The Myth of Tory Economic Competance

There’s a well entrenched assumption in British political culture that the Labour Party is spendthrift and the economy is not "safe" in their hands, whereas the Tories are financially prudent and can be relied upon to steer a steady economic course.

This idea is based on the easy presumption, in which there is some truth, that the Labour Party places priority on decent public services over low taxes whereas the Tories will give priority to keeping taxation levels as low as possible and urge the public services to "improve" themselves by being more efficient.  

It is an easy story to put across, Conservative politicians proclaim it solemnly and their sycophantic press supports them with gusto.The economic history of the post war years tells a different story.

After 1945 our governments tried to maintain the £ sterling as a world reserve currency.  This led to what were called "stop-go policies.”  When efforts were made to modernise and stimulate the economy by private and public investment price levels would rise, imports would be sucked in and exports become more difficult to sell. The balance of external payments would go into deficit  and the result would be pressure on the value of the £. The government would then  be forced to organise a "stop" to the renewal of the economy by raising taxes and cutting expenditure, until "confidence" in the £ was restored and the economy was allowed to "go" again. 

This "stop-go" cycle followed a regular rhythm.

Happily, the possibility salvation came in the 1970s with the discovery of oil in the North Sea.  When this came "on stream", rather than having to import oil (a major drain on the balance of payment) we became a net exporter. Here at last was the necessary breathing space and opportunity to build the modern economy and high grade civil society which had so often been frustrated in the past.

Unfortunately, in the same period neo-liberal economics became fashionable.  Margaret Thatcher became prime minister in 1979 and the bonanza of North Sea oil was squandered on financing a cruelly high level of unemployment rather than building the Sovereign Wealth Fund that other beneficiaries created. 

The Thatcher government and its Conservative successors also introduced the policy of "privatisation": selling off publicly-owned  assets ranging from the public utilities (electricity, gas and water supplies) to the railways in order to "promote efficiency" and, incidentally, to finance tax cuts.  Former Conservative Prime Minister Harold Macmillan called it "selling off the family silver."

 Among the privatisations was the selling off of public housing to tenants at discount prices while not permitting local councils to retain the money and use it to build replacement houses.  The aim was to create a "property owning democracy,"  with the property owners more likely to vote Tory than if they had remained tenants. That aspect of the policy has been a failure, as almost half (40%) of the former council houses are now owned by "buy to let" private landlords charging extortionate rents, double what the councils were allowed to charge . 

A knock-on effect of this policy is the huge rise in private house prices.  In my younger days the average mortgage needed to buy a house was about twice the annual average wage.  Now it is about six times the average wage and beyond the reach of most young people without the aid of the "bank of mum and dad." 

An off-shoot of the policy of selling off public housing  has just come to light. In 1996 present TV Star Michael Portillo,  then Defence Secretary in John Major's government, sold off 57 000 homes belong to the MoD but retained the responsibility for their maintenance.  The nett loss to the public purse on this bizarre arrangement is estimated so far to be between £2.2bn* and £4.2bn*

The financial deregulation (the Big Bang) introduced in the Thatcher years  led directly to recklessness in the banking and money market sectors and the financial crash of 2008/9.  Public funds  were used to bail out the banks, and the Tories, when they returned to power in 2010, used the resulting internal deficit in the public accounts as an excuse  to run the period of public sector austerity. This has  led to a much weakened public sector, most notably in the running down of spare capacity in the NHS, which has made it incapable of maintaining many of its normal functions while dealing with the pandemic.

 The financial irresponsibility of the Johnson Government  in dealing with the pandemic has been and continues to be scandalous.  Highlights, or rather lowlights, have been the £37billion* spent on the allegedly “World Beating” test and trace system which failed miserably.  Other contracts were given via a VIP lane, exclusive to those with contacts to Tory MPs and Peers, for masks, PPE and other equipment and services, to companies with no or little experience of the product and which often failed to deliver.

 The money spent on Chancellor Rishi Sunak’s  “eat out to help out” scheme, which probably helped to spread the virus, pales into insignificance compared with the irresponsibility revealed by Lord Agnew’s resignation  last week, in which, among other things, “Business Bounce Back Loans” to help companies remain solvent during lockdowns,  were given out  without adequate checks. More than 1000 which received one were not even trading when Covid struck.  There were multiple applications from the same addresses.  One of the purposes of the scheme was to maintain employment. 1 500 loans to firms were made.  There are only 1 400 private sector firms in the UK with employees.  The total to be written off in fraudulent claims is estimated at £4.3 billion*

In summary, the economic and financial errors made by successive Conservative governments, particularly during and since the Thatcher era are:

1.     Squandering of the income from North Sea Oil on financing a high level of unemployment rather than building up a Sovereign Wealth Fund.

