The left must find its voice on Syria

Piece for Shifting Grounds

The left must find its voice on Syria

On 26 March 1999, Russia and China tabled a UN Security Council resolution condemning the US-UK led intervention in Kosovo, which had been launched following the escalating massacre and ethnic cleansing of Kosovar Albanians by Serb forces.

The resolution denounced NATO action as a flagrant breach of sovereignty and demanded its cessation. In an important moment, the motion was resoundingly defeated. By 12 votes to 3, Western and non-Western states, many of whom were not natural allies of the US, lined up against it and backed the war. Summing up the mood, the Dutch representative said:

“Today we regard it as a generally accepted rule of international law that no sovereign state has the right to terrorise its own citizens…Times have changed, and they will not change back…”

This consensus did not emerge out of nowhere. It was a norm built up throughout a decade that counted the costs of inaction in Rwanda and Yugoslavia, and particularly in Bosnia at Srebrenica. But this was not some neo-con project. The idea that, in very limited circumstances and by very strict criteria, intervention could be justified to prevent an ongoing humanitarian catastrophe was pioneered by thinkers on the centre left, where it enjoyed broad support.

Thirteen years on, Dutch pronouncements look horribly premature. Bashar Al-Assad’s militias rampage through Syria, shelling and slaughtering his own people en masse – gouging out the eyes of children while they execute them, one by one – to see that his dictatorship retains power. As UN monitors withdraw, Russia and China shield the regime from any meaningful recourse, just as with Kosovo – except this time there’s little or no will to defy them. Times have changed back.

What is striking though is how relatively little we on the mainstream left have to say about all this. I am not for a second accusing people of not caring about events. But there is little of the pressure on William Hague to help find a solution that Robin Cook or Tony Blair felt, and which played its role in the decision to confront Milosevic. There is instead a sense of paralysis, a fatalism that nothing can be done. If this silence is ever broken, it’s usually to warn of the perils of action, rather than inaction.

But it doesn’t necessarily have to be like this. That’s not to argue that the model used in the Balkans or Libya will work in Syria. Ill-judged actions could easily make things even worse; each case is different with its own complexities, and should be treated as such. But there remains a host of at least plausible options far short of occupation or even air-strikes which could help make a horrendous situation in Syria a bit less so, and stem the bloodshed. One is a no-fly zone. Another, the most comprehensive, is a proposal for humanitarian safe havens (‘No Kill Zones’) put forward by Anne-Marie Slaughter in the US (here and here). These, as she outlines, could be defensively patrolled for instance by the Free Syrian Army, with the conditional logistical support of Arab League states, Turkey and the West.

Such plans may not in the end stand the test of scrutiny, though they have so far, and something like them is favoured by the French. But at the moment they are not even being countenanced by those on the centre-left in the UK; they are not even being discussed, let alone pushed for. Instead most seem to have succumbed to the gloomy assumption – until now the preserve of the far left – that all and any action involving Western power is reducible to an act of imperialism that can only end in disaster. If humanitarian intervention ever appears in our discourse, it’s rarely without inverted commas and a sneer.

What lies behind all of this, of course, is Iraq. The disastrous invasion and occupation has made it easy to tar all Western intervention with the same brush (helped further by proponents of war with Saddam cynically appropriating humanitarian language after initial rationales had been exposed). One opened the door to the other, so the argument goes. The histories of the conflicts in Bosnia, Kosovo, Sierra Leone and lately Libya are constantly being flimsily re-written to fit this neat worldview.

But whatever you think of those wars, it is possible and necessary to separate them out from Iraq and Afghanistan – or to support one but not the other. The former were wildly different interventions, prosecuted in totally different circumstance and for totally different reasons. Iraq met few of the criteria set out under R2P, for instance, or even Blair’s own Chicago speech. Similarly, there was no oil in Pristina, and very little geo-strategic benefit to Benghazi. Life is more complex than that.

More to the point, the interventions of the mid-to-late 90s and in Libya actually worked. They were enormously imperfect, complex and bloody (and in the case of Bosnia, belated), and occasionally horrible mistakes were made in the course of them. But they ultimately helped end conflicts which at one point had promised butchery, ethnic cleansing and human misery on an infinitely worse scale. Western influence and power remains a very blunt object indeed, and people across the left are right to treat it with suspicion. It will always be selective, and of course is sometimes the author of brute realpolitic. But occasionally, it can be pressed into engineering the least worst outcome.

Again, what is possible in Syria is likely very different to before. But progressives urgently need to address this mental block to any outside action at all, which seems to have set in among many of us, because at the moment it’s leaving an eerie silence in the face of immense brutality and suffering. The situation is not simple, and as Rory Stewart has said, “we do not have a moral obligation to do what cannot be done”. But we do have a moral obligation to open our minds, and at least arrive at that conclusion honestly.

