Thursday 25 August 2022

Labour's post-war failings

 A recent post outlines the many failings of the UK's post- war Conservative governments.  A friend suggests that, in fairness, I should construct a similar list for Labour.  Although I suspect he is a former Tory supporter, he speculated that the list would be shorter.  It is (though I'm open to suggestions for additions), though largely a list of missed opportunities rather than deliberate errors.

1.    1.  Over-centralisation in creating and in running of nationalised industries.

2.     2. Antagonism towards employee representation on the boards of both publicly and privately-owned industries.  This came largely from the unions, who preferred to preserve their monopoly of negotiating with the employers, thus preserving conflict rather than generating co-operation.

3.    3. Disastrous partition of India at independence. Perhaps this was not so much the responsibility of the Labour Government, but rather the cumulation of the policies of “divide and rule” carried out by Imperial governments over the decades, in generating antagonism between previously happily co-habiting Hindus, Muslims, Sikhs and other faith groups.  Labour were , however, "in charge" at the time.

4.    4. Failure to participate in the setting up of European Coal and Steel Community, Common Market, (Gaitskell’s “1000 years of history” speech,) Harold Wilson’s “re-negotiation”, ambivalence to EU membership in the referendum - and counting. .

5.    5. Failure to devalue in 1964.  Instead, fighting to preserve the $US/£ exchange rate at $2.80 to £1.  Hence the plan to build a “New Jerusalem” was unnecessarily constrained  by a constant battle to balance external payments. Defeat followed in 1967 when the £1 was devalued to $2.40.  Under Mrs Thatcher it actually reached parity (£1=$1) but Tories prefer not to mention that.  It now bumps along at around £1=$1.20.  So much for World Beating Britain over the last half century.

6.    6. Continued failure to promote co-operation rather than conflict in  industrial relations (“In Place of Strife”  reform proposals, again largely scuppered by the trade unions.)

7.    7. Blair/Brown Governments’ failure to use their massive majorities to achieve:

a)    Substantial devolution (eg home rule with tax-raising powers) to Scotland and Wales;

b)    Electoral reform;

c)     Devolution of more powers to English regions or local government;

d)    Democratically elected second chamber;

e)    Reform of company law to include responsibilities to community and employees as well as profits for share-holders.

8.    8. PFI.  This scheme for enticing the private sector to fund public projects (hospitals, schools) was actually introduced by John Major’s Conservative government, but used extensively by the Blair/Brown governments in a rather na├»ve  attempt to make the public accounts look healthier.  Ministers and public officials were not very competent at negotiating contracts, the private sector took them for a ride, and  many public projects are now being forced to pay for themselves several times over.

9.    9. The Iraq War.

1   10. The infamous Miliband-approved mug:” Controls on Immigration: I’m voting Labour.”  A shameful attempt by Labour to undersell even the Tories on this issue.  It was pleasing to see in yesterday’s paper that Scouts in Kent are designing  and sending  “Welcome to Britain” greetings cards to migrants landing on their county’s shores.  One lad encourages them to “try the fish and chips.”

1111. Austerity proposals in the 2010 election which rivalled those of the Tories. Here's some exact quotes from their manifesto (page 6):

TTTough  choices for £15billion efficiency savings  in 2010-11;

toTough choices  on cutting government overheads;

toTough choices on pay: action to control public sector pay;

TTTough choices on spending;

TTTough choices on welfare. . . .£1.5 billion on savings being delivered.

1112.Failure to support the Liberal Democrats’ Coalition proposals for;

a) Electoral reform

b) Reform of the House of Lords.

Sunday 21 August 2022

Helping the eaters or heaters

 Since the Elizabethan Poor Law of 1601 it has been accepted in Britain that it is the duty of the government to ensure, if not a comfortable, at least a minimum quality of life for those citizens who would otherwise be destitute. The 17th century central government craftily passed the responsibility, and the onus of paying for it, on to what passed for local government at the time.  Today it is seen as largely a central government responsibility.

The coming winter will bring a genuinely unprecedented* situation in which  many individuals and families will be forced towards destitution when the effects of double-digit inflation and the huge rise in energy costs are felt.

I feel that the proposals made so far by both government and opposition parties  are clumsy and inadequate.  The existing government has offered every household a grant of £400 to help pay the increased fuel charges.  With fuel price rises in the £1 000s that is peanuts in the context of "just managing" wages, and the rise in the prices of other essentials.  Liz Truss flip-flops between "no-handouts" along with tax cuts which will allegedly stimulate the economy, and the possibility of "maybe" (but unspecified ) handouts.  The Liberal Democrats and Labour have both proposed a freeze on the autumn price cap.  (The Liberals got in first but Labour has received most publicity.)

None of these proposals really tackle the problem.

My proposal is for much more substantial, but targetted, government help to the poorest.  

 I know the Labour Party is, with good reason, opposed to targetting because it involves means testing, which can be both unfair  and humiliating.  Be that as it many, I feel it is foolish, at a time when our health services, care services, education and children's services and most local government services are desperate for additional funding, and there will be inevitable demands for increased provision for the armed forces,to scatter government money on people like me, and many other much, some very much, richer who can cope with the price increases perfectly well. 

For a start I would restore the social credit "uplift" by at least the original  £20, and preferably £30 or even £40, and increase all social security payments other than pensions by the rate of inflation plus 5%.

Then I would give lump sum assistance (say £200 per month) to everyone whose income is so low that they are not liable to pay income tax.  In that way the hassle and humiliation of means testing is avoided.

