Ed Miliband’s tax break for living wage plan – an exercise in missing the point

Ed Miliband has proposed tax breaks to encourage employers to offer a living wage, according to reports in this morning’s Guardian.  Labour, it is argued, wants to reduce the benefits bill by encouraging employers to pay higher wages.  The shadow Treasury team is reported to be considering options.

The aims are laudible – better pay, a real multiplier effect (which somewhat contradicts Ed Balls’ austeritarian view of public finances, but we’ll leave that one aside for the moment), a boost to the economy and a smaller benefits bill.  Everyone would benefit – and there can be little doubt that lifting wage levels for the low-paid would both boost the economy and reduce the benefits bill.  We are clearly in virtuous circle territory, especially when one considers that real pay in the UK is falling – and falling faster than in any of the other top 10 world economies.

But the plan is deeply flawed – in ways that are revealing about Labour’s economic mindset. The obvious objection is that, as with any proposal that tops up low wages, it effectively subsidises employers for doing the right thing.  It’s a bit like reducing VED for drivers who obey the speed limit.  And it ignores the fact that even firms employing staff at less than the living wage will still employ staff who are paid more than it – who are indeed paid well.  How do you define both the level of, and the criteria for receipt of, the tax break, in such as way as to ensure that businesses do not receive subsidies for simply paying their staff what the market will take?  And as soon as you find yourself offering tax breaks to business that are significantly in competition with others elsewhere in the EU, how do you stop this from turning into an illegal State Aid?  And what of the cost of administering all of this, and assessing who is eligible for the tax break?

You do not have to dig too far below the surface to find that this proposal unworkable. The discipline of turning a bright idea into a workable legislative proposal is cruelly exposing (and I speak as someone who in my Civil Service days had plenty of experience of developing Finance Bill legislation).  Like so many ideas that form part of Labour’s “predistribution” package, the whole structure starts to fall apart once you start to ask the awkward questions that turning policy into workable practice must beg.

More significantly, it exposes a long-term issue for wages and working conditions.  The number of people working in the public sector has fallen substantially, not least through outsourcing, and is expected to continue to fall substantially.  The largest employer in the UK – the NHS – has just effectively been privatised, which will mean that the number will fall considerably further as many NHS functions are transferred to the private sector.  Previously, the public sector has been a benchmark for decent pay and conditions – including of course pensions.  Decent pay and conditions in the public sector has driven standards of pay in the private sector as employers compete for staff – which is of course one of the reasons why the right wants to reduce it in size, because its shrinkage is a factor driving falls in pay (along with an explicit policy of reducing public sector pay in real terms).  Moreover, a large public sector payroll has an inherently stabilising effect on economies.

But with an incoming Labour government committed to keeping the Coalition’s cuts and possibly making more of its own, that trend will continue; and in it adherence to austerity economics Labour is actually throwing away the best tool it has to bid up real wages; an expanding, dynamic and decently-paid public sector.

Obviously simply expanding the public sector won’t do the trick on its own.  It needs the courage to argue for decent public sector pay as a good thing, when public sector pay and pensions have always been an easy targets for Blairites as well as Condems.  And it does need supply-side adjustments – better education, better training, career development (all of which come at a price and might be a better target for tax breaks – it remains the case that a firm pays VAT when it sends an employee on a training course but a public school education is VAT-free and heavily subsidised) and a mentality that sees labour flexibility as a managed process of improvement rather than a driver of low pay.

The trouble for Ed Miliband is that dealing low pay in a coherent and intelligent way means dragging Labour off the neoliberal yellow brick road. And that appears as far away as ever.

