A PM held to ransom

David Cameron returned from the European Summit last week announcing that he had vetoed a new treaty in the ‘national interest’. It would be more accurate to say he was ‘held to ransom’ by the Conservative Party’s friends in the City.

Cameron’s Conservatives are a new breed of Tory. It would be wrong to say that, like the resurgent Wispa bars, they are the same 80’s product in a shiny new wrapper. Nearly 150 Tory MPs are ‘newbies’ who took their seats in 2010. Fewer of them attended private school then in years past- 54% today compared with 70% in 1983. The party is a different shade of blue from Thatcher’s time.

One thing that has not changed is the party’s vested interest in protecting the perceived generators of national wealth. The Smith Institute reports that 27% of the current Conservative crop have a history in financial services. According to Aditya Chakrabortty of The Guardian, the financial sector in this country employs about 1 million people. This means that an industry that employs less than one-thirtieth of the working population is represented by one-quarter of MPs in the dominant governing party.

The Conservatives and the financial sector are entwined in other ways too. A report by GMB reveals that nearly 60% of donations to the Tory party come from individuals and companies linked to finance, hedge funds and other City interests. The Square Mile has often been touted as the beating heart of London. In many ways, it’s the beating heart of the Conservative party too.

In light of such figures, it should come as no surprise that a Conservative Prime Minister should fight tooth and nail in the most prestigious of arenas to protect City interests. Cameron’s so-called ‘veto’ was not a free decision made by a plucky little Englander taking on would-be tyrants overseas, it was the ransom he was forced to pay in return for the continued sponsorship of the financial wizards of the City. On Newsnight, the Minister for Europe effectively conceded this point when he argued that: “There was a real risk that without the safeguards [Cameron] wanted…you would over time have a read across from the closer fiscal integration that the Eurozone countries want to do towards measures that would influence financial services in particular.” The ‘national interest’ was revealed by the bumbling Minister to be code for ‘financial services’.

Is it right that the diplomatic strategy of the British government should be dictated by a closeted club of multi-millionaires detached from the everyday experiences of the vast majority of Britons? Once again the formidable array of interests that profit or benefit from the mysterious operations of finance capital have shifted into gear in spirited defence of the sector. Financial services provide billions in corporation tax. Financial services are one of very few sectors that Britain can boast of being a world leader in. Financial services have a noble heritage reaching back to the dawn of empire, and deserve their vaunted position at the apex of our commercial society.

These are all true statements. What is interesting is that very similar things were said of the coalmining industry in this country thirty years ago, of shipbuilding, and of manufacturing. Other things were true of these industries. They were inefficient, could no longer compete with other nations, and required huge public subsidies just to keep going.

Curiously, the same could be said of the financial sector today. It is no longer efficiently allocating credit to those businesses that need it. It is losing ground to American and European competitors, a process that will only speed up as Britain is left out in the cold while closer fiscal consolidation of the Eurozone takes place. It has required £289 billion of direct financing by the taxpayer since 2008 just to stay afloat, far more that the £193 billion it pumped into the treasury in corporation tax between 2002-2008.

This is the final damning reason why Cameron’s Conservatives are a kind apart from Thatcher’s. Her government identified failing industries, stripped them of their workforce and let them loose to explore the seemingly endless opportunities promised by the ‘knowledge economy.’ Cameron’s government is being held hostage by a failing industry that continues to suck up the resources of the British state and dictate policy terms to a country that no longer sees it as a source of any worth.

Louie Woodall is a member of the Young Fabians and Assistant Editor of the Young Fabians Blog

Why Labour’s economic narrative needs to change

In this member post, Young Fabian member Max Krahé argues that Labour should own up to its economic mistakes, or risk losing the argument at the next general election.

In order to win the next general election, Labour must grapple honestly with its economic past. It should highlight its mistakes, and not overstate its achievements. Labour has everything to win from admitting mistakes, and everything to lose from denying them.

This article is not about actual economic analysis and will not dissect Labour’s economic record. It is about taking a step back and looking at narratives that can credibly be constructed. It is concerned with the image of Labour’s economic management, not with the actual record.

