Austerity outstays its welcome

9 06 2014

Anyone watching media coverage of the recent spate of elections, or indeed the news more generally, could be forgiven for thinking that austerity never happened. I don’t think the BBC’s coverage of the local elections once mentioned the gutting of local government funding that has taken place since the banking crisis; the results were only to be discussed in terms of national politics – namely, what this means for the general election.

But austerity is a thing. It has been a thing for many years now. And all main political parties are committed to keeping it a thing for many years to come.

The Conservatives have made their position clearest so far. George Osborne has pledged to engineer a budget surplus by 2020 – which hardly anyone believes is possible – and so the welfare system will be dismantled further, local councils will be bled dry, and the NHS will wither on the vine. None of this is news, in any sense of the word.

What did catch my eye was part of the undercard of Lord Ashcroft’s opinion poll a fortnight ago. The headline act in Ashcroft’s weekly polls is always the voting scorecard – Labour v Tories – but this particular edition also featured a question on attitudes to austerity. The response was completely ignored by the media – but not by Lord Ashcroft himself, who understood its significance:

‘… 41% agreed with the statement “the national economy is not yet fully fixed, so we will need to continue with austerity and cuts in government spending over the next five years.” Nearly seven in ten Tories and a majority of Lib Dems thought so, as did one fifth of Labour supporters.

But a quarter of voters overall, including a quarter of those who said they would vote Conservative in an election tomorrow, felt that the medicine – though necessary – has already worked and the treatment can stop. They agreed that “while a period of austerity was needed to fix the national economy, we don’t need another five years of cuts of government spending”.

Meanwhile a further one third of the electorate, including nearly half of Labour voters, believed instead that “austerity and cuts in government spending were never really needed to fix the national economy, it was just used as an excuse to cut public services.” UKIP voters were among the most sceptical or cynical about the government’s deficit reduction policy, with 41% believing austerity was a cover for cuts in public services. Swing voters, too, will need convincing.

More than six in ten thought austerity could end; these were divided evenly between those who thought the policy had served its purpose and those who did not believe it was needed in the first place.’

What does this mean?

The Tories have long feared that economic recovery would undermine the case for further cuts – if headline growth figures are returning to health, why administer more of the “medicine”? Add that to the third of the electorate who always regarded austerity as a scam, and you have a majority against wielding the axe for another five years. Those supporting more cuts make up the biggest single bloc of opinion – but they are ultimately in a minority.

Note also that UKIP supporters are among the most sceptical of all about the need for more austerity. In one sense that’s not surprising – UKIP have the most working class voter base of any party. And let’s not kid ourselves – just because UKIP supporters don’t want more austerity doesn’t mean they don’t back welfare cuts, as these are seen as much in terms of “morality” as fiscal necessity.

But it is striking that at a time when leading politicians are falling over themselves to beat up on immigrants and benefit claimants out of a supposed need to court the UKIP vote, all three main parties will not so much as hint at deviating from the austerity line.

Why is this? Well, for many frontbench politicians, it is simply what they entered politics to do – the Tories to destroy the social state, the Lib Dem “orange bookers” to marketise it, and Labourites to replace it with unregulated charities.

In addition, nobody near the Labour leadership is willing to risk the ire of the markets, the financial sector or the right wing press by facing down the austerity agenda.

On top of that, you have the 41 percent who backed further austerity in Lord Ashcroft’s poll – many of them Tories, likely to be middle class, and likely to be located at least in part in the southern battleground seats that, whilst now largely irrelevant, remain firmly at the root of political calculations. Labour daren’t ditch austerity and sacrifice some quixotic stab at winning Surrey votes. Immigration and welfare, by contrast, are seens as easy targets that unite haters everywhere.

Put all that together and you get the status quo – three parties committed to delivering what most people don’t want.


MPs’ pay – stating the bleeding obvious

9 12 2013

A few quick words on MPs’ pay.

First, the body that recommended the pay rise may be politically neutral, but it is not ‘independent’ in its views on what we might call ‘public sector executive pay’. Why not? Because the Independent Parliamentary Standards Authority (IPSA) is made up of public sector executives.

Have a look at the board members – here they are. We have an ex-MP, a judge, two former NHS executives and two former quango bigwigs. Those latter four share the career paths of those who spent the best part of the 2000s trousering huge salaries, usually on the basis that they were running large organisations, had considerable responsibilities, and could earn so much more in the private sector.

Pretty much the same arguments regularly wheeled out in favour of MPs earning treble the average wage, then. The pay at IPSA’s not too shabby either.

There’s a line going around that ‘people’ wanted an independent body to determine MPs’ pay, rather than have MPs vote for their own pay rises. This is not strictly true. What most people wanted, as I recall, was an end to MPs getting inflation-busting pay rises well above those of the population at large, as well as their infamously lax expenses regime. MPs had in the past voted themselves a hefty raise – so an independent body was the response. But it’s been stuffed full of suits who are naturally sympathetic to inflation-busting pay rises – and so, once again, we have MPs getting inflation-busting pay rises. There is no public inconsistency here – people, generally, are opposed to this sort of thing no matter what manoeuvring is used to bring it about.

Whilst I accept some of the rationale for ‘competitive’ public sector executive pay (within reason), I think MPs should be paid the average wage of their constituents – same goes for elected trade union officials. I think that MPs should know how their constituents live – how else can they reasonably advocate and legislate on their behalf? If that provides them with an inadequate standard of living – well, that’s telling them something quite pertinent, isn’t it…

I do accept that there are counter-arguments to that. It would favour MPs who had considerable assets, savings, inherited wealth, for whom the low MP’s salary would simply mean dipping into their personal reserves. Meanwhile, those MPs without such financial backing would be signing up for a certain level of hardship; many would therefore be deterred.

But that doesn’t mean salaries have to be three times the average. I’ve seen a few arguments being trotted out in favour of the pay rise, usually enunciated by the kind of people who make great play of being ‘reasonable’ and ‘moderate’ – and to use the technical term, they’re bollocks.

First, high MPs’ pay does not ‘attract the best people’. We do not have anything like the best people – for the most part, we have a pretty low standard of MP. Anyone claiming that we are attracting the best people needs to find a pretty good explanation for the state of parliament in recent years.

