It isn’t working; change tracks

27th May, 2014 9:01 am

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So many activists, staffers and candidates have worked so hard. There were some remarkable victories on Thursday. So many people deserve enormous credit. Yet, despite this, without something fundamentally changing, Labour is heading for defeat next year. A majority is a long way off. Labour will struggle on Thursday’s showing to get anywhere near being the largest party. Anyone who wishes to see this Government replaced must be deeply concerned.

You can grasp hold of the Lord Ashcroft poll, or the fact that Labour topped the vote share in thirty or so key marginals, the millions of doors knocked, or the showing in London. There will be the life raft of Labour’s structural political advantage. You can grab hold of all this driftwood – and a succession of party spokespeople and supporters have done since Thursday. I just don’t think that helps at this late stage.

The clock is ticking.

These results were skewed by the UKIP vote. 50% of their support on Thursday came from 2010 Conservative voters and it was that which held the Tory vote down in many key marginals. So Labour’s lead is spurious in many seats. I have done some analysis of the Ashcroft poll published on Saturday. If 2010 Tories (and Labour) return home next year, Labour would win ten instead of thirteen of the 14 key targets covered in the poll and would have a lead of under 3% in a further two (i.e. within the margin of error). And this is likely to be a year of economic good news and we know opposition support declines in the final year before an election.

Labour’s local election results would actually see the party lose at least four seats as well as gain 29. The Ashcroft poll also shows the Tories’ operation was at least as good as Labour’s at contacting voters in key marginals. Labour’s desire to put a gloss on things is creeping into malignant complacency.

All of this can be explained away and will be. And the party will suffer as a result. Honesty is loyalty; blind faith is not.

Labour has two strategic problems: convincing white working class voters to stick with and suburban voters to support it. Labour has convinced former Liberal Democrats and that’s it. It seems to be losing ground amongst white working class voters if anything and suburban voters simply aren’t engaged.

The cost of living crisis strategy – aimed at working class voters – has become cheap and retail. Most shoppers like Aldi prices but they’d prefer to shop in Sainsbury’s given a chance. People might like the policies. But taken as a shopping basket, they see a party that is willing to offer them goodies and that makes them suspicious. So this narrowcasting becomes self-defeating. A flurry of speeches on immigration won’t put this right.

Secondly, the party’s failure to re-establish a broad reputation for economic competence is limiting its appeal in Britain’s suburbs. Without this strategic change, then a Labour majority remains extremely unlikely. This is the absolutely key issue.

At the moment, the only chance Labour has of becoming the largest party is for the UKIP vote to hold up and hurt the Tories more than it hurts Labour. That’s a pretty desperate thought: Labour’s success reliant on UKIP. Pause and reflect on that for a moment.

Labour needs a broader national narrative. The last thing it should do is go for a narrow targeting of UKIP voters. But the same lesson applies to ‘cost of living crisis’ – micro targeting is mostly ineffective.

Instead, Labour has to relentlessly focus on establishing its economic and fiscal competence over the next year. The conventional wisdom is that you should divert the conversation away from your weaknesses. That is true – unless your weakness happens to be economic competence. This requires a symbolic demonstration of the tough decisions the party would have to make. This has been sporadic at best over the last few years.

Labour should reach for a bigger but simpler offer. It could involve the following priorities:

1. Economic responsibility: a commitment to clear the day-to-day deficit as quick as, if not quicker, than George Osborne. Ed Balls and Chuka Umunna should be unleashed to push this message relentlessly. No Labour spokesperson should be allowed to make any public intervention without saying it. This would be done by spending cuts other than in the case of some tax increases for those with very high incomes and/or wealth. The recovery is now well established; the deficit needs to be tackled quickly. This is a cornerstone of economic competence – for Keynesians as much as neo-liberals.

2. Health and support for the elderly. Without making unfunded commitments, this has to be the priority expenditure area should any spare resources become available in the next Parliament. There should be no ring-fence until the day-to-day deficit is clear.

3. Apprenticeships and higher education. Again, there would be no commitments but as the deficit is cleared, additional resources would be targeted on creating the skilled workforce we need to sustain strong growth – growth that is vital to support an ageing society with high levels of national debt.

4. Housing. It is simply a betrayal of our national promise that house ownership is beyond the reach of so many and rental is so burdensome – especially in London and the South-East. Heaven and earth should be moved to increase house-building and this can be augmented by the right self-financing public investment. This would not impact the fiscal responsibility priority.

5. Wages. A Labour Government would intervene to enforce minimum wages, increase them in some sectors/areas where the benefit outweighs the harm, and ensure that wages are supported through smart procurement again where practical.

That’s it. No cost of living crisis. No flurry of retail policy offers. No nationalising rail or committing to new unfunded areas of public provision. More efficient use of public resources. A simple and relentless focus on five key priorities is the better path. Labour will never be able to out-flank the Tories and UKIP on Europe and immigration so it shouldn’t even try. It has a policy proposition in those areas already – it should stick to those. Instead, the next year should be about economic responsibility, support the NHS and older citizens, apprenticeships and higher education, housing, and wages. It may seem more narrow but it’s actually a very big offer – especially in a time of economic stress.

To be perfectly honest, I don’t see another way back other than praying for economic catastrophe or the sustained rise of UKIP. Neither of those propositions are appealing. It isn’t working, Labour needs to change tracks.

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  • Paul Bateman

    What about the environment, the real issue of now? Or have voters already forgotten the floods?

    • Rex Hale

      Voters have already forgotten the floods. Unless they were flooded themselves. There’s some sort of profound political truth in here somewhere…

  • volcanopete

    There’s now a good package of support for small businesses and few small businesses know it.The same applies across the board,renters etc.
    Targetted communication is needed for these groups.

  • Paul Bateman

    Policies are one thing, but it’s also how to present the stories that count. Ukip use misplaced fear of the Other. Labour should use individual stories to illustrate how they can make a difference. Engage with voter’s humanity, not just with reason alone. Voting is rarely rational. Aim for the guts, not just the minds. That is what Ukip did. It’s what Kahnemann says. Don’t just rely on Piketty.

    • anthonypainter

      I agree with this wholeheartedly. But the stories have to communicate something- and one of the biggest emotions that Labour has to counteract is suspicion of the party’s economic competence. Otherwise, excellent point.

      • Paul Bateman

        Thank you

    • IAS2011

      Paul, I don’t accept that UKIP is simply the initiator of fear here. Is it not clear that what UKIP has done is to ‘harness’ the deep concerns and the ‘voice’ of the public over housing, employment… etc. None of the other parties were willing to harness these voices. this was their failure!

      Though, I do accept that ‘stories’ are a fundamental tool to highlighting political engagement with REAL folk in the UK. Even Charities are being urged to do this better.

      But, the fact is, the ‘system’ that politicians/MPs continue to be perched on is undemocratic – whereby MP representation remain untested for their Quality of Service and measured for their Achievements. Thus, how can MPs be worthy of a £67,000 per annum wage packet without this fundamental and democratic accountability?

      Until this appalling system – only fit for the bold-lacking politicians it serves – is converted into a democratic system whereby Fairness and Justice is the objective for ALL, the public will continue to express their lack of Trust and Confidence in a system and the politicians who FAIL to change it.

      Please name me a politicians who has stated that this system should be changed? Exactly!

      • Alexwilliamz

        Err Nick Clegg?

        • IAS2011

          Alex,
          You’re not making sense.

          If you are also making a point that it is ‘fear’ tactics that has led to Nick Clegg’s problems, then I would say to you that it is Nick Clegg who has been responsible for his own Failings.

          Have we not seen sufficient evidence – post recession 2008 – from politicians still failing to (or not wanting to) reflect the challenges and aspirations of the British public in policy? Also, hasn’t Nick Clegg been one of many politicians who has been forthright in emphasising that ‘the economy has improved” while not making any attempt to acknowledge or understand that the lives of hard working ‘ordinary’ people are still stifled as a direct result of his policies?

          Please, lets not doubt that the failure of politicians to engage with ‘ordinary’ people – is the failure to develop policies aimed at improving the lives of said people. It’s not difficult to understand.

    • Rex Hale

      Totally. Completely agree. Yes yes yes. But can Miliband do this? Can any of the Shadow Cab? Rachel Reeves certainly can’t…maybe Chukka could? It’s a tricky one to achieve as we don’t quite have the personalities for it just yet…

  • Duncan Hall

    If you think this rubbish would win the election, you’re dreaming. But you’ll keep pushing it, whatever the situation because of ideology, not strategy. Think about the people who we didn’t persuade to vote, on Thursday. We assume those who generally vote for us will do so again, but not if they think we’re “all the same” and will all cut. Commitment to keep cutting is a big part of our problem and no part of any solution.

    • bf3

      His response to UKIP on immigration is…. ummm, he hasn’t got one.

      No, wait he has a response: build 50 million more houses.

      Yes, the voters are all coming back in droves.

  • Monkey_Bach

    I’m curious.

    As far as I can see the “recovery” is based on the same faulty model as before, i.e., consumer spending coupled with rampant house price inflation. I’m not sure at all that the future is as bright as Mr. Painter and the Coalition might like to believe.

    If Labour is to make swingeing cuts (like the Tories) where should the axe fall? Working age benefits? (Like the Tories.) Housing benefit to the under 25s? (Like the Tories.) Limiting child benefit to two children per mother? (Just like the Tories.) How will trying to out-Tory the Tories help Labour to beat the Tories in the next general election? Wouldn’t flip-flopping behaviour like this risk a mass exodus of Labours own supporters and large number of Liberal Democrat defectors away from the Party or at least cause them to reconsider voting Labour in 2015?

    Hasn’t funding socially responsible building programmes via the private sector already been tried by the Coalition, which legislated to enable social landlords to charge 80% of the market rent in hope of encouraging private investors to put their money into building affordable rented housing, and fallen flat on its face in double-quick time?

    (Personally I think issuing a bond, with a decent return of interest, would be a much better way to raise money to fund mass building of social housing would be a much better than private finance initiatives and similar.)

    The suggestions in this article are far too general to form an opinion but as far as I am concerned aping the Tories, or even seeking to outdo them on their own home ground, is a recipe for disaster. Seeking to look more “economically responsible” by throwing more people under the bus simply cannot be the way to go in my opinion.

    Who the heck is going to vote for a Labour Party like that.

    Eeek.

    • Rex Hale

      Looking at potential cuts specifically is a sobering process, I agree. And some of the cuts Labour needs to make will be the same as the Tory cuts. Labour would have made plenty of cuts if it had been elected in 2010, as we all know. Pursuing deficit reduction alongside a Labour programme of issues of the sort Painter itemises seems like good strategy to me. But then I’d rather we were still doing the New Labour thing than this reheated 70s stuff that Miliband is trying to sell on the doorstep…

      • MikeHomfray

        Whereas I only rejoined Labour because I was convinced we had left the New Labour nonsense behind. And if we go back to it, then I’m away….

        • Rex Hale

          Quite. And there’s our party’s fundamental divide. Honestly, I don’t think there’s a cat in hell’s chance of Painter’s plan being put into action, or anything like it. Miliband will keep doing what he’s doing. If he loses then he’ll have had his chance with an old Labour agenda….the left/right struggle in the Labour party is going to go on and on…

          • MikeHomfray

            But he isn’t really being given that chance because the New Labour lot keep trying to sabotage him. These briefings to the right wing press, for example, and the known disloyalty of some of the shadow cabinet. Its not on.

    • RogerMcC

      See my other comments here – it depends who you are throwing under the bus.

      Defence contractors, public sector executives who are paid more than the prime minister, the public sector service providers who extract tens of billions from the taxpayer, tax avoiders/evaders can all do with a good running over.

      As for the idea that is somehow more virtuous to finance public sector spending by paying interest to bankers and rentiers rather than raising taxes I’ve no idea how that ever became a left-wing shibboleth.

      • gunnerbear

        “rather than raising taxes I’ve no idea how that ever became a left-wing shibboleth.”

        The fact is that the Blue Mob got 18 years of power by trying to keep taxes down and the fact that the Red Mob got 13 years of power after promising that they wouldn’t ramp up taxes.

        Thus both parties paid for stuff on the ‘never, never’ (or PFI if you prefer) as local MPs of all colours cheered and clapped when a new hospital / school / old peoples home etc. was built on their patch….which like all credit cards just makes it more expensive in the long run…..

        …. but once he started, GB just couldn’t help himself.

        I also think, speaking of taxation – that there should be a ‘pay to play’ rule….if you want to keep your baubles like OBEs, Dame-hoods etc. then you make sure all your books are open to HMG and you don’t engage in aggressive, though wholly legal, tax avoidance.

        Perhaps some of the ‘Great and Good’ on assorted boards could then decide if they wanted to cash or accept the principle of a basic anti-avoidance rule and so keep their baubles.

        And yes, I’ve posted similar comments on ‘rightie websites’.

  • Doug Smith

    Reading this it appears that Labour is now in full panic mode: time to sling any residual values that Labour might have out of the window and bring on the win for the sake of winning approach.

    Only Labour’s careerist elite will benefit from this approach. But then I suppose that’s their primary concern. Ordinary people can go whistle.

    • MikeHomfray

      If those ideas were our manifesto I would vote Green

      • anthonypainter

        Metro-liberal.

        • MikeHomfray

          Yes, Merseyside is just soooooo muesli and sophisticated. Its the classic core vote Labour area, so I think I know a bit more about it than you Londoners!

          • gunnerbear

            Surely not even Scouser’s eat re-processed cardboard – sorry muesli (and yes I know parts of ‘Scouseville’ are quite posh and others not).

      • BillFrancisOConnor

        Before doing so – just have a quick look over the Green record while they were in government in Ireland 2007-2011. In particular have a look at their support for the reduction in the Irish State pension in 2010 and the removal of the medical card from the poorest families in Ireland. This meant that the poorest families in Ireland had to pay for their kids to see the doctor. You might also want to look over their support for putting the debts of the casino banks on the government’s balance sheet thus bankrupting the country. The country is facing 8 -yes eight- more years of public spending cuts, an emigration rate that echoes Irish emigration rates of the 1950s and a rocketing suicide rate among Irish men as a consequence of that record. You might also want to have a quick look at the Green’s performance while running Brighton Council- in particular look over the handling of the binmen’s strike in 2013 – just a bit of advice.

        You might also want to try and get anybody- and I mean anybody- from the Green Party of England & Wales to say: ‘yup that was crap’. If you succeed you’re a better man than me Mike.

        • gunnerbear

          Ya see…that’s what being in government does to do….you enter all bright eyed and full of the joys of spring…then hellfire…the realities of making decisions really kick in.

          After a while in local govt. UKIP will also be getting kicking’s as their decisions end up having real life consequences.

    • Rex Hale

      That’s a strange argument. Painter’s suggested policy prescription is tightly focused on ordinary issues…why would it benefit Labour’s careerist elite? I genuinely don’t understand what you’re driving at.

      • Doug Smith

        The LibLabCon, as a model of economic competence, are far stranger.

        • Rex Hale

          Ah, the LibLabCon. Which clever soul came up with that? It has all the political sophistication of a primary school playground….

          • Doug Smith

            The LibLabCon: political exigences have caused each component to concede enough to the others to make their shared policies far more consequential than their nominal distinctive ideologies.

            It’s so obvious even, as you suggest, a child at primary school might grasp it. But not you…

          • Rex Hale

            I really hope your comment is intended to be some sort of comic parody. If it is, then it’s BRILLIANT 🙂

          • BillFrancisOConnor

            Agreed Rex. It sounds like something you might read in a North Korean propaganda document.

  • IAS2011

    Of course it isn’t working – whether it be politicians themselves or the systems they are perch on – far from democratic!!

    If there is a ‘problem’ here with political TRUST – as we acknowledge voters turn-out reached 30% this time – and the reasons why such Trust and Confidence has been lost, these are extremely easy questions to ask the public. However, politicians are NOT bold enough to ask them – but yet continue to claim that they ‘understand’ people’s concerns(?).

    So, let’s address this ‘problem’.

    Though, I’d like to broaden you approach to ‘a problem’ – by stating that ‘politics itself has proven to be a ‘problem’ to the overwhelming majority of people in the UK – as I am sure this is reflected throughout the international community. Hence, only 30% turned-out to vote in UK elections.

    Could it be that the foundation on which MP representations are based on FAIL to be democratic, and, thus, DO NOT represent a Fair and just society for ‘ordinary’ folk? For example, not any political party leader or politician overall will ever challenge the fact that MPs Representations of Constituents are never tested for their Quality of Service AND never tested for their Achievements. Thus, how can we ever say that MPs are worth the £67,000 per annum they are paid?

    Isn’t it ironic that these same politicians have passed policy to ignite the target-driven culture within our Hospitals and Schools. However, politicians DO NOT apply the same principles to themselves. But, why should they? Politicians vote for themselves. Politicians are responsible for protecting their work ethics and practices and policies – unlike in the real world.

    So, in light of all the above, I think it’s fair to say that there is a much bigger and broader ‘problem’ here – and one that you and others commentators and journalists will never realise or be willing to initiate a debate on. So, until we have a democracy that reflect a Fair and Just system of political behaviour many will continue to suffer the fate of this continuous failure. In fact, many already have.

  • MRSHUTE

    Its a good job Labour didn’t lose over 300 council seats then. White working class voters? The white working class chap on his bike outside the factory gates has gone. The dockers, the miners have gone. Tory bad, Labour good. Keep it simple.

    • treborc1

      Well have a look at the giant retail bike sheds, you will find the white and the black and the Asian working class still low paid still struggling to live.

      Take a look at the councils, Tesco Asda McDonald which labour were proud of for offering apprenticeships at picking up litter or tossing a burger.
      The working class are still around many do not vote anymore and who can blame them.

      .

  • swatnan

    Lets face itr the odds of a Labour comeback after only 5 years of getting a drubbing by an annoyed electorate were not all that great. Ed has done a splendid job of filling in the Leaders role until someone better comes along.

    • treborc1

      Yes and that leaves an interesting question of whom.

  • kb32904

    So what would you cut Anthony ?

    Polls show that the deficit is way down on the things that people worry about. Housing, jobs & the NHS are very much at the top of the liist.

    Ultimately wherever a Labour spokesperson makes any kind of public intervention, the journalists ask ‘what will you cut’ or ‘how will this be paid for’ & we need to have answers for that. Short, sharp simple answers instead of waffle.

    We need to be able to point towards some places where cuts will take place but also to explain to viewers/readers that more public sector housing will reduce the benefits bill because housing benefit costs will be lower. Allowing councils to borrow for building makes practical sense because those houses will provide rental income for many years – they must be built on the express understanding that they will not be subject to right to buy for 30 years or some such period of time.

    I could go on but won’t.

    • treborc1

      I would say welfare would be a target for both parties.

    • RogerMcC

      See my comment above (or wherever it ends up) listing a whole range of cuts which left-wingers not only could but should support but which somehow never feature in the Blairite narrative.

      The Attlee government managed to create the NHS and modern welfare state, rebuild our cities, create whole new towns, nationalise key industries, feed the Germans (as we got the occupation zone that had all the ruined cities but no food), demobilise a vast army and navy and cut a deficit much larger as a share of GDP than the one we have now.

      So austerity can be socialist – vast sums of state money are wasted on nuclear weapons, ships, tanks and planes that have little use in modern warfare, bloated public sector management salaries, subsidies to private sector service providers, PFI deals etc, etc, etc.

      • anthonypainter

        The Attlee government also generated a surplus. Funny how that gets forgotten.

        • RogerMcC

          Not by me – that’s why I mentioned it.

          And unlike our re-nationalising the railways Attlee actually had to pay good money to the coal and rail and power station and steel mill owners.

          So where do you stand on cuts to Trident, other extravagant defence programmes, bloated public sector salaries, the siphoning of taxpayers money into private sector through the creation of state capitalist monopolies that have nothing to do with real markets and real choice etc etc?

