Thursday 8 February 2024

Retreat from the Green New Deal


Sir Keir Starmer’s decision to abandon Labour’s policy of spending £28bn a year on a Green New Deal is shameful.  However the shame applies not to Sir Keir  or the Labour party – for them it is almost certainly prudent.

 The shame applies to the quality of Britain’s public debate, in which the Conservative-leaning print media can be relied upon to sully decent policy emanating from an opposition party and the public broadcasters are cowed into soft-pedalling any enthusiasm for  non-Conservative proposals for fear of  further attacks on their funding.

Given such dominance and subservience the Tories have succeed in demonising “sensitivity to racial and social discrimination”* as “woke”, protection of consumers, including children, as “the nanny state,” defenders of vulnerable people as “lefty lawyers” and enforcers of international law as “enemies of the people.”

Over a very long period our media have somehow managed to convince most of our electorate that Conservative governments are pillars of financial rectitude, whereas Labour governments are recklessly profligate.

The reverse is nearer the truth.

 It was the Conservative government of Margaret Thatcher which squandered the revenues from North Sea Oil on current expenditure rather than set up a Sovereign Wealth Fund.  That same government introduced the financial deregulation which eventually led to the crash in 2008.  It was under John Major’s government that we were ignominiously ejected from the ERM, the Johnson Conservatives presided over the VIP line for the procurement racket during the COVID pandemic, and Liz Truss’s shortest government on record sent interest rates rocketing and shook what remained of Britain’s reputation for financial stability.

By contrast Attlee’s post-war Labour government built up our welfare state, including the NHS “free at the point of use,” introduced family allowances, and brought the public utilities  under public ownership despite that fact that the debt/GDP ratio when they took office in 1945 was well over 200% - more than double what it is today.  Under Tony Blair’s government that ratio was brought down to 40%, substantially below the accepted norm of 60%.  And it was Gordon Brown’s leadership that saved the world’s financial system after the 2008 crash.

So the historical record shows that the Labour party is perfectly capable of introducing its highly necessary, ambitious and relevant Green New Deal, the like of which we need both to restore our economic prosperity and avoid further trashing our planet, and financing it prudently

Rather than debate this and other issues in a reasoned, informed and constructive way,  it is clear that our election will be fought on sound-bites and slogans. 

Labour will be accused of being split, with the Leader not in harmony with the Shadow Chancellor.  True they are, but at least on two “rights”: financial stability v sustainable green growth.  

 By contrast the Tories squabble over wrongs: whether to bribe the electorate by  unaffordable tax cuts, further neglect of the public realm, and further opportunities to feather their own nest.

Among the  questions we should be asking the parties are:

·       What proposals have you to make the UK fairer;

·       How will you improve our public services;

·       Will you repair our democracy;

·       Will you play a constructive and law-abiding role in international affairs;

·       What proposals have you to stimulate the economy for sustainable economic growth?

A responsible media would help us understand the answers.

 That is the definition given in a clue in this-morning’s Guardian Quick   Crossword 16 773

Thursday 1 February 2024

Tax cuts?


To cut or not to cut. . . .?


For some time now the government has been dangling the prospects of (income?) tax cuts in the coming budget and its supportive press has been salivating over the prospect.


However, a few days ago the IMF warned that in the UK’s present circumstances this was not a good idea. On Wednesday 31st January the Guardian’s Economics Editor, Larry Elliott (a Brexiteer, ouch) reported the IMF spokesperson’s summary of their reasoning as follows:

“Preserving high quality public services and undertaking critical public investments to boost growth and achieve the net-zero targets will imply higher spending needs over the medium term  than are currently reflected  in the government’s budget plans.  Accommodating these needs, while assuredly stabilising the debt/GDP ratio, will already require generating additional high quality fiscal savings, including on the tax side.”

Those of us who live here (I believe the chief economist of the IMF, to the delight of the tabloids, is French, and in any case the IMF is based in the US) might think it is a bit late in the day  to “preserve” the high quality of our public services.  “Restore “ would be a more appropriate verb.

 Taking the “profound decline of the Royal Mail” as an example,  Aditya Chakrabortty (Guardian 1st February) describes how “many aspects of British life  have been devalued  and degraded – even while those at the top have made a killing.”

Chakrabortty argues that ”[f]rom Thatcher onwards the Tories have justified privatisation as bringing in essential investment”* In the case of the Royal Mail, “whatever investment has been made in [it] over the past decade , it has been dwarfed by the amount paid out to shareholders.  About £2bn has been paid out to [them} since 2013, equivalent to 60% of its profits after tax.

 Chakrabortty concludes his article: “How does a great  institution die?  The same way  as a country sinks into complacent underachievement : with false promises  from its politicians, with poor management from its corporate leaders, with a lazy regulator – and moneymen who rake off  as much as they can before running for the exit.”

And to the Royal Mail we can add the water industry, the railways, care or the elderly, hospitals loaded with PFI debt, crumbling schools,  PPE. . . . .

There is much to repair.  Tax cuts are about as appropriate as blood letting in 18th century medicine.

*I would add private sector (ruthless, and very highly “compensated”) management skills and modern (precarious) working practises.