On social mobility, we can't ignore the flaws of the tuition fee system

Latest piece for Shifting Grounds
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On social mobility, we can't ignore the flaws of the tuition fee system

Ed Miliband and Nick Clegg have both used this week to fire the starting gun on a debate over social mobility. Both, for different reasons, want to push past a focus on tuition fees. But as universities prepare nervously for the era of 9k fees to begin in September, the summer will inevitably reignite debate on the impact on the aspirations of kids from low income backgrounds. It remains vital that the left do not turn their backs on this debate – and the intellectual failures of the tuition fee system more broadly.

Higher education leaders have taken refuge lately in the fact that applications from disadvantaged groups are ‘only’ slightly down, rather than in total collapse. But this merely massages a deeper, structural problem – which is that far too few kids from working class and poor backgrounds go to university in the first place. Fifteen-year-olds on free school meals are around twice as less likely to pass on to higher education. As pressingly, woefully few attend our top universities.

For this the buck is often passed to schools and lower levels of attainment. But even BIS confess that “young people from disadvantaged backgrounds who achieve qualifications that would allow them to attend a selective university are [still] less likely to apply than their peers.” Research consistently shows that tuition fees influence this decision, with pupils from low income backgrounds far more debt averse and likely to have their aspirations suppressed as a result. Fees can also have some knock-on effect on attainment – if certain kids feel they have less to aim for, why study that bit harder?

These arguments are generally met with short shrift by Government or leading universities, who eagerly believe more time simply needs to be spent “explaining the system” to young people (the NUS or such like tend to cop the blame for ‘scaremongering’ at this point, too). Millions of pounds are poured into outreach schemes for this exact purpose. Huge efforts are made in an attempt to ensure students won’t ‘see the fee’ when weighing up the decision to apply. The argument goes that the headline tuition fee is irrelevant since the debt accrued isn’t normal debt: it’s only paid in small slices each month after people graduate and earn over a minimum amount; repayment is linked to income; it’s written off after 30 years, and so on. In addition, they point out that a range of generous – if complex – bursaries are available for the least well off.

All this is true enough. And most university management is populated by good people who genuinely care about social mobility. But, with the tuition fees system, they are simply pushing a very large boulder up a very steep hill.

This is ultimately because it relies on a vision of prospective students acting as perfectly informed rational consumers in a marketplace. This is improbable enough when dealing with something as ingrained as debt aversion. But it’s made even more difficult by the very discourse and architecture of reform that the tuition fees system rode in on.

Introduced by New Labour but really stepped up by the Coalition, this has seen a shift in the ideal of higher education away from one based on the common good – with publicly funded universities built largely on the shared pursuit of learning and knowledge – towards one orientated to what Stefan Collini calls a “purely economistic calculation of value, and wholly individualistic conception of ‘consumer satisfaction’”. In short, the relationship between student and institution has basically become transactional.

Leaving aside the resulting flaws and contradictions in terms of learning and teaching (which Collini brilliantly takes apart here andhere), this shift intrinsically creates huge problems for those claiming that fees need not deter low income students. Under this system, universities explain fees to students in terms of an ‘investment’. They market their different prices (which from 2012 generally vary from £7,500 to £9,000 a year) on their prospectus – the individual fee linked directly to the individual institution – and fix their entire message on encouraging students to weigh up the costs and benefits as consumers; ‘getting bang for your buck’ and so on (most of which travels under the rubric of the ‘student experience’).

This is marketised language for a marketised system. Fine. But is it surprising, then, that many students continue to ‘see the fee’, tot it up (which can be over £40,000 in all) and factor it into their decision making? And that as a result the more debt averse – many of whom live in households where the assumption is they won’t go to university – are put off by it? The whole organisation of HE pushes them to do so. You cannot set up a system which treats people like consumers engaging in a conventional transaction, as if popping into your local supermarket, while at the same time asking them not to think of the fee as a conventional transaction at all.

That’s why, when it comes to social mobility, all the good intentions, efforts exerted, money spent and (unambitious) targets set will only amount to running to stand still under the present system. If we totted up what the average person is likely to pay for the NHS or the police, presented it to them when they were 17 and required them to take out a loan to fund it or opt-out all together, what would the results be – no matter our exhortations on the progressive nature of the repayment?

The only socially just solution is to take the headline fee/debt out of the calculation all together, and to claim back higher education as a public service. As Miliband rightly says, if young people want to pursue a different route than university, they should have the option to do so. But money must be taken out of the decision. A limited graduate tax – partnered with proper public investment – is the only realistic way to achieve this.

It’s disappointing that despite flirting with this idea, Miliband’s has since turned away from it. But it was Jon Cruddas, his new policy chief, who argued recently that it was the debate around university fees, not Iraq, that marked the real change in the character of the last Government:

“The language was [now] of a rational economic exchange, of a derived utility, discounting for the future and of calculus. No discussion at all of the virtue of creating wiser more knowledgeable citizens; what intermediary institutions- such as universities- are there to achieve.”

It’s vital that as Cruddas puts his feet under the desk, this issue is not filed away or ignored. The flaws of the tuition fee system are a difficult subject for Labour, for obvious reasons. But, along with the Coalition and the whole HE establishment, they must face up to them.