          • anthonypainter

            I take issue with most of those things.

            On Attlee- there is no way of repeating it unless we increase taxes v.significantly. If that is what you are arguing then fine- I disagree but at least it’s a credible position. But if you are arguing either (a) we don’t need to worry about the deficit or (b) that magic money from clamping down on tax avoidance will plug the gap then it’s a non-starter.

          • RogerMcC

            I actually do agree with you that economic responsibility is important and that in principle reducing the vast sums we pay bankers and investment funds to finance our public spending is a good thing.

            And no I don’t believe that actually forcing the global plutocratic elite to pay their taxes is going to produce any stream of magic money.

            But there is some money there, just as there is in scrapping Trident etc and that these sums are commonly exaggerated by the recklessly innumerate doesn’t make them disappear altogether..

  • Meredith Lawrence

    We need to promot and verify the advantages of immigration which far outweigh the negative impressions given by the Tory press.

  • kieran1

    Good article Anthony. A few points.

    First, on the psephology. YouGov were the most accurate pollsters and had a 6000 sample size on their final poll which can give us more confidence in their cross tabs.

    They showed a Labour lead of 4 points over the Conservatives in the euro elections (in reality it was 1.5%) and a Westminster VI lead of 3 points. Extrapolating this (dodgy statistically but useful rule of thumb) means the parties are likely tied.

    This shows that:

    a) the Labour position has deteriorated and on past trends the Conservatives will be the largest party in terms of votes at least next year.
    b) that the ‘UKIP skew’ in the euro elections which hurt the Conservative position was cancelled out by a ‘Green skew’ and a ‘turnout skew’. According to YG LD to Lab switchers dropped from 31% to 18% for the Euros verses the Generals and Lab to Green switchers dropped from 8% to 1%.

    My point is there is a lot of churn which went on at the Euros which means if you start ‘unskewing’ one variable you need to look at the other ones too or you get a distorted picture.

    The issue is that in terms of Westminster VI that YG poll showing a Labour lead of 3 had:

    LD to Lab switchers: 31%
    LD to Con switchers: 12%
    Con to UKIP switchers: 15%
    Lab to UKIP switchers: 6%

    Two big deciders of the GE will be how much this switching will unwind. My own view is that certainly while Clegg stays the LD to Labour switchers will likely stay while the Con to UKIP voters will likely drift back.

    But on these figures even if half the Con and Lab to UKIP switchers return (my view is that UKIP will likely get at least 6% in the GE) that boosts Con by 2.8 points and Labour by 0.9 point.

    My fundamental argument here is that we are in uncharted territory compared to previous parliaments as there is very little direct switching between Con and Lab so we don’t necessarily know how or whether this will unwind.

    There were some Ashcroft findings you chose not to highlight. His marginals poll for example showed almost as many current UKIP marginals voters want a Labour led government as a Conservative led government (Con lead 43 – 37). And 65% of UKIP voters said they would ‘definitely not vote Conservative’.

    On the wider issue of political strategy I agree that in an ideal world Labour need to ‘re-establish a broad reputation for economic competence’.

    But can they do that? It is a very difficult to do from opposition when the economy is starting to do well and the Conservatives and media have so effectively blamed Labour for the economic crisis.

    There is also a huge danger in what you suggest in that it disillusions Labour voters, creates divides in the party and reinforces the ‘they’re all the same’ line.

    So we could end up in the worst of all worlds – still not convincing centrist / soft Tory voters of economic competence and depressing our turnout and enthusiasm. I’m not saying it is necessarily wrong but I’m just pointing out that it would be difficult to do and the results are very uncertain.

    In reality economic competence reputation will only be fully restored by somehow getting back into government and proving it in reality.

    I would argue if when voters go into the election thinking about the question ‘who has better economic competence and who is better at running the economy’ then the Tories will win.

    If however the question voters are thinking is ‘who will share the proceeds of recovery fairly, who is on my side and who will improve my living standards’ then Labour at least has a fighting chance.

    Now it may not be possible to reframe in this way. And I’m not arguing that this strategy is without flaws. I’m simply arguing that any strategy has advantages and disadvantages and there is no silver bullet approach to elections.

    My view would be that the reframing approach is more likely to work because it goes with the grain of current public opinion, whereas yours does not. By that the public have already shown that despite the economic recovery they do not personally feel it and they haven’t given the governing parties any credit.

    One final point. If, and it is a big if, UKIP maintain their position and get 10 – 12% in the GE then the election will be won by the party that keeps its core vote together. That may not be very palatable but that is the reality.

    • anthonypainter

      Thank you Kieran. You highlight many of the right issues and good data points. I agree with your final point – I just think Labour should go for it and try to get over relying on UKIP to ensure it’s the largest party on 32% of the vote….That would have longer term consequences.

      My strategy may not work but I’m confident it has a better chance than the current approach. But it’s very late in the day…..

      • kieran1

        I agree it is very late in the day which is why I think the strategy you propose would be unlikely to work. Unfortunately I think the economic competence deficit is baked in now and the only hope (even if this is relatively slim it is less slim!) is to refocus the debate onto living standards. I think we politicos always overestimate the awareness people have of our policies and positions. And so it is probably already too late.

        Instead I think it is important that we do everything possible to avoid a ‘tax bombshell’ campaign. This could push the Tories to victory (see 1992). That means having costed spending plans for the first 2 years that pass muster with independent experts. My point is that this will help to neutralise a Tory attack but it probably won’t win us a reputation for ‘economic competence’.

        Yours is a strategy with the potential to win 40%+ and a dominant position for the party in the centre ground. Essentially the Blair strategy in 94 – 97. But I don’t think it is acheivable in today’s political circumstances while politics has become so fragmented.

        Instead a populist offer is more likely to be successful – maximising turnout, uniting the centre left and winning back support from WWC voters that have switched to UKIP.

        That group – Lab to UKIP switchers – are I would suggest generally right-wing on social issues (crime, immigration, Europe) but left-wing on economic issues (NHS, progressive taxation, rights at work). Arguably the way to win them back is to show how they would be better off under Labour (and also how neo-Thatcherite UKIP are). This would be through being more populist and supporting the cuts and being seen as ‘the same as the Tories’ is likely to push this group towards UKIP.

        Rex – The somehow is convincing people that we would be better for their individual and family living standards, are more in touch with people’s concerns and would protect public services better than the Tories. Will that work? Who knows? All I am saying is that we are unlikely to have a lead on economic competence whatever we say between now and the election so are we not better off making the election about something else?

        • Tokyo Nambu

          That group – Lab to UKIP switchers – are I would suggest generally right-wing on social issues (crime, immigration, Europe) but left-wing on economic issues (NHS, progressive taxation, rights at work). Arguably the way to win them back is to show how they would be better off under Labour (and also how neo-Thatcherite UKIP are).

          That entirely misses the motives of such voters. No-one is voting UKIP thinking they’ll form a government, so no-one really cares about their fiscal policy. It’s as irrelevant as worrying about Caroline Lucas’s views on the same matters. People aren’t voting UKIP to get a UKIP government (and they won’t get one): they’re voting UKIP to “send a message”. Now of course, “sending a message” to the future President Gore went horribly wrong for people who voted Nader, and UKIP voters should be careful in marginal seats that they don’t let the Tories in, but people aren’t stupid: voting UKIP in a safe Labour seat, making it just slightly less safe, is a rational strategy if you’re upset about Europe and immigration. Trying to stop people from doing this by arguing about what UKIP would do in office is assuming voters are idiots, which is never good politics.

          UKIP’s appeal is that it provides a way for people to tell their Tory or Labour government to do “something” about Europe and immigration. The Tory response is a rather nuanced (and, I suspect, dishonest) “promise” of a referendum, which is subject to enough small print to keep Specsavers in business for decades. Labour’s response is to call voters racist (see also “that bigoted woman”). Neither’s great, but the Tory response is slightly less ham-fisted.

          • kieran1

            Tokyo – I agree that people are using UKIP as a protest vehicle but the key questions surely are a) why are they protesting? and b) how can they be won back?

            And yes UKIP won’t be in government – although it is now possible if very unlikely that they could win 10 – 15 seats and hold the balance of power in a hung parliament – but generally people do want to vote for a party they agree with rather than one they don’t.

            How many Lab to UKIP switchers knew that many in UKIP want to privatise the NHS? Or give massive tax cuts to the rich? I tend to agree in a European election this is less important but in a GE I think people being aware of these positions would help to shift some, not all, voters.

            I am sure a lot of them are angry about immigration and Europe but the problem here is that Labour cannot win them back on these grounds because a) it would cost us more votes from other sectors of our coalition b) it would not be believed.

            I would argue that there is a general disillusionment with the political classes – that they are all seen as posh, privileged and out of touch. But also that people feel very insecure economically and pessimistic about the future of the country and their childrens chances of getting a well paid, secure job, buy a house etc. And immigration and Europe become a scapegoat for these symptoms.

            Therefore showing how a Labour government would make a difference and change their lives for the better has to be the argument to make rather than getting into a dutch-auction on immigration.

            My point is that this means emphasising populist polices rather than austerity politics which is not likely to appeal to this group.

          • Tokyo Nambu

            Therefore showing how a Labour government would make a difference and change their lives for the better has to be the argument to make rather than getting into a dutch-auction on immigration.

            I absolutely agree with this: the anti-immigrant sentiment is actually a proxy for home-owners who know that their children won’t be able to buy a house until they themselves die, people in jobs with decent pensions whose children are in temporary and insecure jobs with no benefits, etc. And making a coherent case on these topics would help reduce the arguments over immigration. Over to you, Ed and Ed.

            How many Lab to UKIP switchers knew that many in UKIP want to privatise the NHS? Or give massive tax cuts to the rich?

            Was everyone who voted Labour in 1983 voting for unilateral nuclear disarmament and immediate withdrawal from the EEC and NATO? Or did they just want Thatcher out and a chance that their jobs might not go? If you can only vote for a party if you agree with all their policies, turnout would be about 0.02%. After all, I doubt that all the shadow cabinet would agree with every policy in the Labour manifesto next year.

          • kieran1

            No of course you are not going to agree with every policy of the party that you vote for. But you are more likely to vote for a party which has policies you agree with, and less likely to vote for ones you don’t agree with. Policy is obviously not the be all and end all but it is clearly a factor.

            It may be that even if we get the message to Lab to UKIP switchers what their positions on the NHS and tax are that some will still vote UKIP. Because they are simply so disillusioned that they don’t care, because they know UKIP won’t get elected, because they like Farage or whatever. But at least it would give some of them reason to reconside.

            I think it is plausible to believe that at least some, if not all, Lab to UKIP switchers would return if we got this message out. And it would certainly be much more effective than either the ‘racist’ line or the appeasement line. And clearly being negative about UKIP can only be part of the answer – there has to be a positive message too.

          • Mark Myword

            I think Labour need to be careful about the future UKIP manifesto. The 2010 UKIP manifesto was Thatcherite/Libertarian in flavour. Farage simply dumped it and everything it contained. UKIP has not yet published a detailed set of new policies. Will they do so it time for Newark? I doubt it.

            But when they do issue a new set of policies, they will be aimed at both Labour and Tory swing voters. Dump HS2, bring railways back into public ownership, a public interest test for takeovers, stronger control of migration, stronger defence, cut foreign aid, reduce reliance on windmills, grammar schools and leave the EU. This will be the ‘national’ manifesto for the people of an Independent UK. (I am not a Ukipper)

          • trotters1957

            Pretty much the BNP manifesto that.
            They’ll try to hide their Thatcher roots but it won’t work.
            UKIPs Labour voters are temporary protest votes, the Tory UKIPPers are there to stay.

          • PoundInYourPocket

            Any UKIP “manifesto” will be a complete fog of incoherent jargon designed to press all the local buttons and get the voters excited. This is a new-style “populist” party, don’t expect the honour of being able to engage in rational debate as you may have done with the traditional parties. This is the new world of nonesense populist politics. Just take a look at your local area UKIP leaflets for the council elections. They are headline fact-free slogans that hit the spot in each council ward. Expect the same from now on.

          • Alexwilliamz

            So like the mainstream parties, but without a history and track record to tie them down to. How our spin doctors must wish they had that freedom!!

          • RobertH

            If UKIP change their tack completely in the 2015 manifesto, Miliband’s job is to portray them as opportunists with no principles who will say anything to get their EU referendum, then revert to their old (2010) policies once elected.

            Labour needs to go on the attack over this. Farage can try to dump the 2010 manifesto and call it drivel all he wants, but his image and name are on it, and Labour should attack him as a shameless, untrustworthy, unpricnipled hypocrite if he tries to u-turn on the Thatcherite proposals contained within it. Farage stood under them four years ago – he can’t be allowed to get away with such blatant, naked opportunism as to abandon them now.

            Whether the tepid leadership is up to this task is questionable, but without doubt, that is what they should do.

          • Tokyo Nambu

            “I think it is plausible to believe that at least some, if not all, Lab to UKIP switchers would return if we got this message (about UKIP policy on the NHS) out”

            I don’t believe it would get any votes back. UKIP are a single issue party. So it’s worth looking at other single-issue parties.

            Up until recently, large parts of the Green manifesto were utterly barking: they have in the last couple of years reined in some of the more outlandish stuff, but in 2010 it wasn’t hard to find out and out wingnuttery in the policy documents. Nonetheless, decent principled people voted Green for decent and principled reasons, and indeed most of the Greens were themselves decent and principled. They didn’t vote Green because they wanted to stop the NHS from purchasing new and effective drugs and replace them with homeopathic tinctures (I exaggerate slightly) but because (a) on the whole they thought the Green’s manifesto was good on the topics they cared about (b) knew that the Greens wouldn’t form a government and (c) knew that if by some miracle they did, sanity would probably prevail.

            Because the Greens were a single issue party, anyone who had a bee in their bonnet about something else could get the policy adopted, because the governance wasn’t great, most of the party didn’t know about that particular bee, and they had other bonnets to worry about. The same’s probably true, mutatis mutandis, about UKIP. Outside their main focus, their policy is a complete shambles, and some horrible people have managed to get some horrible ideas into the manifesto. And when Farage says he hasn’t read it, I believe him: why would he? It’s not as though he’s going to either campaign on it or have to execute it, is it?

            Voters might not be able to join the dots as precisely, but they realise that UKIP policy on the NHS, for example, is entirely meaningless: they’ll never get to appoint a minister or influence legislation, and no mainstream party is currently worrying about modifying its policy on Health to appear the UKIP fringes. Parties _are_, quite clearly, modifying their line on Europe and on immigration to pander to UKIP, so as a “message”, a vote for UKIP is somewhat effective. The manifesto commitments on Europe for the mainstream parties in 2015 will be subtly different to how they would have been had UKIP not existed. That’s not true for NHS policy.

            Dragging up loonies from the UKIP cesspit (yeah, I know, attempting to distinguish between the UKIP cesspit and UKIP more generally may not be easy) and saying “look, they’re loonies, you don’t want them in government” doesn’t work. No-one thinks they’re going to form a government anyway. To treat UKIP in the manner of a campaign in opposition to the Tories is to fundamentally misunderstand the nature of protest politics.

          • PoundInYourPocket

            If you’re interested in politics you consider the policies on offer, you engage in argument and debate. But UKIP are winning over a different kind of electorate. They’re not interested in the policy minutiae, they dislike and mistrust those that claim to know-it-all. They’re angry, fearful and allienated. They are looking for a way out. When that purple and yellow advertising hits the door mat with all those slogans they lap it up. The details are immaterial. Try arguing policy on the door-step with a Kipper, you’ll walk away in a daze as if you’ve been in a parallel universe. There’s no “left” or “right” wing in their world. It’s all slogans and emotion.

          • gunnerbear

            “There’s no “left” or “right” wing in their world. It’s all slogans and emotion.”

            Might that be because the old Right and Left parties have s**t all over the average working man and woman in recent years?

          • Tokyo Nambu

            “They’re angry, fearful and allienated”

            Indeed. And Labour’s response was to call them “bigots” on live television, and then attempt to pretend they didn’t really mean it. And since Gordon Brown (who, given no-one else stood for the leadership, was presumably the best the party had to offer) things haven’t been much better, with the basic narrative being “only racists whose votes we don’t want anyway would consider voting UKIP”.

            That’s electoral suicide. A Labour strategy based on winning London, Birmingham and Manchester while dismissing the rest of working class England north of Luton as racists who aren’t worth worrying about is a strategy to reduce the party to fifty seats. Labour need to counter UKIP and offer both policies and a narrative as to why Labour is on their side. So far, it has utterly failed to do that. The Tories hate white working class England, and Labour don’t care about it: that’s hardly a way to encourage people not to vote UKIP, is it?

    • Rex Hale

      “In reality economic competence reputation will only be fully restored by somehow getting back into government and proving it in reality.”

      That’s a really interesting point. But it’s all in the ‘somehow’ isn’t it? What is the ‘somehow’…? I agree with the dangers you flag up about alienating core vote if we pursue an economic competence agenda, but I’d flag up the risk of doing a Lib Dem if we don’t…ie we promise no cuts, get into government and find we have to make them…and then we lose our core vote just as violently and dramatically as the Lib Dems have just done…

      • gunnerbear

        “ie we promise no cuts, get into government and find we have to make them…and then we lose our core vote just as violently and dramatically as the Lib Dems have just done…”

        And that is the sticky bit about being in power for any party. Real life consequences occur when decisions are made.

    • RogerMcC

      The 1992-7 Tory govt produced a far stronger recovery than this one has done and still fell to a Labour landslide.

      Indeed perversely economic confidence may work in Labour’s favour – for low information voters (and that is what a large majority of them are) a feeling that the economy is fundamentally fixed may mean they are more willing to take the risk of letting Labour take charge and as you say share the proceeds more fairly.

      One only has to look at last great depression to see that sustained economic crises drive voters right rather than left (and even in the US Roosevelt won in 1932 on an austerity platform while it was Hoover who was building dams).

      And of course the more Tories and Lib Dems trumpet their success (however dubious it actually is) in tackling the deficit the less rather than more of a vote-deciding issue it becomes.

      • Tokyo Nambu

        “The 1992-7 Tory govt produced a far stronger recovery than this one has done and still fell to a Labour landslide.”

        A landslide caused by one of the most consummate politicians of his, or indeed any, generation, Tony Blair at the peak of his powers, who had taken over from a widely respected and likeable past leader in John Smith (let’s leave the “shadow budget” debacle that arguable cost the 1992 election to one side), fighting against a wildly unpopular and incompetent looking (Black Wednesday) government which was suffering from savage internal disputes involving, inter alia, the Prime Minister resigning as leader of his party and demanding re-nomination. This coming at the end of approaching two decades in office, with all the problems that causes.

        Which part of that do you think Labour can take comfort from today? The charismatic leader? The savage division in the Tories? Labour’s reputation for economic competence?

        If Labour is to win, it needs policies and a narrative which are coherent. The “cost of living crisis” thing is electorally illiterate: the people whom that affects are, in large part, either tribal Labour voters or don’t vote. A lot of swing voters — older, more likely to be home owners — are still luxuriating in mortgage rates a fraction of what they were ten years ago. Given that Labour campaigned on withdrawal from the EU in 1983, the slightly smug “oh, we don’t think we need to talk about that” attitude toward Europe doesn’t sit well, and makes Labour look nervous. And an utter refusal to offer anything other than an open-door policy on immigration is suicide amongst the white working class (who, it’s rumoured, have in the past often tended to vote Labour, and whose failure to do so might cost the odd seat).

        So you’re left with a set of policies that might, just, shore up one part of the base (“cost of living”, although identifying the problem isn’t the same as providing any sensible answers) while there’s nothing to appeal to huge numbers of swing voters: home owners, those that want to buy houses, those that worry about their children’s education, those that worry about jobs, those that don’t think open-door immigration is an unalloyed good: all of them are people who Labour are happy to tell aren’t wanted as prospective voters.