2.    Privatisation of public assets, particularly public housing at knock-down prices and without replacement, helping to lead  to the present housing crisis

3.    Financial deregulation leading to the 2008/9 financial crash.

4.    The post-2010 austerity regime which weakened the public services, especially the NHS

5.    Reckless financial irresponsibility, especially that which favoured their supporters,  in dealing with the COVID pandemic

And I haven’t even mentioned Brexit.

*      Just to put these billions into perspective, the amount re-announced this weekend which is going to transform 20 (sic) cities and towns as part of the “levelling up” programme (presumably in order to distract us from “Partygate) is a mere $1.5 billion

T

Holocaust Memorial Day

 Primo Levi arrives at Auschwitz.

". . .[T] whole process of introduction  to  what was for us  a new order  took place in a grotesque and sarcastic manner.  When the tattooing operation was finished, they shut us in  a vacant hut.  The bunks are made, but we are  severely forbidden to touch or sit on them: so we wander around aimlessly  for half the day in the limited  space available, still tormented by the parching thirst of the journey.   Then the door opens and a boy in a striped suit  comes in, with a fairly civilised air, small, thin and blond. He speaks French and we  throng around him with a flood of questions  which till now we have asked each other in vain.

But he does not speak willingly; no one hear speaks willingly.  We are new, we have nothing and we know nothing; why waste time on us?  He reluctantly explanations to us that  all the others are out at work.  and will come back in the evening.  He has come out of the infirmary  this morning and is exempt from work  for today.  I asked him (with an ingenuousness  that only a few days later  already seemed incredible to me) if at least  they would give us back our toothbrushes.   He did not laugh, but with his face animated by fierce contempt,  he threw at me    'Vous n'êtes pas à la maison.'  And this is the refrain we hear  repeated by everyone.  You are not at home, this is not a sanatorium, the only exit is by way of the Chimney. (What did it mean?  Soon we were to learn what it meant.

If This is a Man,page 31, Abacus edition, 2013.

Worth thinking about when in the comfort of my   home I  clean my teeth tonight.

How long before we learn that we are all the same species, with the same feelings, hopes and fears, living  together on the same planet, with plenty for everyone if only we'd learn to respect each other share it fairly.

Bye-bye Johnson?

The skids are now firmly under Prime Minister Johnson and his days in office are numbered. He may bluster his way out of his immediate predicament (I'd put the odds at about 50:50) but his chances of surviving in office through to the end of the year, never mind the parliament,  must be less than 10%.

The surprising, and sad, thing is that he has survived so long.  He was elected leader of the Conservative Party, and therefore appointed Prime Minister, In July 2019, so now, (at the end of January 2022), has held the office for a full 30 months.  For most of that time he and his party have had a firm lead in the opinion polls, and it has only begun to crack in the last three month or so.  How has he lasted so long?

The answer exposes the inadequacy of the British political system and culture.

It is not that we haven't had  numerous and credible warnings that he and his style of leadership (or lack of one) make him totally unsuited for high office in the first place. 

Among other things this was made abundantly clear by the resignations of not one but five of the most senior civil servants in his first few months.  All were permanent secretaries, each the epitome of probity and responsibility, people of high intelligence and ability who had risen to the top in what was once regarded as the most efficient government operation in the world.

Each resignation was a powerful signal that the current operation was not a serious or suitable way to run a country. 

They were:

Sir Philip Rutnam, Permanent Secretary to the Home Office, resigned February, 2020

Sir Mark Sidwell, Cabinet Secretary and Head of the Home Civil Service (the grandest panjandrum of them all), resigned June 2020.

Sir Simon McDonald, Permanent Secretary to the Foreign Office, announced his intention to resign, also in June 2020

Richard Heaton, Permanent Secretary to the Ministry of Justice, resigned July 2020

Jonathon Slater, Permanent Secretary to the Department of Education, resigned August, 2020

These are not lightweights, or chancers or opportunists, but among the best qualified and most experienced administrators in the world.

A summary of the errors and failing of the Conservative Governments since 2010 is  given in an earlier post.

 Perhaps the real question is not "Why has Mr Johnson lasted so long as Prime Minister?" but  "Why was he chosen for the office in the first place?"  

