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.

 

Labour's first post-election budget: how to avoid a Balls up

Britain needs a payrise. I would go further. The world needs a pay rise. The challenge is where to start. With less than 200 days to go to the next UK General Election, there is much to do. As set out the UK Labour Party's economic policies do not add up. This is not because of profligate, irresponsible policy commitments. Labour as the only prospective party of government post-May 2015 can not afford that luxury.

Extravagant tax giveaways as proclaimed by outgoing Conservative Prime Minister David Cameron at his party Conference last month are just that, giveaways that you have no hope of delivering. His only hope and that of his flailing party is that enough of the electorate will believe him to reduce an inevitable loss of seats in just over six months' time.

So the electorate needs help to refocus on jobs and growth. Ed Miliband made an interesting appointment last night bringing back Pat McFadden MP on to Labour's frontbench to lead on Europe. Britain's membership of the European Union is the bedrock of future jobs and growth. Miliband reminded people of that in his Conference speech, remembered sadly more for what he forgot to say than what he uttered.

Unless I'm mistaken, he did say:

David Cameron doesn’t lie awake at night thinking about the United Kingdom. He lies awake at night thinking about the United Kingdom Independence Party. UKIP. That is why he is doing it friends and I say pandering to them is just one more reason why he is not fit to be the Prime Minister of this great country.

Better together, across the United Kingdom. But also better together, true to our traditions of internationalism. And nowhere is that more true than when it comes to Europe and the European Union. Friends, let me say it plainly: our future lies inside not outside the European Union.

We need to reform Europe. We need to reform Europe on the economy, on immigration, on benefits, on all of these big issues. But here is the question for Britain. How do we reform Europe? Do we reform Europe by building alliances or by burning alliances?

Indeed. So Labour is up for a head-to-head on EU membership with UKIP and UKIP-lite (formerly the Conservative and Unionist Party). Cameron's kami-kazi tactics over EU immigration levels are a big boost for Labour general election strategists. As suggested by Polly Toynbee in today's Guardian newspaper,  Cameron has reached a point of no return:

David Cameron has crossed the Rubicon. There is no going back. By proposing to limit free movement of labour from the EU he has planted himself on the side of the outs, as José Manuel Barroso made crystal clear in his Chatham House speech on Monday. The other 27 nations will never agree: if limiting national insurance numbers for EU workers is Cameron’s new red line then he has joined the Ukip wing of his party, who won’t let him renege.

This is very unsettling for UK jobs and growth. But every cloud has a silver lining. Labour has an opportunity to be much clearer about its relationship with business, and the role of markets.

Miliband set out a theme in his 2011 Conference speech, a year after being elected Leader:

Let me tell you what the 21st century choice is:

 Are you on the side of the wealth creators or the asset strippers? The producers or the predators? Producers train, invest, invent, sell. Things Britain does brilliantly.

Predators are just interested in the fast buck, taking what they can out of the business.

This isn’t about one industry that’s good and another that isn’t. Or one firm always destined to be a predator and another to be a producer.It’s about different ways of doing business, ways that the rules of our economy can favour or discourage.

Now is the time to spell out more precisely what that means for UK-based businesses and what is in store in terms of an emergency budget next summer. Will it be austerity-lite or Growth4All?

Miliband has to create scope for liberating the UK economy, and local government in particular from the tyranny of Conservative and Liberal Democrat budget cuts. That in part depends on building alliances in the EU that encourage the SDP, Labour's sister party in Germany, and part of a grand coalition led by Chancellor Angela Merkel to back growth measures to help the Eurozone avoid Japanese-style deflation.

Miliband's uncompromising stance pro-EU membership is a start. This will be welcomed by British business. But as they would say: "There is no such thing as a free-lunch." The relative "success" of the UK economy in terms of growth, compared to our EU-partners, masks a dirty little secret - a historic prolonged fall in real wages in the UK, which directly affects millions of UK voters.

There is an understanding to be reached with both business and voters. Labour will set out a strategy to ensure a payrise for Britain. In doing so it will help make the case for a payrise in Europe too. Business can not be expected to agree a living wage plan if government is not practising what it preaches. Ed Balls should be tasked with setting out a budgetary plan to enable all government departments and other levels of government to pay a living wage by 2020, or sooner should economic conditions permit. Firms willing to pay their staff a living wage should be offered a tax break for each financial year the government works towards its own implementation target. Firms that claim poverty beyond that date should be put on notice of the introduction of an Ecuadorian.

That's the moment HMRC will be empowered to check the books of any business claiming poverty to see just where its money is going.

In the meantime, any business with staff obliged to claim working tax credits to make ends meet should expect to have the details of what the wage subsidy adds up to published annually in a report to the House of Commons Public Accounts Committee. That should keep journalists on the red-tops busy with business scrounger stories in the meantime.

Over to you, Ed.

PS. I leave you to draw your own conclusions about the role of collective bargaining and sectoral arrangements in helping people secure better terms and conditions to cope with cost of living increases.

Ditto: investment especially in housing.

 

 

 

Immensely cheering economic data for Labour

On the eve of the 2010 General Election further evidence of economic recovery from the worst recession for 80 years has been released. What is Conservative Party leader David Cameron carrying on about? There is no mess.