        Who, exactly, is Labour targeting?

        • gunnerbear

          “This coming at the end of approaching two decades in office, with all the problems that causes.”

          Brilliantly put. The Blue Mob looked like knackered, cheating duplicitous a**eholes and along comes a chap who looks keen, young and fresh…….

          “And an utter refusal to offer anything other than an open-door policy on immigration is suicide amongst the white working class (who, it’s rumoured, have in the past often tended to vote Labour, and whose failure to do so might cost the odd seat).”

          Top notch.

  • RogerMcC

    ‘No nationalising rail’

    Nobody is talking about nationalising railways in the Attlee sense – only of letting them revert back into public owners as contracts expire – a policy which costs nothing and indeed should reduce both fares and public subsidies.

    It can even be presented as part of the battle to reduce the deficit.

    Every poll shows even a majority of Tories favour this.

    And has it occurred to you that Labour doing well in commuter towns outside London is probably related to our being perceived as at least contemplating this?

    Why is this refusal to costlessly return our railways to public ownership such an article of faith to you diehard Blairites?

    • gunnerbear

      “a policy which costs nothing and indeed should reduce both fares and public subsidies.”
      If the state runs the railways, there will be a cost to the taxpayer. The railways are not run on fresh air and goodwill. The actual savings will be marginal at best.

      • RogerMcC

        a) stop trolling us.

        b) use the time you waste talking UKIP bollocks here looking at how so called privatised railways are actually financed by state subsidies: e.g. https://www.gov.uk/government/publications/rail-subsidy-per-passenger-mile.

        If railways could be funded from fares alone and were not natural monopolies then they could be left to the market and cost the state nothing but they are not and never have been.

        • gunnerbear

          Actually, believe it or not, I’m a regular user of the railways and have a great interest in the best ways to run them. Perhaps I misunderstood your comments, but you said there would be no cost to a policy of renationalisation (which is what you are proposing in all but name).

          As to the costs of the railways, I agree they will always need a subsidy from the taxpayer – I suspect that the real question is what should that subsidy be? After all, even under BR the only lines that made a consistent profit were the ‘main intercity routes’ and also some commuter lines.

          The real eyewatering rises have been in the costs of maintaining the infrastructure…..and remember what happened the last time a Labour govt. got involved with that.

          • MikeHomfray

            I think the issue is whether they should be run on a profit making basis or not, and as you say, most don’t anyway – Branson actually said that he would be quite prepared to run West Coast on a non-profit basis, and I think that sometimes the arguments are presented too simplistically. There are some very good providers and some which have failed entirely.

          • RogerMcC

            This site is called labourlist.

            You are not a labour supporter, deride us as the Red Mob and spin absurd fantasies about our sending out search parties to get more immigrants in.

            Whether you end up voting UKIP or Tory you are a right-wing troll and I really can’t be bothered arguing the minutiae of rail subsidies with you.

            This doesn’t mean that you are not entitled to your opinion and that I would not perfectly happily argue with you somewhere else.

            But your arguments being fundamentally anti-Labour do not belong on labourlist any more than mine would belong on conservativehome, stormfront or ib whatever semi-literate online hell UKIPers have constructed for themselves.

          • gunnerbear

            Strangely my MP doesn’t seem to consider me Right Wing or UKIP – he’s a Red Mobber. I think his view of me is ‘solid blue collar with conservative views on some issues…’ i.e. the sort of voter that voted for Labour so much that Labour used to be able to ‘weigh the votes in’.

            I’ll vote for any party that I think will make my life better and Britain stronger. At the moment, it’s NOTA in terms of the Big Two and Yellow Three. As to the others…really?

            Incidentally, I’m not sure if you noticed it but I use Red, Blue and Yellow Mobs along with Red. Ed, Nick the Slick, Ol’ Cast Iron because that’s how I see them – much of a muchness and utterly beholden to some ‘liberal left’ vision of the world where everything is nice and rosy…..

            ….and we all sure as f**k know that ain’t the case.

            I also don’t think UKIP will – at the moment – ever have much of an impact beyond being a bin for protest votes (bit like the Greens) because FPTP always works against the smaller parties (like Yellow Three).

            And UKIP like the Greens have policies that utterly contradictory in the real world.

          • RogerMcC

            Again it is not your holding the views you have that is the problem but the forum you are choosing to express them in.

            You want to fantasise about Labour plots to flood the country with immigrants there are the websites of most of this country’s national newspapers and of several other political parties where you can do so.

            But no, you tediously repeat the same lines over and over again at labourlist because unlike the parties and publications of the right it lacks the money and resources to moderate comments.

          • gunnerbear

            “our sending out search parties to get more immigrants in.”

            Lord Mandelson said that, “In 2004 when as a Labour government, we were not only welcoming people to come into this country to work, we were sending out search parties for people and encouraging them, in some cases, to take up work in this country.” (Spectator, Progress, DT and other assorted newspapers).
            Add that to Neather’s revelations about how HMGs policy at the time was to force ‘multi-culturalism’ onto the UK, well, I’m sorry, that doesn’t sound like a much a fantasy…..more like a deliberate attempt by some in the govt. of the day to suppress the wages and degrade the working conditions of those at the very bottom of the pile….

      • Kaine

        We already pay subsidies. The most in depth study, that of CRESC at Manchester University, estimates the savings from removing the TOCs at about £2bn a year. Not staggering, but certainly worthwhile.

        • gunnerbear

          Kaine,

          I agree that £2bn is a huge amount of money…but at least you are being realistic and are saying that the railways will still cost the taxpayer billions.

          Nationalising the railways – by what ever method will not suddenly make them cheaper and I’m also sure that (given current projections) Red and Blue Mob leaderships know that the railways will soon be returning even more cash to HMG via higher fares and for want of a better expression, the latest iteration of ‘cap and collar’.

          • Kaine

            I don’t entertain the idea it will make them cheaper. I simply see the current system as ‘rent-seeking’ by three and a half private companies and three foreign governments in a costly and inefficient manner. The TOCs add nothing.

            So yes, £2bn a year for what amounts to a minor administrative change is a decent win as far as I’m concerned.

          • gunnerbear

            Fair comment. The inefficiencies though at are a result of assorted HMGs policies.

    • treborc1

      It was a Red herring both Wales and Scotland both intended to go for a public run railways system and both were told by the big boys in London no you cannot. Miliband visited Wales and then council housing went the same way and affordable houses with a Welsh government funded mortgages system to allow the poor to have a home, and now that gone as well.

      So we can now see what most of us knew anyway Assemblies are only as powerful as Parliament allows them to be.

      • gunnerbear

        “Welsh government funded mortgages system….”
        Respectfully, surely you meant “a Welsh taxpayer funded mortgages system…”
        I’ve asked this question on other sites: why should my cash as taxpayer – taken from me under point of law – be used to fund mortgages for people that otherwise would not be able to get one?
        I don’t mind paying taxes for essential services, but why should my taxes be used to pay for a capital asset that I will in essence be private property?

  • robertcp

    I am not sure that I agree. Labour should reduce the deficit at a sustainable rate. The coalition’s biggest mistake was trying to reduce the deficit too quickly, which was counter-productive. The economy is recovering because the coalition decided to reduce the deficit at a slower rate. This resulted in the deficit actually starting to fall!

    • Rex Hale

      Unfortunately, Labour has lost the ‘too far, too fast’ argument roundly. There’s no point resurrecting it now.

      • MikeHomfray

        Largely because we haven’t talked about the sort of society which this government are establishing – rather than focusing so much on the economy we should have been pointing out that the Tories idea of ‘success’ will leave a society very far from any Labour ideal

      • robertcp

        Maybe but it happens to be true.

  • MikeHomfray

    Sounds like a guaranteed way of coming third.
    Spending cuts would see us lose yet more support in our core areas.
    Housing for rent is what is required. House prices need to fall and demand for the lower priced houses need to be calmed. People are starting to be given mortgages on daft rates again. Look towards housing people whose salaries simply don’t run to buying – need to promote a change of national outlook here as home ownership rates of 60%+ are not sustainable.
    Bringing rail and utilities into public ownership or at least run on a non profit basis would be popular.

    We are not going to be winning any seats in Kent or Essex in 2015. So lets stop aiming our policies at them

    • Rex Hale

      “Spending cuts would see us lose yet more support in our core areas.”

      This is short-sighted. The LibDems’ destruction is because they campaigned from the left and then joined a right wing government – tuition fees being the most dramatic example of that. If Labour is elected on the promise of no cuts, that promise will have to be broken in government, and broken again and again. All this will do is lead Labour into the same cup-de-sac that the LibDems are now stuck in – promising what we can’t deliver and driving our core support away.

      • MikeHomfray

        Of course we can deliver it. but we have to have the political will to do so.

        • Rex Hale

          Fair enough. This is the ideological divide in the party at the moment and we’re on opposite sides of it. Are you suggesting, though, that you doubt Miliband has the political will to deliver it? Or just that the right of the party needs to shut up? (I’m doubtful on both!)

          • MikeHomfray

            I think Miliband on his own probably does. I’m not sure of some of those around him and personally I think the remaining Blairites should leave the shadow cabinet to at least let us have a clear cut message. Hunt is an appalling liability, for a start – he gets so confused and seems to say something different every week. Flint constantly presents policies which are not those of the party. Murphy and Byrne were demoted into invisible jobs and Murphy is, in my view, the source of the regular anti-Ed leaks which do us no good at all. Personally, I think his liberal interventionist views are profoundly mistaken and he should go too. Alexander is incompetent and seems to make a lot of tactical errors. Put Tom Watson and Michael Dugher in charge of the election campaign.

            If this doesn’t work and we don’t win, then the right of the party can argue their corner – but to do what they are doing at the moment which is effectively trying to sabotage the party because they are not in sole charge is treacherous.

          • Rex Hale

            Though I hate the fact, Miliband WAS elected and he has to have his shot. We can debate the issues here on Labour List as much as we want, but the shadow cab has to be disciplined. Anyone who can’t fall into line with Ed should go. If he wins, he wins – and, as you say, if he loses, then the right of the party can have another bash at it. So, basically we’re in agreement on that!

          • anthonypainter

            Says the man who threatens to leave the party every time someone disagrees with him…

          • Doug Smith

            What else can Labour Party members do? There’s so little democracy within the Labour Party even PPCs can only write to Guardian in order to lobby for a policy change.

            And of course, Labour’s Hard Right behaved similarly over the Livingstone mayoral campaign – they didn’t like him so they went high-profile with an abstention campaign.

          • MikeHomfray

            Better than staying in a party who you clearly have no sympathy with any more, eh, Anthony?

  • RogerMcC

    Economic Responsibility?

    As an admirer of Sir Stafford Cripps I am all in favour of socialist austerity.

    Lets start off by dumping Trident and whatever useless aircraft carriers and tanks and fighters specified to tackle a Soviet menace that hasn’t existed for 25 years that we are still committed to building.

    And then lets cast a cold eye over every outsourcing and PFI deal that has not reducing overall state spending (other than by creative accounting back when Gordon Brown was still allowed to do it) but only siphoned more and more of it into the profits of the Sercos and Capitas and G4S’s.

    Lets attack the massive overpayment of public sector executives (not one of whom should be paid more than the prime minister) and the billions spent on consultants and temp staff.

    How about tackling the free schools and academies, remove their effective pupil premium (we can keep the names just remove the incentives) paid by the state and their freedom to siphon taxpayers money into inflated salaries and dubious sub-contracting?

    And last but not least there is tax avoidance which should be treated as a vastly greater contributor to the deficit than ‘welfare fraud’.

    There is an austerity programme we on the left can all support.

    • anthonypainter

      I reckon your programme might, at a stretch, raise about £5billion pa. It’s a slight dent but no more. Not very Stafford Cripps.

      • RogerMcC

        a) £5bn p.a. – 0.8% of 2013/14 total public spending – is hardly an insignificant sum.

        Utter misery has been inflicted on the poorest and most vulnerable people in our society to save (at least in theory although I suspect rarely in practice) sums which are a tiny fraction of that.

        b) The one item that can be costed immediately is scrapping Trident which a 2012 cross-party commissioned report estimated would save £1.86bn p.a. in itself.

        c) The others are indeed difficult to cost – lacking the dictatorial powers Sir Stafford had in 1945 one could hardly for instance unilaterally deprive thousands of senior public sector managers of the inflated pay and bonus packages to which they have a contractual right, the reduction in subsidies from gradual rail re-nationalisation are difficult to predict, we’re stuck with the aircraft carriers unless we sell them to the Chinese, 30-year PFI contracts are specifically designed not to be easily terminated etc etc.

        But savings are savings.

        You offer a completely uncosted programme of spending cuts but reject some specific recommendations as utterly insignificant because they only amount to £5bn – which makes me deeply worried as to what you think is required.

      • PoundInYourPocket

        That 5 billion is a lot of bedroom taxes.

        • gunnerbear

          Or spare room subsidies depending on where you stand…..and that’s the issue the Labour Party have to own up to.

          You’re not going to like what I have to say next but here goes…..

          …I was in a pub the other night after shifts along with more than a few other shiftworkers and skilled men and women from assorted trades…..

          ….the topic of UKIP came up and one comment after another was along the lines of, “Well if f**k all else changes, I hope UKIP keep kicking the government and it keeps up cutting benefits. Get the scroungers of their a**es. The last lot made it way to easy to get benefits….”

          And that was from a very mixed group of people – the debate was sparked because of a chap who had read that – yep, you’ve guessed it – that a household on benefits were entitled to taxpayer funded resources to the value of £26K.

          I stress anecdote isn’t evidence but what surprised me was the agreement from such a wide group of people given how some had voted in the past (including some who would never, ever, ever vote Blue).

          I’m not sure how the traditional parties would even begin to address those concerns without risking fracture of themselves.

          It you’ll allow the phrase, I also think the Yellow Mob are toast – no one apart from the die-hard yoghurt knitters will ever vote for them again.

          • FMcGonigal

            “a household on benefits were entitled to taxpayer funded resources to the value of £26K”

            As I am sure you well know the £26K is a MAXIMUM, not an entitlement.

            Low-paid working families are also eligible for similar benefits reduced as earnings rise but are not subject to the £26K cap.

          • FMcGonigal

            From UKIP’s 2010 manifesto (they are careful not to put a figure on their “basic cash benefit”):

            Welfare

            • Non means-tested “basic cash benefit” for low earners and unemployed. Jobseekers allowance and incapacity benefit is scrapped.

            • Child benefit for the first three children only.

            • No benefits for anyone who has not lived in the UK for five years.

          • gunnerbear

            Err..okay, how about this then; the maximum entitlement to benefits is £26k.

      • Alexwilliamz

        But that’s 5 billion regular running costs (no capital cuts) plus I reckon many of those areas are ones in which public expenditure would GROW over coming years unless the political classes begin to address them.

    • Alexwilliamz

      Please start writing our manifesto. I think a LOT of people across the social/political strata (although not those in Westminster) would get behind this kind of message. People I regularly talk to are sick of this gravy train aspect of managerialism that has grwon up since the 80s.

      • RogerMcC

        Given the actual demographics of Labour’s membership let alone leadership I don’t really think a war on managerialism is an option.

    • gunnerbear

      “Lets start off by dumping Trident and whatever useless aircraft carriers and tanks and fighters specified to tackle a Soviet menace that hasn’t existed for 25 years that we are still committed to building.”

      Kiss good bye then to thousands of well paid jobs in quite a few Labour seats. More than a few workers at BAE systems might get a bit cross if you put them out of work and may even vote Yes in an independence vote…and if Scotland goes, the Labour Party can kiss goodbye to lots of seats.

      “Lets attack the massive overpayment of public sector executives (not one of whom should be paid more than the prime minister) and the billions spent on consultants and redundancy packages and temp staff.”

      Totally agree – not one member of the public sector should get paid more than the Prime Minister. When you talk about redundancy packages, I take it you mean that to cover everyone in the public sector regardless of rank and job?

      Tax avoidance – agree avoidance seems dubious but HMG must tighten the law and make it much clearer. Talk of morality and ‘spirit of the law’ is to my mind, wishy-washy garbage when billions of pounds worth of business maybe at stake.

      I’ll also be brutally honest, if I won millions on the Lottery, I’d make damn sure that HMRC got it’s hands on as little as possible – and I suspect that the view is held by the majority of the population (and I don’t mind paying taxes for the NHS, Defence & Emergency Services, Education and some of the Welfare State, it’s just some of the other policies most HMGs want that I think are bloody wasteful).

      • RogerMcC

        You disagree with not just Labour policy but Labour values and yet you continue to bombard us with your opinions…..

        What is it about the concept of a site actually called labourlist designed for Labour activists, members and supporters you fail to get?

        • gunnerbear

          Why is against Labour values to point out that if you chop Trident – a perfectly clear political point – that there are consequences for the workers involved. The highly skilled workforce at Barrow would be out of a job, virtually overnight.

          Again, I’m agreeing with you 100% that tax avoidance is morally dubious – both for individuals in business and business itself, but that simply making pious statements won’t change anything. If you think that loopholes / allowances need to be closed then that means telling HMG to get them closed.

          Incidentally my understanding is that it won’t make any difference what you or I want – tax is becoming more of an EU issue thus if HMG wants to control it’s own tax affairs in full…yep….you’ve guessed it….we’ll have to leave the EU.

          I’m sure you find my statement about the lottery winnings a bit (or maybe even a lot distasteful) – all I was being was honest (not saying what I’d spent it on).

          I thought LL was supposed to be place for debate, not an echo chamber (I’ll leave that to the UKIP & LD sites). On some issues I’m probably left (NHS) and on others right (law ‘n’ order). I’m sorry if that makes me not easy to fit into a ‘tribal box’.

          In my working life in heavy industry, I’ve come across attitudes that are very tribal, non-tribal, surprising and at times hair-raising. I’ve seen copies of Private Eye, the Socialist Worker, the Guardian, the Times, the Sun, the Mirror, the Star, the Daily Telegraph at work read by all.

          • RogerMcC

            Here you go:

            About Us

            LabourList is an independent progressive blog providing a
            platform for open debate about centre-left issues and the future of the Labour movement. It also acts as a hub to showcase the best centre-left blogging.

            Although we are a broad umbrella organisation seeking to draw together the many views and factions of the progressive spectrum, we also believe that progressive ends – such as a robust and resolute welfare state, social and educational equality and a fully funded National Health Service, free to all at the point of delivery – can only ultimately be achieved through the continued electoral success of the Labour Party.

            While you may still imagine that your anti-immigrant, anti-taxation and anti-welfare views are ‘progressive’ and ‘centre-left’ that would require a very peculiar definition indeed of those terms.

            And clearly you do not believe that whatever you’d imagine are progressive ends can only achieved by the continued electoral success of the Labour Party – other than by dragging it so far to the right that even diehard Blairites would have difficulty recognising it.

          • gunnerbear

            “social and educational equality….”

            I’m a believer in the idea that HMG should at last fund a true, fully tripartite structure ensuring proper Trade/ Technical Schools can be just as selective and elite as any Grammar School. I also believe that for those children for whom mainstream education (not special needs) is not appropriate, then they should be educated in high quality facilities that suit their talents thus they get an education without disprupting others.

            I think in terms of exams, the Labour Party should have the courage to say, “Hellfire, we all know it….GCSE grade inflation is rampant. From now on it stops. We’ll also make it free to go to university to study a limited number of subjects vital to the nation….but if you want anything not on that list…be prepared to pay for it. We know that it was garbage to pretend that 50% of teenagers were capable of going to Uni. to study subjects that would actually lead to anything worthwhile. We will have to direct limited resources to where they will do the most good.”