10p tax: one-and-a-half cheers for Ed Miliband

I’ve been pretty scathing about the Labour Party on this blog, so a bit of credit where it’s due: Ed Miliband’s eye-catching announcements today committing Labour to a 10p lowest tax rate, funded by a so-called mansion tax, are a step in the right direction.  It’s some way from the New Jerusalem that some enthusiastic Tweeters, for example, appear to be claiming, but it’s significant.  It’s also tactically adroit; it responds to claims that Labour is light on policy, and the poaching of the Liberal Democrats’ cherished mansion tax policy is a clever sideswipe, a reminder that  Liberal Democrats in Government have failed to achieve even their more modest aims.  It’s also good to see Labour apologising for the politically bizarre decision to abolish the 10p tax rate; Tories have been crowing that this shows inconsistency but in fact most people know that acknowledging your mistakes and learning from them is what grown-up people do.  It’s a powerful contrast to George Osborne’s credo: never apologise, never explain.

Encouraging things include:

• A clear commitment to redistribution – Labour spent a lot of time talking about “predistribution”, a chimerical idea that appeared to have less substance the more one examined it.  Labour is clearly talking the language of redistribution, in the recognition that it is fundamentally popular.  It’s a commitment that sits a little uneasily with the One Nation Labour rhetoric (more of which in a moment) but it is certainly welcome to see Labour shifting the debate in this direction
• Shifting the balance from taxes on income to taxes on wealth – again, an important development; recent evidence that wages have fallen back to 2003 levels have masked a much bigger, long-term change: that the proportion of national income taking the form of wages has, in recent decades, fallen dramatically in relation to profits and rent.  Nearly all the benefits of growth (such as they are) have been realised as rents and profits; to the extent that Labour is addressing this issue, this is in my view a positive development.
• Getting to grips with the economics of housing – one of the most dangerous fallacies of our time is that rising house prices are a good thing.  A tax on house values challenges this assumption.  Labour has been saying some encouraging things about housing lately – especially on the subject of reforming the rented sector; again, this is a sign that Labour may have moved on from its obsession with promoting home ownership.

But  Miliband’s comments are also, in my view, an indication of how far Labour has to go before it can claim to offer a really credible radical alternative to the Coalition.  In particular:

• The big questions of tax and spending are still not being addressed – none of Miliband’s announcements break out of the austerity mindset.  Of course Labour is wary of making uncosted tax proposals; but Labour remains committed to keeping Coalition cuts and potentially making more.  These announcements do not move that debate on in any way.
• The mansion tax remains a highly risky option – the principle of taxing large houses has a lot going for it; mansions cannot be squirrelled away in the Cayman Islands.  But you have to have a bureaucracy to value the properties and administer the tax, and it seems to me that this is far from straightforward; and a tax that cannot be administered cost-effectively and consistently is inevitably going to be brought into disrepute.  Moreover, it means that tax revenues are at least in part contingent on the state of the housing market; speculation and rising housing prices, which are socially damaging, would be perversely beneficial to the tax base.
• The 10p tax rate benefits the well-off too – it’s fiscally a pretty blunt instrument (which perhaps is why Labour – in what would have been a rare triumph for macroeconomic theorising over political expediency – dropped it).  There are other ways of raising living standards for the lowest earners, like the tax credit system that the Coalition has decimated; Danny Alexander is actually right (even a broken clock is right twice a day) when he argues that taking the low-paid out of tax altoghether can be more progressive, although doing so without offsetting increases at higher level denudes the tax base.  Ultimately there is a larger problem of low pay, with low-paying employers in effect being subsidised by the state (and in the case of workfare participants, being given a workforce for free) that Labour is not addressing here.  And of course the very poorest people in society pay no tax at all (including some elderly people living on very low incomes in homes that could be caught by the mansion tax).  It is difficult to see how the 10p tax rate can be effective other than as a package of changes to benefits and tax credits – and possibly some real increases in the minimum wage; but these are nettles that Labour remains deeply reluctant to grasp.  Liam Byrne is still talking the language of reinventing Beveridge, abandoning universal benefits and cutting further – it’s a frivolous response to the situation we face.

In other words, Labour still has a long way to go.  The real issue is that the economic logic requires a willingness to increase public expenditure, and that restoring public expenditure cuts – most particularly benefit cuts – remains an essential step that Labour remains reluctant to take.  And it needs to stop hiding behind the One Nation Labour banner.  The rationality of One Nation is that as the rich get richer, we all benefit – it’s basically trickle-down Toryism.  Labour needs to realise that there are real conflicts between the interests of wage-earners and asset-owners, and needs to get off the One Nation fence, if it’s going to offer a radical answer to austerity.  The logic of Miliband’s announcement points that way.  But far, far more is needed.