Labour got a lot of economic decisions right in government. But attempting to tell a story about ‘Labour’s decade of economic golden years’ is foolish: in the midst of the largest recession since 1929, a narrative of success is unlikely to wash.

The recession started under Labour, and in a sector closely associated with the Labour boom. People who have lost jobs, seen their savings wiped out, or find themselves in negative equity do not care if inflation was under control for the last 10 years. Labour’s economic successes are too far removed from most people’s day to day experience.

Negative stories on the other hand, including of course the Tory ‘deficit denier’ narrative, fall on fertile ground: they effectively exploit a gulf between positive Labour statements, e.g. ‘look at how well we managed the economy’, and people’s daily lives.

As a simplistic positive narrative about the economy is not viable (nor indeed true), what should Labour’s message be? A simple story might be this: Yes, debt was on the high side, and not every pound spent was spent wisely. The deficit was structural.

Nostra culpa, nostra maxima culpa*.

It’s not a line that should be used unprovoked, but could form part of any response to the next round of deficit denial and ‘Labour mess’ allegations.

How might it play out? By accepting the Conservative’s accusations we end the argument about national debt levels, and vacate ground on which the Conservatives are winning. Reducing debt levels is generally perceived as a good thing (as distinct from the narrative of ‘cuts and austerity’). So let’s not talk about debt.

Of course, the Conservatives may continue to attack ‘Labour’s high deficit’. So much the better: criticising a previous government’s policy would make the Conservatives look like an opposition party, undermining claims of being forward-looking and concerned with growth and the future of this country. It would lend support to our rival narrative of the ‘no-vision austerity Tories’.

Compare this with a continued defence of the deficit. In the short term Labour risks looking like a sore loser, and the deficit denier story may sink in for good (dishonesty is probably more damaging than excessive spending).

Even if the Tories eventually stop making ‘deficit denier’ accusations, this would merely freeze the debate. At the next general election expect the Tories to wheel out the same accusations: Labour cannot be trusted on the economy, they are still deficit deniers etc etc. Unless a credible counter-narrative has been established in the meantime, these statements will fall on fertile ground.

So if we don’t settle this debate now, we risk being branded (successfully) as economically incompetent at the next general election. Or we admit to our mistakes at a later time, taking the inevitable hit in the polls closer to the election.

The time to own up is now.

We should not be afraid of buying into the Tory story of the ‘Labour mess’. This will settle the issue, neutralise one of the more potent rhetorical weapons in the Conservative armoury, and will do so with plenty of time to spare before the next elections.

If we do not own up to our mistakes now, we leave ourselves open to Conservative attacks. And doubts about Labour’s competence on the economy are likely to re-surface at rather inconvenient times.

*Admitting to leaving behind a bit of a mess shouldn’t taint Labour as economically incompetent, if managed well. In owning up to the ‘Labour mess’, we regain the credibility needed to argue that 2008 was 1929 but 2009 was not 1930. Yes, debt may have been on the high side, but let’s not miss the wood for all the trees: Labour has prevented a catastrophic collapse of the banking sector; Labour has saved the country from the brink of an economic depression. Maybe it’s ok if we didn’t leave the kitchen spotless in the process?

The Future of the Fabians: 3 suggestions

Fabianism is older than the Labour Party. Its tradition stems back before the Labour Representation Committee, before Keir Hardie and before version one of Clause 4. And yet Fabianism was crucial to every Labour government since it formed the party and must still be crucial to contributing to the formation of the next Labour government.

Sunder Katwala moves on from his service to the society and leaves it at time of renewal across the Labour Party. The Fabians and the Labour Party will both have new General Secretaries in 2011 and both individuals will have the challenges of making their organisations adapt to opposition.

Young Fabians and Young Labour members should rise to this moment and to Ed Miliband’s assertion that a new generation has taken over the party. In 2010 over 190 of the Society’s 320 new members were Young Fabians.