            “such as a robust and resolute welfare state…”
            I’ve never said the welfare state should be chopped. Never, but without reform it is doomed. The costs are outpacing what is affordable. On Any Questions recently, the politicians were all yammering away about the welfare state and then the non-political chap on the panel pointed out that without reform – by about 2030, it is thought that the ‘Welfare State’ will be taking over half of all taxpayer funded HMG spending.
            Even back in ’69 – Crossman said that the ‘train was beginning to get out of control and that the costs were truly terrifying’ and that leaves aside whether the ‘Welfare Electorate’ is simply to big to face down unless any party has real stones to make very limited resources reach the right people in the right amounts. Even the Fabians in their “2030 Vision” recognise that though I disagree with some of their choices.
            For example they want to cut defence spending yet keep international aid very high. I’m not sure that is a vote winner in ‘blue collar land’ as more than a few people I know ‘blue collars’ have relatives in HM Forces or have served in them. Like it or not, those prospective Red Mob voters (well some are regular RM voters) would much prefer to see higher defence spending and lower aid or even higher spending on education and lower aid.

          • RogerMcC

            You argue very well that labourlist’s defining principles are fundamentally in error.

            So why do you spend so much time here?.

            Nobody I know on the left spends their days commenting on conservativehome, UKIPheim or below the line at the Daily Heil.

            But we have a whole cohort of right-wingers who comment here and at other left sites.

            And if you look at the exchanges between Anthony here and those of us commenters who are not right wing trolls the

          • gunnerbear

            Because on LL you get all sorts of strands of thinking on all sorts of issues and posters tend to put lots of links in that are interesting.
            I don’t think LLs principles – or the Labour Party’s for that matter – are in error, just that when they are ‘executed’ in the real world, there are all sorts of effects.
            It’s a bit like Ed’s speech – I imagine if he had tried that at a local WMC near me, there wouldn’t have been much support….why? Not because he is a bad chap but rather for 13 years he was part of HMG that did absolutely nothing for areas he now claims to love. Voters tend to remember that. They won’t vote Blue – for some that is never going to happen – but they feel they have no choice but to go NOTA. It’s something I keep hearing (and I know anecdote isn’t data).
            Again, if I was a strategist at one of the Big Two, I’d be very worried at just how fragile the vote is.

  • Daniel Speight

    Anthony’s answer to the public perception that the major political parties are all the same is … well to make Labour more like the Tories. I wonder how much of that missing core vote will be recovered this way. However much Balls promises to follow Tory spending plans, it just doesn’t seem to help with those polls does it?

    I’m all for a balanced budget too, but maybe the way it will need to be done isn’t by cutting everything that a social democrat should hold dear. Then again maybe social entrepreneurs like Anthony don’t really believe in that social democratic stuff anymore.

    • Rex Hale

      No. The only thing that Painter says we emulate is their reputation for economic competence. Everything else on his list leaves room for Labour values to shine through.

      • MikeHomfray

        But that seems to equate to an essentially neo-liberal economic approach. Sorry, but as the Blair government proved, you can’t run social democratic social policy within a neo-liberal economic framework

        • Rex Hale

          I’m not sure the Blair government DID prove that, Mike….I thought it went rather well 😉

          • Danny

            And by thinking that, you find yourself in an ever decreasing and dwindling school of thought. It’s just a particularly loud school of thought. See the author of this article as evidence.

          • Rex Hale

            A dwindling school of thought that won three elections…

          • Danny

            Ah of course. It won three elections. How silly of me. I really need to amend my benchmarks on what makes a good government. Using things likes analysing the gap between the rich and the poor, assessing how secure and comfortable a worker feels in their job and ascertaining whether the lives of the majority were improved through the actions of a government is a stupid means of rating a government.

            I need only look at how many elections they won.

            How do you decide who you prefer out of Thatcher and Blair? Flip a coin?

          • Rex Hale

            So you don’t care about winning elections. There’s a lot of that about in the Labour Party at the moment. Rather be ideologically pure than actually, you know, win the argument and gain power and improve people’s lives. Fair enough. You must be rather pleased with how it’s going right now? On course to lose big in eleven months time – it will be a glorious moment of triumph for you…

          • Danny

            Was it heads or tails?

          • MikeHomfray

            But in the medium term the additional spending collapsed because it was built on the neo-liberal framework set by Thatcher – so as soon as the coalition came into power they could very easily dismantle the advances made

          • robertcp

            Went rather well?! The worst recession since World War Two. I am glad that it did not go badly!

          • Rex Hale

            I thought that was the Tory argument? That Blair and Brown caused the recession?!

          • robertcp

            Brown was unlucky that he was Prime Minister when the crisis occurred but he was equally lucky that he was Chancellor during the boom.

          • PoundInYourPocket

            A Joseph Rowntree report that compares the relative value of welfare benefits clearly shows and concludes that the worst time to be unemployed was under Blair/Brown. The best time, suprisingly, was under Thatcher. Benefits for the unemployed were continually cut back during the New Labour years. Hard to believe, but true, read the report.

      • anthonypainter

        Spot on. And why does ‘left wing’ have to means ‘fiscally profligate’ or ‘economically incompetent’. If we can’t get the basics right then all of our values suffer.

        • Dan

          Because “economic competence” by your definition rules out doing ANYTHING that a Labour government needs to do.

        • treborc1

          Because surely if your a copy of the Tories, it means either Cameron is a left winger or Miliband is to the right.

          And I just saw him speak now about labour being different being not scared and being different, sounds great until he went off on his hard working people rant .

          The simple fact we all know if your not going to borrow to build then sadly Labour and New labour and the Tories are basically toss a coin and takes your pick.

        • PoundInYourPocket

          It doesn’t.
          Under Tory stewardship we had almost back to back recessions, from the after effects of the “Barber boom” in the 70’s through the wasteland of the Thatcher monetarist recession in the 80’s on to the post Black Wednesday debacle of the 90’s with hugh defecits. From whence cometh this ridiculous idea that the tories are “good” at running the economy ? From the Tory press of course. The economic data shows otherwise. Stop agreeing with the Telegraph and start making the counter argument. Look at the growth and surplus generated by Brown that enabled massive investment in the NHS, Sure-Start, Education, tax Credits etc etc.

        • If you are going to talk about economic competence you have to have start from the beginning and understand what a £ actually is and why economic competence isn’t, at government level, at all the same thing as on a non government level.

          Government is an issuer of £ not a user. Competence is measured not by £ saved or spent but by the degree to which the economy works efficiently. By the length of the dole queues. Governments should be more concerned with wasting available resources. But the sad thing is that many people don’t see it. They think its smart to have an economy working at only 70% efficiency .

          Google {3 spoken how it all works}

      • PoundInYourPocket

        Are you forgetting the recessions of the 1980’s, and the 1990’s due to the discredited moneterist economic policy of Thatcher and Lamont’s “Black Wednesday” debacle. Have you overlooked the hugh surplus generated under Brown’s chancellorship that allowed investment in the NHS, increased pensions, Sure-Start and Tax Credits etc? Why , are you not rebutting the ludicrous claim that the Tories are more creditable than Labour on the economy ?

        • Rex Hale

          I don’t deny any of that, but this is all about a strategy to win. Like it or not, the Tories have a reputation for economic competence, as every opinion poll bears out. That’s a fact, no matter how unfair or perverse we may think it. And that’s what we have to change – something we’ve so far failed to do. In fact, Labour hasn’t really tried. Time to get on with it.

          • PoundInYourPocket

            I agree with you that this (misperception) has become the received wisdom that we now need to counter. My ongoing gripe is that we keep allowing these myths of Tory competence to gain traction. This allows myth to become unchallenged reality which shifts the whole political debate to the right. We need to rebut these myths with a bit more vigour as we are incrementaly losing our ground and being shifted rightwards. Now we are having to be “as tough as the Tories” on the economy and welfare as we are failing to make the case for our own brand of politics. Soon we’ll be struggling to defend what used to be taken for granted, fundamentals such as free education.

      • Daniel Speight

        Rex a couple of years ago Anthony reviewed a very good book by Jeffrey Sachs called The Price of Civilization where the author argued for a balanced budget in the US, very much from a social democratic position which was the opposite to the neo-liberal consensus between Thatcherite Tories and Blairite New Labour. Let’s use Anthony’s own words from a later review of his own review on Labour Uncut.

        Sachs has established himself as a leading critic of the new centre-left Keynesian orthodoxy. Good for him – someone has to push back against the use of Keynes to avoid real choices while conveniently ignoring the potential unforeseen consequences of much of what is proposed. But that’s not the strength of the book. The strength of this book is that he actually includes a costed plan for recovery and elimination of the primary deficit while investing in science, education, childcare, infrastructure etc.

        My argument with Anthony at the time was even after he gave such glowing recommendations to the book, he then went on to ignore pretty well everything it suggested. It seems he is still in denial.

        Yes let’s, as Sachs suggests, aim at a balanced budget, but as Sachs says this isn’t just about cutting state spending, it’s also about how we use taxation. Should the richest in society be taxed harder? Seems there is public agreement that they should. Should we get into a competitive death spiral on low corporate tax rates? Again public reaction against the globalized tax avoidance by large companies seems not to support that idea. If Amazon or Starbucks want to sell to British residents then they should pay their taxes in full would seem to be a vote winner. None of this makes it into Anthony’s post. All we get is more Tory-like austerity economic policies.

        Oh and the railways. Whatever did happen to the Blair stakeholder society? Didn’t seem to stick at the time and it’s long gone with Anthony.

        Funny thing is I’m writing this on a day when the Tory appointed Canadian Bank of England governor sounds more progressive than one of Labour’s supposed intellectuals. Carney talks about the failing social contract that capitalism should provide with the population, about increasing inequality, and about the need for increased regulation of the financial industry, (OK not too loudly I accept.) In the end Carney sounds more like a social democrat, which he isn’t, than Anthony Painter, who should be. But then again that’s where New Labour and Progress have bought us. A little bit more social democracy from the leadership will make a big difference. All it takes is a bit more courage from Ed and those around him.

        • Doug Smith

          And, speaking at the Inclusive Capitalism conference, IMF chief Christine Lagarde has revealed herself to be an opponent of inequality.

          The Progress section of the Labour Party are now out on their own as defenders of the corporate elite with their ‘won’t say boo to the capitalist goose’ attitude.

        • gunnerbear

          ” If Amazon or Starbucks want to sell to British residents then they should pay their taxes in full would seem to be a vote winner.”

          I hate to be really, really boring but those companies are paying exactly what they have to by law. If you think they should be paying more, demand the law is changed. Don’t hammer them for doing everything that is legal to protect their own cash….or would you offer to pay the taxman more out of your pocket if you didn’t have too?

          Incidentally, how rich is rich?

    • IAS2011

      So much about ‘spending plans’ – not enough about viable engagement with REAL people in order that the ‘Right’ policies can be developed and Upwards social mobility can be achieved… once again.

      Surely, innovative policy development amid a challenging climate is key to counteracting failed policies such as the Work Programme and building a new confidence in an employment market that desperately needs an enhancement of its productivity and, thus, the people to fill such gaps.

      So, lets talk policy – not spending – as we should know that a ‘hand-up’ is still an effective tool as apposed to a ‘hand-out’.

  • James Sorah

    Probably one of the most depressingly negative
    articles I have read for some time despite the stiff opposition.
    So your answer is more cuts to pay off a
    deficit (the historically low interest on a national debt
    inflated by bankers greed) coupled with some vaguely progressive tinkering’s
    around some broad policy areas!? If, god forbid, the leadership adopted
    this position our message to the electorate will be; ‘yes your local, library,
    police station, hospital, youth service, etc, will still have to close,
    and yes we will continue privatising everything! But hey we will ask
    nicely if employers will raise the minimum wage, aspire to build more
    affordable houses, be nice to those who need social care (if we can afford it)
    and talk about having more apprentices…..zzzzzz’!!
    Good luck with that but
    personally I think such an ‘offer’ will open the trap door to a well
    deserved oblivion and I could think of a 101 things I would rather do with my
    time than try to sell it on the doorstep

  • Rex Hale

    I completely agree with Painter’s diagnosis of the problem – in fact I’ve summarised exactly the same points in my far-too-numerous comments over the last week. The prescription is much more difficult to define – but I think Painter has some good ideas here. I completely agree that economic competence must be the first thing, and that that means biting the bullet now, and hard. All but the most die-hard of old style socialists know that we have to make some cuts – any government will do – and denying/avoiding that plays into the Tory narrative of spendthrift Labour. Add in the retail stuff and we’re basically doing the Tories job’ for them by solidifying their argument that Labour is spendthrift. Strategically Painter is completely right to argue that we need to focus on a small number of fundamental, powerful areas. There are plenty of other policies the party can have (getting rid of the vile bedroom tax, for example) but our message needs to be tightly focused on a few major concepts, positive and relentless – just like the Tories’ message has been.

    (Of course, I think it’s too late to actually achieve any of this, plus I don’t think Miliband is capable of it and he’s certainly not ideologically in tune with it…)

    • MikeHomfray

      I certainly hope he isn’t. I wouldn’t vote for that sort of Labour party, and it would be a surefire way of finishing third. I wish you would grasp that we are never going to win back southern seats with Tory voters who dallied with us once and once only in 1997. We won in 2001 and 2005 because the Tory opposition was unelectable.
      We are now in the position of needing to keep together enough votes to gain a majority. We clearly cannot and should not ape Ukip, but we can do something about the perceived consequences of the issues Ukip raised. Unemployment and housing
      So – mass public sector housebuilding programme and public sector led job creation aimed at our core areas.

      • jaime taurosangastre candelas

        “Public sector led job creation aimed at our core areas”

        What are they all going to do? And is it not a little bit miserable to ignore the many millions of Britons who do not live in the northern cities?

        • MikeHomfray

          Our core voters aren’t only in the north, though.

          And that is why I separated the two issues. I agree that much of the housing needed would be in the south. There is also the situation of the empty housing which needs bringing back into circulation, though

          I think that there are plenty of things which people could be doing, which the current government have shut down or think could be done by volunteers. Many of those jobs would be in the north.

          • jaime taurosangastre candelas

            I always have some difficulty with the concept that the public sector can act as a sponge to soak up issues of unemployment. There has to be something useful for those people to do.

            It is the same with the Jobs Guarantee that is talked about as a possible Labour policy. How can a Government guarantee a job? Doing what? What skills are needed?

          • trotters1957

            Why not more schools, roads, hospitals, universities, railways, infrastructure, power stations. houses

            Its called PUBLIC INVESTMENT, its not waste, its investment, something the private sector hasn’t done for 5 years.

          • MikeHomfray

            But I believe in having a large and strong public sector, to provide a high level of public provision and public goods. I think it marks out societies which are developed and civilised. The things they would do are endless – from environmental improvement through to restoration of the many cuts to important services
            By investing in this way we stimulate demand and create a stronger and more resilient society. Keynesian economics, social democratic politics.

      • Matthew Blott

        Your grasp of economics wouldn’t fit on the back of a fag packet.

        • MikeHomfray

          Yours would fit on the back of a Tory party membership card – ideologically and in their depth

          • Matthew Blott

            Touche.

            I’m in favour of very high inheritence tax, progressive taxation on income, a living wage and protecting our major industries from foreign takeover. I don’t think these views would go down too well with the Tory party but because I don’t want to join you and the rest of the Chavistas on some doomed Bolivarian Revolution I am “right-wing” apparently. So be it.

            Still on the other hand, despite your protestations, I find it very hard to find anything you say that would be out of place in the Respect Party and I urge you once again to join because I think you’d be a lot happier there.

          • MikeHomfray

            Think its you who is out on a limb these days. New Labour is dead.

          • Rex Hale

            Maybe, but the vision that underpinned it and won three elections still survives, and I suspect that in June 2015 it will be re-emerging as Labour realises it has to tack back towards the centre ground….

          • gunnerbear

            “protecting our major industries from foreign takeover.”

            What about the ones already in foreign hands?

        • PoundInYourPocket

          I presume you’re good friends with T.I.N.A.

          • gunnerbear

            Err..what’s TINA?

        • Matthew Blott

          I

    • Matthew Blott

      Agree with this completely, good post. I suspect it will go down like a lead balloon though.

      • Rex Hale

        Thanks, Matthew. I have to say that, for the most part, Labour List commenters can disagree across these left-right lines pretty constructively. Sometimes I have been a little provocative with my anti-Miliband meanderings, but mostly there’s a tolerant attitude abroad here. In the end, Miliband is going to run his campaign the way he has been doing. There’ll be no change. I think that’s disastrous, but I also think that the Shadow Cab need to get behind him and stop the destructive counter-briefing. It’s fine for us to argue and debate here, but the Shadow Cabinet need to take a single line, and be loyal to their leader. Anyone who can’t do that should get the hell out of it, and then they can talk to their hearts’ content to anyone who’ll listen about what’s wrong with the current strategy. Hell, they could come on here and debate with us! I’ll probably bow out of Labour List shortly and let events take their course. Those who believe in the way things are going will do everything they can to make it work; I hope they’re right, and I’m wrong 😉

    • PoundInYourPocket

      My membership card is getting closer to the shredder.

  • BillFrancisOConnor

    Whenever we have won big (1945, 1966 &1997) we’ve offered hope. There seems to be very little hope offered here. Furthermore, the elephant in the room is austerity and IMHO one of the principal reasons for the success of the extremes across Europe from Syriza in Greece to the FN in France is the economic insecurity induced by the lack of regulation and control on global capitalism. This lack of control and regulation has generated politically disorientated, economically insecure and jobless ‘huddled masses’ living in grossly unequal societies. The party has to make the case for a reinvented role for the State – firstly to properly regulate and control the excesses of the type of casino capitalism that is now dominant, secondly, to give greater security to people of all ages and thirdly to address the Edwardian levels of inequality that are now prevalent in advanced post-industrial Western societies. Unless we begin to offer people at least a start in this direction we’ve had it. Furthermore, if these issues are not addressed then IMHO at least one, (but possibly more), European country will find itself with extreme Nationalists in government.
    History tells us where that kind of eventuality leads to.

    • Neil Thorburn

      What I don’t get is why the facts about our money supply system, a system that allows private banks to create money out of thin air and loan it with ridiculous interest rates attached, has never been seized upon by Labour? I mean this system is single handedly responsible for deciding where all new private money (personal debt) is created and to whom it is loaned. Our governments, through the issuing of bonds in return for this funny money, fund our civic services, war efforts and national investments with it. As individuals and as a nation we then pay vast sums of interest for the privilege of using it. I may have over simplified the problem but the principles I use are sound. The majority of new money, which is absolutely critical for all economic activity, gets created out of thin air and released into the real economy as interest bearing debt by private commercial banks. If you reduce the amount of money being created in the economy as personal debt, you must increase national spending or find outside investment (selling off our assets!) to maintain the nations money supply. If you do not do this, the nations economy as a whole goes into recession but by doing this, the nation finds itself paying more sums to fund the interest on a larger national debt! Which if you were listening, was funded from money out of thin air! On the other hand, paying back your debts on time reduces the amount of money in the economy and if you do not borrow at the same rate or more, your in recession.

      Surely any hardcore Socialist worth their salt would pick up on this quite unlawful financial system as being THE ELEPHANT IN THE ROOM and the root cause of every problem within our society imaginable? But alas I don’t seem to hear too many Socialists actually talking about it. WHY NOT PLEASE?

      • Jack

        You are correct, but letting the plebs find out how the banks are screwing us is tantamount to saying that Phill killed Di. The banks are in business to create debt, the ‘money’ they loan, which is not theirs in the first place because it doesn’t exist, is just the vehicle they use to transport the debt to the customer. Because the money they use is none existent it follows that the interest they charge is illegal.

        • Neil Thorburn

          I agree that this is one hell of a formidable challenge but it is a challenge that I would expect any political party that claims to represent the hard working masses of this Nation, to get its teeth in to with vigour 😉

          • Jack and Neil, I don’t think the Positive money group have it quite right. Yes they can create money when banks issue loans but how long does it stick around? Not until the loan is repaid that’s for sure.