Success for Hollande could change the terms of the debate

Piece for Shifting Grounds blog



It’s fair to say that the fallout from the 2008 financial crisis has not been kind to the left. A favourite talking point of those writing obituaries for social democracy is that right-of-centre governments have come to dominate the continent, holding power in 22 of 27 EU countries. So as the French presidential election reaches its crescendo this week, the prospect of an Hollande presidency could prove a decisive moment in recent history.

For one thing, if Hollande makes it to the Elysee he will have been propelled there by a revival of the far left. The Left Front, led by Jean-Luc Melenchon, has assumed a place and importance in this election that must seem a distant dream to their UK counterparts. Working as a coherent counter-veiling force to Sarkozy and Le Pen, they have dragged the debate leftwards and re-connected with working class voters long since thought lost to apathy or worse, the Front National. Here we should at least allow ourselves optimism at what the broad left can achieve with a few charismatic or competent leaders, and with Pythonesque splits and sectarianism left in the past. (Not losing sight of the shared enemy, Melenchon has long urged his voters to transfer to Hollande in the second round.)

But we kid ourselves if we think what we are seeing in itself represents a ‘uniform swing’ to the left acrossEurope. The French system is distinct, and the left there work on far more fertile territory than in other states: France’s political discourse (if not electoral history) traditionally leans their way. What is of more importance is if Hollande both wins and is able to implement his policy platform in the face of vested interests.

The austerity economics of the past few years has brought into focus a phenomenon that’s defined the past three decades – that is, economic policy (and debate) largely framed by the prevailing wisdom among financial elites. The most potent embodiment of this in recent times has been the almighty position assumed by the international bond markets. Although treated as neutral, these have demanded a highly prescriptive form of right-wing economics in exchange for low interest rates – with particular focus on deep spending cuts and tax rises (on all but the rich) as the best means to reduce debt, deficits and increase growth. Any alternative is deemed ‘unworkable’ or ‘unrealistic’ at best, and haunted by the threat of punishment. This trumping of sovereign governments of whatever stripe, mostly derived from unchecked de-regulation and globalisation, forms part of what Zygmunt Bauman has called a ‘disconnect between power and politics’.

Hollande at least poses a challenge to this order. His manifesto proposes deficit reduction via stimulus and growth, and represents the first coherent alternative to austerity inEuropesince the collapse of Lehmans. It promises to boost state spending by €20 billion over 5 years, create 60,000 new teaching posts, fund new jobs for the young unemployed and invest in social housing. Alongside this is a new 75% tax on incomes over €1 million, taxes on banks and financial transactions, a ban on stock options and the promise of significant banking reform. Significantly, Hollande has also pledged to re-negotiate the EU fiscal treaty to give greater emphasis to growth over cuts, and to push for a more active role for the ECB.

While this is by no means revolutionary, it is far outside what is deemed acceptable in the pages of the Wall Street Journal. Sensing the threat, Hollande’s opponents at home and abroad have begun the scaremongering that will be familiar to anyone who’s followed the economic debate in the UK. Openly inviting speculation, Sarkozy has said the Hollande’s plan will turn France into a ‘new Greece’, while transnational financial ‘leaders’ have been summoned to warn of a ‘bloodbath’ in the markets – a ‘new wave of instability’ – should voters vote the wrong way, or Hollande have the cheek to act on his mandate. Echoing this, The Economist – which has long viewed the belligerence of France’s social model as a sort of childish impudence defying ‘inevitable’ liberalisation – has spent much time fretting that candidates ‘may actually mean what they say’! Deep spending cuts are presented as unavoidable, and a country whose underlying economic position is sound has suddenly been talked up to be on the brink of collapse.

Whether Hollande, if victorious, can face down such threats and intimidation and push ahead with his programme will tell us a great deal about politics in 2012. It will give us a clear picture of where the balance of power really lies between markets and democracy, and the real scope for change. If he avoids Mitterrand’s fate, and France emerges unscathed, he may help break the hoodoo that market reprisal has thus far held over Europe’s centre-left parties and their electorate, particularly in the UK. If no ‘bloodbath’ is forthcoming, and austerity’s ‘leading lights’ are exposed to have cried wolf over the French Socialists, then centre-left parties will have the beacon of a bold, workable alternative at the heart of Europe.

Of course, there is no guarantee that Hollande will stay the course – he is, ultimately, a pragmatist – nor that he will successfully pursue his argument at an EU level. So far, though, he has shown no signs of back-tracking. No doubt the resurgence of the far left, whose presence at least partially accounts for the scale of Hollande’s manifesto, helps to explain this – and should they remain united, they may yet have a key role to play in holding his feet to the fire.

Either way, the stakes are huge. Mark Fisher has defined the ‘No Alternative’ fatalism that has underpinned the neo-liberal era as ‘capitalist realism’. In his seminal book on the subject, he writes:

"The long, dark night of the end of history has to be grasped as an enormous opportunity. The very oppressive pervasiveness of capitalist realism means that even glimmers of alternative political and economic possibilities can have a disproportionately great effect. The tiniest event can tear a hole in the grey curtain of reaction which has marked the horizons of possibility."

