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.

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.

 

 

 

Living wage: time for Labour to get serious

A significant shift in business thinking appears to be underway when it comes to pay. Guy Stallard of KPMG is a leading advocate for the living wage and serial tweeter @Guy_Stallard. Today he was egging on Labour's shadow spox for Business, Chuka Umunna, and Work and Pensions, Rachel Reeves, ahead of today's vote on Labour's plan to increase the National Minimum Wage to £8 by 2020. Stallard thinks political leaders should be congratulating Living Wage employers for doing the right thing. We won't have long to wait to see if any politician applauds those enterprises, large and small, charities, and publicly quoted that are proudly accredited living wage employers.

Today's debate highlights the feebleness of Labour's current position over pay in response to the cost of living crisis. It stems from a leadership failure to be clearly define the Labour Party's new relationship with the business communities post-crash.

Pay - a living wage - is an opportunity to be crystal clear about that new relationship. Pro-business, yes, but. There are various ways in which government can shift behaviour. It requires budgetary commitment. Government itself must become a living wage employer. That means all its contractors have to do the same, not just for the purpose of securing a particular contract, but in order to bid for government work at all.

Then there is the rest of the economy, where there are still some firms acting illegally and not even paying a NMW. There has to be a blitz on non-papers, and others who have found devious ways of cheating their employees.

Next, there are carrots. A year ago Ed Miliband promised tax breaks to reward firms that do pay a living wage, and those that need some encouragement. They would have to pay some taxes in the first place to enjoy any benefit. But that issue is outside the scope of this post.

Then there are those businesses that cry poverty. Well, handsome is as handsome does. There is no reason in practice and every reason in principle why reluctant businesses should be audited or means-tested. Failure to pay a living wage results in demands on the public purse in the form of working tax credits. It is the businesses that are the scroungers and should be clearly labelled as such, not low paid workers.

There is precedent as currently being shown in Ecuador as reported recently by Left Futures http://www.leftfutures.org/2013/02/living-wage-ecuador-shows-the-way/

Ed Miliband has an opportunity to set out this new approach in Living Wage Week early next month. Don't hold your breath.

Devolution: opportunity for Miliband to shed his Ball(s) and chain?

Labour leader Ed Miliband's timidity, or is it understandable caution, can't propel our party to an overall majority at the General Election next May. The core vote is too fragile, especially in those diminishing Labour heartlands.

He has to ask himself how can Labour can appeal to them once again.

Miliband has shed some Blairite baggage. Iraq was't right, and so on. But he continues to be dragged back from being an inspiration leader by his very own ball and chain - aka Balls and Cooper.

To reunite the Union that makes up the United Kingdom means finding a way of enabling all those on the peripherary to believe that at least the Labour Party is listening to them. The only way I can think of is tearing up the way UK budgets are set and inviting everyone to participate in making a Growth4All budget.

The devolved nations already have the infrastructure in place to set their budgets, if not the means to finance them directly yet, except in a very minor way in Scotland. There is a mood among northern cities to have their say. But there is neither encouragement, nor the institutional framework to facilitate consensus building. The last minute horse-trading by party leaders ahead of the Scottish independence referendum may have secured a NO vote, but added to the risk of clumsy fragmentation.

Miliband could stop the rot. But it means shedding that ball and chains, and spelling out how Labour wants a UK consensus about a Growth4All budget that must be set out before the Summer Recess 2015. Every elected Labour Party representative in local, regional, and the devolved nations has a part to play in encouraging discussion, debate and resolution of budgetary priorities. Those debates should be being encouraged in every Labour Party branch, constituency and local government unit.

If the chancellor of the exchequer in waiting doesn't like the idea, tough.

Devolution: Labour action - branch resolution, waste of time?

Labour Party leader Tony Blair sought to kill off the art of resolution writing by imposing a new method of policy-making, misleadingly called Partnership in Power. The system was adopted by the 1997 Annual Conference after a historic UK General Election victory. Hapless members or at least their Conference delegates, carried along by the euphoria, suspended critical judgment and signed away collective freedom of expression.

In future policy was to be made through commissions, and deliberations of the National Policy Forum (NPF). The NPF was and remains dominated by leadership placepersons or self-appointed loyalists. That is despite the introduction of one-member-one-vote elections for constituency Labour Party delegates, in the full face of leadership opposition in 2009.

The last remaining vestiges of resolution-writing persist in the form of Contemporary Issues (no more than 10 words) with a 250-word backgrounder aka a resolution, or an Emergency Motion.

So how are members of a local Labour Party branch expected to get their heads round a seemingly complex issue like devolution and the aftermath of the Scottish independence referendum? From a leadership point of view, we are not expected to. Fullstop. Shut up and accept the leadership line. To a greater degree that works with the Parliamentary Labour Party.

So there in a few sentences is a process-driven insight into calls for devolution. Treat people like idiots and there is a risk of revolt.

The resolution I published yesterday here followed concerns raised pre-Conference by branch members about the lack of debate inside the Labour Party about of either demands for devolution or action required post-referendum, and my own reflections since. One of my comrades who was most keen to see the issues discussed emailed me after the result of the referendum highlighting the results for independence in local authority areas that form part of the so-called Labour heartlands in Scotland.

Risks to the Labour vote in Scotland in the run-up to the 2015 General Election can not be understated. To rise to the challenge, Labour leader Ed Miliband needs to hear from disparate voices inside his party and those that support Labour's values.