Lions led by donkeys: October 20 and the sheer dysfucntion of British politics

Yesterday, around 150,000 people marched through central London to protest against austerity and job cuts.  Similar marches took place in Glasgow and Cardiff.  In almost every respect, the marchers represented everything that is decent about Britain; people cutting through the political and media narratives and responding to the reality of austerity and the direct effect it has on people’s lives.  Many of them would have been public sector workers, forced to implement austerity every day while working desperately against mounting pressures to protect the dignity and wellbeing of those they serve.

And yet, at the heart of the event, there was a  morass of conflict and inconsistency that showed clearly how British democracy has lost its way.   The most obvious was of course Labour leader Ed Miliband addressing the rally; leader of a Party that has promised not only to keep all the coalition’s cuts in place after 2015 but to make additional cuts of its own.  Miliband’s presence was of course a symbol of the relationship between the TUC, who organised the march, and the Labour Party.  The strangeness of this event is not so much the fact that Labour looks increasingly like an echo-chamber for the coalition’s neoliberalism, but that Labour remains largely funded by unions whose members appear to oppose the neoliberal consensus of which Labour is an integral (and, on the basis of Ed Balls’ recent pronouncements, enthusiastic) part.  The relationship between Labour and the unions looks increasingly like a dysfunctional marriage in which the maintenance of appearances and patterns of behaviour has long superseded any sense of common purpose; without that troubled relationship Miliband addressing yesterday’s rally is about as likely a spectacle as Margaret Thatcher addressing a symposium on the benefits of free school milk.

None of this would be so puzzling if there were not a nuanced, evidenced case against austerity economics; indeed, if austerity economics were not failing in its own terms.  As many of us predicted at the outset, cuts and austerity are not reducing the deficit but increasing it; a slower version of what is happening in Greece and Spain is happening here, and all Labour’s economic policies are set to do is to speed the process.  Much of the austerity narrative is astoundingly economically illiterate; every time a Coalition politician solemnly intones banalities about paying down the nation’s credit card, or talking about Labour’s profligate legacy, they are showing their inability to grasp – or at least to articulate – the most basic economics.

A fine example of that illiteracy can be found in comments by Hove MP Mike Weatherley, who was reported a while ago celebrating benefit cuts of £10 million in Brighton and Hove without apparently the slightest inkling that this was £10 million taken out of the local economy – hitting businesses both large and small (although the small ones do not have access to the cheap labour of workfare, pioneered by Labour and implemented with zeal by Tories.

And also note in that piece how Tories continue to  press the lie that housing benefits are paid to those on benefits rather than lining the pockets of landlords, and repeats the lie that those who receive benefits are not working, when that is simpy not the case.  These lies continue to gain traction, and not only do they build on the rhetoric of Labour in office but continue to inform its public positioning.  It’s not as if the language is quite the same as that of the Tory party – which at its recent conference often appeared to be only two gin-and-tonics from labelling the recipients of benefits as “useless eaters” – but is couched in terms of that insidious dog-whistle phrase “hard working families”.  Labour’s rhetoric on benefits is almost a dictionary definition of moral cowardice.

And the technical understanding of how shifts in public expenditure affects economies is increasingly undermining the case for austerity.  One of the stranger aspects of yesterday’s events was a Labour leader addressing a TUC rally from a position that appears to be substantially to the right of the IMF.