Francois Hollande is no messiah, and his platform is no panacea, but it may yet prove to be that tear in the curtain that social democracy has so long been waiting for.

Why the 50p tax cut is based on Osborne's own dodgy dossier

A shorter version of this was on Liberal Conspiracy

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Why the 50p tax cut is based on Osborne's own dodgy dossier

Yesterday, the Government released the long-awaited HMRC report on the impact of the 50p tax. The report argues that the tax only raised around £1 billion a year – lower than the Treasury's initial forecasts of £2.6 billion a year.

This has seeped into received media wisdom, confirming the prejudices of much of the right leaning press. It was used to justify cutting the rate to 45p, and forms the bedrock for the entire edifice of the Government's Budget narrative – that they are taking 'five times more from the rich'.

But there's growing evidence that the document was not a proper basis for justifying such a massive and controversial tax give away to the richest in our society. Here is a summary of some of the report's main flaws flagged up since its release yesterday:

1. The report rests on analysis of one year's Self Assessment returns – that of 2010/2011. It points out that, as the last Government didn't bring in the 50p tax until a year after it was announced, the super-rich essentially paid themselves their salary for 2010/2011 in the tax year of 2009/2010 instead, to avoid paying the new 50p tax (this is called 'forestalling'). HMRC estimate that between £16-18 billion in total was brought forward in this way, and say this corresponds to a yield of about £1 billion for the 50p tax after other 'behavioural effects'. Thus, there is a huge drop displayed in revenue for 2010/2011 and an inflated amount for 2009/2010. This is the main empirical basis for the claim that the wealthy 'just avoid the 50p tax' and that it brings in very little.
   
   But the problem with this, as many (including Faisal Islam) have pointed out, is that by its very nature forestalling can only happen once. The super rich couldn't have gone on paying themselves in tax year 2009/2010 forever. In the years after, they'd had to have stumped up the cash. In addition, only 90% of the Self Assessment returns had been received by the time HMRC had started the review. The data for 2010/2011 is thus hugely distorted, and cannot be a reliable basis for such a judgement on the 50p tax.
   

2. Acknowledging this problem, the report goes on to estimate how much the tax would have brought in independent of 'forestalling' and other one-off behaviours. Again, they come up with about £1 billion. But again, this is highly questionable. It's based on high levels of other avoidance. The initial Treasury estimates already factored such avoidance in to its initial estimates in 2010. What the HMRC have done is extrapolated on the basis of an even higher Tax Income Elasticity (TIE) – the extent to which the wealthy change their behaviour, including avoidance, in the face of higher tax rates – than contained within the initial Treasury figures. It has deliberately picked a higher rate (0.45 rather than 0.35), and the 'post behavioural yield' of the 50p tax is less for this reason.
   
   As Paul Waugh has pointed out, this was a highly political decision. Language within the report suggests it was done at the behest of the Government. This decision, in turn, seems to have been largely based on one academic study – Brewer et al (2009). Howard Reed is among many to have cast doubt on this study, and argues that past Treasury figures have actually overestimated such avoidance (TIE) rather than underestimated it as the Government now implies. Nevertheless, it remains just one academic study – there is no proper empirical evidence presented in the report demonstrating avoidance and behaviour change on this scale over the 50p tax in the UK. The claims that rich bankers simply moved abroad after the introduction of the report has also been debunked. This, of course, is notwithstanding whether any Government should ever just accept defeat over such behaviour rather than cracking down on it!

All of which is highly wonky and technical. But the upshot is, relative to the scale of the judgement it's making, the HMRC report on the 50p tax is scarcely worth the paper it's written on (and it's a download only document!). It was hobbled from the start by George Osborne, who limited it's only empirical analysis to one highly distorted, unrepresentative year of Self Assessment returns. This is important because the report forms the basis for which the OBR scores the reduction to 45p as only costing £100 million – in reality, it is likely to be far higher, perhaps even £3 billion. If the Chancellor had wanted a proper review of the 50p tax, he could have waited and got the HMRC to analyse Self Assessment data for years in which the wealthy couldn't have 'forestalled' their income . He didn't, presumably because it would have risked returning figures that didn't suit his prejudices.

All of this is why even the OBR's boss Robert Chote has told Channel 4 that “This is a judgement based on not even a full year’s data...The costing of these sorts of changes is by no means unarguable…”.

Those on the left need to bare this in mind. Those of us opposed to this tax cut for millionaires should not allow ourselves to be presented as defending a tax which raises 'little or no money'. The dominant media frame for this debate, 'we know it raises no money but does cutting it send the wrong signals?' is based on a fundamentally flawed premise; an incomplete and effectively theoretical report. It is not about head against heart – there is good, hard headed reason to believe the 50p tax raises significant sums of money. It is up to its opponents to produce credible, empirical evidence to the contrary. Yesterday's report failed this test spectacularly, and we should say so as loudly as possible.

