Sunday, 22 January 2012

Labour are the party of responsible capitalism, but we need to be work out exactly what measures we're proposing.

Post the Fabian Society conference on the 14th January, everyone was shouting about “predistribution, not redistribution”; that Labour should advocate an economy where the distribution of wealth is fair and equitable without the government having to step in with wildly redistributive policies, as part of the wider campaign for “nice” capitalism…I saw some rather over excited tweets claiming that if Labourites simply kept pushing that phrase from now to the election, we would defiantly see a Parliamentary majority.

And then Cameron decided he was a nice capitalist too.

This isn’t hard territory to outflank him on, though; yes, the Conservative’s Co-operatives bill is no bad thing, but largely Cameron’s words are far more rhetoric than substance, while it has been Ed Miliband who has been framing this debate, Labour who are the sister party of the Co-operative party; it was the Co-operative Party in partnership with Labour which secured the legislation that is to be consolidated.

But while a Cameron focused more on benefit caps than pay increases might not be hard to outflank on nice capitalism, Labour needs a really coherent, strong, responsible capitalism policy package to show how we would go about reinventing the markets once back in power; many key Labour figures have put forward various ideas, but these need expanding and consolidating.

 Ed Miliband has put forward five key proposals:

- Banks lending to the businesses that need it; and this being their primary goal, above the pursuit of short term profits.

- Greater power to shareholders with long-term holdings greater power, particularly at times of takeovers, to refocus the emphasis on long term sustainability and growth, rather than short term profits.

- Encouraging vocational skills, to meet unmet market needs.

- Restraints on executive pay.

- An end to "large concentrations of unaccountable private power that lead to higher prices, exploit consumers and lead to inefficiency".

We need to look further at how Labour would actually make these things happen; how would they been encouraged…or would they be legally enforceable?

Should banks have to lend a certain minimum to businesses…if so what types of businesses? Would all companies have to give greater power to long term shareholders…should there be some sort of minimum length of time that shareholders would have to hold shares in a company? What kind of educational reforms would be put in place to encourage vocational training? How far should the government go in actively breaking up monopolies to avoid concentrations of power?

As for high pay, we should certainly adopt the High Pay Commission's recommendations for greater transparency…

-Publishing the top ten executive pay packages outside the boardroom

-Forcing companies to publish a pay ratio between the highest paid executive and the company median

-Companies to reveal total pay figure earned by the executive

…but is that enough? Will business pay its top level people less just because it’s all out in the open? Some, probably, but it’s very unlikely all would.

If we’re not looking at taxation as a way to curb top tear pay (although the five point plan’s bankers bonus tax could probably find a place in a responsible capitalism package), then instead maybe we should examine linking the amount that the highest paid earner can earn to the amount the lowest paid earner can earn…potentially enforcing this through legislation.

Meanwhile Labour can go a lot further in supporting and encouraging co-operative enterprise than Cameron is currently doing (although we should, of course, fully support what he is doing), and outside of the cooperatives movement we can still work to put employees in a far more central position in regards to decision making; for example, making businesses put employees in remunerations committees.

Finally, and I’m starting to sound like a parrot here, but Labour should actively support, as in, say we will pass legislation making it law kind of support, the Living Wage. Not just saying “well, hopefully; we’d like to do it”; saying that we will.

Labour are the party of responsible capitalism, but we need to prove that, unlike Cameron, this is substantial and not just rhetorical, by sitting down and working out exactly what that means in terms of what actions we would and will take in power, to great a better, fairer capitalism and society, and presenting this to the public as a fully thought out, coherent proposal.

Friday, 6 January 2012

Labour's flagship policy offer?

In his article for LabourList, Gus Baker argues that Labour need bolder and more dynamic policy ideas to inspire the public’s support. Now, I disagree with his implication that “pledges to decrease VAT on home improvements to 5% and regulate peak time railway fares” are all the party currently has to offer; the £2 billion tax on bankers’ bonuses to create jobs is very much in keeping with the public sentiment of the moment, while investment in schools, transport and roads is a potentially very big and bold piece of legislation.

But I do think, firstly, that the main thrust of what the public are hearing from Labour is criticism of the Conservatives; they are not hearing the five point plan clearly articulated. Labour should, more, when criticising Tory policies, be saying “and what they should be doing instead is…”.

And furthermore parts of the five point plan are…vague. With the exception of the £2 billion tax on bankers’ bonuses, the ideas of “job creation” and “public investment”, though clearly policies that Labour should adopt, are not…one, simple idea for people to get excited about, the way the minimum wage was. And meanwhile the VAT cuts and national insurance breaks (again good policies) while are not vague are, as Baker said, are not massively awe inspiring ideas either. Not that we shouldn't support these policies; it's just that they don't make very good flagship policies.

So then...what?

What policies could Labour adopt that are simple, clear and exciting?

Dropping the Health Care Bill?
Obviously something we do believe, and it has popular support, but trying to make it out centrepiece would be problematic because it’s negative; it’s hard to get the public excited about something that is saying “let’s go back to the way things were!”.

Renationalising the Railways?
OK, although I do think this would be a good idea, I’m almost joking by writing it; not only do I think the Labour Party isn’t going to do it, there’s potential for it not go down all that well with the public (potentially; I would love to see someone do a study on this).