So here are three suggestions I would offer to the new Fabian General Secretary as an active member of the Young Fabians:

1. Membership is more than paying your subs

The Young Fabians pride ourselves on being an inclusive organisation, where being a member means more than receiving a magazine and pamphlet in the post each month and going to conferences. Young Fabian members are encouraged to attend social events, contribute to policy commissions, join in online debates, write for our blog and for our magazine. We strive to make our members feel part of an organisation of like minded young people that they have ownership of and a space where they can debate and offer ideas. There is more the senior society can do to foster a sense that Fabians are part of a tradition, a community, a movement, where their ideas are valued and contribute to the future of the Labour party.

2. Campaigning is an important part of politics

Whilst we’re unashamed of being part of “pamphlet labour” and talking policy is our usp, the Young Fabians have a great tradition of being young campaigners as well as young thinkers. For local, general, European elections and even the US and Swedish General Elections, the Young Fabians have hit the #labourdoorstep and given the shoe leather needed to win elections for Labour candidates. There is a time for pamphlets and a time for action and the Young Fabians are as proud of our canvassing as of our policy and research. Without campaigning, Labour candidates would never get elected and our policies would stay in pamphlet books rather than getting on to the statue book.

3. Politics happens outside London

After some deserved criticism and a lot of hard work, the Young Fabians have made huge strides at improving our reach outside of London. The key lesson we learned, wasn’t to mandate a largely London based Executive to travel up and down the country running meetings. It was to learn that empowering non-London based members to run events with advice and guidance was more productive and brought better results. We still have further to go on this but there is much to be gained from empowering Fabians to run their activities, with relevant support, wherever they are. The new General Secretary should build and develop the Fabian local societies, encouraging them to become active parts of the Labour party in the regions and areas they work.

I’m sure there are more ideas that other Young Fabians would like to add to the debate about the future of the Fabians. Please join the debate and submit your contribution here.

Brian Duggan is Policy Officer for the Young Fabians.

The trouble with G.O’D.

The Guardian reports today that Sir Gus O’Donnell – head of the Civil Service – blocked an attempt by Gordon Brown to launch a judicial inquiry into the phone hacking affair because of the general election.

Given recent revelations, that looks like particularly poor judgement.

And it raises another important question: is Sir Gus O’Donnell too political to be head of the Civil Service?

On the one hand, you might agree with his analysis that it would “inappropriate to hold a judicial inquiry so close to a general election”, as the Guardian reports – any such inquiry would likely have become a campaigning issue due to (a) the fact former Editor of the News of the World, Andy Coulson , was a key part of David Cameron’s so-called ‘inner circle’ and (b) Labour had lost the support of the News of the World (and the Sun).

On the other hand, the appointment of Andy Coulson – and his retention even when the evidence of widespread phone hacking continued to drip into the public sphere – calls into question Cameron’s judgement. It is entirely appropriate for political opponents to highlight this.

More fundamentally, the proximity or otherwise of elections should not be used to insulate politicians from poor decision making, and nor should it be used to obfuscate the judicial process – remember, victims of phone hacking were subject to illegal acts for which some reporters have already been imprisoned.

This is the second time in 10 months that Sir Gus O’Donnell’s advice has been called into question – the first related to his role in the coalition negotiations last summer.

Is it now time for him to go?

Alex Baker is Secretary of the Young Fabians.

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Just what is Liberal Conservatism?

This week is set to be the International week of the 2010 Election campaign. So in theory, we should all understand a little more of what William Hague’s Liberal Conservatism is all about. Ahead of the week I’ve just read the Tory manifesto International affairs section and am still puzzled. I’m hoping, but not expecting a little more clarity during the week.

Rightly, the manifesto identifies that more than ever the interests of nation states are interconnected, economically and politically.  But the policy solutions still seem ideologically unclear and unsound.   

While the answers to Britain’s domestic challenges are met with a shrink-state response, the manifesto calls for “a concerted response from the state” in its international chapter.

There also seems to be a glaring contradiction in Conservative policy to the European single currency, varying between forthright hostility to a guarantee for the public to have their say:

“a Conservative government would never take the UK into the euro.”