 An excellent article by Aditya Chakraborrty explores this.

The selection of a Conservative leader is in two stages.  First the sitting MPs (at the time those elected under David Cameron's leadership in 2015) narrow the contenders among their numbers  down to two "front runners."  These MPs are the ones who, fully aware of Johnson's  "on-off relationship with the truth," his profligacy with public money on silly projects as Mayor of London, his inadequacy as foreign secretary, put him on the ballot paper, solely  becasue he had the "spark" of an election winner.  

They should have known better.

The largely elderly, and comfortable, Tory party membership, with perhaps less excuse, gave him their confidence.

The UK's political problem is greater than Mr Johnson, and will not be solved  whoever from the Tory ranks replaces him..

Our Labour Party, we Liberal Democrats, the Greens and many other parties agonise over our philosophies  and beliefs, and what it is we actually want to do in government.  

The Tories suffer no such agonies, they just want to be the government, and will say and do  and say whatever it takes to win.

In the competition for winning, the public and media place personality over competence and beliefs.  Hence the colourful "chancer" takes precedence over the stolid plodders.

 Let us hope that, out of the disaster  of the present government comes a realisation that  for serious politics we need serious politicians.

Rubbing Russia's nose in it.

I claim no expertise in foreign affairs; nor do I have any instant solutions on offer to avert the current prospect of war between Russia and Ukraine,  which could easily expand to involve the Western democracies.  But I do believe  the present dangerous situation is the result of a failure of diplomacy, not in ancient history  but in my lifetime, and a change of approach is needed.

 In defeating Nazism in the Second World War the United States suffered                       407 000 military casualties, the UK 383 000 military casualties and France 210 000 military casualties.*

 The losses incurred by the Soviet Union  in defeating Hitler were on an altogether different scale, estimated as between 8 and 11 millions.

The Soviet Government had every reason to be suspicious of their Western Allies.  After all, "we" had intervened, albeit sporadically, on the White Russian side in the Russian Civil War, (that, I emphasise, was before my lifetime) in which the Bolsheviks eventually prevailed.  And there was a strongly held view that the Western Allies may have  delayed their invasion of Normandy and the opening of the Western Front, to enable the Soviets armies to be weakened if not exhausted on the Eastern Front.

Be that as it may the Soviet Union's leaders and peoples were entitled to expect some sort of gratitude from their Western Allies, and considerable respect.

 Sadly, rather than moving along  in happy harmony the victorious allies grabbed the bits of Europe they had occupied.  The Soviets imposed their "system" on the East, like it or not, and the Western Allies imposed  "our "system on the West , assuming that they liked it, which by and large they did (though there were "iffy" moments in France and Italy and Greece.)

The "Cold War" continued for the next 35 yeas or so.  The NATO military alliance was set up to defend the interests of the West, the European Union established to develop our economies.

Around the end of the 1980s the Soviet political and economic systems collapsed.

Now was the time to show the proud Russian people and their government respect and offer constructive assistance if required.

Instead, not to put too fine a point on it, we gloated.

Hard line monetarist economists surged into the Soviet area and urged privatisation.  Kleptocracies developed and oligarchs found, and still find,  the London (Londongrad!) a convenient centre in which to launder and hoard their gotten gains.

 Former Soviet satellites were invited to join NATO, the very alliance set up to oppose their  Soviet masters (though there is some talk of a secret undertaking  that this would not happen.)

 Formers satellite economies  (largely at Margaret Thatcher's instigation) were welcomed into the European Union.

 We rubbed the Russian government's nose in it.

 Like previously weakened sates (eg Germany in the 1930s) they turned form tipping their toes into democracy to the election of a strong man.

 We now need tact and diplomacy to get us out of the predicament we have created.  This will involve showing Russia "some respect."

So far we have had the opposite. 

*This list is not meant to be comprehensive.  i know there were lots more countries involved and millions of civilian deaths.

 

 

Funding the BBC

 

 Although Culture (sic) Secretary Nadine Dorries' announcement that the BBC's licence fee is to be frozen for the next two years and replaced by something else soon after. is clearly a part of the government's desperate attempt to distract us from the " Partygate" stew in which Prime Minister Johnson  is drowning, the bullying threat is not a new one. 

In the years since 2010, during which the Conservatives had been in power, the funding  for the BBC has been reduced in real terms by no less than 30% and there has been constant discussion of a replacement for the Licence Fee on the grounds that it is anachronistic  (receiving TV or Radio programmes is no longer dependent on the ownership of a television set or radio) and regressive (the poorest households pay the same flat rate as the richest households - this concern of the Tories for the plight of the poorest is touching).

