Peter Kenyon

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

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.

Don't forget the ATMs - they still work thanks to Labour

A Twitter follower asked me a short while ago if I had seen the BBC 2 programme screened on Saturday evening about the Treasury. I hadn't. But I have now, thanks to BBC iPlayer. HM Treasury was part of my life in the period 1977 to 1982, when I was a financial reporter at Reuters with an unusual beat that included the body politik, in the form of a Press Gallery place and membership of the Parliamentary Lobby. So many of the characters from that era were contacts. (For the avoidance of doubt, their secrets remain safe.)

What was compelling for me was the footage of the current Chancellor of the Exchequer (CHX). If you haven't seen the programme his brief remarks 1 min 00 sec to 06 sec in encapsulate what every voter needs to know. He describes what was at risk. Typical Alistair, it is understated. Their impact on the 2010 election ought to be decisive. You don't have to speculate whether he is real or serious or plausible. He's been there. He understood what was at stake. Labour, in government, acted appropriately. We were all able, if we had anything in the bank, to continue ot withdraw cash from the ATMs. Fewer jobs were lost than forecast would be, even under a Labour government, Fewer homes were repossessed than forecast, even under a Labour government. As for the future Labour has already set out its tax and spend proposals. No bribes, no snake oil salesmen, just Alistair - survivor. And, of course, Gordon and the rest of team Labour.

Such a pity that human nature being what it is that Labour risks a pasting in the 2010 general election. Just 32 days to defy the odds. That's 32 more than Team Labour had to grasp the banking crisis nettle and act when the telephones rang in October 2008.

Salient messages: Labour kept the cashpoints working or GB tears?

I'm grateful to one of my NEC colleagues for suggesting at our last meeting that Labour should remind voters that a Labour government led by Prime Minister Gordon Brown kept Britain's cash-points working when the banking crisis struck.

If we could afford posters it would make an interesting visual for the nation's billboards, compared to the notorious Saatchi & Saatchi 'Labour isn't working' campaign in the run up to the 1979 election. Why not stickers? Sponsored by each of the banks that was rescued? Wouldn't that help remind the electorate of the realities of market forces on each of their ATMs, and Labour's role in keeping the ATMs in service?

I can't help thinking those would send much more salient messages about the Labour Party than news that Brown wept in an interview with Piers Morgan to be broadcast next week. I'm wondering how many other people think private grief is best kept.....private.

Observer/Guardian wakes up to Tobin tax story

Good to see that the Grauniad's Sunday stable-mate, the Observer picked up on the Tobin Tax story in its editorial column today

I chided the Economist for missing it on Friday,

I'm not sure that I share the Observer's rather unimaginative conclusion:

The real obstacle is the endurance of the ideology that believes in deregulated, untaxed, ever-expanding global capital markets as an end in themselves. It is clear from the past two years who wins and who loses when such a creed is allowed to dictate government policy. It is also clear, from his endorsement of a Tobin tax, that Mr Brown is no longer taking that dictation.The conversion has probably come too late in domestic political terms. It is derided by many Conservatives as cynical City-bashing ahead of an election. But if Mr Brown secures global agreement on a Tobin tax, his motives are irrelevant. The policy is a good one; it would make a worthy legacy.

As a member of Labour's National Executive Committee representing grassroots members, I think its my job to help develop a different political narrative. We want the vast majority of the electorate to appreciate what's going on here when it comes to deciding where to put their cross on the ballot paper whenever the General Election comes in 2010.

I hope my avid readers among 'the powers that be' will remember the 'X' goes against the person representing 'The Labour Party', not Gordon Brown. He has merely been won round to an idea whose time has come. 

Remember that quote from the back of Labour Party card.

[The Party} believes that by the strength of our common endeavour we achieve more than we achieve alone, so as to create for each of us the means to realise our true potential and for all of us a community in which power, wealth and opportunity are in the hands of the many, not the few.’