Second, and related – the reason we are not getting the right calibre of MP is not because pay is too low. This is tied in to the idea that MPs’ salaries need to be competitive with those of top headteachers, police chiefs, hospital consultants, public sector executives and corporate leaders – otherwise, we’ll fail to attract people with ‘real life’ experience and will be limited to our current crop of universally derided professional politicians.

Which is odd – because professional politicians are a relatively new phenomenon. Go back sixty or seventy years, and MPs’ pay was much lower – in real terms – than it is today or will be from 2015. In 1946 MPs were paid a basic salary of £1,000, which is roughly £35,500 in today’s prices. And yet the House of Commons was replete with former soldiers (distinguished ones, not Iain Duncan Smith), corporate leaders, ex-miners and blue collar workers – people from a wide variety of backgrounds and experiences, not fast-tracked advisers and apparatchiks.

The reason we have a professional political class, and the reason we don’t attract candidates from a wide background of experiences, is nothing to do with supposedly low pay and everything to do with party machines. The ever-growing centralism of the Conservative and Labour parties, combined with freakish party discipline, has meant that only obsessives who have spent years plotting their political careers have had a realistic chance of being selected to stand for parliament. Open primaries have nudged the door ajar, but the tolerance of constituency party autonomy and backbench dissent that once marked British democracy is now long forgotten – parties want the type of people who will toe the party line, and select candidates via processes that favour those who’ve been positioning themselves for years.

This blocks out the 99% of the population with better things to do than spend ten years plotting a route to Westminster far more effectively than a salary miles above the national average but still, supposedly, too low.

The final argument that needs addressing is that of the hard-working MP. They work so hard that they deserve to be paid more – so the line goes. I don’t doubt that MPs work hard – they do. Hours are long, constituents’ needs are never-ending, and no doubt there’s always a ribbon that needs cutting on a Saturday afternoon. It is a hard job, a tiring job, and a thankless job to boot.

It is also one of the most privileged jobs in the country.

Perhaps MPs forget, as they troop off to the lobbies at the sound of a late night division bell, that the job they are doing is one that millions of people around the country would give their right arms to do if they had the chance – if they could do so without having to run the reflexive gauntlet of party machines and grease their way up political ladders.

Instead they – we – are reduced to ranting in the pub or on social media, waving our arms at the TV news or just rolling our eyes and muttering, ‘they’re all useless’.

MPs are paid a healthy salary, but the real remuneration is in power. There are 650 MPs who get to decide on legislation – a vote denied to every single other person in this country. Sure, the corruption of our political system has invited hordes of lobbyists, financiers, FTSE directors and think tank wonks to formulate policy and law in advance – but the vote is in the Commons, and the voters are MPs. Individually they may not have the power to swing a vote, but collectively they do, and they could do so whenever they wished were they not so wilfully bound to party loyalty and personal ambitions.

The hard-working constituency MP is often virtue hiding vice. A hard-working MP is often busy helping constituents who have fallen foul of benefit cuts or the withdrawal of local services that are the direct result of the very policies that the very same MP voted for. Traipsing around the constituency fixing roofs and mending fences is a salve to the conscience of MPs who know they have sold out their constituents in Westminster, but still want to convince themselves they are ‘doing good’.

For example, I’m told that Francis Maude, one of the fiercest Tory frontbenchers, has been relentless in helping his Sussex constituents who are having their adult care funding withdrawn by the local council. Very good of him – but of course, if it wasn’t for the savage local government funding cuts he helped formulate and drive through, the situation wouldn’t arise in the first place.

MPs who spend hours, days, weeks, months sifting through constituency casework around rejected benefits claims and withdrawn social care funding should not bleat about deserving higher pay. They should first examine their own voting records and see whether they have been the ones who have increased their own workload. Did they vote for benefits cuts or conditionality? Then that’ll be why their constituents have lost their benefits. Did they vote through local government funding cuts? Well, that’ll be why adult care funding is being withdrawn. And opposition MPs don’t get off the hook – what manifesto did they stand on? Would that manifesto have had the same results?

There is a horrible culture of entitlement among the wealthy and the rich. In the private sector this usually equates to the notion that they are ‘wealth creators’; in the public sector it is usually based on the conviction that they could earn far more in the private sector; but when you reach the charitable sector and MPs, it is based on the idea that they are ‘doing good’ and should not be financially disadvantaged for it.

But most MPs are not doing good. They have collectively created the most discredited and despised parliament in memory. They vote in ways that worsen the lives of millions of people, and then claim that the time they spend helping those people manage the consequences justifies a pay rise – a claim that is downright offensive.

I said at the start this would be a few quick words. Now at the end, it clearly is not. But the hardworking MP deserving an inflation-busting pay rise is a myth that needs taking down properly.

And if any current MP doesn’t want to do it for their current salary – let me know, because I will.

Ticked boxes and triangulation that will take Ed to Number 10

29 09 2013

Party membership these days is a judgement by the heart, not the head. Like an unrequited love, the belief is a drug on which the believer becomes hooked.

We saw this again during the Labour conference last week. Ed Miliband’s list of policy announcements have been hailed as everything from a return to social democracy, to a return to socialism. And whilst there is more substance to chew on than his One Nation guff a year ago, the substance merely confirms that what he is offering will not solve the myriad problems Britain faces.

Labour Party members have this desperate desire to believe. But what Miliband really gave us was the product of advisers and pollsters suggesting which boxes to tick as a means of hiding the triangulation that Labour is engaged in on austerity and welfare. It’s the oldest trick in the Labour book and the suckers are sucking it up.

But whilst it won’t cure Britain’s economic ills, it did just seal a Labour victory in 2015.

How to put lipstick on a pig

Energy price freeze

The big one, not because of its actual ambition or impact – both of which are extremely limited – but simply because it was unexpected. Fleet Street was caught on the hop, the Tories overreacted, and that’s about all you need for a five-day media frenzy.

Labour's policy review (credit - Mick Coulas)

Labour’s policy review (credit – Mick Coulas)

Labour has correctly identified energy prices as a major political issue, and the energy firms as an easy (and deserving) target. Expect the Tories to find a way to keep prices down pre-election, or even cut them – it is, after all, in both the Conservatives’ and the energy firms’ interest to avoid energy bills becoming an election issue that hands victory to Labour. The Tories may ditch their carbon commitments to promise cheaper energy in 2015.