The dysfunction we saw yesterday was that of tens of thousands of decent people – people who know that there is an alternative that is better, fairer, more efficient, more grounded – being betrayed and abandoned by the Westminster elite; and by a Labour leadership that really has nothing to offer beyond more of the same.  Yes, Labour politicians do make all sorts of noises about fairness and justice; but they simply appear incapable of understanding that fairness in society depends above all on economic justice, and on reversing the transfer of resources from the poor and vulnerable to the wealthy and owners of property – a transfer that Labour presided over in office, which the Coalition has accelerated and which, rather than the deficit, looks like the rationale for austerity and cuts. Labour’s leadership looks like nothing so much as a First World War general, straight out of Blackadder, whipping up enthusiasm for the big push while the poor bloody infantry try to rationalise away their anticipation of the likely reality.

The real debate in Britain – and elsewhere in the rich world – is not between political parties in the establishment, but between a political establishment that is united around a neoliberal programme and the people who understand and experience the realities of austerity – who see their livelihoods destroyed, their experience devalued, their votes ignored.  Five million people have walked away from Labour since 1997; quite a lot more will walk away from the Liberal Democrats in 2015.  But the anti-austerity case is not necessarily a left-wing one; its advocates include people like Paul Krugman and Joseph Stiglitz, former Clinton advisers and no socialists; the authors of the Spirit Level, whose programme looks like a traditional centrist social democracy; increasingly the IMF appears to be accepting the anti-austerity logic.

I have written here many times before that a political system based on a main-party consensus that does not reflect wider opinion cannot be a healthy democracy.  Yesterday, in Hyde Park, accompanied by all the accoutrements of the traditional Labour-TUC link, that conflict was manifested in a very obvious way.  There is a very strong, evidenced and clear case against austerity economics, based on fairness and economic justice.  The people who marched yesterday understand that case.  Labour lacks the intellectual and moral courage to articulate it. Those who want real social and economic justice in Britain need to look elsewhere.

Agenda for a new Green leader

Caroline Lucas has announced that she will not seek re-election as Green Party leader later this year, in a move aimed at increasing the exposure of other leading Greens.  It’s a wise move; Caroline’s achievement has been enormous, raising the profile of the Party by gaining our first Westminster seat and providing what has at times looked like a lone Westminster voice against the politics of neoliberalism and austerity.  We have our first Green council, working to confront the huge issues of making a Green case in against parameters dictated by central Government.

The risks have always been that as a Party we could come to look like a one-woman band, and that Caroline could be stretched too thin. Her decision is as good a way as any to minimise those risks.

A leadership election provides an opportunity to reflect on what sort of a party we want to be.  Greens have always been rightly sceptical about cults of party leaders – it was a tough (but with hindsight surely right) decision for this party to adopt a single leader at all. But this election does give an opportunity to think and debate about what we want the party to be.

These, then, are the personal thoughts of just one not very active Green Party member about what he sees as the priorities of a new leadership.  I’m not talking about policy details here, and I’m certainly not criticising Caroline’s leadership which I believe has addressed these issues in a way that no other UK politician has come close to managing.  But these are themes that I believe an effective Green movement must address. Those thoughts fall naturally into three (inevitably linked) categories: dealing with the crisis in democracy, reshaping our economic agenda, and creating a sustainable, fair and cohesive society.  All of these lead naturally into a fourth – the need for a return to evidenced discourse and a challenge to the prevailing ideological narratives.

Dealing with a crisis of democratic legitimacy

If there is one theme that has run through everything I have written on this blog it is the depth of the democratic crisis we face, here in Britain and more generally in the developed world.  The situation in Britain is desperate: three main Westminster parties all pushing a neoliberal agenda and arguing over nuance and who is better qualified to implement it, with an electorate that is increasingly unwilling to vote at all, and a feral media united in an apparent determination to avoid intelligent debate that goes beyond the Westminster consensus.  Even in those parts of the UK where government is devolved, there is no real debate.  In the meantime, the failure of that Westminster neoliberal consensus is becoming clearer by the day.  And there is a quiet consensus to limit the scope of active democracy – for example a localism agenda that seeks to turn effective local government into commissioning bodies doling out contracts to companies providing services for profit.