In praise of ‘anti-business snobbery’

Post for LabourList
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This afternoon, David Cameron gave a speech condemning what he called “anti-business snobbery”. This comes after months of self-pity in the business community over rescinded bonuses and the ‘responsible capitalism’ agenda.

This is likely to find a receptive audience in parts of the Labour right, many of whom have spent much of the past 18 months trudging around assorted conferences and events wearily rolling their eyes and waving uninspiring documents that urge the Labour party to match George Osborne every step of the away in his quest to be “relentlessly pro-business”.

The trouble with all this, and with the Prime Minister’s speech, is that in modern day parlance ‘pro-business’ is more often than not a proxy for the total abdication of critical faculties in the face of anyone with a bit of money.

Running through Cameron’s speech is the familiar premise that what is good for business elites and profits is always and inherently good for social progress and the economy at large. This logic has run through the approach politics has taken to economics over the past 30 years, as successive governments went weak at the knees at the sight of anyone calling themselves a ‘business leader’. The corollary is that all the state can do is remove countervailing forces to the ‘creative destruction’ of capital and just shadow it in awe – skill workers up appropriately, provide a basic safety net, and so on.

But all this is just not true. Three different phenomena that have emerged in the past ten years prove it so. Firstly, the unchecked growth and detachment of the financial sector from the real economy, leading directly to the financial crisis, deficit and drying up of credit for small businesses. Secondly, the separation between ‘wealth creation’ and wage growth, and the resulting explosion in inequality and damage to domestic demand. Thirdly, the slow polarisation of the labour market whereby middle income jobs are increasingly outsourced or replaced, leaving a bulk of low-paid, un-unionised jobs at the bottom and a tiny professional-managerial elite at the top; in short, a ‘social mobility’ ladder with the middle rungs knocked out of it. On top of all this, energy and train companies have turned their respective markets into effective cartels.

Some of this is the result of technological change it would have been hard to prevent. But much of it is a result of decades of deference to ‘business leaders’, an unshakeable faith that what is good for them is eventually good for the rest of us, and the hands-off approach to the private sector and globalisation which flows from it.

But none of the resulting damage should even come as a surprise to any progressive. It is in capitalism’s DNA to maximise profit and short-term ‘shareholder value’ by pushing down labour costs and wages. While there remains no coherent alternative to capitalism, this profit motive is regrettably necessary – but it should not be allowed to go unchecked or unquestioned. The business community is an interest group like all the rest. If we let their leading lights dictate economic policy, we’d be reducing the top rate of tax and abolishing the minimum wage. Does anyone outside of top two tax brackets think this is really the route back to prosperity?

It is the job of the CBI and their ilk to scaremonger and threaten – on the rare occasion the left has the confidence to persevere we find it is a rouse, as it was with the minimum wage in the 1990s. It’s only an outburst of ‘anti-business snobbery’ which forced Tesco to pay a wage and offer a job to the unemployed – I haven’t noticed their business model collapsing overnight. Similarly, the austerity agenda (complete with cuts in corporation tax) endorsed by our business establishment has proven a total failure.

A fair and functioning economy needs entrepreneurs, yes, but it also needs workers on decent wages with decent security and job prospects. This is a caveat we too often neglect when we fetishise ‘wealth creators’. Real wealth creation should be a collaboration. If someone wants to found the next Apple or Dyson, fine – good for them – but it is the role of the state and organised communities to ensure they pay tax, good wages and don’t try to monopolise the meaning of public good. If that makes me a snob, then sign me up.

Four reasons why 'the squeezed middle' should be at the heart of Labour's thinking

This appeared on LabourList

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Four reasons why 'the squeezed middle' should be at the heart of Labour's thinking

With the budget fast approaching, the Deputy Prime Minister’s moves on the personal allowance last week make it clear that the government is making a push to be seen to stand on the side of those on low and middle incomes. This is a demographic Ed Miliband has until now been able to make his own, and must now move quickly to reclaim.

We shouldn’t be surprised that the government confident enough for a land grab. Ed’s own approach on this subject over the past year has been a bit frustrating. He introduced the squeezed middle to our political lexicon, but that is largely where it’s remained. Beyond one speech, he hasn’t built on it or fleshed out its implications, just flung it into the odd soundbite or interview. Hence it’s become a sort of ephemeral buzzword; a phrase used to describe the world, but not change it. Neither is a “blitz of interventions” on it enough, as his aides promised. He needs to put it at the heart of everything he says and does, as the problem which ‘responsible capitalism’ seeks to solve rather than just as a point of reference.

This is not because, as some have argued, it is some buzzy catch-all phrase, but because it’s a serious economic phenomenon affecting the lives of low-to-middle income earners across the country (e.g couple earning between £12,000-30,000 per year, or a family with three kids on £20,00-48,000). The average wage has been flat in real terms since 2003. The Resolution Foundation’s recent findings highlight again that these people are now badly struggling, just about keeping their head above water – most are struggling to pay bills and are having to cut back, and inevitably feel the pain of inflation, wage freezes and cuts even more acutely.