And later “We will ensure that by law no future government can hand over areas of power to the EU or join the Euro without a referendum of the British people.”

Now, I’m not advocating that now is the right time to join the Euro, but a manifesto is always the right time to be clear what your position is.

The document is unclear of what One World Conservatism is or what Liberal Conservatism would achieve. But from the Tories foreign policy record, I don’t relish the prospect of these ideologies guiding British foreign policy.

Let’s not forget these things as we move into the international week of this election David Cameron went on a free trip to South Africa, funded by a lobbying group founded by a former member of the South African military intelligence to bust sanctions against South Africa. Let’s also not forget that when Labour took office our international aid budget was in decline and we where losing a beef war with Europe. And today in the European Parliament, the Tories lose more legislative proposals than the Liberals, Greens and Communists because of Hague and Cameron’s self-imposed exile from the mainstream grouping.

In the week ahead let’s continue to take a long hard look at the Tories and ask Cameron and Hague, just what is your vision for Britain in the world and where would we be if we took your advice?

Tory Manifesto launch: “Do it yourself Government?”

There’s been a flurry of manifestos being launched today – UKIP, Plaid Cymru but the main event was obviously the Conservatives manifesto launch this morning at Battersea Power Station.

As Anthony Painter has pointed out the Tories have form when it comes to Battersea Power Station, broken promises and unfinished enterprises.

As for the manifesto itself, if Labour was supposedly looking towards North Korea for inspiration for its manifesto cover then Cameron was perhaps looking for the Thatcher touch. In hardback and costing £5 from all good stories that would sell such things, the Tory manifesto is a hefty 131-page tome. This is probably where a couple of short videos could have come in handy to explain what the booklet is about!

Don’t worry, you can even listen to audio recordings of it.

If the launch was supposed to convey a vibrant party entering into the election with energy and conviction then, perhaps, having a launch where members of the shadow cabinet were rolled out to individually give their five minute pitch for a Conservative Government was not the best approach. In fact the BBC online seemed to get bored with in and cut the live feed till the Cameron main event. It all seemed a bit 2005, they even continued with then slightly pained ‘rent-a-crowd’ behind Cameron.

Ideas like the National Citizen Service (that will be £800m please) and the marriage tax break plan (but big KC doesn’t seem to think much of it) all point to a party going backwards in order to seem current.

Ok, what about the manifesto itself? Well the big idea is ‘The Big Society’, it is the centrepiece of the Conservatives agenda which underpins all their policies. Except it isn’t very new or very well developed. Sunder over on Labourlist has pointed out that this all sounds less ‘SamCam’ and more blue rinse Thatcher.

The idea is that the Government is going to do less, but you’re going to have to make up the shortfall. If you want a good school, run it yourself. If you want public services, start your own. The Tories seems enamoured with the idea that ordinary people have endless time and resources to invest in the running and providing leadership of services. And it fails to address the key question of what happens if people just decide not to get involved? Or worse?

All the parties talk about localism but the Conservatives are not talking about alternatives, they are talking about substitutes. It isn’t the only place where the policies seem weak. The Conservatives’  politics around democracy and young people look especially lacking when compared to any of the other major parties.

The rest of the manifesto is, as the FT has pointed out, a rehash of previously announced policies:

• Sack your MP. Tories would give power of “recall” to let electors throw out MPs. Parliamentary Privilege Act to stop MPs evading prosecution.
• See how government spends your money. Central government job vacancies to be published online. All major contracts of £25k-plus to be published on line. In local government all items and contracts over £500 to be published.
• Pensioners. A promise to protect the winter fuel payment; free bus passes; free TV licences; disability living allowance and attendance allowance; and the pension credit.

Commentary seems to be lukewarm with Gary Gibbon from Channel 4 asking whether Tories’ manifesto had been designed by Smythson and the Independent rushing to tell us that Keane’s drummer was ‘horrified’ that they had used on their songs as at the launch. The Institute of Fiscal Studies puts a big question mark over the idea that the Tories won’t have to raise taxes and points to the lack of any further detail on their tax and spending plans for the lent hog the Parliament. Interestingly I could find only Johnthan Freedland on the left who seemed to think that Cameron gave a ‘commanding’ performance and ‘beginning to seal the deal’.