It is a simple and overpowering fact that many of the measures that characterise this Government were things that neither Coalition party dared put explicitly to the electorate at the last election – the effective destruction of state-provided healthcare, savage public expenditure cuts, cuts in benefit for the disabled, £9000 tuition fees.  But all of them were there in the public domain if you looked below the surface – by reading the Orange Book for example – and every single one of them is effectively a continuation of what Labour did in office.  But nobody, explicitly, voted for these things.

It is almost as if the main parties are fomenting an active suspicion of democratic institutions and practices.  Britain must be the only country in the world in which politicians and the media actively campaign against existing human rights legislation, which does no more than enshrine basic convention rights.  Political dissent is being marginalised and in some cases criminalised; the pre-emptive arrest of a republican street theatre group before last year’s Royal Wedding is just one particularly telling example.  But the use of aggressive police tactics against dissent, like the collective punishment of kettling, and the growing privatisation of public space, are all examples of a society which increasingly seems afraid of those who challenge the consensus. All these are symptoms of a polity racked by fear, acknowledging tacitly its lack of legitimacy. Liberal Democrats used to claim to be upholders of civil liberties – on this issue, as in so many others, they have been shown up in Government as a party of time-serving liars.

The new Green Party leader must be an unequivocal defender of democracy – as, indeed, Caroline Lucas has been.  Most importantly the Green Party must reach out to those who have been left behind by Britain’s failing democracy, and must seek to re-engage them in a democratic process.  It’s a challenge about how we as a party conduct ourselves – not just through our own democratic processes, but by reaching out to people who are, frankly, not well-represented in our Party structures; the poorest and most vulnerable.  I believe we are a society that is ripe for a growth in fascism, and in which the democratic model that both the mainstream politicians and the media present is a sort of eviscerated consumerism, in which a concept of “choice” that has little to offer beyond decisions about whether to buy Jaffa Cakes or Hobnobs in the Co-Op has been elevated into a central mantra of Government. As Greens we have to reject X-Factor democracy and engage with people and ideas that are routinely dismissed or even demonised by the Westminster consensus; it means arguing that democracy is not about choices between market options but about mature collective decision-making, based on trust.

One of the most powerful facts about mainstream British politics is the way in which the Labour Party, which claims to speak for the poor and vulnerable, has long since ceased to do so in any meaningful way.  Labour luminaries from Ed Miliband to Liam Byrne are quite happy to speak the language of benefit scroungers, of feral underclasses and of forced workfare while still arrogantly assuming that they have a God-given right to the votes of the people from whom they have walked away and whom they casually demonise.  Understandably, those people have walked away from Labour in their millions since the high-water of 1997.  The new Green Party leader must understand – and act on the understanding – that Labour is a disgrace, and must understand that it is their duty, and the duty of the Party, to speak for and engage with those people – to give them a voice, and hope, and a stake in the democratic process.

Empowerment must be at the top of the Green Party’s agenda.  There is no other party that is seriously placed to act as an advocate of democratic renewal.

Reshaping the economic agenda

Austerity is a political choice, not an economic necessity. That simple fact must be at the heart of the Green Party agenda.  Neoliberalism, for all its language about freedom, is a deeply anti-democratic creed; where the enrichment of the few clashes with democratic choice, neoliberals will always choose the former, as a growing track-record shows.   And we as a party need to see that the real fault-line in economic policy is not between Westminster parties but between those who believe in the neoliberal doctrine of austerity – the Conservative Party, the Liberal Democrats, the Labour Party leadership, the SNP, big business (obviously),the media, the academic economic establishment – and those who argue for another way – the Green Party, Plaid Cymru, many Labour people, quite a lot of people who have been Liberal Democrats (I’m assuming those with a sense of decency will have torn up their membership cards a long time ago), a growing number of economic commentators, and people of no party who consistently reject neoliberalism at the ballot box and who are the victims of what looks increasingly like the biggest Establishment wealth grab since the Enclosure Acts.