For Labour, the faltering living standards of this group are also a real political phenomenon, spanning the whole of the country, including the South and the Midlands where the party’s greatest challenges lay. The much cited Southern Discomfort series found ‘the squeezed middle’ “hold the key to Labour’s recovery” in these areas; around halve of floating voters say they do not have enough money to make ends meet. While some move up the earnings scale, many stay put – they remain the centre of gravity on the income spectrum.

But what should all this mean in practice? A hazy appeal to these people is not enough – Ed has to put them at the forefront of his strategy, especially on the economy. They need to be at the heart of every reaction to events, every press release, every PMQs, every speech. He shouldn’t be afraid to define the group if pressed, but it would also appeal to many others who feel like they work hard, pay taxes, but get little out of it. This would open up space for a distinct and coherent alternative to the Tories, in a number of ways.

1. A simple argument on the economy which resonates.

The fact is, most people are broke. Stagnating wages play a big role in explaining this, and are a significant underlying weakness in the economy (as Bill Martin and others have argued) – they have left consumer confidence perilously low, with obvious knock on effects for productivity and employment. Miliband should point out that the Tories’ economic approach is failing because the scale of their austerity measures take yet more money out of ordinary people’s pocket – the very people who drive the economy – for instance the VAT rise, cuts to child benefits and tax credits. This shifts the focus of the economic conversation away supply-side fetishism and on to what we have – a demand crisis.

2. Bold, short-term policies which also address the party’s economic credibility.

Shockingly, most polling shows the views of ordinary voters are not the same as Westminster insiders. Most are not besotted with deficit reduction time-tables (hence ‘too far, too fast’ polls well in abstract) they just don’t trust the Labour party with their money, unfair as it may be. It’s this which the Tories have exploited to push their message as the only credible approach. But there are more progressive ways of neutralising this issue. Labour should advocate a cut to the bottom rate of income tax as a means to stimulate the economy. This must be costed; so Ed should suggest partially doing so through increasing the top rate of tax by the same basic amount (e.g 2p on the top for 2p off the bottom) – then challenge the Tories to oppose it. A more vocal campaign for a living wage should be his next step, as a means of making work pay. This, on top of Labour’s other work challenging train and energy companies, would hammer home the message that the party’s economic priority is the back-pockets of ordinary people, not the wealthy elite. This is the surest route back to economic trust, not trying to out-posture the Tories on cuts.

3. Some coherence on cuts

If Ed wants to stick to his underlying position on cuts, there needs to be more logic to those he supports and those he doesn’t. Putting those on low-to-middle incomes at the heart of Labour’s thinking would mean opposing those cuts which most directly add to the squeeze on these families (for instance child benefits, housing benefits and tax credits) while supporting them in areas where they have the least impact on this group and thus on demand (for example, International Development or Defence). This doesn’t obviate the need for touch choices, but protecting living standards should replace the more scatter gun approach adopted thus far.

4. Long term vision (which goes beyond just spending)

The squeezed middle also lends itself to a long-term argument for the run up to the next election. At the heart of the this pithy phrase lies the failure of an entire economic model. Even when the economy was booming in 2003-2004, growth had stopped translating into wage gains for many ordinary people. They were working harder, but gaining less. The benefits were increasingly skewed towards the top: while the share of GDP going to low-to-middle income earners steadily declined over the last 30 years, it soared among the top 10 and 1%. For all the growth in the last eight years and in the next eight (if any), average real disposable household income will likely stay around the same. Neither is growth in new industries or technologies per se bound to aid employment – well paid working class and lower middle class jobs have steadily been sucked out of Anglo-Saxon economies (as the story of the iPhone in the US illustrates), replaced by more insecure, lower paid work. It is to this backdrop, to fill the gaps and make ends meet, that many have borrowed up to their eye-balls.

This is the most significant long-term trend occurring in theUKtoday. Finance-led growth, the decline of trade unions, and a hands-off, self-regulatory approach to the market and globalisation have all played a major part in getting us here. For a generation, all of this – the dominance of big money, inequality and excess at the top – has been sold with the promise that the benefits will ‘trickle down’. Now, for the heart of our working population, that trickle has dried up. Livelihoods and the economy at large are being now undermined. New Labour’s more redistributive measures mitigated the effect of this, but never re-shaped it. A return to the old growth, in the long-term, won’t be enough. The system is broken, and there’s an obvious need to re-think the entire way we do capitalism in this country.

Unlike other party leaders, Ed at least gets this, and has a critique of modern capitalism which accounts for it. His ‘responsible capitalism’ agenda is a good start, but he needs to state the problem more clearly: it is not an abstract issue of morality, or heart over head, but efficiency, real jobs and building an economy which serves everybody. Neither does this have to all be about spending – to the vogue question, ‘What is Labour about when there’s no money?’, pre-distribution should be the answer – getting up stream to better shape economic outcomes. Greater economic organisation in the workplace, a more active state ‘picking winners’, the separation of casino and high-street finance, national and regional investment banks, the protection of industry from predatory takeovers, new procurement rules, measures to deter outsourcing, and much more all have a role play a role.