But the real question is why is where is the Party really focused (as Sky points out): both Parties are talking up the economy but, for the Tories, if the idea is to do something about the deficit faster and harder than Labour, then why all these whet spending promises?

Lord Kinnock: voters will back experience and continuity like they did in 1992

Last night Lord Kinnock spoke to Oona King, former diversity adviser to the Prime Minister, and the Young Fabians at an event in Portcullis House, Westminster.

Lord Kinnock spoke about a wide range of topics including reflecting on his own experience of the 1992 general election and the parallels with the forthcoming national poll.

In the video above, Lord Kinnock says that he believes as we get closer to the election, voters will back experience and continuity and this make a Labour victory more likely. He also praises the way Gordon Brown handled the economic crisis.

There’s no substitute for policy thinking and campaigning

As we move closer to election day and the polls begin to tighten one thing is increasingly clear. There is no substitute for good policy thinking. You can spend money on billboards, pollsters, glossy leaflets and even gimmicks, but if you haven’t done the graft and got the ideas and arguments together, you run the risk of the press tearing you apart quicker than voters put the leaflets in the shred pile.

As Labour begins to put the detail on top of the core narrative of securing the recovery, protecting frontline services and building the new industries of the future, we are already starting to see a Tory party run fast out of ideas as well as direction.

For Young Fabians, sometimes unfairly derided as being a little shy to campaign on the ground, this is a time to step in and do some scrutiny of the Tory parties policy and detail. That’s why we’re re launching, Young Fabian Policy News and have included a brand new feature ‘Opposition Policy Watch’ to look at some of the thinking coming from the Tory right and put it to the test.

If you’d like to contribute to future editions of Young Fabian Policy News please get in touch and if you’d like to receive further information from the Young Fabians, you only need to join.

The press are right to say that this election will be a big choice, a big battle of competing ideas and visions. I think Labour has done the thinking and the graft in policy terms, I don’t think that the Tories have and it’s up to all of us to expose that.

But whilst it is true to say that Labour is winning the battle of ideas, we must also win the argument on the doorstep. There is no substitute for hard graft and thinking in the policy sphere, but there is also no substitute for knocking on doors and speaking to voters to communicate those ideas and I know that Young Fabians across the country will be helping Labour campaign on the ground as well as win the battle of ideas.

Politics is about more than promises. But if that’s all you’re offering. My advice is, don’t break them.

Yesterday’s announcement about Lord Ashcroft confirmed my suspicions in more ways than one. That one of the Tories’ chief donors and strategists is a non dom is hardly surprising. For a decade Tory leader after Tory leader has tied himself in knots trying to protect him. Yet the real indictment of the Tories is not simply that they hid this truth from the public. It’s that they placed a man at the heart of their operation who was happy to shortchange the exchequer at the same time as he pumped money into their key marginals. Flashy leaflets took priority over tax for public services. That says as much about Cameron as it does about Ashcroft himself.

It’s a matter of weeks until the election and David Cameron continues to refuse to put meat on the bones of his plans for the country. His speech to the Tory spring conference yesterday was another example of Cameron’s cynicism. A speech with as much substance as he had notes. He might as well have saved us all the time and simply said, “look at me, I’ve remembered loads!” The first time he did it (according to him that is. He didn’t actually do his 2007 conference speech without notes. They were sitting right in front of him) it was cute. The second time it was just smarmy.

Across the country the public are getting smart to Cameron’s game. A Comres poll in tomorrow’s Independent shows Tory support falling and Labour as the largest party in Parliament. Local people from across Cheltenham have been swamped by Ashcroft leaflets. The Gloucestershire Echo revealed yesterday that Tory HQ have plowed over £30,000 into the town. But residents know that it takes more than expensive design work to win their support. Politics is about more than promises. But if that is all you’re offering and you refuse to outline concrete plans. My advice is, don’t break them.