            For example if I borrow £1000 from my bank the bank edit my account and I see the extra £1000 there. So they’ve created the money. Out of thin air!

            I then use that to pay off the taxman. The taxman takes my cheque which is my IOUs puts it through the clearing system but he won’t take either my IOUs or the banks created IOUs. He wants real government IOUs. So the bank has to supply those from its reserves.

            At the same time it edits downwards my account thus destroying the money they created when they issued the loan.

            So the lesson is that bank money is destroyed when anyone tries to use it to pay taxes.

          • Neil Thorburn

            Cheers Peter, good points but I think your argument is flawed. I agree with your view on Positive Money, my jury is certainly still out but this is why we need to expand the debate and claw for the truth. Our lives depend on it.

            For starters I don’t think credit is money per se but rather it is a substance, according to the Consumer Credit Act 1974, that is to be treated as sterling. On that point alone I would appreciate it if anyone could point me in the direction where sterling is defined to the nth degree within the legal system? I have noticed that the Decimal Currency Act 1967 (the legal constitution of our modern money) is not available in the National Archives and they have yet to reply to my emails requesting it. If we all paid our taxes with credit, the nation would be bankrupt rapido and banks will or should not create credit for this purpose.

            Lets assume your business has borrowed the credit (thin air!), it has created some form of economic activity, generated a profit (reallocated someone else’s money to your business) and you have paid off your loan (Principal + Interest). At this juncture it is useful to note that the Principal sum you have paid back is retired (cancelled out against the original sum of credit created out of thin air) and the Interest element of the loan is reallocated to an account on an inshore tax haven (The City).

            Now you have to pay tax with money your business has in the bank (credit with the value of the economic activity now attached to it) and you opt to pay by cheque and send it off to HMRC. HMRC will cash that cheque with your bank and your account credits HMRC with the sum owed into HMRC’s bank account with a commercial bank. It is all done electronically and at no point are pounds and coins exchanged.

            HMRC are not allowed to use or demand payment in Bank Reserves because this type of money is exclusively used by the central bank and affiliated commercial banks to balance payments between each other only. Gilts are basically loan applications in that they are IOU’s or Promissory Notes that the Government use to raise finance from the commercial banks and other closely related financial institutions. In other words, the nation borrows its money from private commercial banks who create it out of thin air and charge us interest for doing so.

            Bank Reserves I believe is electronic central bank money from thin air that is used to buy up Gilts (Government bonds) directly from the banks or indirectly via the banks, if the Gilts being bought are owned by a non affiliated financial institution. Bank Reserve credit is retired when we pay off our National Debt. Basically it is an exclusive wealth transfer system that is not allowed to be replicated, without consequence, by any other non affiliated banking organisation in the world.

            I am really interested in finding out how much it costs the nation to create its credit at the commercial level and as to what the precise costing mechanisms and costs, which dictate how much credit the central bank has to create to buy back this Government Debt, is?

            So the lesson there is…I can see no reason why on Earth we would employ such a system as I certainly cannot see the national benefit it is supposed to provide. I believe that the very existence of any possibility that there is any truth in any of this, warrants strong and cohesive action now. The truth needs outing…

          • You might want to take a look at a paper by Stephanie Bell (now Kelton)
            Google {bell hierarchy of money}

            The way I look it is that all money is a written IOU. You just need to look at who has written that IOU. At the top is a written IOU of government or their central bank which is not really independent! There is no gold or silver backing up that IOU any longer and there is no guarantee that the IOU is worth anything in particular against any foreign currency. So why is it worth anything?

            The answer is that anyone issuing an IOU needs to accept that IOU back in payment. So if Govt taxes then it has to accept its own IOU back as a payment in tax.

            These IOUs are the reserves of central banks and also the bank notes in our purses and wallets. The IOUs issued by commercial banks are lower in the hierachy. They are IOUs of bank X or bank Y and will both be accepted by you and I. But bank X will only accept its own IOUs not BankY’s. If it gets bank Y’s it will either swap them for its own IOUs or an IOU higher in the hierachy ie a Govt IOU.

          • Neil Thorburn

            I will do mate.

            I don’t have a problem with IOU’s or electronic central bank reserves and what your saying about bank credit from bank A being different from the credit produced by bank B is quite correct. However, IOU’s (legal term is Promissory Notes) have to be repaid in sums certain in money. Common sense also dictates that the credit type medium of exchange, regardless of where it came from, is worthless on its creation but carries value after it has facilitated some form of valued economic output. In essence, if credit had the ability to change colour depending on the amount of economic output it facilitates, it would and it would be a lot easier to see what goes on. The creation and prudent allocation of credit is a very good idea and I am not having a pop at it.

            Where the problem lies is with whom does this vast power lie within our democracy? How are they putting it to work? Why are they putting it to work for some but not for others? How much are they charging us for this incredible power we privilege them to have?

            Remember, credit amounts to nothing more than our potential which ultimately gets paid off when that potential is realised. It’s ours and it is not the property of some commercial banks to manipulate to their hearts content whilst charging a fortune for doing so. That is the major flaw with the system and it needs to change.

            Have a look at the history and function of the public bank of North Dakota. Socialism going well and truly in the right direction…unlike the UK…

          • Originally a promissory note would have been for an amount of gold either directly or indirectly in terms of a currency unit of account which was itself guaranteed by gold.

            The note was obviously much more convenient to handle than a quantity of gold bullion.

            So, over time that has all changed so the promissory note seems to promise nothing at all now. No gold no silver. So they don’t have to be repaid in anything at all. They are just IOUs. Tax vouchers. Tax credits. My IOU is worth nothing to me. I can write as many as I like. I’m no richer or poorer because of writing them. But they are worth something to everyone else. So they can in principle be used as money by everyone else but myself providing that everyone is confident I will honour the IOU. So I can spend my own IOU if people will take it. When I get it back I tear it up.

            Its the same with government. The £ is the IOU of the British Government. They can spend them. But if they spend too many they risk inflation. If they don’t spend enough they risk deflation and unemployment. They impose taxes to make their IOUs worth something and stop us spending too much which would potentially create inflation. They don’t need to tax to get ‘money’. They don’t need to borrow to get money. They can’t save up their own money for a rainy day and there is no need to. They are issuers of currency not users of currency. Everything is different for them than it is for us.

            “with whom does this vast power lie within our democracy?” With government. Preferably democratic of course.

          • Neil Thorburn

            Peter,

            The Government only produces 3% or less of their £ GBP in notes and coins. The BoE does produce electronic reserves in addition but their use is confined to issuing commercial banks with enough for inter bank transactions and generating enough to buy back Government debt (Gilts/Bonds etc).

            97% or more of Bank Money, which is passed off as £ GBP, is produced by commercial banks when they create the loan. Thus the power to control money expansion or money deflation within the economy does not lie with government but rather it lies in the hands of bankers who are very loosely controlled by Monetary Policy which as we all now know, is total rubbish!

            Taxation is not imposed upon us to stop us spending. Taxation is imposed upon us to pay for Government spending and other feudal rip-off’s. Interest is imposed on our credit to transfer economic wealth away from those who create it. It is not imposed on us as it once was, for the privilege of using someone else’s money. That is why banks reside on an inland tax haven. So when the cheating [email protected]##rds get found out, it will be very difficult for us to get it back….;)

          • The 97 :3 figures are not really comparing apples with apples. The 97 would include all commercial bank deposits. (bank IOUs) The 3 would not include National Savings deposits (government IOUs). Neither would it include bank reserves (government IOUs) which besides being used for dealings with other banks, as you indicate, are also needed for the banks’ dealings with government.

            Government won’t take bank IOUs in payment of taxes.

            Neither does the 3 figure include government gilts which are just government IOUs with some interest attached.

          • Neil Thorburn

            I think the percentages are an approximation but to make it easier for you, Broad money is a measure of the total amount of money held by households and companies in the economy. Broad money is made up of a) bank deposits -which are essentially IOU’s from commercial banks to households and companies – and b) currency – which is mostly IOU’s from the central bank. Of the two types of broad money,bank deposits make up the vast majority – 97% of the amount currently in circulation.

            The government accepts all forms of broad money in payment of taxes because HMRC has a normal commercial bank account and does not deal in reserves. Only the BoE and affiliated financial institutions (commercial banks etc) deal with reserves. Commercial banks have to act as intermediaries when the BoE uses QE to buy toxic debt from non affiliated financial institutions.

          • “The government accepts all forms of broad money in payment of taxes ”

            That’s only true in the immediate instant. If Broad money is created by Bank X then only Bank X will accept it ‘as is’. If it is created by Bank Y then Bank X will put it through the clearing system and swap IOUs with Bank Y by contra. Any imbalance will be settled from their reserves in government money.

            Similarly the government is like a Bank too. It will swap Bank X IOUs for its own IOUs. In other words it will only accept its own IOUs, or government money, in payment of taxes.

            Similarly when paying out interest on bonds and via the overnight rate mechanism government will only pay out interest on bonds and money that it, and it alone, has created.

            If banks could create their own money, deposit it with the central bank and pocket the interest then it would be far too easy! There’s be no need to operate ATMs, have branches in the high street, or lend to people like you or I who would cause them far too much paperwork!

          • John Armour

            Taxation is imposed upon us to pay for Government spending and other feudal rip-off’s.

            But you acknowledge that the government creates money ex nihilo Neil.

            If the government stopped taxing, or even cut back, it’d have to cut back spending pari parsu, a neo-con ‘wet-dream’.

            I think the main purpose of taxation must therefore be the management of aggregate demand.

            History tells us it’s also an effective way to create demand for the currency. The government tax office doesn’t do barter.

      • David Battley

        I’m afraid those “facts” are suspect, and the reason why no government anywhere in the world has tried to create money out of thin air to fund investment is that it does not, and can not, work.

        The suggestion that it does is, I’m afraid, a conceit put about by supporters of MMT who acknowledge neither the inflationary impact of the measure (as MMT economists do) nor the requirement to adopt sensible fiscal measures if you want to attract any investment from private citizens/businesses.

        • Neil Thorburn

          Unfortunately these facts are no longer suspect and are
          confirmed by the BoE in their Quarterly Bulletin 2014 Q1 – Money creation in the modern economy. This paper was most probably produced on the back of the efforts undertaken by a group called Positive Money, who have been relentless in their struggle to raise awareness of
          this Emperor’s New Clothes economic tale.

          Bearing in mind that it is now a BoE substantiated fact that
          97% or more of our money supply is created as interest carrying debt created out of thin air when private commercial banks make a loans (public & private
          loans), I believe that this is an area that needs to be scrutinised sufficiently in order to assess what impact it has on our Nation as a whole. Your suggestion that Governments have never created money does not make sense and is frankly not true. BoE Bank Reserves is money created out of thin air, as is our notes and coins. QE on
          the face of it appears to be nothing more than public credit being created out of thin air to transfer toxic debt (debt that will never be repaid) away from the private financial institutions that created it in the first place. This public credit off course being created out of thin air as an interest carrying debt that will have to be repaid by the public. In addition I would highlight the fact that the public bank of North Dakota reserves the right to create its own credit and it does so to fund economic opportunities that benefit North
          Dakota as a whole. Contrary to what you are saying, their system not only works, it works very well.

          As I see it, credit is not money per se but rather it is an
          opportunity to create economic activity that in turn creates things of real value, if indeed the economic activity created by it is useful. How we ensure our credit is put to good use
          when it is mainly created by private hands is beyond me. Creating credit does not come without risk as when it is created and enters the real economy; it dilutes the value of the money (credit that has produced something of real value) already circulating in that economy. When you aggregate all the factors pertaining to our money supply and put them into the context of our democracy, our system (which is in fact their very own private system) is sheer lunacy. What is more frustrating is the
          fact that It could easily be tweaked by denying private banks the privilege to create credit and forcing their business’s to adopt normal market practices such as full reserve banking and ensuring all their speculative business liabilities are met by their shareholders and investors. Our national demand for money supply via new credit creation is probably our most challenging problem but no doubt, given that there are already working models in the world (North Dakota etc), I am sure that our best economic brains could successfully adapt them to create a world of difference not only in this country, but in countries all over the world.

          • David Battley

            1. The Quarterly Bulletin you quote starts off with “the views expressed are not endorsed by the BoE”.

            2. You are also deliberately misconstruing “money”, “cash” and “assets” between their colloquial and technical meanings.

            3. QE had a positive impact on inflation, resulting from a devaluation of GBP. It was, in effect, created at a cost to us all.

          • Neil Thorburn

            Thanks David, it seems not many economists have the time to get down into the weeds on this matter and thus this lack of communication may be a source of crossed wires.

            1. That might be the case but this information is on their website, was advertised on their social media sites, is explained in a video shot in their vaults, and is widely touted as factual by big hitting economists such as Ann Pettifor, and the Positive Money Team. This information is communicated openly within various action groups and has been bought in to by certain MP’s supporting calls for change in this area. Am I to assume at this point that you totally refute the authenticity of the information being communicated here? If so, why please?

            2. I do not do this on purpose. Interpretation and meanings within a legal context are the only meanings and interpretations I would normally use. My only reliable sources for determining these meanings are legislation interpretations, law dictionaries and normal dictionaries. I have to declare that I find it quite impossible to pin down any meanings of legal substance when it comes to the topic of money. I have asked certain big hitters questions on the matter and I have been told that the law is not well defined in this area. At this juncture I would be sincerely thankful if you could define for me the technical meanings of the words you say I misconstrue? I shall gladly pull together a small explanation on how difficult this language is to pin down (in its official legal meaning) if your an outsider trying to learn?

            3. I know what QE is (or at least I think I know) and I conclude from my understanding that any rapid expansion of the money supply (that does not create real value or expands a lot faster than the real economy being created by its introduction) will dilute the value of the money in circulation prior to the expansion.

            I might not know it to the nth degree but I think I know it well enough to realise that the power of credit creation is a huge power that if managed incorrectly, will impact us all, as it has done all so often. The big question (assuming that the information being communicated is factual) for us as a nation is, do we want something that is of such critical national importance to be in the hands of private persons operating for the good and benefit of their private shareholders only? Given their track record to date, I personally think not and I am keen to understand why this critical information concerning our money supply has not been forthcoming up until quite recently.

          • David Battley

            I am intrigued by how strongly you hold these views, while at the same time acknowledging not knowing it to the nth degree.

            This is really not an economic website, so I would not think it appropriate to follow this rabbit hole too much further, however I ask that you try to seek answers to questions about whether the money supply is controlling or being controlled by activity in the country.

            Briefly, however, the initial suggestion (in my opinion erroneously) made by many MMT supporters is that we control the money supply, so therefore we can create wealth. This is not true. There is an equal and opposite reaction on the value of the money in circulation, meaning that yes you can create more pieces of paper purporting to be £10 notes, but by the act of doing so each one becomes worth less than we currently consider £10 to be worth, and eventually your workers demand to be paid proportionally more of them: thus you arrive back where you started with a slightly less valuable currency.

          • Neil Thorburn

            Thanks David,

            I appreciate that this is not an economics website but would argue that economics sits central to every political argument on the planet. I also know that it is one of those complex areas of discussion that many feel is too difficult to tackle head on, thus they rely on others to tell them in lay terms what is going on. I believe that this hasn’t happened because those trusted with that part, have actually failed themselves to understand what is going on and either misinformation or no information of substance has been articulated to the masses. I do not mean to put peoples noses out of joint but I cannot ignore claims by serious economists such as Ann Pettifor, who publicly declare and joke that most economists on the planet do not understand how money is created.

            Thus I currently hold the view that there are very few who understand this topic to the nth degree and I have made it my aim to fill my knowledge gaps wherever I can. I am an expert in the field of Failure Modes Effects Analysis (FMEA) which is basically a method for analysing overall systemic failures through decomposition of the system into its physical and functional components and assessing the potential failures of each component part via cause and effect theory. It is a very useful tool and one I intend to put to good use as my understanding improves.

            I currently believe I have a broad understanding of money and its economic function within a legal system. Contrary to popular belief though, I do not hold the view that national money (a national medium of exchange) is given its value by the trust of those using it but rather, I believe it is (or should be) given its value by the force of the law underpinning its value which in turn enforces its lawful value onto all those using it. If this was not the case, then I struggle to see how any legal debt can be enforced in the courts.

            Thus in my book lawful money needs legal constitution and a set of legal rules that controls it. This is especially pertinent to money creation because as you rightly point out, generating money out of thin air and introducing it to the real economy has an enormous impact on the value of nations money currently circulating (the stuff that has already created some real economic output in terms of goods services etc).

            In short, I fully understand that by expanding the money supply you do not get something for nothing and that anyone holding that belief is folly. Creating new money out of thin air serves as nothing more than creating a conduit that facilitates economic activity by enabling economic exchanges between the real working parts of society. Modern money (within the context of credit) itself in real terms is worthless when it is created. However it is a substance of critical national importance and those who control its creation and flow, control the majority of economic activity and well being of those undertaking this economic activity. They in fact control the politics, they control the nation, they control everything. It is worth noting that only when credit has created useful economic activity (the activity that outputs commodities of real value) that it can then attach itself to this value and become a true store of that value.

            Thus for me, the creation of money (credit), those who control its flow, the true cost of its creation for those who use it and where the surplus wealth of our nation is being syphoned off to in the form of Interest, are very serious questions that I would like very serious answers to and I would prefer to do that work in a public forum rather than in a mostly closed shop where only Geeks hang out. From a socialist point of view, my aims surely can’t be that bad? Cheers for chipping in…

          • David Battley

            Thanks for engaging here Neil, and I hope you do not consider my interventions overly abrupt. Internet debates usually are.

            For me, this is a very interesting side to the debate.

            In short, if I understand you correctly, you see taking direct control over the money supply as a means to the end of controlling and directing production, following a fairly well defined political orthodoxy (albeit one that lies fairly far over to the left of the spectrum) that central control provides the most effective means to ensure than resources are delivered fairly, but also (I am making a presumption of your belief system here) that this ensures that all such resources are utilised most efficiently and effectively.

            This being the case, I am not sure why you see this as any more or less palatable than taking such direct control via straightforward political means? It is, in effect, exactly what happened during the war, with government control extended over factory production and civilian purchasing (through rationing), and has strong parallels with both the French or Russian revolutions.

            The problems with both forms of control really start when you consider what happens “outside the system” i.e. beyond our borders, where we continue to be reliant on imports.

          • Neil Thorburn

            Cheers David and please feel free to be as critical and abrupt as you wish. It makes for good progress.

            I don’t think I stand in the corner of a total State controlled society, I rather shudder the thought. You raise an important point with whom the control of the money supply should reside and yes it is a difficult one to answer. I consider myself a realist who’s eyes are looking into the distance rather than at what is immediately in front of my face so I think it prudent to spell out what I see as my vision of the Nirvana.

            Mankind has a destiny and what I aim to achieve is to ensure that mankind takes forward the best it has to offer. I do not subscribe to copious amounts of TLC being splashed out on people who have lost the will to motivate themselves but likewise, I am quite opposed to the playing field being rigged to benefit of those who are benefiting the most from it and I am appalled that they are doing this at the cost of the people their system churns up.

            The system as it stands allows some of the most nefarious and monumental idiots to rise to the top of society when they have no right to be there. At the same time it has devoured populations into an unfair disadvantage through poor housing, poor schooling, poor diet, poor everything and this has been going on for generations. So what is the right balance that encourages and determines that the best our society has to offer goes forward whilst dealing with those who have fallen off the edge?

            I would like to see the UK return to being a work horse of economic output that is valued by the world over. Not producing Barbie dolls or any other piece of junk that will turn a profit but serious commodities for a serious world going forward. I want our people to take pride in their country and to put their backs into it. I want our country to take pride in its people, invest in them and support their efforts. I want the advantages and innovation of private enterprise working in a country but I want it governed by a strong and accountable Executive whose allegiance is with their country over and above any alliance they have with industry or any other unscrupulous souls.