But no space for any of this can really exist unless the broader trend it seeks to address is more widely known and prioritised. Inconsistency, not ideology, has long been Labour leader’s biggest problem – picking themes up, making a speech, then not building on it. He has done well to redress that over ‘responsible capitalism’ and bankers bonuses, but he now urgently needs to build that within a bigger argument about living standards, and hammer away at it day after day. For Labour, the way to the British people’s hearts is through their wallets.

Review: The Purple Book and Tangled Up in Blue

Shorter version of this is on the Fabian's Next Left blog

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Any willing provider? Labour's new anti-state chic. A review of the Purple Book andTangled Up In Blue

The Purple Book: A Progressive Future for Labour, Robert Philpot (ed), Biteback, 2011.
Tangled Up In Blue: Blue Labour and the Battle of Labour's soul, Rowena Davis, Ruskin, 2011.

Perhaps the most striking thing about the years following the economic collapse of 2008 was the absence of new ideas on the democratic left. Labour's election defeat confirmed for most that something had gone awry with modern social democracy. Most agreed that approaches to state and market had been ill struck, and that the economy had become too dependent on the City. But these axioms never gave birth to much in the way of renewal. All the while the Tories were stitching together their own story, re-casting the crisis as one of overspending and inefficiency, co-opting Britain's other allegedly centre-left party along the way.

It's amid this impasse in 2011 that Labour's multi-coloured insurgencies have emerged, offering their own readings of the past, present and future. Chief among them have been the Purple Book, organised by Progress, and Blue Labour, lead by Maurice Glasman but resuscitated from his misdemeanours here by Rowena Davis. Although many Progress members may now balk at the suggestion, the two actually started life closer than is often recognised. A number of the Purple Book's contributors and cheerleaders (e.g Caroline Flint, Tessa Jowell, Philip Collins) were involved in the first wave of seminars and publicity that gave rise to Blue Labour. They've since sensibly gone their own separate ways, but retain their shared starting point that the root of Labour's woes lay in becoming too centralist and remote; “administrative, elitist and technocratic”, as Davis puts it. Both claim to be interested in returning to Labour's decentralising tradition, and both eschew 'big state' Fabianism, top-down universalism and public spending as the solution to all of societies' ills.

As befits its organisers, The Purple Book approaches this argument in a considerably more slick, metropolitan way. At its best, it is far more thoughtful, practical and self-aware than many of its critics have given it credit for. It hangs together in a way few anthologies do, and is more astutely conscious of itself as an electoral strategy than its rivals. There are plenty of interesting ideas on the value of co-operatives as a means of spreading social control over public services (Caroline Flint, Steve Reed and Paul Brant's sections on housing are surprisingly engaging) and on revenue-raising at a local level.

The trouble with it is, at times, it feels like a new language is being adopted to advance a familiar agenda, which is essentially one of marketisation. The passage on public services that Paul Richards approvingly quotes from Blair's memoirs is interesting in this respect:

“...we have fashioned a template for reform: changing the monolithic nature of the service; introducing competition; blurring the distinctions between public and private....and in general trying to free the system up, letting it innovate, differentiate, breathe and stretch its limbs.”

Richards adds the only problem with this approach is it didn't consider social ownership in the mix. But he never really explores whether Co-ops should be prioritised above private providers, for instance, just that services should be removed from monolithic central state control. This ambivalence is made explicit by Alan Milburn who, on education, says:

“There need be no single model. There could be academies or trusts, parent-owned or community controlled, run by social enterprises formed by teachers or by chains run by voluntary, or for that matter, private sector bodies.”

The impression gained through the book is not of a central state endowing local communities, but of diversification and the state “letting go” as an end in itself. All this is fine if one believes in it, but it's difficult to know how it differs from the current government's 'any willing provider' approach to healthcare. Co-ops are in the mix and are to be encouraged, sure, but what of the potential for conflict between different providers? Surely a Co-Op couldn't hope to compete with private providers in terms of outcomes; does the state inherently privilege Co-Ops in the contracting process to balance this out? What are the rules applied when opening services to tender? What if no local group – or demand for co-operative control - emerges? None of these questions are ever really explored satisfactory, apparently lost to the contributors' reforming zeal.

A similar frustration stalks you as you read the books' sections on political economy. Tristram Hunt's contribution is fantastic, by far and away the best of the bunch. It wisely focuses on 'pre-distribution' and the need for the state - in smart, considered ways - to get 'up stream' and shape a more equitable distribution of the benefits of growth, as opposed to simply redistributing through the tax system. But this more bold, hands-on approach with the market is never matched or built on elsewhere. The living wage, pay multiples, greater democratic organisation in the workplace, regional or national investment banks - all are examples of small, fairly inexpensive things that can be done to achieve the more balanced economy the book talks of, but nothing like it is ever touched on. Instead we get a few nods to more “strategic” industrial activism from Peter Mandelson, but what this means is left fairly vague. Would it mean, for instance, protecting local communities from predatory takeovers of local industries such as Kraft's of Cadbury's?