Voters in the spotlight: X-in the box for Labour

Think hard. What do the vast majority of us depend on? Dare I write it? Yes, it's the economy. British Prime Minister and Labour Party Leader (at least until Friday if this story is to believed) is by his own admission neither the best communicator nor looker in political life, but he does know how to run the economy in good times and bad.

Reading the UK press, viewing TV or listening to radio over the past couple of years anyone could be forgiven for thinking that the banking crisis was the fault of a Labour government and nothing to do with the bankers, and that the subsequent recapitalisation of the banks through government borrowing was a monumental political error by Labour. Neither contrary proposition is an easy sell. In the televised prime ministerial debate last Thursday Brown was unable to get his opponents to admit this latest recession was completely different from those in the 1970s, 1980s and 1990s. Nor did he secure an admission that the banks that were unable to recapitalise from the markets (which Barclays was able to do) namely, RBS and Lloyds/HBOS had to be bailed out by government.

That doesn't mean it's time to forget that the right judgement calls were made and the economy is now on the up when putting an X-in the box on Thursday 6 May.

Let's have a proper debate at Labour's policy pow-wow

Save the Labour Party of which I was recently re-elected chair has just issued a call for a debate at the Labour Party National Policy Forum about the Party's relationship with the private sector.

Its constitution prohibits STLP from taking a view about what that role should be. But it seems obvious in the light of the near-collapse of the banking system prevented by our Labour government, the consequent recession and risk of depression refered to at PMQs today that we have got to rethink our policies towards the private sector.

We are calling on all Labour Party members whatever their views on this defining issue to use the next NPF on 28 February 2009 as an opportunity to have a say, and stimulate an open debate.

You can read our latest bimonthly members' newsletter here.

We have also started a monthly newsletter for local party officers here.

Our aim is to provide single points of reference until Labour Party staff under Ray Collins leadership get the message - there is too much stuff for most members with other lives and responsibilities to make sense of and be effective volunteers/activists, unless they happen to be on a career path in politics, the trades unions or socialist societies. That means the vast majority of members struggle to follow what's going on, if they bother at all. even though we are much reduced in numbers.

In praise of checks and balances - boom and bust

Briefly, political debate between the ruling Labour Party and Britain's opposition parties about the wisdom/folly of ending boom and bust seems to have been mangled by the pressures of the 24-hour news cycle. When Gordon Brown as CHX set out to end role of government in creating conditions of boom and bust, it seemed to me his error was presuming that the checks and balances in regulation, and sound banking practice were sufficient to sustain the integrity of the banking system. That is what has been found wanting in the extreme, not the need for prudent government borrowing/spending, which is now being used as a rod for his back as PM. What are the messages coming from the National Economic Council and its regional offshoots? I think we should be told. I can't believe they are urging Labour not to borrow more to help ease recession and get the economy moving again. The golden rules were relevant when the banks were banks, and not casinos risking everyone's savings. When the Tories say they want an Office of Budget Responsibility, perhaps what they should be asking for is an Office for the Prevention of Reckless Banking Practices - that's the real cause of the current crisis not Brown's management of the British economy.

Rebuild the Labour Party - redemocratise

Benjamin Barber writing in today's Guardian makes the case for our current market difficulties focussing on decades of eroded trust and democracy. He concludes:

The lesson? The remedy today lies not simply in de-leveraging but in re-democratising. Recreate social capital and trust will follow.

That's been my cracked bell for the last five years. Now I'm a member of Labour's NEC I intend to clang it more loudly. If we want to win the next election, we practice what we preach and start by redemocratising the Labour Party.

**** a brick: stockpile at record levels?

Is this the indicator that Labour Party leader Gordon Brown should focus on when he has sorted out global financial system regulation?

Brick stockpiles were reported in this morning's Guardian at 1.2 billion in the yards of three major manufacturers - enough to build a city the size of Nottingham - population: 278,000

In an interview from Brussels, where EU heads of state are meeting, Gordon mentioned further measures to boost home insulation to help reduce energy bills, and create jobs. I'm not an expert in the employment outcomes. But my hunch is that a substantial home building programme, and nothing less, is critical to dragging the UK economy out of the jaws of recession.

Labour unity preserved - 42-days shelved

Labour Party unity has been further consolidated by yesterday evening's announcement by Home Secretary Jacqui Smith to shelve plans to detain terrorist suspects for up to 42-days. I opined a week ago that this could be the first test of new-found unity post-Conference. My suggestion was:

Government can maintain its concern on the record, so that in the event of the need for longer powers of detention emergency legislation can be put before the House.

The Home Secretary told Parliament:

I have prepared a new bill to enable the police and prosecutors to do their work – should the worst happen, should a terrorist plot overtake us and threaten our current investigatory capabilities. Some may take the security of Britain lightly. I don’t. The Counter Terrorism (Temporary Provisions) Bill now stands ready to be introduced if and when the need arises. This would enable the Director of Public Prosecutions to apply to the courts to detain and question a terrorist suspect for up to a maximum of 42 days.

Quite so. Honour all round. Now the banking system has been rescued from systemic failure, it's time to focus on (among other things) reviving the economy, cutting taxes for low and middle-income families, building council houses, buying up abandoned private housing developments and pressing energy companies to pass on wholesale price cuts to retail customers.