            Somewhere in the mix there is I am sure a workable compromise but the problem needs to be stripped back to its bare bones for all to see and for all to speak up. I suppose a start would be to leave the system as it is, let the commercial banks and BoE carry on with private enterprise (full reserve banking in time of course but leaving the door open on regulated credit creation) but lets fund Government with interest free credit paid for by over taxation to build the surplus and accelerate investment. If the debt is real (which it isn’t) lets freeze it, put our nation back to work and pay it off at some point in the future.

            It is interesting that the Public Bank of North Dakota is doing well and may provide some of the answers as to how we balance funding between private and public sector banking organisations. On the point about our interaction with other economies operating under the cloak of the central banking model, well that is a telling factor and closer analysis of the economic factors that led us into WW2 may shed some light as to how seriously those in control of this banking system take it.

            In reality, any real change in the system would also need sweeping changes across EU and North America to have any chance of getting off the ground. I see splitting from the EU (scale the problem down) as being a critical factor and for the sake of my kids and any other good people out there, I will remain the optimist in hope 😉

          • John Armour

            The Quarterly Bulletin you quote starts off with “the views expressed are not endorsed by the BoE”.

            Saved by the caveat again David ?

            At what point does the evidence become overwhelming ?

          • David Battley

            When it is either acknowledged and adopted as a principle by any government in the world, and/or shown to work practically: economic theories are “ten a penny”, as my grandmother would have said.

        • John Armour

          I’m afraid those “facts” are suspect, and the reason why no government
          anywhere in the world has tried to create money out of thin air to fund
          investment is that it does not, and can not, work.

          That would be news indeed for the People’s Bank of China.

          • David Battley

            Hmmm an odd allusion that is barely worth responding to: I assume you will share the insights you have into the (notoriously secretive) world of Chinese government and Chinese financial industry that leads you to conclude they are, in fact, “creating money out of thin air”.

          • John Armour

            Hmmm an odd allusion that is barely worth responding to

            Thanks for taking the trouble.

            I got my ‘insights’ from Frank E Newman a former US Treasury Dep Secretary who also worked in China, in banking, for many years.

          • David Battley

            So… just to be clear you are accepting at face value as a source a man who has, from his five years as Chairman and CEO of Shenzhen Development Bank (now merged with Ping An Bank), likely accumulated a significant number of shares, and therefore finds himself in a position where by he will stand to gain significantly more from the US increasing spending beyond its current debt ceiling (and hence increasing investment in China, leading to more business for… oh yes Ping An Bank) than the US decreasing spending in line with conventional economic theory.

            You do see the problem here, don’t you?

          • John Armour

            You do see the problem here, don’t you?

            Not really David, but then I don’t have your “vision” (or imagination)

          • David Battley

            I’m sorry to hear that.

        • John Armour

          The suggestion that it does is, I’m afraid, a conceit put about by
          supporters of MMT who acknowledge neither the inflationary impact of the
          measure (as MMT economists do)

          You offer criticism of MMT but have obviously read nothing written by its proponents (or perhaps not understood).

          I have never seen where MMT economists gloss over the inflationary impact of spending.

          They go out of their way to make the point that all spending carries an inflationary risk.

          If you can provide evidence to back your claim I expect you’ll be providing it ?

          • David Battley

            Oh dear: please read what I write more carefully. I am saying that MMT economists DO acknowledge the risk of inflation; it is their supporters (who posit it as the magic bullet to creating infinite state spending) who do not.

          • John Armour

            My apologies David. I did not see that you were necessarily making a distinction between ‘supporters’ and ‘economists’, having in mind your previous antagonism to MMT.

            I am delighted that you have learnedt that MMT economists understand that all spending carries an inflation risk.

            Your depiction of ‘supporters’ however as people who posit it as the magic bullet to creating infinite state spending is a generalisation that is simply not true.

            Oddly, it’s usually neo-liberal economists who make that claim about their MMT professional counterparts. Like Paul Krugman.

            It’s almost impossible to read MMT and not get the inflation link with spending.

            And having said that, I will now say that it is possible for a sovereign currency issuing government to run deficits in perpetuity.

          • David Battley

            Possible… yes, but in the same way that it is possible to stand up on a boat, and like all balances, if you push borrowing too far (and conventional economic theory suggests that’s exactly what we’ve done in recent years – for the best of reasons etc. etc.) then the reaction has to be a stronger-than-typically required movement (i.e. a reduction in the deficit, which becomes a surplus if this reduction is increased beyond an arbitrary level) in the other direction to bring yourselves back into equilibrium.

          • John Armour

            Possible but not really, eh, David ?

            Conventional economic theory on this subject is dead wrong.

            Sorry David, no links, no references. Waste of time.

            “Fool me once…”

      • John Armour

        Our governments, through the issuing of bonds in return for this funny money,

        Why would anybody buy government bonds with “funny money” Neil when it carries an interest burden greater than the anticipated dividend ?

        Remember, all “funny money” nets to zero.

        I think you’ll find the government will only accept payment from reserves, that is, the “real stuff”.

        After all, that’s the purpose of bond issuance, to mop up excess reserves, isn’t it ? Bond issuance doesn’t finance government spending.

        • Neil Thorburn

          Thanks John and these are interesting points that needs clarification.

          A gilt is a UK Government liability in sterling, issued by HM Treasury (not the BoE) and listed on the London Stock Exchange. They are issued to raise finance for Government spending.

          [Why would anybody buy government bonds with “funny money” Neil when it carries an interest burden greater than the anticipated dividend ?]

          I am not sure what your saying? If a bank purchases gilts directly from the government with credit, how does that penalise the bank?

          The government sells the bonds in return for credit and under our banking system, transactions between banks is facilitated by central bank reserves only. Bank reserves are obtained by the commercial banks by selling assets (I believe these are things like personal debts, portfolio’s, gold etc but it is not credit as this is a liability of the bank and not an asset) in return for reserves and cash.

          Bank Reserves I believe is electronic central bank money from thin air that is also used to buy up Gilts (Government bonds) directly from the banks or indirectly via the banks, if the Gilts being bought are owned by a financial institution that cannot hold bank reserves. Bank reserve credit is retired when we pay off our National Debt.

          I am really interested in finding out how much it costs the nation to create its credit at the commercial level and as to what the precise costing mechanisms and costs, which dictate how much credit the central bank has to create to buy back this Government Debt, is?

          [Remember, all “funny money” nets to zero].

          Not true. Banks only create the Principal element of the loan whilst the loan will have to be repaid with the Principal + Interest. If the Interest element of the loan is not created at the point when the Principal is created then when is it created and how does that net to zero?

          [I think you’ll find the government will only accept payment from reserves, that is, the “real stuff”.]

          Not true. I believe the government operates it finances from its own bank accounts it holds with commercial banks. Government departments are not privy to spending or using reserves. This is BoE and affiliated commercial banking money only.

          [After all, that’s the purpose of bond issuance, to mop up excess reserves, isn’t it ? Bond issuance doesn’t finance government spending.]

          I have not got a clue what you are going on about here. Please elaborate as this idea goes well against the grain of my understanding?

          Cheers

          • John Armour

            I have not got a clue what you are going on about here [bond issuance]

            This is the ‘nuts and bolts’ of our monetary system Neil and if what I’ve written sounds odd, it seems you have been sadly misled, as we all have been.

            : (

            I’m not going to address all your points but rather ask you to read an article by Professor Bill Mitchell, one of the principal developers of MMT, whereupon it should all become clear.

            The article also covers QE which I think you will find interesting.

            Because you have already read the BoE Quarterly on the money multiplier myth you’re already half 90% there.

            Google “Mitchell + The complacent students sit and listen”

            Use the “site map” to access 100’s of essays Bill Mitchell has written. It’s my “go to” place when I want the “no bullshit” explanation.

            Meanwhile, I’ll just say this: when the government deficit spends, excess reserves are created in the banking system which if left intact would drive the bank rate to zero. The central bank or Treasury then issues bonds to mop up the excess as a monetary operation.

            The coincidence of the deficit spend and bond issuance makes it easy to convince people the government is borrowing to finance the deficit. But nothing could be further from the truth.

          • Neil Thorburn

            John,

            Brilliant! Just reading through it now and will get back to you…Cheers

          • John Armour

            I have not got a clue what you are going on about here [bond issuance]

            This is the ‘nuts and bolts’ of our monetary system Neil and if what I’ve written sounds odd, it seems you have been sadly misled, as we all have been.

            : (

            I’m not going to address all your points but rather ask you to read an article by Professor Bill Mitchell, one of the principal developers of MMT, whereupon it should all become clear.

            The article also covers QE which I think you will find interesting.

            Because you have already read the BoE Quarterly on the money multiplier myth you’re already half 90% there.

            Google “Mitchell + The complacent students sit and listen”

            Use the “site map” to access 100’s of essays Bill Mitchell has written. It’s my “go to” place when I want the “no bullshit” explanation.

            Meanwhile, I’ll just say this: when the government deficit spends, excess reserves are created in the banking system which if left intact would drive the bank rate to zero. The central bank or Treasury then issues bonds to mop up the excess as a monetary operation.

            The coincidence of the deficit spend and bond issuance makes it easy to convince people the government is borrowing to finance the deficit. But nothing could be further from the truth.

          • John Armour

            An afterthought to my last reply Neil..

            You clearly understand that the government creates money ‘out of thin air’.

            That should make the issuing of bonds unnecessary as a financing tool ?

          • Neil Thorburn

            I totally agree, there is nothing in my mind that should prevent Government could finance itself through self generated interest free credit but with the caveat that we, through the economic activity this spending supports and creates, balance the books with our output via taxation. Although I also fully understand that I have a long way to go to improve my understanding of these matters fully.

            At this time (pending the further filling of my knowledge gaps) I see that this whole monetary thing as being a system that has been turned on its head. A bit like someone driving a car and finding out that all their expected actions to control the car, have actually been having the opposite effect on its control than what they believed was happening (whilst they were focussed firmly on the view to the front through the windscreen of course). It seems we have been going left when turning right, accelerating when were braking, have five gears for reverse and only one going forward. Everything seemed to look OK when viewed through the windscreen though!! 🙂

            I think that what you are saying lies at the heart of the understanding for those who are pushing for money reform. For me, my understanding is that money was once solely a substance that served as store of some economic value and its usefulness for those who held it was in its ability to allow them to buy and sell at the market. The fundamental principle of this being that something of value existed prior to it attaching itself to the money. Thus something very difficult to replicate (tally sticks, gold etc) became the accepted medium of exchange but its usefulness was still mostly limited to the markets, which were for some, too far to travel to anyway and yet they still managed to survive, growing local crops, keeping livestock and providing services to each other. Indeed, indigenous tribes within the uncivilised world still exist without money today.

            Today however, being cognisant of the development of bank notes as a form of currency, we live in this civilised world which serves to control every aspect of our lives. Although it is not impossible, it is extremely difficult to survive in civilisation without money. This is due to the constraints that legal systems place upon natural people in their status or adopted identities as persons. Professor John Finnis (an authority on jurisprudence) explains in one of his many essays that the person is the personification of a set of legal norms. He says “The person exists only insofar as he “has” duties and rights’ (these rights pertaining, remember, only to that same person’s own conduct); ‘apart from them the person has no existence whatsoever”.

            Well that may be so but I still hold on to the fact that I am a man! but this is a debate between civil law versus the common law and not for here. However, in the context of money, this legal fact establishes for me the principle that objects existing within the legal system must have legal constitution along with the legal rules that govern their behaviour and relationships with other legal objects (persons) and money, in my view, is one such object. It is without any shadow of doubt, one of if not the most important object that people living within the confines of the legal system interact with. Without that interaction or more importantly, correct interpretation, understanding and legal interaction, most will die, its that simple.

            Thus the crux of my endeavour is to establish the truth pertaining to our legal money but it seems that this important point is overlooked by many economists in their endeavours to understand and explain it. For example, the legal constitution for our modern money within the UK lies within I believe, the Act of Parliament that created it. This being the Decimal Currency Act 1967. However, and bearing in mind its importance to our people, our National Archives team as seen fit not to publish this document on their site and it seems, conveniently ignore requests for site of it. The legal constitution and definition of sterling is another. My quest to make sense of it all goes on.

            My point being that although I understand that our money is being created out of thin air and that our governments mechanisms for raising finance through the private commercial sector appear on the face of it to be complete lunacy, I am still in the process of trying to fathom whether or not there is a legal reason for this, whether there is any legality in the creation of money out of thin air (especially for money created outside the scope of the Consumer Credit Act 1974 – Mortgages) or whether this whole system relies on its effectiveness because people believe its lawful and there is no legal consequences for those perpetrating it because legally, it simply doesn’t exist or it exists as something else?

  • Andy Harvey

    What a lot of writing to say very little. All this does is just reshuffle the cards a little. Labour has already committed to increasing the minimum wage in line with average earnings and building 200,000 more homes, so that is 4 and 5 on your list done. Vague promises on health and education are worse than useless, and trust in running the economy is hamstrung by the figure of the Shadow Chancellor. But trust will come back only by speaking the honest truth to the electorate over a number of years to come.

    The results on Thursday give us a fighting chance for 2015, which after 4 years of a first-term new Government is ‘not bad’. Pulling all the recent policy announcements together with those about to made in the policy review will help provide the broad offer to the nation. It needs to promote good jobs with decent pay and rights at work. It needs to regulate prices where it can from rents to energy and transport. It needs to make a full commitment to the NHS and public education, and, above all, it needs to offer a ‘2020 vision’ of how our country will look by the end of the next Parliament. And, then everyone, from Ed down, needs to get out and sell it.

    • LeeMatthews

      “Labour has already committed to increasing the minimum wage in line with average earnings and building 200,000 more homes”

      But that does not mean it will actually happen. Saying and doing are two different things. Gordon exposed the fact that Manifesto’s are not legally binding. All political parties now have that “get out of jail free” card now.

  • Dan

    I agree with more of this article than I expected to, but you are simply wrong to suggest Labour are struggling in the suburbs. They performed extremely well in affluent suburbia, most notably in London. Their problem is solely in white working-class towns — and those people are absolutely NOT interested in so-called “economic competence” or clearing the deficit. Quite the opposite.

    • Guest

      Labour even did well in a lot of working-class towns and cities!

      • Dan

        The big cities are different, though. In old mining towns and other medium-sized towns, where poverty is much more long-term and entrenched (i.e. people blame Labour as well because they didn’t do enough for them while in government), Labour are losing a heck of a lot of support to UKIP, because they’re seen as standing up for the working-class more than Labour.

        • anthonypainter

          And it was second in eg Liverpool and Birmingham.

          • MikeHomfray

            But miles behind – and in Liverpool took the votes which used to go to the LibDems which was always partially a dustbin anti-Labour vote anyway.
            Thinking about the places which didn’t go for us but we usually win, they are on the whole smaller to medium size towns with not many BME people. Grimsby, Basildon, Great Yarmouth, etc

          • Andy Harvey

            Absolutely, this is not about being complacent about UKIP. That would be disastrous. But it is also about not hitting the panic button. A clear-eyed assessment as to why some of our traditional vote preferred them is essential. To be honest, it has been coming for as long as New Labour decided to triangulate the vote, assuming that our core constituency had nowhere else to go., They were wrong in principle and the results of that misguided policy are starting to show.

          • leslie48

            If you don’t press the panic button when we only have 25% of the UK vote last week, when do you press it. UKIP are the tanks on our lawn and we need to do something quick. I think a panic would be good for Labour and a bit less spin!

        • PoundInYourPocket

          true – when you look at Sunderland the Tory vote stayed the same, the Labour vote dropped and UKIP gained. Looks very much like dissafected Labour voters turning into Kippers.

        • Alexwilliamz

          The brutal truth maybe that a new demographical shift needs to happen. That the city is the future and mdeium sized towns need to either tie in to a city and work out how to complement and support them or rebrand themselves as commuter towns, with the service industry that entails. Only a handful of niche smaller towns will be viable outside of the gravity of cities. The challenge is shifting all the gravity from London to a handful of ‘counterwieght’ cities around the UK. Something that would also massively benefit London. Obvious locations to build these hubs with better internal and external transport links are Lpl-Man-Lds-Shfd, Tyneside, Glas-Edin, Cardiff-swansea, the West midlands, and possibly a Southampton-portsmouth south coast hub.

        • Alexwilliamz

          The brutal truth maybe that a new demographical shift needs to happen. That the city is the future and mdeium sized towns need to either tie in to a city and work out how to complement and support them or rebrand themselves as commuter towns, with the service industry that entails. Only a handful of niche smaller towns will be viable outside of the gravity of cities. The challenge is shifting all the gravity from London to a handful of ‘counterwieght’ cities around the UK. Something that would also massively benefit London. Obvious locations to build these hubs with better internal and external transport links are Lpl-Man-Lds-Shfd, Tyneside, Glas-Edin, Cardiff-swansea, the West midlands, and possibly a Southampton-portsmouth south coast hub.

      • leslie48

        But you did not get back Trafford from the Conservative Party.

  • Jimmy

    We can’t take those former LibDem votes for granted (and we’d be truly stuffed if we didn’t have them). One priority must be to make sure they don’t drift away and that we do, if possible, get more of them. There’s no evidence that we have, or are likely to get, much of the Tories, especially as they only got a relatively feeble 36% in 2010.

  • Martin banks

    You seem to have forgot to mention that Miliband needs replacing, ASAP.

    • Rex Hale

      I’ve resolved not to drone on about this any more on Labour List. It isn’t going to happen…well, only in my fantasy and dreaming….

      • Martin banks

        It’s truly shocking that someone hasn’t got the balls to challenge him…shocking.
        Never mind all the points that other folk are making about policies, you are just wasting your time because Ed cannot convey them very well. People need someone who they can connect, at least a little, with.
        I used to dread listening to Brown, let alone seeing him on the TV. It’s the same sometimes with Ed, not always, but enough.
        Labour need to get in, Ed needs to loose his seat?

  • Syzygy

    Deficit reduction ‘is a cornerstone of economic competence – for Keynesians as much as neo-liberals.’ is ludicrous and untrue for real keynesians. Keynes said look after employment and the economy will look after itself.

    The level of UK unemployment indicates that the deficit is too low not too high. With the investment strike of big businesses (which are busy speculating on the markets), government needs to step in as the investor of last resort. Labour should have a commitment to full employment (not the NAIRU rubbish of neoclassical and neokeynesianism) and a Job’s guarantee. A job guaranteed for all who want or need one. This would provide an automatic stabiliser, maintain or increase the workforces’ skills and underpin a mechanism for setting the minimum wage (i.e. a living wage) that private employers would need to match.

    Let’s also not muck about with gov’t borrowing from itself and paying interest. Let’s have ‘Quantitative Easing’ into the real economy. If the BoE can create £375bn to put into the banks (for them to speculate in the emerging markets), it can create the sums needed to finance a job’s guarantee for all, including those with special needs.

    What jobs? I can think of 1000s of things that need doing but a major priority should be to reduce the UKs energy needs, massively boost renewable energy production and transform our society away from oil dependency.

    I didn’t get past the first priority for this economically (and I would argue politically) illiterate piece from a New-Labour-boy.

    • anthonypainter

      In my experience, there is a near perfect positive correlation between those accusing others of economic illiteracy and the accuser’s economic illiteracy.

      Thanks for the ‘boy’. Made my day.

      • Neil Thorburn

        He is just frustrated Anthony, as many of us are, with the incredible blindness our politicians and politically minded electorate seem to possess. Even more so with Labour, as being a South Wales valley boy, I have been led to believe that this party has my best interests at heart but I fail to see how this can possibly be.

        I am no economics guru but I do know systems engineering and I know a con when I see one. I have just spent an hour or so looking at the economics online website and to my shock (Not) I cannot find anything that remotely explains the way our money is created as debt with interest by private companies. I have found that when you study this subject in enough detail, you quickly make sense of how this and other economies are easily manipulated; and all fingers point to the very unlawful way in which our national money is created. It is a system that simply transfers vast amounts of real value (goods, services, land etc) from certain individuals, regions and nations, to another.