But away from the hyperbole, energy prices are already too high – a freeze self-evidently does not lower them. That such a limited policy can set off pandemonium at Westminster merely reflects the introspection of the political class. That such a policy will likely discourage investment in Britain’s creaking electricity generation, at a time when it is desperately needed, will eventually raise questions about ownership that no party wants to go near.


There’s plenty of speculation over whether a Labour government could actually deliver 200,000 new homes a year, but the bigger question is how many of these would be low-cost social housing, where the need is most acute. On that, there has been little detail. ‘Affordable’ housing priced at near-market rates won’t cut it. If Labour has reversed 20 years of antipathy towards council housing, you’d have thought they’d have said so by now.

But even a million market-priced homes would raise some interesting questions. Will Labour keep the government’s Help-to-Buy scheme, which might keep house prices up while leaving the Treasury on the hook? And if the increased supply of homes does lead to a fall in house prices, where would this leave bank solvency, which is dependent on maintaining inflated house prices? Where would it leave the Treasury’s exposure on existing Help-to-Buy purchases?

It’s possible that Labour hasn’t thought this one through to its logical conclusions.

Bedroom tax

Labour was always going to commit at some point to scrapping the bedroom tax – it’s the highest profile and least popular of the government’s various benefit cuts. With any luck, Miliband’s pledge will encourage social housing landlords to pass no-eviction policies, reassured that arrears might stop accumulating in 2015.

But from Labour’s perspective, the bedroom tax pledge is pure triangulation. It allows Labour to keep all the other government cuts to the welfare system as part of its commitment to austerity, while the party’s left wing begs us to look the other way. The bedroom tax pledge is the golden chalice that lets Labour serve its poison.


Sack Atos but don’t scrap the disability benefits assessment system – it’s like changing the driver of a train that’s off the rails. This classic bit of spin was probably designed to keep Liam Byrne in a job – Labour supporters rather conveniently turned him into a bogeyman for all the party’s woes, but this one insubstantial announcement was enough to win them over.

Health and social care

Andy Burnham’s oft-repeated pledge to repeal the sections of the Health and Social Care Act that enforce NHS privatisation was, until last week, about the only thing Labour had given its supporters to cling to. In reality it’s just one element of some off-the-scale triangulation – but Labour’s health and care policies need, and will get, a post all of their own.

Zero hours

Labour’s friendship bracelet for the trade unions to salve the Falkirk splits. Legislating on zero hours contracts will do precious little to rebalance the worker-management relationship that enables such exploitation – and that’s before you even broach the crisis of work. Zero hours contracts could easily be transformed into ‘casual’ contracts that allow workers to opt out, but carry the implied threat that if they do so, they will not be offered work again.

No doubt this one Warwick-lite bone tossed from the table will sate Labour’s union lapdogs – allowing them to collectively ignore the public sector pay freeze, insecure working arrangements, continued local government austerity, the anti-union laws…

Business rates

Labour’s pledge to forego a proposed increase in business rates due in April 2015 and freeze them the following year will have minimal real impact – an average £450 saving for small businesses over the course of two years. These businesses are already being badly squeezed by rising rates, and £225 a year is unlikely to make the difference between… well, anything.

But again, this is about minimising action and maximising message. Even assuming the Tories don’t delay the rates rise themselves, most small business owners will do the maths and draw their own underwhelmed conclusions. But Labour isn’t trying to help small businesses here – it’s looking to tell the public at large that it is interested in small businesses, understands their needs, and will put them at the heart of economic growth. Like the Tories’ ‘jobs tax’ twaddle in 2010, Labour is trying to build a mountain out of a molehill.

What to expect when you’re electing

We have already seen what we will see right through to the election. The same Labourites who cheered Ed Miliband’s ‘One Nation’ speech a year ago, just hours after Liam Byrne had promised more welfare cuts, are now hailing the arrival of the New Jerusalem.

“The gap between the parties is far too narrow – but a lot of people live in that gap. It’s the people I grew up with who will pay the price if you pretend there is no difference at all.”

That John Lennon quote will be the gaslight anthem for Labour tribalists in 2015. That Labour’s promises will be delivered is to be accepted without question. To demand, expect or require more, is to indulge in a Commie wonderland that will Let The Tories In.

Labour's chief spin doctor for 2015

Labour’s chief spin doctor for 2015

If you let slip that a loved one relies on care services that will be hit by continued austerity, you will be sidelined. If you explain that welfare cuts have hit you even though you aren’t under-occupying your house, you will be silenced. If you point out that you can’t cope with energy bills as it is, you will be savaged for being unrealistic, inflexible, and everything up to Helping the Hun.

The party that still claims to represent the working classes will have a message for those working classes – eat what you’re given and get the fuck in line.

Swings and roundabouts

All of this will work, of course. When it comes to British politics, the binary rules all, the binary is king. The 2015 election will once again present voters with a choice between a Tory government and a Labour one, with the Lib Dems reduced to the role of mercenaries to get either party over the line. And it will not be pretty.

Voters are not idiots, but Britain’s political system (and I don’t just mean the voting system) forces voters to act idiotically, knowingly voting against their interests because there is no other offer on the table. Nobody votes with hope or enthusiasm, fewer still with trust.

Labour’s message will be simple – and it will not be the branded ‘socialism’ used to whip up their activists last week. Instead it will be to go through a list of issues – energy, housing, welfare, pay, growth – and tell voters that they’ll be better off with Labour on each one.

Which they might be. Marginally. If that.

But that’s all it takes. The binary rules all, the binary is king. Faced with a choice between a Conservative government and a Labour one, Labour’s natural supporters in the swing seats across the Midlands and the North will put a cross by the red rosette, without hope, enthusiasm or trust. At an election where the Tories will struggle to get their vote out, Ed Miliband’s ticked boxes and triangulations – together with stagnating incomes – will be enough to secure him a small overall majority.

Of course, that’s where the trouble begins. An unstable Labour government – with suspicious voters, party members duping themselves into thinking socialism is nigh, and trade union members opting out of funding the party – trying to deliver continued austerity and public service fragmentation against the expectations of their support base is doomed to fracture and fail and split apart right down the middle.

The binary will lose the left half of its kingdom.