A Green Party leader must explicitly and resonantly reject the politics and assumptions of austerity – once again, Caroline Lucas has led the way, often appearing (along with a handful of Labour and Plaid backbenchers) to be the only voice raised at Westminster against the neoliberal consensus.  And we as a party must be absolutely unequivocal – austerity is a political choice, not an economic necessity.  It is without empirical foundation and is manifestly failing.  And that leader must have the understanding and willingness to engage with the alternatives – whether those alternatives come from think-tanks like the New Economics Foundation, or from Elinor Ostrom’s pioneering work on the commons, or from Richard Murphy’s Courageous State.  There is a ferment in economic thinking and it is a populist movement – consider the way in which UK Uncut has ensured that corporate tax evasion is at the top of the political agenda.

Above all, Greens must be in the vanguard of arguing that market economics is based on illusion and unsustainable. There is a debate about the axioms and purpose of economics that the academy is largely ignoring, focussing instead on the refinement of mathematical models that embody assumptions that are really no more than unsupported ideological statements.  Economics must be at the heart of our agenda – we need to understand the narratives and fears that lead to the paradox that, at the very times that market economics is palpably failing, voters embrace the architects of that failure – the National Government in the 1930s, Thatcher in the 1980s.  Ed Balls has thrown in the towel; alternatives, promoting equity and hope, must come from outside the Westminster consensus – it is for us to create and lead the political opposition to austerity economics.  The evidence is ample and growing; and there is plenty of creative thinking about alternatives.  And we must reiterate – as Keynes did in the wilderness in the 1930s – that economics is a matter for democratic control, and is a matter that should not be the preserve of experts but should be opened up to the full glare of political debate.

And we need to be champions of the public sector.  We need to state clearly and firmly – as the three Westminster parties cannot – that privatisation is, in principle, wasteful and is about consolidation of wealth and power  in the hands of the few; we must learn to argue for a strong, enabling, democratically-accountable and, in Richard Murphy’s admirable phrase, courageous state.  Once again, Greens must stake their claim in the territory from which Labour has walked away.  Murphy’s cappucino cup analogy – the state as the strong black coffee on which the frothy milk of private accumulation sits – is simple, powerful and one that I argue must be at the forefront of Green thinking.

One of the most insidious political propagandas of our time is the belief – underpinning almost every piece of economic reportage – is that the advocates of the market, and of austerity, are economic “realists” – while those who challenge it are well-meaning, ungrounded idealists.  I’d suggest that a key task for the new Green leader is to attack that explicitly.  The Left has to learn to get to grips with economics again, and to press the case that economic policy is about political choices, and connect with the people the political classes have left behind to lead them out of economic fatalism.  It’s a huge task – but a necessary one.

Social cohesion

Not long ago, six children were brutally murdered in Derby by an arsonist. Because the parents were recipients of benefits, a good number of media commentators apparently believe they were asking for it.  The callousness and cruelty of those commentators is something that has come to characterise Con Dem Britain (as Owen Jones argues powerfully here); it is a political position, sanctioned by Ministers for whom off-the-record briefing against the vulnerable has become a legitimate political tool.   As a society we have to ask ourselves how such hatred and loathing has become absorbed into the political mainstream – and I want to see a Green Party leader who will take an unequivocal stand against such hatreds, whether they manifest themselves through racism, through the blaming of women who are victims of rape, to the demonising of those receiving benefits and unable to work.  I want a Green Party leader who is angry – angry, for example, at the spectacle of a private sector company certifying for profit the terminally ill as fit for work, or at politicians who seek to encourage the belief that those on receiving benefits to provide them with mobility are somehow scroungers, and who tacitly encourage abuse and violence against the most vulnerable in society.  If I wanted crocodile tears I’d join the Labour Party; I want real, visceral anger from someone who is willing to speak truth to power.  I want a leader who will stand up to the casual bullying that, more than anything, characterises the temper of Coalition Britain. I want to be part of a party whose leader will call out the most privileged Government in recent years when they make ideological statements about people of whose lives, struggles and problems they are wholly ignorant, making decisions from which they have been shielded by wealth and privilege.

