Posts Tagged ‘Economy’

Recession expression

Saturday, March 21st, 2009

There is an old addage: “It’s not what you say, it’s how you say it that matters”. Never is this more true when talking about economic issues, which are usually baffling to non-experts (and, as recent history has shown, equally as baffling to experts too).

Terms like ‘quantitative easing’ or ‘fiscal stimulus’ bear little relation to the lives we lead: Jane Bloggs is more concerned about paying her bills, then whether the Bank of England is creating money to buy bonds.

But Gordon Brown is a substance man – not bad in times like these – and his oratory shows it. Consider this section from his New Year’s message:

The scale and speed of the global financial crisis was at times, almost overwhelming. I know that people felt bewildered, confused and sometimes frightened.

That is why the response had to be swift and decisive.

That is why we acted so quickly to get money into the banks.  Not for any desire to finance bankers, but because if we didn’t it would have put at risk that which is most important to you and me – your jobs, your homes, your savings, your standard of living.

What keeps me up at night, and gets me up in the morning are the hopes and aspirations of the British people. My guiding principle, at all times, is the welfare and well being of British families and British businesses.

All of this would have been put at risk if we had not intervened and simply done nothing, as some would have had us do.

This will be a challenging year for the economy but I believe, with the right policies, we can build a better tomorrow, while dealing with the challenges of today.

The failure of British governments in previous global downturns was to succumb to political expediency and to cut back investment across the board, thereby stunting our ability to grow and strangling hope during the upturn.

This will not happen on my watch.

The lesson of this crisis is that we do not let recession take its course, yield to defeatism, or simply muddle through and just hope for things to get better.

The message is – we take action: we are providing an extra £60 to pensioners immediately, on top of the winter allowance; increasing child benefit from January 1st to £20 per week; and helping 22 million basic rate taxpayers with a £145 tax cut. Added to that, the cut in VAT this year will knock around £275 off the average family household bill. Not to do this would be imprudent.

Today the risk of attempting too little is a greater threat than the risk of attempting too much.

But then contrast this with a speech David Cameron made in January:

So let me tell you my vision of a good future for our economy. It’s an economy where government and its citizens live within their means, save for a rainy day, waste not and want not. It’s an economy where everyone has the chance to own their own home with space to live and breathe – and where we work to live, not live to work. It’s an economy that’s more productive, where people can work shorter hours and spend more time with the things that matter – family and friends. It’s a better balanced economy where we spread ownership and opportunity throughout Britain, so it’s not just concentrated in the hands of the few in one corner of the country. And it’s a more modern economy, where we create rewarding, good-paying jobs in the green and technological industries of the future.

If we achieve this vision, our country will be both richer and happier – with our standard of living and our quality of life rising together. And let us be clear, the quality of life matters.  It matters a lot. It is not just something for the good times; not just something for the richest. The richest in our society can already buy themselves a decent quality of life: it’s not the rich we need to worry about. So our economic vision is not driven by money alone, but by our view of what is right.

Spot the difference? Gordon’s tone is matter-of-fact, laden with economic terms and sprinkled with figures from policy announcements. David’s tone is soft, empathetic and somewhat lyrical.

Being in Government shouldn’t prevent Gordon, or Labour, from talking in more poetic language. Instead the electorate is bombarded with fact after fact, or with terms used by policy wonks but which aren’t always understood on the doorstep. At this time in the economic cycle, the party needs to appear sympathetic to the needs of the electorate; Labour needs to focus on people in its communications, not policies.

The same Labour communications technique has been in use since 1994, and has worked well for three elections. But in this new economic reality, isn’t it about time it was decommissioned?

  • Do you agree? Share your views by posting a comment.

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The goalkeeping performance of Brad Jones

Monday, March 9th, 2009

This may seem a strange title for a Young Fabian blog post but it shows just what the Labour Party is up against politically.

Irish broadcaster and challenger to the Murdoch monopoly, Setanta, today published their FA Cup ‘plums of the weekend’; the players adjudged to have performed the worst across the three FA Cup quarter finals and one 5th round tie that took place on Saturday and Sunday. Everton’s victory over Middlesbrough put a big smile on my face but it also got Brad Jones, Boro’s goalie, a place in this list. In Setanta.com’s justification for his selection, his performance was described as ‘about as convincing as a Labour party economic forecast’.

Let’s put aside the economics here and the unique circumstances we are in. Instead, the politics. Over the course of the 1990s – and definitely by 2003 and Iraq – television satire began to move away from a heavily anti-Thatcherite agenda to being critical of the Labour government. Natural, most people would argue, whether or nor they found it funny or agreed with it. This slightly obscure internet article, however, goes beyond critique and hits a severe level of either distrust, disdain, hatred, or all three, for the Labour party and the government. It’s a very light-hearted piece, and not at all about politics, but that in many ways serves to emphasise the anti-Labour feeling.

Never mind the polls, Labour politicians, advisers, organisers and candidates should be under no illusions as to the scale of the challenge that this indicates. The public must be convinced of three things. Firstly, that Labour is capable of governing (which the Setanta article seriously questions) and secondly, that we have the ideas and values not just to manage the recession but to improve the country in the more typical economic times that will return soon I hope. Thirdly, we must be explicit about the risk of electing a Tory government led by David Cameron.