Vote Pandora

But that’s just party politics. The failure of Labour’s programme to solve the problems it targets will raise far bigger questions that Westminster would like to avoid. How can we build £100bn worth of new power stations whilst relying on private firms to deliver them? How can we make housing affordable if doing so wipes out our banks?

And which way will we jump when we can no longer put off answering them?

Labour to win the 2015 general election with an overall majority of between 4 and 20 seats.

Squeezing the zombies until the pips squeak?

7 09 2013

Amid all the hype over our new housing bubble, this report in the Telegraph is very interesting:

Banks squeeze interest-only mortgage borrowers

A few choice excerpts:

“Millions of borrowers are being forced to pay more or sell their home by banks’ hardline attitude to interest-only mortgages.

“Half of the property market is buzzing, with cut-price mortgage rates and huge amounts of debt handed to first-time buyers. But the boom has not filtered through to the four million customers with interest-only mortgages, many of whom are over the age of 50.

“Instead, lenders are pushing these borrowers on to higher rates when fixed deals end. For example, one lender charges interest-only customers nearly 5pc, while offering nearer 2pc to others. Many are forced to accept these expensive rates because other banks refuse to take on the loan.

“If interest rates rise, thousands may be forced to sell their home to cover the debt. In other cases, interest-only customers are forced to start repaying the debt immediately – if they move house, for example.”

Interest-only mortgages were a big part of the pre-2008 housing bubble. Borrowers only had to pay interest for many years, with no repayments of the main chunk of the loan – the ‘principal’ – until a big repayment at the end of the term, perhaps after 25 years. What could possibly go wrong?

“In the pre-crash boom, customers were able to borrow on an interest-only basis without showing how the debt would be repaid. Then the credit crunch struck. It quickly emerged that hundreds of thousands of interest-only customers would struggle to service their debts.

“Estimates suggest there are between 2.5 million and four million interest-only mortgages, with around 150,000 maturing annually. Half of these face a shortfall of about £71,000, while one in 10 of all interest-only borrowers had no repayment plan in place.”

Well colour me shocked. So now lenders are jacking up interest rates on existing interest-only mortgages as fast as they can.

“The clampdown has proved disastrous for interest-only customers who reach the end of a fixed-rate period, move home or come to the end of their mortgage term.

“Millions are trapped with their existing lender – and if interest-only is no longer offered, customers must move to a repayment basis. Because those over the age of 60 are unable to extend the term, repayments can increase 10 times over.”

I’m not a banker, but my guess (and it’s only a guess) is that there’s two things going on here.

First, jacking up rates on interest-only mortgages that have long been signed enables banks to replenish a bit of their capital whilst they lend into the mortgage boom at the other end. In other words, they’re squeezing those who can’t get out so they can suck in those who still could.

Second, there’s the small matter of ‘zombie’ loans. These are loans – both to homeowners and businesses – that were unlikely to ever be repaid because of the borrowers’ parlous finances. Whilst zombie borrowers are able to pay the interest on these loans (as long as interest rates stay low), they have little chance of actually repaying the principal. They’re neither alive nor dead, but ‘undead’ – like zombies.

Now, there have been suggestions that banks should cut these zombie loans loose – essentially forcing these borrowers into default so that some of the capital can be recouped and used to underpin fresh loans to supposedly ‘productive’ new sectors of the economy.

The trouble is, banks driving homeowners and small businesses into default en masse does not look good politically.

But if the banks can drive interest-only mortgage holders to sell their homes, they can get these riskier loans – many of which will be in ‘zombie’ territory – off their books on the quiet, drowning it out beneath the noise of the new Help to Buy property bubble (which is apparently what passes for a ‘productive new sector of the economy’ these days), thus minimising the political blowback (NB – see Update below). And because house prices are rising, they can get back all the money they lent under the mortgages before negative equity hits.

As I say, I’m not a banking expert, so if any of the above is wrong I will stand corrected. But I’m on more solid ground with politics, and politically this is not good news for the government. If a few million interest-only mortgage holders – most of them members of the homeowning middle classes – find themselves hit by rising interest rates, that will ensure their finances remain squeezed until the election. And given that the Tories’ electoral fortunes depend not merely on headline GDP growth but rising real incomes – especially middle incomes – then this is a big problem for them.

Of course, this kind of personal finance story only reaches the Westminster bubble several months (if not years) down the line, so don’t expect them to realise until it’s too late.

Update: Frances Coppola, who knows this stuff better than most, tells me on Twitter that it’s “not on the sly. They are under regulatory pressure to reduce or end interest only mortgages because of their riskiness”. So the bankers aren’t pulling a fast one as I implied, but the effect is still the same – cut loose the zombies, don’t make too much noise. It’s just the regulators calling the shots rather than the lenders.

Special Relationship reported missing, presumed dead

29 08 2013

[London] – The long heralded ‘Special Relationship’ between the United States and Britain was reported missing and presumed dead last night at the age of 67.

Reports indicated that the relationship had disappeared somewhere in Westminster, and was believed to have fallen through deep fissures within the Conservative and Labour parties, with little chance of survival.

The alliance, fathered by Sir Winston Churchill in 1946, had seen the two nations maintain global peace by launching a succession of wars over many decades.

But after an expensive petroleum business venture in Iraq failed spectacularly in 2003, support for the relationship fell among the British public, while the global financial crisis has meant that neither country can any longer afford to act as a global policeman.

The final straw came on Wednesday night, as British Prime Minister David Cameron was forced to delay plans to win parliamentary backing for an attack on Syria.

Just 24 hours earlier it had seemed that the governing Conservatives and Labour opposition would all back plans for a new war, on the basis that this is what they always do.

However, an opinion poll published by The Sun newspaper on Wednesday as an alternative to MPs speaking to actual people found that only 25 percent of the public supported the planned attack, with 50 percent opposed.

Labour and Conservative MPs soon expressed public concerns over the rush to war, and with the Liberal Democrats having famously opposed the Iraq venture, Cameron delayed a vote on military action to give himself time to find a better excuse for a stupid idea that won’t work.

United Nations Secretary-General Ban Ki-moon is leading a search and rescue team to try and retrieve the relationship, and a team of national newspaper proprietors is on hand to perform emergency life-saving surgery in a Wapping clinic should the alliance be found.

