed its affairs differently in the campaign to date. The refusual of the Party's National Executive Committee to protect members' selection rights whilst speeding up the process has left a trail of suspicion leading to either No 10, Unite the union, the unions in general or any combination of those involved.  We will never know whether some Labour PPCs won their nomination fairly. Not very clever for a Party promoting 'A future fair for all'.

Those shenanigans have sadly further impeded the prospects of restoring trust in either the Labour Party or our parliamentary democracy. That sense of business as usual is being compounded by Prime Minister Gordon Brown himself proclaiming his determination to remain in office whatever the outcome of the General Election. Such reminders that the Labour Party is 'institutionally undemocractic' are particularly unwelcome just when all the party election strategists want to maximise mobilisation on the streets. With the media having had its way luring the main political party leaders into televised debates the electorate could be forgiven for thinking they are going to be voting for a prime minister.

The party leader that stamps on quietly rebuts that idea repeatedly throughout the campaign will deserve the trust of the electorate for understanding the British constitution. Brown has already rehearsed lines reminding voters that 'this election is about their future, not his', and MPs that he is 'one of a team, not a team of one'.  If he uses 'sofa electioneering'  to cement that idea in the public's mind, he will do himself and the Labour Party credit. But it would only be credible, if he insisted on reinstating members' right to nominate Labour's leader and deputy leader every year from now on as set out in the Party's Rule Book.

I have already pledged to lead a write-in campaign for him if he wins the 2010 General Election. But the idea that he has a divine right to dictate whether he remains leader or not is ludicrous in a democratic socialist party. All he is doing is fuelling the Conservative idea 'Vote for Change'.

Something for next week's Labour Party National Executive Committee to resolve, the day before the Budget?

Labour Party: A Darling budget for May

Far be it from me to even contemplate interfering in the Chancellor of the Exchequer (CHX)'s perogative to determine the budgetary position just weeks ahead of the next election.

But I feel free to report my own thoughts on this issue in the context of recent discussions about the content of the 2010 Labour Party Election Manifesto.

There has been no debate about UK fiscal policy in Labour's National Policy Forum during the life of the current Parliament. Under the distinguished and politically adroit chairmanship of 'Privatise the Postmen' Pat McFadden MP, the National Policy Forum was forbidden from raising such matters. No such constraints were imposed at the meeting last Thursday between Ed Miliband, election manifesto coordinator,  and constituency representatives from Labour's National Executive Committee and National Policy Forum.

There were three out of six NEC constituency section representatives present - all from the Centre Left Grassroots Alliance slate. We all majored on the need for Labour to return to progressive taxation in its 2010 manifesto. This is a critical means of delivering 'A Future Fair for All'. 

The setting for that future is as much the budget, as the Manifesto. There is probably neither the time or opportunity for major tax reform in the 2010 budget. But there is scope for greater clarity about the direction of travel. Income tax policy and living incomes (benefits, wages and pensions) must be the instruments of choice for tackling poverty, and delivering a fair future for all. Those that can afford to pay should be encouraged to do so.

As for the deficit, the electorate is already wising up to the punative consequences of Conservative economic policy on the vast majority of people whether in work, on benefits or retired (unless extremely well-heeled). What Labour has yet to do is transform the popular perception of public debt into 'good' (not 'bad' as argued by the Conservative, Liberal Democrats and the right-wing (read most of) the media.)

There are areas of public investment that require further help. The most important in the view of many of my Labour Party colleagues at last week's meeting is council housing for rent. There is still too much slack in the construction sector. The private sector's failure to deliver affordable housing in sufficient quantity and quality is blighting hundreds of thousands of people's lives.

My worry is that Labour's budget deficit reduction programme is cast in terms of a Parliament and not as under former CHX, gordon Brown,  the expected economic cycle. We don't want a repeat of 1970 when Roy Jenkins' fiscally neutral budget did not help Harold Wilson secure a third election victory. 40 years on the markets and the banks have been rumbled.

The CHX's challenge is how to escape Treasury orthodoxy and deliver a Darling budget for May.