The basic rate tax threshold  is a  rough and ready measure, but it is one that already  exists.  There is also the problem of "sudden death" at the margin.  Perhaps those who pay income tax only at the standard rate could receive a  reduced sum, such as £50 a month.  A proportion  of the cost could be financed by stopping the payment of the Winter Fuel Allowance to pensioners such as me, whose pension are sufficient to make us liable to income tax, so we don't need the extra help.  One of my more affluent friends calls it his "winter wine allowance."

As outlined in previous posts, there are plenty of assets and activities the effective taxation of which would not unduly affect demand and sustainable growth (land, profits, capital gains, inheritances, financial transactions, windfall taxes.)

The above figures are off the top of my head and uncosted, but are offered as a suggestion.  A government anxious to protect its citizens from penury would order the Treasury to start work now on this or similar schemes, ready for implementation before the cold weather sets in.

* Throughout the pandemic minister after minister excused their importance by claiming the situation to be unprecedented. It wasn't.  The Cygnus exercise predicted almost exactly such a situation but its findings were ignored.  The fuel price rise along with double digit inflation does, however, merit the adjective, certainly for peacetime.  Some have called it a "humanitarian crisis," the sort of situation for which a Churchill would have called for "Action this day."

Sunday 14 August 2022

A Miscellany*

I've been away on holiday (Anglo-French hiking around Chichester followed by visiting  long-standing friends near Margate) for a couple of weeks, hence no posts.  However, here are a few random thoughts on what I've gathered from such of the news I've caught.

 Liz Truss is so awful that I find myself willing Rishi Sunak to do well in the debates and interviews (in some of which Truss is too chicken to participate.) 

Sadly we need to remember that Sunak is not only a lightweight (see previous comments on his Chancellorship) but also without backbone.  His predecessor as Chancellor resigned rather than accept Johnson's demand that the Treasury should sack its advisors and rely on those in Downing Street.  Good for Javid.  No person of principle would have accepted the job under those conditions.  But Sunak did.

Liz Truss promises that under her premiership entrepreneurial economic energies will be released and all sorts of wonderful prospects will eventuate as a result of growth.  That myth, if not as old as the hills. goes back at least to Harold Wilson at the opposite end of the political spectrum He promised us that under socialist planning a healthy, caring and  prosperous state  would emerge and wouldn't cost us a penny (real pennies in those days): It  would be financed out of growth.  There are two problems with Truss's policy.  First  there is no lever to pull that will produce wondrous growth in the short run - but poverty-stricken households need help to eat, and heat thee homes, this winter, not is some golden decade in the future.  Secondly, she may be right in the long run,  maybe even before  we're all dead, but additional growth based on additional consumption is gong to exhaust the planet's finite resources and make it uninhabitable, as is evidenced by fires in France, floods in Australia and aridity in Africa, to name but some.

Yet, following on form that last point, both Truss and Sunak cheerfully advocate undoing such modest measures as we have to alleviate  global heating.  Truss would abandon the Green Levy and Sunak reduce the VAT on fuel.  Such short-termism is now totally unacceptable.  As Truss said in another context THIS-IS-A-DISGACE.(


  In the Guardian on the 10th August George Monbiot  quoted  some interesting facts about our water industry: not a single new reservoir has been commissioned since privatisation in 1989;  the distribution system leaks at the rate of  2.4bn litres per day on current estimates; untreated sewage is poured into our rivers on a regular basis; rather than fix these problems the companies have distributed £72 billion (that's billions, not mere millions,) into the bank accounts of their shareholders.

I don't have any figures to hand, but I suspect much the same can be said of oil industry, as for years it has cheerfully denied that its product has anything to do with the climate crisis (much as the tobacco companies  denied that there is any connection between smoking and lung cancer.  In Africa one of the most popular cigarette brands was called "Life." )

The use of food banks has increased, is increasing and ought to be not so much diminished as eliminated.  In addition we are now reduced to the humiliation of having to create "warm banks" to which we may retreat  when they can no longer afford to heat our homes.  THIS-IS-A DISGRACE.

The reality is that the economic model touted by the Tories, based on the "trickle down effect"** does not adequately serve the needs of a significant proportion of our population. A tiny proportion - 0.1%, 1% or maybe even 10% -  do very well indeed out of it.  The vast bulk of us live very comfortably indeed, taking as normal luxuries (foreign holidays, designer clothes if you like that sort of thing, meals out, centrally heated houses, separate bedrooms of the kids, arts and entertainment, gadgetry galore) beyond the wildest dreams of our grandparents and even, for some of us,  our parents.  But a bottom 20% to 25% are constantly on the breadline, tempted into unaffordable debt, and some can't manage at all without recourse to food banks and, coming shorty, warm banks.  THIS-IS-A-DISGRACE.  As still one of the richest society in the world we need to be devising  ways  of sharing our incomes and wealth more equitably.  The candidates for the Tory leadership are offering the opposite.

Conservatives, including both leadership candidates,  like to indicate  that  their inhuman and possibly illegal policy towards refugees is aimed at combatting  "the evil business of people smuggling."  Hmm?  If that were the case then the easiest and quickest way to do it would be to set up booths on the coast of France, or wherever else potential migrants are gathering, with banners saying "Welcome to Britain."  I forget which European crisis it was which  produced a lot of refugees at an airport, and an assertive woman, probably from the WVS or something similar,announced in commanding tones: "Those who wish to come to Britain follow me!" and marched them on to a nearby RAF transport.  Whoever they were will have contributed considerably to our prosperity and diversity.   The comfortable and ageing Conservatives who form the electorate for our next prime minister might like to ponder how much these  and similar migrants have contributed to their comforts.  But they won't read about it in the Daily Mail, the Sun or the Express.

*Very old readers may remember this as the heading for a Guardian column.

**  Shorthand for  cutting taxes and scrapping regulations to release the energies of entrepreneurs and the resulting employment opportunities will eventually benefit the lower orders.