But experts believe the chances of survival are slim. Even if Mr Cameron’s delaying tactic works and parliament does vote to support an attack, last night’s events remain a landmark as the first time an agreed strategy by the two governments has been derailed in so public a manner.

Left-wingers have long sniped at the relationship, but with even right-wing Conservatives joining the critics, sources believe the relationship may have died of loneliness. Another possibility is death by democratic causes, with the British government no longer able to spin doing whatever the Americans want as maintaining Britain’s role as a major power.

Either way, any surviving relationship will no longer be ‘special’, and will instead come under intense public scrutiny; paparazzi photographers have already been seen at Chequers, a favourite romantic retreat for the relationship.

The Reverend Tony Blair, vicar of Basra, ambassador for Kazakhstan and the former British Prime Minister, led tributes to the relationship last night. “I am deeply saddened by reports of the passing of the Special Relationship. Without it, I might have lasted long enough as Prime Minister to have got the blame for the debt-fuelled recession I helped create, and would never have had the opportunity to trouser a fortune flogging my Middle East contacts to corporate interests, and for that we should all be forever grateful.”

Sources suggested last night that a golden shower may be erected as a permanent memorial.

The truth about Big Len’s list – insiders, council cutters and a warmongering minister

16 08 2013

Amidst all the furore over Falkirk Labour Party’s selection of its election candidate for 2015, Unite leader Len McCluskey – accused of trying to manipulate the process in favour of his anointed candidate – made great play of his desire to change the face of Westminster.

He would replace the Oxbridge cabal on the Labour benches with working class MPs from outside the political classes, espousing left-wing policies.

Check against delivery

“We want to give our democracy back to ordinary working people,” McCluskey wrote in The Mirror last month.  “We say they need to be given a fair crack of the whip in the Labour Party in particular – the Party that was founded to represent working people, because the establishment of a century ago ignored them.”

He lambasted Blairites who were “angry that Unite is supporting candidates who want radical policies”. This after he accused New Labour of “dishing out seats on the basis of personal connections” in an article in the Guardian in May.

Opening up Parliament to working class candidates? Reducing the number of insiders and usual suspects filling up the green benches? What noble intentions.

And what utter bollocks it turns out to be.

The full list of Unite-backed candidates was revealed last month after the Falkirk row ignited,  but it received little attention or analysis. While it’s true that it contains few Oxbridge graduates, Len’s List is rammed to the rafters with political insiders and full-time union officials – the very networks that provide plenty of Labour MPs already.

But that’s far from the worst of it.

The Minister for Baghdad Booty

Mike O’Brien is the Unite-backed candidate for North Warwickshire. He was MP for the seat from 1992 to 2010, when he lost by just 54 votes to the Tories – one of the tiniest majorities in the country. No wonder he wants his seat back in 2015.

What’s less clear is why Big Len’s Unite – supposedly so keen on “radical policies” – is backing him.

Mike O’Brien would like his seat back. Better watch out, Iran

During his two decades in Parliament, Mike O’Brien held a variety of ministerial posts. Perhaps the most high profile of them was his stint in the Foreign Office from 2002-3, as Minister for the Middle East. After helping to broker the now infamous warming of relations between Britain and Colonel Gaddafi, he was part of the Foreign Office ministerial team that took us into the Iraq War.

Let me say that again. He was part of the Foreign Office ministerial team that took us into the Iraq War.

The Iraq War that cost Britain £8.3bn, led to more than 100,000 civilian deaths and did huge damage to international relations. That Iraq War.

Well, it’s a ‘radical policy’ – of sorts.

O’Brien’s specific role became that of cheerleader for British firms looking to profit from ‘reconstruction’ of the mess we’d made. In November 2003, he spoke at a London conference urging British companies to join Bechtel and Halliburton in the Iraq War contracts jamboree.

“I hope that, as was the case with the original Bechtel contracts, British companies secure a large slice of the new contracts,” he told his audience. “Already, many British firms are contributing to the reconstruction programme in Iraq across a wide range of sectors.

“As I have mentioned, the new Iraqi currency was printed by De La Rue. In the field of engineering, Halcrow, Mowlem and Mott MacDonald are helping to build the future of Iraq – literally. International transactions in Iraq will soon be processed by a consortium including Standard Chartered Bank…

“So I sincerely hope that when the $18.6b [reconstruction funding] approved by the US Congress comes on tap, British companies will again be able to secure a significant proportion of the contracts.”

He wasn’t actually much cop at it – the US duly handed most reconstruction contracts to American firms, who promptly bodged the whole thing up whilst making a financial killing from it.

Len McCluskey wrote in The Mirror: “Unite is proud that it is trying to reclaim Labour from the people that bought in to the free-market myth wholesale.”

Is it proud to be backing Mike O’Brien?

The council cutters

Back in January, McCluskey imagined a world where Labour councillors tried to resist cuts ordered by the government.

“I’m not suggesting for one second that this would happen but wouldn’t it be incredible if all Labour councillors said they were not going to make the cuts,” he told an audience at the LSE. “Wouldn’t that be fantastic? Wouldn’t it be incredible if every Labour council in our nation said: ‘We’re not implementing these cuts?’ What would happen?

“Our message is always that [Labour councils] should engage with the trade unions and work together to see if cuts can be minimised, to see whether there is an opportunity to build a resistance to what the Tories have imposed on them.”

So when Unite decided to back various Labour councillors in their bids to run for Parliament, presumably they went for anti-cuts campaigners?

Er, no.

In reality, those Labour councillors who do try and fight Labour council cuts soon find themselves suspended or forced out – Kingsley Abrams (a Unite member, no less) in Lambeth, George Barratt in Barking, Keith Morrell and Don Thomas in Southampton.

The councillors on Len’s List are cut from rather different cloth.

Engaging with the unions, Islington Labour style (photo: PCS Euston)

There’s Catherine West, leader of Islington Council, and Unite’s successful choice to run for Hornsey & Wood Green. Not long after she took over the council in 2010, police were called in to forcibly remove protesters – including local Unite members – against her council’s plans to cut spending on counselling for rape victims and teenagers leaving care, day centre provision for the elderly, and support for foster parents. Council funding for charities has now fallen by 17.5 percent in three years; Solace Women’s Aid, a domestic violence charity, has seen its funding fall by a third. Up to 700 council jobs were expected to go by 2015 – including, one imagines, members of Unite.