Prison reform?
I certainly think Labour should get behind the idea of a more reform based prison system as a way to cut reoffending and thus better protect the public, but this also falls into the category of being too vague and generalised. Furthermore, it would essentially mean agreeing with Ken Clarke; though I would be all in favour of the party working with Clarke on the issue (besides the fact that Clarke is a. lovely and b. correct on this issue, some bipartisanship might win points with the public), such a flagship policy like this would really have to be something we can say the Tories wouldn’t do.

Income tax cuts?
Andrew Harrop recently argued that Labour should advocate progressive income tax cuts. There are ups and downs to this idea…the public might well be in favour, but to some doesn’t seem all that left could perhaps be done alongside public spending to stimulate the economy?, but is that affordable? This could be a strong political move, but how effective it would be without government spending, and how possible it would be with government spending is questionable. But certainly an option Labour should explore.

The Living Wage?
This is probably my top pick: raising the minimum wage to a living wage of £7.20 (£8.30 in London). It’s a simple, clear cut change in the law that would be of great benefit to so many. There is, of course, the question of whether those who are already paid the living wage or above would see it as advantageous to them; but I believe people are both egalitarian enough and aware enough that they themselves might one day end up in a low paid job that they would still support the policy.

These are just some ideas; there are certainly other options…but Labour should certainly think around potential flagship policies that the public can get enthusiastic about.

Thursday, 5 January 2012

Democrats for Ron Paul?

Romney limps to a hollow victory, Santorum gets his anti-Romney surge, Bachman is gone and Perry might as well be, Gingrich cancelled his result watching party and some silly person voted for Cain. But among the many shenanigans at the Iowa caucus, we saw the strange phenomenon of normally Democrat voters registering Republican to vote for Ron Paul.

Although his final result was perhaps a disappointment compared to the indications of the initial exit poll, Paul still came third with 21 percent. Now, a lot of the (often incredibly zealous) support for Paul is hardly surprising; clearly for any Libertarian Paul is something of a dream come true.

But Democrats? People who support Obama in ’08? Going from voting for a man who was proposing an economic stimulus to a man who believes so much in the power of the free market he’d like to do away with loans for students and have universities operate purely on market mechanisms?

Paul won’t win the Republican nomination (It’s gonna be Romney. It was always going to be Romney. By the time he gets the nomination he’s going to look incredibly weak, but it’s still gonna be Romney). But it’s interesting to examine why people we would presume are progressive are lending their support to the Libertarian (and, potentially, what this says about their perceptions of and opinions on the Obama administration).

His any-war message is a big deal to a lot of his supporters; Obama being seen as pro-war because of his intervention in Libya (which I personally think was brilliant, but anyway…), as is his emphasis on freedom and civil liberties (while Obama signed an extension of the patriot act). This perception of him at the candidate of none intervention and freedom is one that understandably appeals to progressive voters.

And there’s no denying of his personal appeal; he seems to be a man of genuine belief and integrity (though I may not agree with his beliefs I would concede that he seems to be a good person who believes in the principles he preaches). This goes hand in hand with the perception of him as the candidate “not in the pocket of wall street”; exactly what this means to different people, and in what way Obama is in the “pocket of wall street” varies; but it has become a concept with significant weight and significant appeal to many, including the anti-banking and big business thinking of some on the left.

It should also be noted that his belief in states rights go someway to undermine some of his more socially liberal policies; he may believe in gay marriage or a more liberal policy on drugs, but as his belief would be that he, as president, should stay out of those issues, his presidency would not make such laws more likely. And his reputation as the incorruptable defender of liberty and peace is not entirely water-tight.

This, though, does not change the perception of him as the socially liberal and incorruptible alternative to Obama, whatever the flaws in this perception may be.

But what happened to “it’s the economy, stupid”? Is that not the key issue on which voters make their choice, in the majority of the cases? And in that case, why would Democrats make such a dramatic shift? Are we to assume that former Obama supporters supported him over social issues but were economically right wing, and now Ron Paul gives them a candidate who fuses those two values?

This still seems problematic in the implication that their support for the Democrats in ’08, then, was based not on the economy but on social issues.

So then, what? Perhaps it is that, though people’s primary reason for voting is on the economy, it is not on economic principles. Swing voters are most likely to vote for the incumbent if the economy is doing well, and for the opposition if it is not. And perhaps Ron Paul brings enough personal appeal while not being the often true stereotype of the crazy anti-gay, anti-contraception, creationist Republican to entice less ardent (and maybe less economically knowledgeable) Democrats to do the same.

This is just speculative; I still find it close to un-understandable that a supporter of the occupy movement would also support Paul. But I do not think support for Paul from progressives is a mark that they are suddenly opposed to medicare or anti-discrimination laws or really want the free market to rule supreme (of course, many of Paul's supports would like that, but I would argue this isn't true of those who normally support the democrats). This speaks more of a dissatisfaction with Obama's record on civil liberties (which I would argue is over hyped and largely ridiculous; getting rid of don't ask, don't tell anyone?) and a generalised feeling of a need for a change of direction in the economy, rather than actual support for the change Ron Paul would like to see.

And I still maintain that the real winner of the Iowa caucus was Obama; very little could have helped him more than the entire farce that has been the race for the Republican nomination so far. But the support from liberals for Ron Paul is still an interesting phenomenon, that may prove useful study for both the Democratic and Republican parties.