 Whilst the above "technical inconsistencies" are true, the real reason behind the Tories' opposition to the BBC is probably two-fold:

 1.  The BBC's success  (its programmes win hands down over its commercial rivals in any "ratings" comparison) is an affront to the Tories' entrenched idealogical belief that the public provision of  goods and services is inefficient  and always inferior to private provision motivated by the profit motive and the so-called disciplines of the market.

2. The Tories' private sector backers, such as the Maxwell Empire, are anxious to get their profit-maximising  hands on it (ditto the NHS).

If you want "stick and lift"* then read Barwise and York, "The War Against the BBC" (Penguin Books, 2020).  

 The fair but adequate financing of public broadcasting is not just a problem in the UK, but affects all economies in which it exists. Accepting that  the licence fee may no longer be the most appropriate way of financing it Barwise and York examine some of the alternatives  (pages172 - 9):

A subscription service: The BBC would compete with the private sector (eg Skye, Netflix) on equal terms. This option was considered by the Department of Culture, Media and Sports (DCMS) Committee  in 2015 as offering no evidence that the BBC's public service and quality functions would be improved, or even maintained.

A household levy: This was the DCMS Committee's preferred option.  It would apply to all households regardless of whether they owned a TV or radio set or had access to  the Nett. There could be exemptions for student households, second homes  and certain social security recipients.  It is a bit hard on the tiny fraction of households in which no one genuinely ever uses a radio or television, but these must be very few indeed. It is the system used in Germany, will be introduced in Ireland in 2024, and in France the levy is collected along with their equivalent of Council Tax.  If this were adopted in the UK it could be varied according to the Council Tax band, thus making the levy more progressive.

An earmarked tax: This could be an additional sales tax on any equipment capable of receiving or enhancing broadcasting in any of its forms.

An additional electricity tax:  Given the crisis of fuel prices at the moment politicians would perhaps be wise to put this one on the back burner, but it is attractive in that since richer households probably use more electricity this would make the levy more progressive.

There is a very detailed parliamentary report on all the options which can be read here:

https://publications.parliament.uk/pa/cm5801/cmselect/cmcumeds/156/15609.htm 

 I've only skimmed through it (the printing is very small) but the writers do warn that whatever change  is proposed will produce snags, some expected, perhaps some surprises.  This could be a case for adopting Chesterton's Fence (as raised by Anonymous in  a comment to a previous post).  

Tory politicians might consider it best to leave well alone, as there may be a parallel here with the rates. These were mired with anomalies but had existed since the Elizabethan Poor Law of 1601 and  we had got used to paying them.  Mrs Thatcher's determination to abolish them and  introduce the Poll Tax  led to riots and her defenestration.

*"Stick and lift" is a phrase used such as my grandmother's generation (born 1870) to mean "all the gory details."  It is not in Brewer's "Dictionary of Phrase and Fable" so may have been peculiar to Yorkshire, or even just this bit of the West Riding.

Labour's Monoply Tendency

In an article in the Guardian  on Monday our Batley and Spen MP, Kim Leadbeater (Labour),  referred to her murdered sister's  well publicised  theme; "We have far more in common than that which divides us." 

I'm pleased that the "in common" tendency in the Labour Party is alive and well, but regret  that  it doesn't as yet seem to permeate the majority of the party, still less the party managers.

At our Batley and Spen Liberal Democrat AGM last week our guest speaker was a friend of long standing, Baroness (Angie) Harris of Richmond,  She described in detail the efforts  being made in the House of Lords to modify the damage to such building blocks of our democracy as our right to protest, some people's right to vote, the modest improvements made so far in our  electoral system (second preference votes for Police and Crime commissioners),  and claimed, more in sorrow than in anger that, "the Labour Party rarely* supports our amendment, though they expect us to support all theirs."

This is an unfortunate feature of our modern Labour Party: that good ideas are only good if they come from the Labour Party itself  How different from the Labour Party of Clement Attlee's day, which eagerly seized on and implemented the social security policies of Liberal William Beveridge and the macro-economic management policies of Liberal John Maynard Keynes.

Two examples of this "we have the monopoly of good ideas" tendency are evident in Labour's behaviour during the 2010-15 Coalition.