Then there’s Vicky Foxcroft, selected for the safe seat of Lewisham Deptford. She’s chair of the Labour group on Lewisham Council, traditionally a Labour fiefdom. Foxcroft – a councillor since 2010 – is not technically on the ruling executive, but her role is one that entails loyalty to the Labour council leadership, headed by elected mayor Steve Bullock.

So, what kind of council is it? What is the record of the Labour group she is a leading member of? Well, Steve Bullock himself doesn’t have much time for Big Len’s call for no-cuts budgets but the Labour council has a rap sheet longer than most. Lewisham was one of the first councils to dive into a long-term cuts programme and just earlier this year it agreed a new three-year cuts programme including ending universal access to the youth support service and axing funding for under-fives’ play clubs.

Moving on, there’s Pete Lowe, running in Stourbridge. Pete is deputy leader of Dudley Council, and also cabinet member for finance. This means he has a key role in drawing up the council’s budget. So when, in March this year, Dudley Council passed a budget that froze council tax even though most respondents to a public consultation said they were willing to pay more, it had his name all over it. When that budget drove money into council reserves whilst slashing funding for frontline services, it was his responsibility.

And when those service cuts include reduced care for disabled people, funding cuts for mental health and learning disability services, a range of cuts in elderly care, increased “community led litter picking” – litter duty for the public? – and a long list of cuts to children’s services, including “reduce voluntary and community sector commissioning budget to vulnerable children, especially those living in homes where adults abuse alcohol and drugs and where there is evidence of domestic violence”…

…then it’s safe to start judging him.

Not that he sees it that way. “We are clear on direction and purpose – to offer an alternative voice to the Tory government for millionaires,” he said while passing the cuts budget. Which is odd, seeing that the Tory councillors in Dudley actually voted to support it.

Not half as odd as Len McCluskey supporting him, mind.

The usual suspects

But the Unite list features 41 names, not just four. Let’s move on from policies and track records -perhaps the full Unite list fulfils Len’s pledge to extend Labour’s parliamentary party beyond the usual insider networks?

Again, no.

I’ve listed the 41 Unite-backed candidates further below, together with a quick run-through of what they do. Many of them have working class backgrounds, but mostly they are in very much middle income careers – especially when you consider that full-time trade union officials are usually paid more than £25,000, sometimes much more. Of course, we don’t know their current salaries, but their lines of work indicate most of them aren’t struggling to pay the rent, regardless of how their parents may have lived.

But what is far more damning is the number of them who already have (or had) jobs in politics – as councillors, student politics leaders, working for an MP, member of Labour’s ruling National Executive. People with those roles are already inside the political networks from which plenty of existing Labour MPs emerged. They might not have taken the Oxbridge-spad route, but these are well established career paths for MPs.

Then there’s paid trade union officials – not shopfloor workplace reps, but paid regional and national officials, usually full-time and often on comfortable salaries. For all the talk of Oxbridge types in Westminster, there are already many Labour MPs who are former full-time union officials – in fact, five currently sit in the shadow cabinet (Burnham, Winterton, Flint, Benn, Angela Eagle), plus at least two recent cabinet members (Tom Watson, John Healey) and ’rising star’ Michael Dugher.

In other words, paid trade union officialdom is an established route for prospective MPs.

Of the 41 candidates on Len’s List, 25 have or had a formal political role – that’s 60% of them. Chuck in the paid trade union officials on the list and you have 80% of the Unite-backed candidates coming via established political career paths and insider networks.

Which is interesting, given that a Smith Institute study found that fewer than half the existing Labour MPs after the 2010 election had an occupational background in politics or trade unions. They may have used different methodology, but the variance remains stark.

Compare all that with the seven candidates on Len’s List working in education, health or other public services, and the five working in manual labour or transport, and the idea that Unite are opening the gates of Westminster to outsiders falls apart.

Len’s light sabre

How precisely Unite came to settle on this list is not exactly transparent. But most of these candidates were not backed solely by Unite. They were often supported by a number of local union branches – including Usdaw, whose politics are very far from left-wing – and typically had a roll-call of endorsements from Labour bigwigs, local councillors, the odd MP. The evidence of central co-ordination is not strong – rather, it looked more like the kind of candidates who’d normally run for election, backed by local union branches, with Unite HQ sticking its national badge on at the end.

In other words, the line peddled by both Unite and the Right – a trade union using its national muscle to transform the face of the Labour Party towards a working-class Left – lacks any firm evidence.

So why claim it? Well, it enables Big Len to position himself as a ‘big hitter’ in the Labour Party, with more power and reach than he really has. As he tries to pump himself up as a key powerbroker who holds the future of the unions, Labour and the Left in his hands, talking about a fantasy list of anointed candidates – of whom fewer than half have so far succeeded in their battle for selection – is rather handy. It maintains the myth of ‘reclaiming the Labour Party’ and attempts to justify the millions of pounds of members’ money that is wasted funding it.

Big Len takes on the two Eds. In his dreams

Admitting that the sabre he is waving is in fact a stick would not help him in his endeavours.

But the long and the short of it is this. Either Len McCluskey is backing a bunch of political insiders and council axemen with a warmongering ex-minister as the cherry on top, or local union branches are simply supporting the same kind of people who normally get selected to stand in general elections.

Bad business, or business as usual? Either way, Len McCluskey is talking bollocks.