Throughout there is often simply an unwillingness to leave well-worn comfort zones and suggest anything that might appear 'anti-business' or 'old Labour'. Instead the book frequently retreats into public service reform, or constitutional issues, as if the past 5 years hasn't happened. At the end of the book, editor Robert Philpot lists its recommendations – there are around 10 pages on reforming the state, and just 1 on reforming the market. But what the UK has seen is surely not a failure of the big state, but the market – or at least, the state's relationship with it. How else to understand the financial crisis, or the de-coupling of growth from wages?

In short, it's not that 'leaving the big state behind' (the books' promotional strapline) feels like the wrong prescription for the UK's problems – it's that it's the wrong diagnosis. When Patrick Diamond argues that “social democrats need to acknowledge that state intervention has left a multitude of social and economic ills untouched”, he writes as if we've just experienced 30 years of post-war Keynsianism. Nor did Labour lose because it was too statist. Philpot triumphantly reveals 1 in 4 of Labour's lost voters saw 'government as part of the problem not the solution' – but what of the other 4 in 5? Nobodies arguing there's a thirst for a Soviet-style command economy, but there is room for a positive case to be made for the state in the market, actively shaping it not least so that it puts money in the pockets of ordinary, hard-working people. A brash anti-statism simply neglects the challenges of our time.

A similar misreading pops up through the Blue Labour story, as documented in intimate and intelligent – if at times slightly breathless – fashion by Rowena Davis. It holds at its heart the mantra that “relationships are transformative”; that organising local communities is the best means by which to achieve social change. But instead, to Glasman, Davis writes, “the modern Labour party...seemed obsessed with expanding the state”. This would be fine were it just a piece of posturing, but it leads Glasman to sweeping statements (“the model that we had in 1945 of universal state based [provision]... lead to massive erosion of solidarity”) which can in turn beget frustratingly rigid policy conclusions.

Take Sure Start centres. Blue Labour, says Davis, wouldn't open more of them, because it believes they've become “a means of...free childcare” while both parents are at work, not of promoting relationships. Instead, Glasman wants the state to facilitate neighbours taking turns to look after each others kids. But Sure Start centres more often serve as a space where parents interact with and help other parents, picking up tips or sharing support as well as receiving it from staff. They foster exactly the sort of relationships that Blue Labour values in a more effective manner than ad hoc approaches. The idea that universal state services are always an anathema to social solidarity is simply false – as the public support the BBC or the NHS further shows.

This belligerence denies a more important, complicated conversation about when, where and how state services get it right in promoting relationship, and how they can change to get it right more often, rather than just cease. Here Davis tellingly notes that traditional social democrats were the only under-represented sections of the Labour party during Blue Labour's formative seminars - Sunder Katwala couldn't make it, and no Brownites were involved. It's difficult not to conclude that greater dialogue with the schools of thought Blue Labour sets up such antagonism to (particularly Fabianism) could give more nuance, and less divisiveness, to its conflict with 1945.

Yet there remains much to engage with about Blue Labour, and Davis convincingly argues that it has been received rather lazily by parts of the media (the reaction to Glasman's recent intervention serves as a case in point). Unlike both the Purple Book, and Philip Blond's Red Toryism, Blue Labour is rooted in a powerful critique of free markets, seeking to organise communities “against the dominance of capital”, on their high street and their workplace. This lends itself to plenty of thought provoking policy prescriptions. It has cogent ideas, for instance, on shifting the UK towards a more skills based economy, and its ‘a third, a third, a third’ model of public services (wherein, for example, a school would be run equally by the state, parents and staff) avoids a lot of the ambivalences of the Purple Book.

It’s also no surprise to learn from Tangled Up In Blue that Glasman wrote probably the two most rich and evocative Labour speeches of recent years - Gordon Brown at Citizens UK and David Miliband’s Keir Hardie lecture, both among the best either have given. There’s a certain magic and humanity to the Blue Labour language, of organising and action, that transcends the Think Tank generated jargon of our time. So much so in fact that its advocates occasionally slip by you a slight (and sad) exaggeration of the appetite among the public for getting involved in local decision making, something common to the Purple Book too. Oscar Wilde, afterall, famously said “the trouble with socialism is it takes too many evenings”, and Davis does in turn seem to over-state the influence of both Cameron’s ‘Big Society’ and Brown’s Citizens UK speech had on the electorate.

Nevertheless, it's imperative that Fabians engage with the strength and weaknesses of these two books. Social democrats shouldn’t allow ourselves to be boxed in as reflexive defenders of the state. Not even the most ardent among us can deny that occasionally government ends up feeling top-down and transactive, or that services need to be shaped by those running and receiving them. Neither should we dismiss the power and energy of community activism as only to be harnessed for winning election campaigns; sometimes you need to govern in poetry, too. But there is an urgent need to push back against the bogeyman-esque depiction of the state that at times animates Purple Book and Blue Labour thinking. We need to articulate a vision of the state that's not in opposition to organised communities, but in constant partnership with them, providing a bulwark against the dominance of capital and the dysfunction and alienation which accompanies free market capitalism. How’s that for a New Years resolution?