        The shocking truth of its existence has been hidden from public view, has not been taught in our Universities and is seemingly a topic that our political elite and so called expert political commentators feel free to ignore. Our media sells our National Debt to us as though we are borrowing real money from financial institutes and it always reinforces the point that we have to service this debt with crippling interest payments. Indeed most fiscal policies are sold as deficit reducing policies to lessen the interest we pay on it. If you scrutinise the legislation on our money and financial systems, the plot thickens to indecipherable.

        Ann Pettifor (PRIME) has joked over the fact that very few economists actually understand the economy because they don’t really understand what modern money is and they are probably clueless as to how money is really created. I thank the BoE for confirming recently, what some of us who follow the work of Positive Money have known for some considerable time, the way our money supply is created and what that means for our democracy.

        My question to you and all other socialists is quite simple. Are you aware of its existence and why on Earth are you not jumping up and down for all your worth explaining it to the electorate? Forget bedroom tax etc, this very corrupt money creation system is so rancid, Its political dynamite! What is going on within the Socialist movement that prevents real and determined action on this single issue that arguably is the root cause (and root remedy) of all other issues campaigned for?

    • Doug Smith

      “What jobs? I can think of 1000s of things that need doing”

      That’s a very important question. And there are thousands of things that need doing throughout the EU – where youth unemployment can reach 50% and millions are unemployed.

      Whether it’s the teachers in Greece struggling to teach children with malnutrition – a consequence of EU enforced austerity.

      Or people in Britain, having to make a choice between heating and eating.

      We know that there’s plenty that needs to be done. The fact that the LibLabCon is unable to respond with anything other than sloganised politics tells us that the political system is busted.

    • gunnerbear

      “Labour should have a commitment to full employment (not the NAIRU rubbish of neoclassical and neokeynesianism) and a Job’s guarantee. A job guaranteed for all who want or need one.”

      And since at the present time the Labour Party is utterly committed to the EU, you have in fact just asked HMG and the British Taxpayers to create jobs for anyone who enters the UK from the EU….as the EU have made it crystal clear that the free movement of people will never be up for discussion.

      How many millions of jobs do you plan to create?

  • crackenthorp

    It is time to let and trust Ed Miliband to get on with the job and detractors need to shut their mouths and follow his leadership. Never have i known such people to panic in the face of adversity. Ed has the answer so let him lead.
    If these detractors do NOT shut up then i will cancel my party subscription and monthly donations and wash my hands of the party

    • Rex Hale

      Well that told us.

  • Saddo

    Taking each of your points in turn

    1 No chance of any economic credibility with Balls around and if he goes, every one will be reminded how long Miliband worked on the economy for Brown. Its probably too late anyway for labour

    2 Health outcomes getting better in England. Wales NHS a mini disaster, run by Labour. No credibility here either.

    3 Employment at record levels, and getting better. Hard line to sell with any believably

    4 Labour did nothing last time over 13 years, so who’s going to believe them now. House building is actually increasing

    5 Put minimum wage up too much, you increase unemployment. The current system actually works so why change it – unions involved etc.

    Elephant in the room = Miliband. Just not a credible PM just like Hague & IDS and look what happened to them as opposition leader.

    • Tokyo Nambu

      2 Health outcomes getting better in England. Wales NHS a mini disaster, run by Labour. No credibility here either.

      And given Wales is a testbed for some of Labour’s (or, at least, the teaching unions’, which amounts to the same thing) policy proposals on education you’d be hard pushed to argue that Welsh education is a shining city on the hill. Abolishing SATs has worked well for them, hasn’t it?

  • PoundInYourPocket

    Given your 5 point plan, there’s no need to run a campaign, no need to knock on doors. Just vote Tory ?

  • Alexwilliamz

    I’m not so sure that an improved economy will automatically give the Tories an advantage. Partly because it remains very localised and partly because it has taken so long. What increased prosperity might do is actually get people thinking about other issues again, things like the health service and public services. The tories big problem is they have hitched their whole waggon to austerity, without really setting out a clear vision of what all this austerity is for longer term; other than business as normal for the rich and wealthy. That is the message that constantly needs driving home. On the flipside a lot of the migration panic will fade if people see wages increase and job prospects improve. Worries over immigration are almost always tied to economic downturns and so the UKIP and to a lesser extent the tories may find this an issue that fades from the top ten of voters issues as things improve. While I know everyone is banging on about listening, the reality is most of those who turned out did not vote for UKIP and last time I looked we are a democracy and if people want what UKIP is offering, then the Labour party will just have to let them vote UKIP since as a party we can offer those voters nothing. Instead let’s focus on getting those sitting at home on polling day into the booths with a message of a better future which, whatever anyone says, is one we can still choose, if the political will exists.

  • Neil Thorburn

    Originally posted below but I sincerely want to ensure maximum exposure on this topic.

    He is just frustrated Anthony, as many of us are, with the incredible blindness our politicians and politically minded electorate seem to possess. Even more so with Labour, as being a South Wales valley boy, I have been led to believe that this party has my best interests at heart but I fail to see how this can possibly be.

    I am no economics guru but I do know systems engineering and I know a con when I see one. I have just spent an hour or so looking at the economics online website and to my shock (Not) I cannot find anything that remotely explains the way our money is created as debt with interest by private companies. I have found that when you study this subject in enough detail, you quickly make sense of how this and other economies are easily manipulated; and all fingers point to the very unlawful way in which our national money is created. It is a system that simply transfers vast amounts of real value (goods, services, land etc) from certain individuals, regions and nations, to another.

    The shocking truth of its existence has been hidden from public view, has not been taught in our Universities and is seemingly a topic that our political elite and so called expert political commentators feel free to ignore. Our media sells our National Debt to us as though we are borrowing real money from financial institutes and it always reinforces the point that we have to service this debt with crippling interest payments. Indeed most fiscal policies are sold as deficit reducing policies to lessen the interest we pay on it. If you scrutinise the legislation on our money and financial systems, the plot thickens to indecipherable.

    Ann Pettifor (PRIME) has joked over the fact that very few economists actually understand the economy because they don’t really understand what modern money is and they are probably clueless as to how money is really created. I thank the BoE for confirming recently, what some of us who follow the work of Positive Money have known for some considerable time, the way our money supply is created and what that means for our democracy.

    My question to you and all other socialists is quite simple. Are you aware of its existence and why on Earth are you not jumping up and down for all your worth explaining it to the electorate? Forget bedroom tax etc, this very corrupt money creation system is so rancid, Its political dynamite! What is going on within the Socialist movement that prevents real and determined action on this single issue that arguably is the root cause (and root remedy) of all other issues campaigned for?

  • Chatterclass

    The Labour Party leadership is certainly not short of those
    offering advice after the local and European elections last week: turn right,
    turn left, confront UKIP, ignore UKIP. The article by Anthony Painter is just
    one in a long list, and while I agree with some of the analysis, I
    fundamentally disagree with the solutions.

    I have spent the past 5 months on the doorstep, albeit
    primarily in a left leaning ward in a left leaning constituency, currently held
    by a LibDem MP. I have had thousands of conversations with voters from across the political spectrum: from those
    who left Labour over the Iraq War and still find Labour too right wing to those
    disgruntled former Labour voters who now support UKIP (and a fair number of
    disenchanted LibDems and Tories too).

    There is a deep distrust of the political process and of
    politicians in general. This much we know. The convention of a party following
    its manifesto in office has been comprehensively destroyed. It doesn’t matter
    what is promised, the electorate is unlikely to believe it.

    However, do not underestimate the electorate’s intelligence.

    We discovered that our voters wanted a vision of something
    better. That, whatever the demographic, they understood only too well that the
    UK is becoming less equal, that the wealthy are getting wealthier and the rest
    being squeezed. When people voiced doubts about Ed, we could say that we would rather that we had a leader with
    values than one that was shiny and smooth. That Ed at least is values driven
    and wants to make things better. That the party was grappling with the difficult
    issue of the failure of capitalism to improve our lives; that in the 4th
    largest economy in the world, if working people were relying on food banks and
    we couldn’t support our most vulnerable, something had gone terribly wrong. How
    did we raise money without suppressing growth? How did we invest in public
    services when there was no money left? That Labour would face more a more
    difficult set of economic indicators in 2015 than they had left in 2010: the deficit
    has barely been reduced and the debt has doubled. And on the doorstep,
    conversation by conversation, we could demolish the myth that Labour had
    trashed the economy.

    The Labour Party is facing an ideologically driven
    Conservative Government bent on destroying the entire post WWII settlement.
    Every branch of the welfare state is under attack: from the NHS to legal aid. The
    rule of law is being undermined by attacks on the justice system and new laws
    such as the Gagging Act. Across the political spectrum there is disquiet about
    this – from the LibDem 2010 switchers to UKIP sympathisers. These are the issues
    Labour must campaign on. I spoke to a woman on polling day who told me that she
    used to vote for Labour but that she had her friends had decided to vote for
    UKIP. She said that she didn’t like Ed. But when I explained that Ed is a
    Labour leader with Labour values, that he was returning the Labour party to one
    that supports ordinary people and not just the wealthy – it resonated. She
    cared about the NHS. She cared about foodbanks. She started to switch. It was
    not about immigration.

    The reason that the Party didn’t do well in the EU elections
    is plainly obvious. It, like its opponents, is following a key seat strategy
    and concentrating effort and resources in only 100 or so key seats. It is not a
    strategy that works for a national election based on PR in regions. There just
    isn’t the mechanism nor the manpower to contact and get out the vote.

    Personally, I think that this is dangerous. While I agree
    with a key seat strategy, one should not ignore one’s so called ‘safe seats’ – in this
    new political era they may not stay safe. The Labour Party needs to be part of the
    communities that it represents, reflecting and responding to voters. The reason
    Labour is not doing better is as much about organisation as about message. There
    is too much reliance on segmenting the electorate and only speaking to those
    who may be supporters: fine as a strategy when you have a majority but not when
    you are trying to build one. We should be engaging with non-voters – they are
    our supporters and we need them. We are doing too little to speak to ordinary
    18-24 year olds – again, the old maxim ‘If you are not a socialist when you are
    young you have no heart’ – they are our voters. Within our key seats we need to
    find and encourage our supporters to vote. And that means knocking on doors and
    having conversations on the doorstep that extend further than asking which
    party you support. If a door isn’t slammed in your face, you need to have a
    conversation. And even Labour voters need to be listened to, to make sure they
    stay Labour voters.

    On a fundamental issue, I don’t agree with Anthony Painter.
    We cannot project economic competence by promising to cut harder and faster than
    our opponents. If nothing else, the experiment of trying to cut our way out of
    a deficit has been shown to be completely fallacious. The only reason that the
    deficit reduced recently is that there were surprisingly good tax receipts.
    Further severe cuts are likely to plunge us back into recession. And another
    thing – what exactly would you cut? Most austerity cuts so far have been to
    local government and to welfare benefits, with a disproportionate level of cuts
    to authorities with higher deprivation and to the disabled and those needing
    social care. Councils are already having to make very difficult choices – and when
    a library is lost you can’t reopen in once the economy stabilises. So, what would
    you cut?

    I don’t think that the ‘cost of living’ strategy is in
    itself wrong. But the messaging is clumsy. Don’t underestimate the electorate.
    And nobody wants to hear the term ‘hard working families’ ever again.

    I think that most people want an overarching vision as opposed
    to individual policy promises. Any promises, whether they be about building housing
    or about creating apprenticeships, need to be anchored within a vision and
    framework of building a fairer society. Electors want to know who we are, what
    we stand for, what kind of society we want to work towards. This is the Labour
    Party message that needs to be hammered home. Instead of linking everything to
    a cost of living crisis, link everything to building a fairer society. Piketty,
    ‘The Spirit Level’: these are concepts that resonate.

    And the best thing that those devising policy could do is to
    walk down streets and knock on doors, every door, and have those conversations
    on the doorstep. Because that is how you hone the message, find out what works,
    and speak in a language that ordinary voters respond to and understand.

    • PoundInYourPocket

      yes yes yes !

  • ” The recovery is now well established; the deficit needs to be tackled quickly. This is a cornerstone of economic competence – for Keynesians as much as neo-liberals.”

    This is just not true. The deficit has to equal the net savings of the population plus the current account trade gap.
    Currently the figures are 2% for saving and 4% for trade.
    4% +2% = 6%

    That’s just to stand still, never mind to expand the economy.

    A lack of appreciation of the basic arithmetic is just economic incompetence of the highest order.

    If you want to balance the budget fine. But first you need to remove the trade gap and stop people saving. Or grow an export surplus like Germany to allow people to save.

    Otherwise you’ll crash the economy like has happened in Greece. The equation still holds. People end up too poor to either save much or buy imports.

    • jaime taurosangastre candelas

      I think you are talking about different things. Anthony is talking about a political vector and velocity: deficit reduction (the vector), and the speed of achieving it. You are arguing about whether the issue needs to be addressed at all.

      It is a dismal science, economics. You make it seem more so, and I would argue less understandable by counter-intuitive complex logic. Your arithmetic works, but is nothing like the full story.

      • No we are talking about exactly the same thing. The amount of money that the Government issues , by spending, into the economy, and the amount of money that the Government removes from the economy in taxation.

        If the Government takes out more than it puts in then we all have less to spend. Their surplus is everyone else’s deficit. If inflation is the main priority then, of course, a surplus would be the responsible thing to aim for to reduce spending power.

        Of course the issue, of the deficit, needs to be addressed. But how can it be when it isn’t explained to our supporters just how that works. If there is an issue it is probably that it isn’t big enough!

        When Mrs Thatcher compared the economy to a household budget 20 years, or more, ago she was ridiculed for not understanding how the economy worked. Except she did understand IMO. It was just a cover for pushing up unemployment and squeezing inflation out of the system. She had some justification for doing that then because inflation was a problem. There isn’t any justification at all right now.

        • jaime taurosangastre candelas

          The one thing that you should never trust any politician with is money.

          Money is not in the control of Governments, with the limited exception that they can create debt. If a Government starts doing too much of that, sensible people take their chips off the table and turn them into a different currency.

          • I don’t know which country you live in but in all the countries I’ve ever visited money is completely in the control of government. Or in the case of the Eurozone the German government 🙂

            But technically you could have a point. My bank once knocked back a £10 note I handed in. It looked OK to me but they wouldn’t let me keep it.

            That wouldn’t have come from the government!

          • jaime taurosangastre candelas

            Have you thought about what money actually is? It is a means of exchange. I owe my bank about £100,000 on my mortgage. They don’t mind how I pay it back, if I offered them Euros they would not mind. They would rather I do not pay them back instantly, as they rely on the interest. But they would take Dollars or Euros instead if I managed to run out of pounds.

          • “Have you thought about what money actually is?”

            Yes its a tax credit or a tax voucher! If you are doubtful just imagine that the government did indeed print something called a £10 tax voucher which could be used towards your TV licence or whatever else you like.

            How much would that voucher be worth? I’d say exactly £10. If you had one of these in your possession you’d find everyone else would be happy to accept them just as they would a £10 note. Unless they suspected them to be fake that is!

          • jaime taurosangastre candelas

            No, that is currency.

            If you take your voucher, and put it in a drawer for six months, you will find that it can still pay for £10 of goods or services that are denominated solely in pounds. But you might also find that it only buys the same volume of petrol that six months earlier you had only to pay £9 for. Or you might be lucky and find that you can get more petrol.

            Money is international, and controlled by the confidence expressed in billions of transactions. Currency is a matter for governments, and they are always playing catchup and pretending they are in charge.

          • Your comment shows rather muddled thinking and is therefore hard to respond to. I’d refer you to a BoE article:
            “money creation in the modern economy”
            which comes up top of the list if you Google the phrase. You’ll also see a Guardian article which reports on it.

          • John Armour

            You take your pounds to an exchange, they swap them into something else,
            for a fee. And then your money is not in the control of Government A,
            but instead of Government B

            To swap your pounds into another currency required another party to reciprocate. I don’t think you’ve thought this through.

      • John Armour

        You won’t be able to borrow money if you frighten investors.

        It doesn’t matter if you’re talking about private sector borrowing or so-called government borrowing, you’re wrong either way.

        For the private sector there’s no market for loanable funds (banks don’t loan depositor’s funds) and the BoE can pay interest on excess reserves and ditch bond sales altogether if it wanted.

        But there are too many parasites living on risk-free bond dividends so it will probably never happen.

        • But, but don’t we have to be nice to the Chinese and appear to be financially responsible so that they will lend us the money to fund our deficits? But we can’t borrow too much because that will be imposing a debt burden on the next generation who won’t thank us for being so profligate! 🙂
          Our credit card is maxed out. We are running out of money. Everyone knows that 🙂 🙂

          • John Armour

            Argggg ! Living beyond our means !

            I wonder if anybody’s said that yet.

            If not, they soon will.

          • Rex Hale

            Living beyond our means.

            (No need to thank me. Glad to be of service).

          • That’s because we think money grows on trees? We haven’t been cutting our coats according to our cloth? We’ve been spending like drunken sailors?

            The reality is that we are living below our means. We are wasting the potential contribution to society of every person who is currently unemployed or underemployed.

    • anthonypainter

      Ah, the accounting identities. 1) The deficit figure is current plus capital- I focus on just current (in fact, I would borrow to build houses- self-financing) 2) As the recovery gathers pace, investment increases (as does deferred expenditure) so the net savings figure changes. Your model is static; a snapshot. There are certain milestones in every debate – one is the moment when an economist wields accounting identities.

      • It’s good that you haven’t totally forgotten! No matter how much you try to cloud the issue the key thing to remember is that 6% (which is what it currently is) is the minimum the deficit needs to be at the moment. To try to reduce it, at any time in the foreseeable future, will increase unemployment and the depth of the recession.

        The key thing to watch for is that 2% figure in private sector savings. That’s fallen in recent years due to the creation of increased private debt caused by too much bank lending. In other words a return to Tory boom and bust that Gordon Brown was keen to avoid. Tories like the banks to create money by lending. it makes their books look better than they otherwise would. Until the next bust of course.

        So, even though many people in the UK are struggling financially at the moment they are likely to be in even more trouble just after the 2015 election when that bust will occur and it will almost certainly be triggered by a rise in interest rates which really do need to go up a bit. It’s unlikely to happen before. The Tories aren’t that stupid. At least I don’t think so!

        The deficit will shoot up on its own then, as tax revenues fall, and there won’t be a thing any government will be able to do about it.
        So just don’t promise anything much on the deficit. Anyone would be a fool to do that.

        • anthonypainter

          You outline a scenario. Fine. There are a number of scenarios. But like a lot of Keynesians (which I assume you are?) you have a too static/mechanistic view of the economy. It is far more dynamic (see recovery post 1993 if you want to see what can happen even as you reduce Gov Ex).

          Again, savings includes corporate investment/saving and private not just the latter category.

          • Savings is money that isn’t spent. Investment is money that is spent with a view to obtaining a financial return. They aren’t the same thing.

            In 1993 the government budget deficit was about 8% and the private domestic sector was saving at 6% and the external trade deficit was 2%. See how the accounting identities always balance?

            That was an good base from which to start a general recovery as the private sector started to spend and borrow. So as the recovery got underway savings fell and so did the govt deficit. So much so that the government sector went into surplus and the private sector went into deficit at the turn of the millennium. It was pretty much the same story in the USA too. The result? A recession as the private sector ran out of money.

            A lot of the increased credit in that period went into the share market and there was a bust in share prices , the dotcom bubble – then later termed the ‘tech wreck’ if you remember. The solution, if that’s the right word, was to replace the dotcom bubble by a housing price bubble on both sides of the Atlantic and that was the start of the GFC.

          • anthonypainter

            It’s net savings!