Len’s list in full:

Candidates who won a Labour nomination: 13

Dudley South: Natasha Millward – white, female; paid union official (area organiser, Unison); previously worked as student development officer in Further Education colleges

Burnley: Julie Cooper – white, female; councillor and council leader (Burnley)

Lancaster & Fleetwood: Cat Smith – white, female; union rep; job unclear, describes her work as “supporting social work professionals”; former Westminster researcher; former member of NUS national executive; previous Labour candidate (Wyre and Preston North, 2010)

Lewisham Deptford: Vicky Foxcroft – white, female; Councillor and chair of Labour group (Lewisham); Paid union official (finance sector industrial officer for Unite)

Hornsey & Wood Green: Catherine West – white, female; Council leader (Islington); previously worked in welfare and housing, and worked for David Lammy MP

City of Chester: Chris Matheson – white, male; paid union official (industrial officer for Unite); previously worked in the electricity industry

Brighton Kemptown: Nancy Platts – white, female; Marketing communications professional (director at Claremont, an agency focused on working with the third sector); previously a paid trade union official, senior project manager at GLA, and Head of Policy with the Daycare Trust; previous Labour candidate (Brighton Pavilion, 2010)

Plymouth, Sutton & Devonport: Luke Pollard – white, male; Lobbyist (Head of Public Affairs, ABTA); formerly head of Labour’s international office; later worked in PR (public affairs account manager at Edelman); past clients included Sainsbury’s, South West Water and Cancer Research UK; formerly researcher to two Labour ministers; previous Labour candidate (South West Devon, 2010); student union president (Exeter, 2001)

Halesowen & Rowley Regis: Steph Peacock – white, female; Paid union official (West Midlands political officer, GMB); formerly a secondary school teacher; former member of Labour NEC; current member of Labour National Policy Forum; previously worked for Labour MP Sylvia Heal; girlfriend to Tom Watson MP

North Warwickshire: Mike O’Brien – white, male; Labour MP for North Warwickshire from 1992-2010; held numerous ministerial positions throughout, including at the Foreign Office during the Iraq War’Brien_(British_politician)

Wolverhampton SW: Rob Marris – white, male; Labour MP for Wolverhampton SW 2001-10; voting record – backed the Iraq War and foundation hospitals, though he did rebel against top up fees in 2004

Stourbridge: Pete Lowe – white, male; councillor, deputy leader and cabinet minister for finance (Dudley); previously worked as a nurse for many years

Cardiff Central: Jo Stevens – white, female; trade union solicitor and law firm director (Thompsons Solicitors)

Candidates who did not: 18

Amber Valley: Julia Longnot certain if I have the correct one – white, female; paid union official (national officer, Unite)

Sherwood: Lachlan Morrison – white, male; councillor (Ashfield); works as a plasterer; trade union workplace rep (shop steward, UCATT)

Kingswood: Rowenna Hayward – white, female; paid union official (union membership development officer, GMB)

Blackpool North & Cleveleys: Chris Webb – white, male; paid organiser for North West Labour Party; previously worked for MPs including Gordon Marsden

Bermondsey and Old Southwark: Gavin Edwards – white, male; councillor (Southwark); paid union officer (national officer, Unison)

Enfield N: Annajoy David – BME (Asian), female; businesswoman and company director (ran a business restoring and building houses in Spain); former vice chair of CND; previous Labour candidate (Scarborough and Whitby, 2010)

Bury N: Jane Lewis – white, female; councillor (Bury); trade union workplace rep (Unite, Co-op Bank)

Manchester Withington: Angela Rayner – white, female; paid union workplace rep (Stockport Council branch secretary, Unison, reportedly paid £20kpa); formerly worked in social care

Warrington South: Sharon Connor – white, female; social housing worker (environmental officer, Liverpool Housing Trust); current member of the Labour Representation Committee national committee

Weaver Vale: Rebecca Long-Bailey – white, female; solicitor (Hill Dickinson, health)

Wirral W: Christine Spriggsnot certain if I have the right one – white, female; involved in music education (regional executive officer NW, Youth Music)

Hove: Simon Burgess – white, male; vice chair, Labour National Policy Forum; currently works in education (marketing and projects manager, Hamilton Lodge School and College for Deaf Children); former councillor and council leader (Brighton and Hove); formerly office manager for Des Turner MP; previous Labour candidate (Brighton Kemptown, 2010); formerly worked in mental health for the NHS

Bristol South: Amanda Ramsay – white, female; public affairs consultant, generally for charity campaigns; national organiser and vice chair of think tank/forum Pragmatic Radicalism; former councillor and council cabinet member (Merton); used to work for Graham Stringer MP

Birmingham Yardley: Eleanor Smith – BME (black), female; trade union president (Unison); nurse, (Birmingham Women’s Hospital)

Nuneaton Miriam O’Reilly – white, female; journalist; jointly leads the Labour Commission on Women; former TV presenter (BBC Countryfile), sued the BBC for age discrimination

Sheffield Hallam: Martin Mayer – white, male; bus driver; trade union workplace rep (branch secretary, Unite); trade union executive member (executive council member for passenger transport, Unite)

Stockton South: Linda Hughes – white, female; councillor (Darlington); paid union officer (senior union support officer, TUC)

Falkirk: Karie Murphy – debarred from selection; white, female; office manager for Tom Watson; former workplace trade union rep (Unison, Glasgow Victoria Hospital); former NHS health visitor; former chair of Scottish Labour

Nominations yet to be completed: 10

Ilford North: Mike Hedges – white, male; taxi driver; union official (chair, Unite London & Eastern Political Committee)

Finchley & Golders Green: Alon Or-bach – white, male; software engineer in the mobile technology sector; member of Labour’s National Policy Forum

Brent Central: Kate Osamor – BME (black), female; describes herself as ‘representing disadvantaged families’ – not sure of specific role; trade union committee member (Unite, London and Eastern Regional BAME, and Community Workers and Not For Profit committees)

Pendle: Azhar Ali – BME (South Asian), male; current councillor (Lancashire) and former council leader (Pendle); director of Rumi Consultants (not clear what the company does or whether it is active)

Cleethorpes: Ian Gent – white, male; trade union workplace rep (BAE staff union convenor, Unite)

Pudsey: Jamie Hanley – white, male; specialist trade union lawyer (head of client relations, Pattinson & Brewer); has been member of Labour’s regional board and executive; former member of Labour’s National Policy Forum; previous Labour candidate (Pudsey, 2010)

Elmet & Rothwell: Veronica King – white, female; paid charity officer (campaigns and media work, Alzheimer’s Society); previously worked at the Daycare Trust; previously worked at the Greater London Authority; former member of NUS national executive

Dewsbury: Paula Sherriff – white, female; councillor (Wakefield); health worker (service manager, Virgin Care)

Dumfriesshire, Clydesdale & Tweeddale: Archie Dryburgh – white, male; opposition councillor (Dumfries & Galloway); works in training and education (vocational assessor for Magnox, trainer with NG Consultancy)

East Dunbartonshire: Alan Moir – white, male; councillor (East Dunbartonshire); rail worker with Scotrail

Rejoice, rejoice! The first step in the death of the Labour Party

9 07 2013

I cannot believe it.