Economist newspaper reveals political bias, misses story

The Staggers blog has picked up the cover of the latest issue of the Economist newspaper and concluded that it's running with the the rest of the right-wing press as far as the next British general election is concerned. I think the Economist goes to press late overnight Thursday/Friday, but surely that is no excuse for missing the real story.

Was the Editor so pre-occupied with the cover design that s/he missed the significance of the Anglo-French bilateral meeting in London between Prime Minister Gordon Brown and President Nicholas Sarkozy?

There they were meeting less than a mile from the Economist's offices possibly laying the ground to make sure the bankers really do pick up the tab for the crisis through a 'Tobin tax' on transactions.

What will the Economist say if the US Treasury Secretary is won round, the IMF falls in line and the bankers are obliged to pay up?

I look forward to much grovelling in St James's.

 

Peston calls time on banking crisis

Time to think positively? It's official. Well, Robert Peston has a view. See here.

My tuppence worth (still awaiting moderation at the time of writing) was:

10 October 2008 was an important date too. It changed our politics. Under a Labour Prime Minister the banking crisis was then tackled head on not just domestically, but internationally.

A seven-month turn-round?

Will he get the credit?

Last of the Blairites speaks

I have been wondering what had happened to Alan Milburn in the Labour Party rent-a-Blairite line up. Here is the answer.

This is not the moment to examine Milburn's contribution to the statification of the NHS. But his understanding of the progression of the progressives starting with Thatcher (entirely predictably if you are a neo-conservative) is set out thus:

In the 1980s the new idea that ushered in the Thatcher/Reagan era was for power to be vested in the free market and its policy expression was privatisation. In the mid-1990s the new idea that ushered in the Clinton/Blair era was for power to be vested in reformed institutions and its policy expression was modernisation.

Now the new idea is to vest power in the citizen and the community and to make its policy expression empowerment.

Wakey, wakey, Alan. First, you have to have a banking system that works. That requires the state, and regulation. More of. Get it?

Wacky barber backs 50p tax hike

Just back from a cheerful chat with my local barber who knows about my political proclivities. So yesterday's budget was a natural for discussion.  Imagine my surprise at the welcome reception the 50p tax rate announcement got.

He was a bit puzzled about all the money to bail out the bankers. So I asked if he'd thought about what might have happened if our Labour government hadn't propped up the City. In a trice, he was after the 'parasites'. If they don't want to pay up "good riddance". Meanwhile, the salon filled up at £23-50p a head.

So, Alistair, that's at least one voter who's got the message.

Was Brown bonkers to bail out the bankers?

It's two weeks since I last blogged. My only excuse is fighting an election campaign. Not your usual Town Hall tussle. This is the Labour eight against the Guildhall (club, line and sinker). You can read about it here. Barring unforeseen hitches, we will be fielding eight candidates in six wards enabling over 50% of the total electorate of 21,332 to choose who represents them in a contested election. Tomorrow is just the deadline for nominations. If there are contests (as we hope) in at least the six wards (out of 25) in which we are standing, then voting for 41 out of 100 seats on Common Council will take place on Monday 16 March. Among the hot topics are the state of social housing and was Brown bonkers to bail out the bankers? On the latter subject (sort of) I was quoted in the Guardian here. It read as though I was blaming Common Council for the recession, triggered as it was by systemic banking failures. I was simply trying to draw attention to the dual role played by leading City figures who act as ambassadors for London as a world financial centre, and also run the local authority known as the City of London on behalf of local residents and businesses. 

Our Manifesto says:

Mismanagement of financial institutions has put people’s savings at risk. Labour members of Common Council would maintain a proper balance between the interests of residents and developers.

In short, we don't think our Prime Minister was bonkers to bail out the bankers. We hope our modest campaign will give the wider electorate an opportunity to appreciate the far greater catastrophe in terms of lost savings, pensions and jobs that would have followed if Brown had not been decisive and intervened back in October last year.