            You don’t address *the* fundamental point. Economies are dynamic not static/mechanical. This is why Keynesianism is highly flawed other than in the short-term.

          • Yes you’re right. It’s net savings that matter.

            So are we in agreement now? Government deficits can’t be considered in isolation from net savings or the current account deficit. If one is 2% and the other is 4% then the deficit will inevitably be 6%.
            You’re sure you don’t have a problem with that?.

          • anthonypainter

            I have a problem with applying set numbers to the balances. it’s a dynamic picture….but then I’ve said that.

          • Yes, of course its a dynamic or a changing picture. As things stand at the moment, Net saving is 2%, net imports are 4% Govt Deficit =6%

            The next set of figures could be NS=1%, NI=4% , GD =5%

            So, if that were to happen, there would be an interesting question of causality. Has the GD dropped by 1% because NS has dropped 1%? Or has NS dropped by 1% because GD has dropped by 1%?

            It could be either and I’m not sure it is possible to say with absolute certainty which parameter drives which other parameter whenever anything does change. What do you think?

            However the evidence from observations of what has happened in Greece and other Eurozone countries is that it is extremely dangerous to just concentrate on the Government deficit, which seems to be the parameter of choice for the Conservative , Lib Dems, and Labour Parties. The Lib Dems being the party of Keynes and Beveridge have really no excuse!

            Neither has the Labour Party. It would make more sense to concentrate on reducing the trade deficit. The trade deficit is only possible because overseas buyers wish to hold Sterling IOUs ie Government gilts. So slow down the sale of them for starters.

            Of course if you were even more sensible you’d just go with the flow and not be too worried about the deficit. It is what it is. Trying to influence it is like trying to influence the exchange rate. It has taken years and £billions to learn a lesson on that the hard way!

            Government should just concentrate on keeping inflation within reasonable bounds and unemployment as low as realistically possible and the deficit will take care of itself. How can it not do otherwise?

          • Thanks for taking the time to reply to comments -even if we do (or did?) disagree. I did that too when I wrote an article. It should be a condition for all authors IMO. Not doing that is like delivering a speech and refusing to answer questions.

          • Did you edit this comment to add the last paragraph, after I;d replied? That’s a bit naughty if you did.

            But anyway now that you understand that Keynesian economics doesn’t mean that government should force everyone else into deficit by running a surplus you’ve switched tack and are suggesting that “Keynesianism is highly flawed “.

            The only chance any Progressive political party has of achieving its social goals without resorting to violent revolution is by via the workings of Keynesian economics. The ultra left don’t like Keynes because he’s seen as reformist. The political right don’t like Keynes because they see how his theories make that reform possible.

            You’re obviously not ultra left. Therefore I wonder why you are in the Labour Party. The Labour Party has run a campaign against Trotskyite entryism, it is high time there was a campaign against Tory entryism too.

          • John Armour

            Again, savings includes corporate investment/saving and private not just the latter category.

          • John Armour

            Again, savings includes corporate investment/saving and private not just the latter category

            That statement was might raise Wynne Godley up from the dead.

      • John Armour

        Ah, the accounting identities. 1) The deficit figure is current plus
        capital- I focus on just current (in fact, I would borrow to build
        houses- self-financing)

        You’re using some shorthand here that I don’t understand Anthony.

        Would you mind expanding on it a bit. I’m genuinely curious.

    • John Armour

      I think we’ve both explained this to Anthony Painter before, Peter.

      It really doesn’t get any simpler than the sectoral balances equation.

      Far from being the cornerstone of economic competence, it’s actually a noose that the Tories sold Labour telling them it was nice bow tie.

      • anthonypainter

        Thanks for explaining John. I feel enriched.

  • Wolves_Phil

    34% of people in Ashcroft’s latest poll consider that “Austerity and cuts in government spending were never really needed to fix the national economy, it was just used as an excuse to cut public services”. A further 25% instead consider that “While a period of austerity was needed to fix the national economy, we don’t need another five years of cuts in government spending.”

    The final option had 41%, that “The national economy is not yet fully fixed, so we will need to continue with austerity and cuts in government spending over the next five years.”

    So 59% have had enough of austerity. Labour needs a policy that commits to an austerity programme that goes as far as and faster than Osborne’s further plans like it needs a hole in the head.

    • anthonypainter

      Manage the economy by opinion poll if you wish…..

      Besides, you make the same mistake that Labour is making when it says ‘this policy is popular, therefore I will be more popular if I adopt it.’ This is why cost of living crisis is achieving nothing but the occasional short term burst of support. Your approach misses the subtleties and dynamics of support for parties and the fact the ‘economic competence’ is a complex rather than a simple measure based on many signals over time. Labour has been giving off too many ‘wrong signals’ for too long.

      So I’m afraid your argument falls on both economic and political grounds.

      • Wolves_Phil

        I recall that the first big rapid fall in Labour support from the low 40s in the Spring of 2013 coincided with Balls’ adoption of Conservative austerity policies.

        You may be convinced that further rapid austerity is necessary and will work, that is that Osborne’s general course is right and should be backed more explicitly by Labour other than to quibble over a few fine details. I am not. The evidence that I cited shows that public opinion is on my side. Ignore it if you wish.

        As for the “cost of living crisis”, the raft of individual policies now emerging are popular and there is a coherent theme that links them. The problem is that almost none of the electorate is yet aware of them and it is that that Labour has to address.

        • Rex Hale

          To argue that none of the electorate is aware of the COLC policies is absurd – the evidence shows that these policies are polling well, at least in the short term following their announcement. Of course people know about them – it’s clutching at straws to argue that they’re not. The problem is that these policies are not adding up to support for Labour as a government-in-waiting. It’s not about failure to communicate – it’s about failure to convince.

          • Wolves_Phil

            I can only go on what I picked up from canvassing many hundreds of people face to face over the past month. Raise Labour’s policies on issues such as extending the minimum wage, protection for those renting housing, building 200000 houses a year, the GP pledge and so on and it turns out that people are simply not aware of them.

          • David Lewis

            The minimum wage only helps people already in work. It hinders low skilled unemployed people getting jobs.

            Interfering with the rental market just takes rental properties out of the market which increase rents.

      • Dan

        Oh right, so the opinion polls that Labour aren’t trusted on the economy have to be taken at face value, yet polls which contradict your viewpoint that Labour’s popularity would improve if they rejected austerity are wrong.

        By the way, the same poll shows that UKIP voters (who I assume you agree are the crucial swing group) are even MORE hostile to spending cuts than the average voter. Which backs up anecdotal evidence from those of us who’ve spoken to UKIP voters, virtually none of whom say they’re rejecting Labour because they don’t consider them “economically competent”, but rather because they say they don’t look after working-class people anymore (which they do use immigration as an example of, but also say things like they think they don’t provide enough jobs for everyone, that they don’t spend enough on things like the NHS, and they don’t tax the super-rich enough).

        • anthonypainter

          “The last thing [Labour] should do is go for a narrow targeting of UKIP voters.”

          • Dan

            Then who are they supposed to target? The Tories in last week’s local elections were truly down to core vote levels; 29% is below their 1997 vote. Labour are not going to win over those true-blue uber-wealthy Home County Tories who even Blair didn’t win over.

            UKIP voters right now generally ARE the typical swing vote. Look at where they’re strongest: Essex, right across the Midlands, parts of Yorkshire, all areas where most of the marginal seats are. They are the people who gave Blair his majorities, and they are the people who gave Labour their big opinion-poll leads in 2012 (despite what New Labour diehards think, middle-class darlings in Surrey, the type of people who actually might want further huge austerity, never voted for Labour even when Blair was in full pomp). And, while that group of traditional swing voters may want tighter controls on immigration, they vehemently do not want further spending cuts, and they don’t care about the deficit.

          • anthonypainter

            If you think that a mixture of fiscal irresponsibility and unfunded spending commitments is the way for Labour to win back any vote at all (UKIP or not) then I really don’t know where to begin.

          • Dan

            And if you think proposing further spending cuts which cause hardship are the way to win over people who are already furious at getting a bad deal, then *I* don’t know where to begin.

          • anthonypainter

            They are coming whether Labour proposes them or not. Or do you have an alternative plan?

          • Dan

            Yes. Not cutting spending further, and not worrying about running a deficit which is modest by historic British standards.

          • anthonypainter

            In other words, no.

          • Dan

            Typical New Labour dogma. An argument you don’t agree with means it’s not an argument at all (or not “credible”). How ironic that you people have become everything you once claimed to stand against, by saying Labour should support arguments that it’s been proven the public don’t agree with.

          • anthonypainter

            ‘You people’, ‘Blairite’….. the same factional garbage that almost made the Labour Party extinct.

        • Rex Hale

          I suspect it’s a mistake to see UKIP voters as the ‘crucial swing group’. Miliband was right yesterday to concede little to them r.e. immigration. As for your point on polling, the low figs for Labour on economic trustworthiness/competence are longstanding and static. The polling over a long period of time suggests a relatively fixed perception among a large proportion of the electorate. Polling on labour’s increased popularity if it rejects austerity is something quite different; is there a substantial history of polling on this? How was the question phrased? It’s one of those questions you can get any answer you want to, depending on how it’s phrased….whereas, asking people to rate each party/PM/Chancellor on economic issues is relatively straightforward and transparent.

      • Neil Thorburn

        I agree, there is a vast difference between doing something that is popular and doing something that is good for the Nation. So without any further distraction Anthony, please comment as to why austerity (which is further reducing the availability of money circulating in the real economy) is good for the nation? I believe austerity aims to reduce the deficit which in turn is aimed at reducing how much we have to borrow as national debt. The national debt obviously consisting of what we borrow and what we owe in interest.

        Given the nature of our money supply system whereby our worthless credit, which is first generated out of thin air by private commercial banks as interest bearing debt (Principal + Interest) to create the economic activity that adds real value to our circulating money, then surely it is imperative that our money supply into the real economy is maintained? What is also interesting here is the economic force that reduces the total money in circulation, this mainly being the cost of servicing the debt that created the money in the first place.

        For instance, when a loan is repaid the Principal element of that repayment is destroyed by the bank. This is probably done to balance the fact that the Principal was created out of thin air in the first place. However the Interest element is kept by the bank and after running costs etc are deducted, it adds to their profit. However, the bank only created the Principal, so the question has to be asked as to where the money to repay the Interest element comes from? The answer of course is simple. Those who borrow (create the Principal) rely heavily on others who are also borrowing in order that their business can interact with these other borrowers to earn enough profit to cover the Interest element cost of their loan. Thus some borrowers are always being financially chewed up by this system and it seems, the Interest the banks profit from leaves the economy when it is reallocated to the inland tax haven called the City of London.

        So back to that very first question, when commercial banks are reluctant to loan new money to private borrowers into the economy but expect previous borrowers to make good on their loan repayments. Assuming that there is no huge input of external money in to the economy, where on Earth is the money to service those private loans to come from? As I see it, the only other place it could come from is by Central Government accelerating its so called borrowing (creating the new money) and putting the country back to meaningful work? Austerity it seems is not about efficiency measures within this system but rather, it is more a cloak and dagger policy aimed at wiping out elements of society that for generations have been denied opportunity (credit) to better themselves and from where I am standing, it seems most if not all mainstream political parties have played major roles in keeping this lunacy under wraps, only to let it go rampant on these people as and when it so wishes.

  • To equate economic responsibility with fiscal good management is absurd. A relentless focus on this would once again turn off those who have been half persuaded that the LP will address their concerns. Why this inability to see that what makes people despair about the Labour Party is that they are unable to see what makes it truly different from the Tory party. The failure to challenge the austerity politics of the Tories has already cost Labour dear and if the election becomes a contest to out-do the Tories on fiscal management it could lose that too.

    • anthonypainter

      It’s not an equation. It’s a relationship.

      How do think those people would feel if they voted Labour on one basis, only to find them acting in a different fashion once elected? That is the implication of your argument (not just you but many of the coments here).

      The next election should be a battle of vision, values and priorities not one of economic competence. At this moment it will be a battle of economic competence…and Labour will lose that battle (deptie the fact that it’s policy position is not a million miles off what I propose…).

      • Well. you have completely lost me and it would seem a number of fellow critics. . Your piece did not read as though it were about vision which is undoubtedly true and with which i have no disagremment. I simply do not understand how you infer from my few lines that this means saying one thing and doing another. The policies which would fit a non austerity vision obviously need to be spelt out and implemented. I But they will need popular support which is not to be had if they are not spelt out.

    • Rex Hale

      “Why this inability to see that what makes people despair about the Labour Party is that they are unable to see what makes it truly different from the Tory party”.

      We all extrapolate from our own experience to some degree, but it’s a mistake to present our experience as universal truth. You may despair of the Labour party for this reason, but I despair of it for being unable to leave old-style socialism and class war behind. I despair of it for its demonising of Blair and its repudiation of the big-tent New Labour model that won three elections. Doesn’t mean everyone is the same as me, or the same as you.

      • Inevitably our views reflect in some measure our personal experience but only to some extent. Otherwise you end up in the unhelpful post modernist position of saying that all we have to go on is our subjective perceptions of any given situation. Blair did indeed win three elections but in the end with the lowest amount of popular support for decades as the immense optimism of 1997 drained away and the membership of the LP shrank dramatically. This is not just a manifestation of my personal experience whilst you would be very hard put to it to show that the current disillusion with politics in general and the lack of confidence in the LP in particular is because it is either commited to old style socialism or to class war.

    • Neil Thorburn

      Its all smoke & mirrors David. Good fiscal management of a healthy motivated nation with a strong work force paying its way in the world is what we need. Unfortunately this is difficult because most of us have debt burdens from hell to service and although it comes from us all having to borrow monies that are created out of thin air, some are travelling around in yachts whilst most of us are being left to rot. I have tried to get some real engagement on this issue within this forum but it seems all the big economic hitters here are not interested. Austerity targeted at the most vulnerable within our society amounts to nothing more than social cleansing and actually starves the economy of the much needed circulating money it needs to function. I am sincerely hoping that some people here have the depth and breadth of knowledge to address this queer economic money supply system we have but alas, I will not be holding my breath.

  • David Lewis

    The day that Ed Miliband became leader was the day the election was lost. Ed Balls as shadow chancellor was not even a necessary confirmation.

    It really is over.

  • Alec Burt

    Why do ‘economic credibility’ and ‘deficit reduction’ always have to mean those worst off in our society getting kicked up the backside?

    • anthonypainter

      As you can see, I’ve advocated increased taxes on those with high incomes and the wealthy. So there are choices about where the burden falls.

      • David Lewis

        But that does not increase revenue as we all know but it does lose elections.

        • anthonypainter

          Frankly, that’s just nonsense.

          • David Lewis

            Frankly it’s not. Look at the proportion of revenue derived from the proportion of earners and also look at the derided but accurate Laffer curve.

            Why lose elections based on flawed dogma. Why not lose them on unpopular policies and terrible leaders as usual.

          • Neil Thorburn

            So why can’t the nation create it’s own interest free credit as a loan to itself to fund public spending? Obviously any monies created this way would be retired when the future taxes (that back its creation) are collected. Given what our money supply is (thin air), from where it comes from (Commercial Banks), and at what cost (Interest and bank charges), why on Earth are we not doing this for ourselves? North Dakota is doing just fine in this recession.

            Bank of North Dakota History

            During the early 1900s, North Dakota’s economy was based on agriculture. Serious in-state problems prevented cohesive efforts in buying and selling crops and financing farm operations. Grain dealers outside the state suppressed grain prices; farm suppliers increased their prices; and interest rates on farm loans climbed.

            By 1919, popular consensus wanted state ownership and control of marketing and credit agencies. Thus, the state legislature established Bank of North Dakota and the North Dakota Mill and Elevator Association.

            Bank of North Dakota (BND) was charged with the mission of “promoting agriculture, commerce and industry” in North Dakota. It was never intended for BND to compete with or replace existing banks. Instead, Bank of North Dakota was created to partner with other financial institutions and assist them in meeting the needs of the citizens of North Dakota.

            BND opened July 28, 1919, with $2 million of capital. Over the years, our fiscal responsibilities to the state have increased dramatically. Today, the Bank operates with more than $270 million in capital. The State of North Dakota began using bank profits in 1945 when money was first transferred into the General Fund. Since that time, capital transfers have become the norm to augment state revenues.

            Commercial, farm and secondary market real estate programs were established to benefit state residents and the local financial institutions who serve them. BND’s federal funds program provides an alternative funding source for banks to access additional capital for consumer loans.

            In 1967, Bank of North Dakota made the first federally insured student loan in the nation. The Bank continues to provide a variety of loans for students and their families wanting to pursue post-secondary education.

            In partnership with more than 100 other North Dakota financial institutions, Bank of North Dakota continues to meet and expand its 90-plus year mission to promote the development of agriculture, commerce and industry in North Dakota.

          • Neil Thorburn

            Anthony, why can’t the nation create it’s own interest free credit as a loan to itself to fund public spending? Obviously any monies created this way would be retired when the future taxes (that back its creation) are collected. Given what our money supply is (thin air), from where it comes from (Commercial Banks), and at what cost (Interest and bank charges), why on Earth are we not doing this for ourselves? North Dakota is doing just fine in this recession.

            Bank of North Dakota History

            During the early 1900s, North Dakota’s economy was based on agriculture. Serious in-state problems prevented cohesive efforts in buying and selling crops and financing farm operations. Grain dealers outside the state suppressed grain prices; farm suppliers increased their prices; and interest rates on farm loans climbed.

            By 1919, popular consensus wanted state ownership and control of marketing and credit agencies. Thus, the state legislature established Bank of North Dakota and the North Dakota Mill and Elevator Association.

            Bank of North Dakota (BND) was charged with the mission of “promoting agriculture, commerce and industry” in North Dakota. It was never intended for BND to compete with or replace existing banks. Instead, Bank of North Dakota was created to partner with other financial institutions and assist them in meeting the needs of the citizens of North Dakota.

            BND opened July 28, 1919, with $2 million of capital. Over the years, our fiscal responsibilities to the state have increased dramatically. Today, the Bank operates with more than $270 million in capital. The State of North Dakota began using bank profits in 1945 when money was first transferred into the General Fund. Since that time, capital transfers have become the norm to augment state revenues.

            Commercial, farm and secondary market real estate programs were established to benefit state residents and the local financial institutions who serve them. BND’s federal funds program provides an alternative funding source for banks to access additional capital for consumer loans.

            In 1967, Bank of North Dakota made the first federally insured student loan in the nation. The Bank continues to provide a variety of loans for students and their families wanting to pursue post-secondary education.

            In partnership with more than 100 other North Dakota financial institutions, Bank of North Dakota continues to meet and expand its 90-plus year mission to promote the development of agriculture, commerce and industry in North Dakota.

  • IAS2011

    So much talk about ‘spending plans’ – not enough about viable engagement with REAL people in order that the ‘Right’ policies can be developed and Upwards social mobility can be achieved… once again.

    Surely, innovative policy development amid a challenging climate is key to counteracting failed policies such as the Work Programme and building a new confidence in an employment market that desperately needs an enhancement of its productivity and, thus, the people to fill such gaps.

    So, lets talk policy – not spending – as we should know that a ‘hand-up’ is still an effective tool as apposed to a ‘hand-out’.

  • Theoderic Braun

    I challenge Anthony Painter to spell out how and where Labour should make cuts in order to reduce the deficit even faster than the Conservatives. Obviously Mr. Painter must have some idea as per which budgets should be slashed and possibly by how much; it would help his case if he could outline, in broad brush strokes, where he believes such mighty cuts could and should be made practice.

  • MonkeyBot5000

    “No nationalising rail or committing to new unfunded areas of public provision. More efficient use of public resources.”

    Directly Operated Railways running the East Coast line has proven to be the most efficient use of public resources. We have real world figures to show this.

  • Pingback: Reassurance, reassurance and reassurance | Rich Durber()

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