Let’s start here on the latter. For me, Brad Jones performance was about as convincing as David Cameron’s claim to be truly progressive. His vision of a fair society is no doubt different to most people and now is not the time for government to withdraw.

Over to you for more suggestions …

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Is Brown the new Barack?

Wednesday, March 4th, 2009

I missed the beginning because of work stuff – yes the Young Fabian Executive have day jobs too – but I thought our Prime Minister did very well just now in his address to Congress.

He came across as passionate, knowledgeable, a man with ideas about bringing us out of recession and preventing similar failures in our interdependent financial world in the future. And at times human. These are the characteristics that many Labour supporters have seen before at private or party events but which he has struggled to convey to the wider British public. It will be interesting to see which clips are shown on the TV tonight and whether the slightly pointless ovation count is played up.

On The Apology that most of the Cabinet were apparently advocating, he was absolutely right not to do it. Yes, because of the poster argument, but also because the key benefit of apologising would be to draw a line under the past and be able to focus on plans for now and for the future. But this would not have happened. The media – particularly the tabloids and Tory press – rather than say thank you, would have plagued Brown for apologising in America and he would have faced increased pressure to ‘tell us to our faces’. The Prime Minister and his Cabinet colleagues are beginning to find some more appropriate language about how we got here, and hopefully it isn’t too late, because acknowledgement (but not apology) is necessary. It is frankly ridiculous that the whole of the world’s financial trouble is being seen as something Brown should take the blame for and he is right to try and ride the clamour.

Despite the ups and downs of yesterday’s scheduling, a successful trip. But if he learns one thing from Obama, and the behaviour of the White House yesterday, it is that he can not just be the world statesman he’s playing to be, but must also be seen to be concentrating on Britain. The public here will want to know how global solutions to recession will keep them in work and keep the roof over their heads.

Look out soon for Young Fabian work and events - with international and domestic focuses – on what this means for young people.

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Valentine’s Day in Brussels

Sunday, February 22nd, 2009

I spent last weekend in Brussels as the UK representative on the Expert Group on the economic crisis for ECOSY, the young European Socialists.

Beforehand I was intrigued about my fellow group members and how they would view the UK and the Labour Party, (despite it being Valentine’s Day, I didn’t expect it to be all love and roses). We’ve come a long way from the late nineties when the centre-left was in Government in most of Western Europe. Now I believe only the UK, Spain and Portugal have centre-left Governments, with Germany and Netherlands in coalition. But far from blaming Britain for the economic crisis due to our large and underegulated financial markets, my comrades from around Europe were looking to Labour for the solutions. They credited Gordon Brown with being the first to act and thought that through decisive action to protect British banks he had shown an alternative to the US approach which saw Lehman Brothers collapse. Most other countries have followed, and in some of our larger European neighbours such as France and Germany, second bailouts like the one we had in January are expected.

I found that very similar debates are taking place across Europe on issues such as bonuses, transparency and regulation. Some countries, such as Germany and Greece, had placed greater conditions on banks who had received Government funds than we have in the UK. The Group all agreed that bonuses should be based on long-term success and that we needed stricter regulation and greater consumer protection.

Our discussions convinced me of the need for effective co-ordination at the EU level, and beyond. In a globalised world, the level of regulation in other countries can have direct impact on British people and may require taxpayers’ money to bail out banks or protect consumers. A prime example was the uproar when individuals, companies and even charities realised that their deposits in Icelandic banks would not be protected should they fail. In the new financial system that emerges in 2009 and beyond, we need to be confident that our economy will not be destabilised by actions taken by banks in another country.

We also discussed how to protect our citizens from the negative impact of the recession, in particular to avoid mass unemployment and repossessions. Even countries that have a small and highly regulated financial sector, and therefore had no exposure to US sub-prime problems, are also now in recession and looking for ways to minimise its length and effects.

Here, the variation in existing welfare state provision can make a big difference to the level of flexibility Governments have and the levels of fear that workers feel about losing their jobs. In the Netherlands for example, workers get 70% of their salary for a year when they become unemployed, so that when they lose their job they don’t immediately have to worry about losing their home. The Government there is considering giving this money to employers for six months to enable them to reduce working hours or lay off workers temporarily. This long-standing investment in welfare means that the Government has much more scope to move the money around and direct spending in places that it will make the biggest difference. Of course the generous welfare systems in Scandinavia and other parts of Europe have long been the envy of the UK left, but I completely agree with James Purnell (writing here and in ippr’s latest Public Policy Research) that in order to improve welfare benefits and make them as untouchable as the NHS, we need to reform the system. It should focus much more on supporting people rather than simply handing over benefits each week and leaving them there for years and, we should create “a system that offers real help for people who play by the rules”. By moving towards a system more like the Dutch or Danish models, we can protect the welfare state from Tory and tabloid attack and improve the lives of millions of families, through the recession and beyond.

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