In response to Labour’s Falkirk selection kerfuffle, Ed Miliband is to scrap the historic automatic funding of Labour by members of affiliated unions.

Instead of members of Unite, Unison and other Labour-linked unions automatically paying a fee towards the party’s funds unless they opt out, they will in future only fund the party if they specifically say they wish to.

That may sound technical, but the expected impact is dramatic. As the BBC reports: “The fees are worth about £8m a year to Labour. Insiders estimate making them non-automatic would cost the party about £5m.”

Let me be clear – this is the first step in the death of the Labour Party.

For those of us who’ve long wanted the trade unions to ditch their abusive relationship with Labour, a party that repeatedly takes their money with one hand whilst slapping them in the face with the other, breaking this funding link has been priority number one for years.

I remember seeing ‘Free the Funds’ campaigns more than ten years ago.

Deadbeat union bosses have regularly gone to war with their own union activists who dared suggest such a thing, so determined are they to keep wasting members’ money funding Labour’s endless rightward shifts.

Indeed, Unison regularly harasses, defames and expels committed union members for the crime of questioning why their union funds a party that consistently acts against their interests.

And now Labour have gone and done it themselves. All of a sudden, a Westminster silly season story of precious little interest to the public has had a game-changing effect.

Game-changing as in scoring a massive own goal.

Decisively making the wrong decisions

Perhaps Ed Miliband got spooked by all the whispering that he’s not a decisive leader. Britain’s political culture tends to overvalue ‘decisiveness’ at the expense of sound judgement – one of the reasons we tend to elect leaders who announce big changes that invariably fall flat on their face.

Whatever the reason, Ed has certainly acted decisively, but he’s made what – for his party – is completely the wrong decision.

It is no exaggeration to describe this as the single biggest blunder by a British political leader in living memory.

Let me explain.

For nearly 20 years at least, Labour has tried to define itself against the trade unions. Sometimes the intention (as now) was spin for the benefit of the right-wing press, at other times it was ideological – but the policy effect was always the same. Union members – as public sector workers, low-paid workers, or staff engaged in industrial disputes – took the hit.

Meanwhile, Labour-affiliated trade unions bankrolled the party. Even while Blairism got the corporate cheques rolling in, union funding was a key plank of party finances. It was a one-way bet that the unions always lost – I struggle to think of a single beneficial policy that union funding secured since the minimum wage fifteen years ago – but nostalgia, inertia and tribalism kept the funds flowing.

For a while this uneven relationship was assuaged by the public sector pay rises fuelled by the fruits of the Blair-Brown property bubble, but even during the so-called ‘years of plenty’, there was plenty of disquiet among rank and file union members. The Fire Brigades Union disaffiliated in 2004 after a bruising national strike against the Labour government. The RMT was kicked out after it supported non-Labour candidates in Scotland. Unison’s attack dogs were regularly unleashed on activists who called for the Labour link to be broken.

For the unions it made no sense. For Labour it was the longest free lunch in history.

But if union members gained so little from funding Labour, why did they do it?

Just another box on the form

Call it the path of least resistance. Doing something is harder than not doing it. Signing up for an organ donor card is harder than not. Just as, in a theoretical opt-out system, choosing not to hold an organ donor card would be harder than the status quo of holding one.

It’s the same with trade union members funding Labour. At present, the unions operate an opt-out system – a union member is automatically assumed to be willing to fund Labour unless they specifically tick the opt-out box.

Under Ed Miliband’s proposal, this will be reversed – each member will fund Labour only if they specifically tick the box to do so.

Some of those members will just not even read that part of the membership form. Many more will take one look, consider what the austerity-supporting, welfare-bashing, cuts-promising Labour Party offers them, and decline.

It’s a small shift that will cost Labour £5m – nearly two-thirds of the money currently raised by opt-out affiliation fees.

And for the Labour Party itself, it’s lunacy.

We hate ourselves and we want to die

Ed Miliband seems to think that by breaking the automatic link with union members, it will force Labour to do more to engage with union members in order to get them to actually join the party, at which point they would of course fund it. He thinks it will drive an increase in party membership.

In theory that line carries some logic. There’s just one problem. Labour has already committed to take a giant shit on trade union members should it win the next election.

In pledging to stick to Tory spending plans, Labour has in effect pledged to enact more public sector job losses, more cuts to local government funding, more attacks on social security (affecting members of Unite’s laughably hypocritical ‘Community Union’ initiative). It will no longer commit to even slowing austerity; it will not commit to repealing the bedroom tax; it’s not even willing to say whether it would scrap George Osborne’s new seven-day minimum time limit on claiming benefits following redundancy, a measure that will save the Treasury a relative pittance.

If Ed thinks that kind of talk is going to get union members – screw it, anyone at all – joining the party, he’s even more delusional than his two vainglorious predecessors.

Here’s what will really happen.

As expected, party funding from the unions will plummet. The pro-Labour union leaders will stay loyal (whilst pointing more fingers at Labour’s Blairite faction, Progress) but their members will want away. Membership will not rise significantly, and any small rise will be just a flash in a passing pan. Labour will be squeezed for funds at the next election, probably forcing it to solicit more corporate donations.

But that’s just the start. After 2015, amidst the crushing reality of Labour austerity, membership, donations, and union relations will collapse. Much of this would have happened anyway, but by breaking the opt-out funding link with the unions, Ed Miliband has made it far easier for union members to ditch the party; rather than having to force recalcitrant union bosses to break the link, often under threat of expulsion, they can simply vote with their feet. Dave Prentis can talk all he wants about historic links with his Labour brethren – his members will have long since gone their own way.

What a generation of witch-hunted Unison activists have tried and failed to achieve for more than a decade, Ed Miliband has accomplished for them at a stroke.

An act of self-immolation

Cutting the automatic union funding of Labour is the first step in the death of the Labour Party. And for those of us who have wanted this for years, it is a brilliant, brilliant thing.

But that’s because we want to see the death of the Labour Party. How extraordinary that Labour wants to see it too.

This article is written with a doff of the hat to everyone who fought for years to democratise trade union party funding, and who were variously harassed, smeared, abused, humiliated and expelled for it. You won in the end.