Labour had in their manifesto proposed the Alternative Vote (AV) to make the electoral system more representative. As part of the Coalition Negotiations the  Liberal Democrats obtained the right to hold a referendum on the reform of the electoral system.  Although AV is not the preferred reform for most Liberal Democrats, not wanting to let the best to get in the way of the possible, we chose AV for the Referendum,  in the expectation  of Labour's support.  

We didn't get it.  Their leader Ed Miliband was in favour but the party would not campaign for it, the Tories used their media muscle  to oppose itand the referendum was defeated.

It is perfectly possible that, with AV in place, David Cameron would not have won a majority in 2015, and almost certain that the Tories would not have the majority of 80 which, despite their incompetence, will keep them in power for at least  another two years.

Similarly the Liberal Democrats in the Coalition Negotiations obtained the right to  propose a reform of the House of Lords. Again,it wasn't perfect.  Again, the Labour Party, although vaguely in favour, refused to vote for the parliamentary time necessary  to debate the bill.  Had it been passed  it would have been impossible for Mr Johnson to add to an already inflated House  82 new peers, which include his brother, Lord Frost, and 13 former Tory Treasures who had each contributed at least £3m to party founds. 

Not only wilt they  now be law makers for life:they'll now each receive £310 for every day they sign  the attendance register   (Unemployment benefit is £71.70 a week)

All is not lost.  I forget who it was, but a commentator recently speculated that, whatever their parties' hard liners thank, Ed Davey and Kier Starmer seem to have an understanding that they will not ostentatiously campaign in those seats where  the other has a better chance of winning.

Personally I would like to see the Liberal Democrats, Labour , the Greens, the Nationalists and anyone else remotely progressive   form a grown up alliance for one election only to introduce proportional representation by single transferable vote in multi-member constituencies.

Sadly our democracy does not yet seem to be mature enough for this adult approach so, not letting the best get in the way of the possible, will the die-hards in all these parties please recognise that we really do have "far more in common than that which divides us."  Otherwise we are lumbered with the likes of the shambles of the present incompetent  corrupt short-termist self-aggrandisers for decades to come.

 

* She may have said "never," I'm relying on memory. 

Cover-up Britain

 

Last night I watched the first episode of a television "docu-drama", "Anne," which covers the quarter-century struggle of Anne Williams, mother of the 15 year old Kevin, one of the the 97 football enthusiasts who died as a result of the mismanagement of the crowd in the Hillsborough Stadium in 1989. This episode covered the initial response of those responsible (it was al the fault of drunken hooligans in the crowd) and the sinister pressure on Mrs Williams by "officials" to drop her search for the truth about what had happened to her son.  There are another three episodes.  

As far as I know, although the truths that the police lied consistently over a long period, and council officials responsible for the safety of the ground were negligent, have all been confirmed, no one was ever never brought to book.

Ghastly as the results were, anyone can make a mistake. The really humiliating indictment of the quality of our civic society is the persistent efforts of officialdom to cover up its errors, escape responsibility, and in all probability retire on a comfortable pension.

A similar story  surrounds the failure of the police to investigate thoroughly the murder of the black teenager Stephen Laurence just a few years later in 1993, and the long  struggle his family had over 19 years to force the police to investigate properly and prosecute his attackers.  

In a very different context, over this weekend Tony Blair, our former prime minister,  has been made a Knight of the Garter, KG, the poshest of the Orders of Chivalry,  So that's all right then.  He  who misled the House of Commons and took us into an illegal war in Iraq which caused around 200 000 "violent civilian deaths"  gets his reward after all.  No mistake can be big enough to rule out the customary reward.

There is nothing new in this.  The other prime minister, Anthony Eden, responsible for the other major  British post war humiliation, the illegal invasion of Suez, also got a KG and an earldom to boot.  Well, at least he also had the reputation of being an effective foreign secretary and popularised a particular style of hat.

But it does seem to me that the British establishment is adept at using its skills to assure us that, whatever the facts turn out to be, all is really for the best in the best of all possible systems.

Part of the technique seems to be to delay processes of investigation for so long that, by the time reports are made, the issue has passed out of topical interest.  Will that be the case when the horrible deficiencies, greed and indifference to regulations  which lead to the Grenfell tower-block fire are finally confined?

 The present government has been keen to  delay any inquiry into their handling of the  COVID -19 pandemic to well into next year.  By the time it  ends it's pretty certain that the Prime Minister Johnson will have been ditched and the caravan  will have moved on. The delays, the misjudgements, crony contracts, waste and excess deaths will be "history." 

 Maybe Mr Johnson (or will he be Lord Johnson 2 by then?) will get his KG too.