Resolutions are one way of providing such expression. Amendments are a transparent means of highlighting differing points of view to that proposed.

 

 

 

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.

Careering On - Building a One Nation Labour Party

Dear Ray

Season's greetings

I don't envy you this task. On the one hand we have our party leader, Ed Miliband seeking to position himself against powerful vested interests, and on the other an anti-union agenda being run by …..powerful vested interests. It would be easy to be distracted by the context in which your assignment was set.

As you know I prefer to think positively. So this report you are preparing is an opportunity. To build a one nation Labour Party must surely involve membership. At the heart of this challenge are questions about the role of political parties and their members in modern society.

One thing that is a given is “The Labour Party is a democratic socialist party” - the first sentence in the revised Clause IV of the Labour Party's constitution. To the best of my knowledge you will not be recommending any change there.

So let's start with political parties themselves. What are they for? For me, they are unique, the only institutions in a democratic state able to form a government, decide the policies that reflect the values of those being represented, and empower their elected representatives to make the law to enact those policies.

So any credible recommendations to build a one nation Labour Party must surely have a paying mass membership at their heart. Anything less suggests the right of a (necessarily) small number of career politicians to decide what is best for the rest of us.

Benjamin Franklin said: "In this world nothing can be said to be certain, except death and taxes." Personally, I have never had any reason to doubt the certainty of death. But taxes? Their certainty begs questions about rights to impose and, if legitimately, how? Bearing in mind, today is Christmas Eve, one of the New Testament gospel authors, Luke, tells us: “...there went out a decree from Caesar Augustus, that all the world should be taxed.”

So Ed decreed that a one nation Labour Party should be rooted deeper in the lives of working people and their communities – but to what ends? To reinforce prejudice and inequality? Of course not. And paid for out of general taxation? Ah, state-funding, so tempting.

Like too many leading figures in public life, Ed is a career politician. In building a one nation Labour Party, he has to face these problems head on. Career politicians are not the creatures of conjurers. Political party membership is the starting point for power-crazed careers as well as keeping them in check, as the Labour Party knows very well from recent experience.

So I'm looking forward to you promoting mass membership as the centre-piece of your final report. That leads rapidly on to affordability – the current full rate is too high. And making membership compelling – very difficult if the first thing membership involves is freezing you out of selections.

Good luck

With best wishes

Despair: back of the class for Balls

Happy New Year, comrades.Tory-lite thinking is alive and well in Ed Miliband's shadow cabinet. It is too late for me to revise my ranking of our PM wannabe in Labour List's end of year survey. He would have got a Poor rating instead of Excellent for associating himself and my party with Ed Balls thought disordered contribution to the debate on welfare reform published on the PoliticsHome website here in the early hours of this monring.

Just consider the headline: Britain needs welfare reform that is tough, fair and that works. To what level of prejudice and ignorance does the Labour Party have to stoop to secure an overall majority at the next election?

Wouldn't a headline such as : 'Britain needs real welfare reform that is universal, consensual and compassionate' have struck a more appropriate note?

Balls fails to address the underlying causes of either long-term unemployment or benefit dependency in his capacity as shadow chancellor of the exchequer (SCHX to the political cogniscenti). He should have spent a bit of time over the Christmas holiday rereading Harold Wilson's 1963 conference speech in which he said:

"the Britain that is going to be forged in the white heat of this [technological] revolution will be no place for restrictive practices or for outdated measures on either side of industry"

The technological revolution continues apace and Balls wants to offer more call-centre/shelf-packing jobs to those plagued by long-term unemployment, with no guarantee of a living wage, or a career. He fails to address the continued dependence of business on state-subsidies. Worse there is a presumption that:

Of course we need spending cuts and tax rises to get the deficit down, but with the flatlining economy sending borrowing up by 10 per cent so far this financial year it’s clearer than ever that you cannot get the deficit down without a plan for jobs and growth which works.

We only need spending cuts, because the economy has been flatlining under the ConDem coalition, and successive governments, including new Labour, failed to address, not just, unfairness in the tax system, but a breakdown in the tax collection system to the benefit of the rich.

Balls then posits three tests for welfare reform:

First, it must pay more to be in work than live on benefits, both for the individual and the Exchequer.

Second we must get tough on the scourge of long-term unemployment by matching rights with responsibilities.

Our third and final test is this: any welfare reforms must be fair to those who are in work or genuinely want to work.

All of this is predicated on a mythical mass of scroungers. Balls fails to tackle what most reasonable people recognised a long-time ago. Britain needs a universal child care system free at the point of delivery - both to encourage a work-ethic in the young, and enable everyone who wants and is able to work to do so without crippling child-care fees.

As for the Tory dog-whistle about rights and responsibilities, isn't it the responsibility of the state to ensure, for example, the economy is delivering full and long-term employment? What's Balls got to say about that - a job guarantee to stack shelves... A guarantee that cannot by definition be delivered by government in a mixed economy. Worse, he promises that tackling long-term unemployment will be a top priority. Well, I suppose that's understandable if it were in the context of restarting the economy, universal childcare, living wage, fair taxes. I could go on.

I have lost count of the number of schemes dreamed up in Whitehall to tackle long-term unemployment which in too many instances have proved to be revolving-door capsules for those affected.

Then Balls adds insult to injury by rounding on 'the minority who try to cheat the system'. Was that addressed to the financial services sector, or the dining clubs of Westminister and Pall Mall? No, of course not. They were and remain the untouchables.

Back of the class for Balls.