A Green society is an empathetic society. The British political and (especially) media establishments seem to regard empathy as something that is weak and soft.  Greens need to show that it is the only possible basis of a good society; we need to demonstrate that it is the casual cruelty of the Conservative and Liberal Democrat leaderships that is every bit as damaging as their economic dogma.  And we have to have the moral courage – as Labour clearly does not – to resist the easy temptation of easy populism.  Leadership is about reminding people that the world is a more complex place than many people are comfortable believing.

A return to evidenced discourse

I have focussed on three main areas of debate – but underlying all of these is a bigger issue about political discourse, and what seems to me to be an abandonment of evidence in favour of ideological narrative.  We see it in almost every aspect of political life – the use of prejudice and unsupported assertion to rationalise the wealth and power grab of the 1%.  Political debate becomes not an attempt to understand and interpret reality, but a competition between unsupported narratives; the winner is the party that can make the most outrageous lie stick.

The most obvious example – and one which is close to the heart of all Greens – is climate change; an overwhelming scientific consensus challenged by a toxic combination of big oil and tin tabernacle religion.  In this, as in so much else, Greens are on the side of empirical knowledge against the narratives of the powerful.  We’re dismissed by the mainstream politicians as woolly and idealistic – the same politicians who accept all the axioms of market economics in the face of their disastrous consequences, who await the intervention of the confidence fairy, who haven’t got a clue about peak oil.  Sustainability is about the long-term – planning for the next seven generations rather than the next seven months – and that requires rigour and an engagement with the realities of the world around us.  In one sense we’re talking about the revival of the best of the liberal tradition – the adducing of evidence to mould society in the service of ideas, themselves grounded in reason and evidence.  In the face of neoliberalism, there is no more subversive doctrine than to bear witness and to speak truth to power.

It means self-discipline. It means that we need as a party to shed our New Age image – a willingness (figuratively speaking, of course) to ban homeopaths from our Republic.  In challenging market economics and responding to climate change, or in arguing that equality leads to better physical and mental health,  Greens must be the party of good hard evidence.  We have to resist the siren call of woo, whether economic, social or scientific (one of the best things that has happened to the Green Party in recent years has been the adoption of a science policy that points us back towards rigour).  And we need to demonstrate that in a political culture of parliamentary parties fighting illusory battles, while engaged in an ideological enterprise aimed at disguising a power and wealth grab in favour of the rich and powerful, we are the party whose ideals of sustainablility, equality and justice are grounded and realistic.  It’s a huge task – one that in my view Caroline Lucas has risen to magnificently – but we need more of it, and I believe that the new leader has to use his, her or their position to focus Party strategy on that task.

In a political system based on unsupported ideology, the Green moment may be when reality bites back – as inevitably it must.  In a sense that it what sustainability means.

50p tax rate and Tory triumphalism

Widely-circulated predictions that George Osborne is about to announce the end of the 50p top income tax rate for those earning more than £150,000 have attracted much comment.  The obvious one is fury at the naked unfairness – here is a handout to the wealthiest in society that comes at the same time that those on the lowest incomes are seeing their living standards cut (for example the estimated 900,000 people on low incomes who will lose nearly £4000 per year due to changes in tax credits in April).

Then there are also concerns about the economic justification. There’s no real evidence that this will do anything to stimulate the economy; this looks like a case for the confidence fairy if ever there was one.  Moreover, macroeconomic theory suggests that increasing the incomes of the poorest is much more likely to stimulate the economy, as they spend all (or nearly all) their income; cutting tax for the lowest-paid, or increasing public expenditure is a far more effective stimulus.  And there’s  the Treasury spinning of the figures  - in the absense of any hard numbers for tax take, claiming that the 50p tax rate is raising “hundreds of millions rather than billions” despite predicting that it would raise £3 billion per year (with tax expert Richard Murphy arguing convincingly that the take could be as high as £6 billion - the TUC paper to which that article links is essential reading).  At a time when benefits and services for the poorest and most vulnerable are being slashed in the name of deficit reduction, it’s an astonishing policy – a naked, obvious wealth grab on behalf of the wealthiest paid for by the poor and those on middle income, at a time when Coalition rhetoric still claims that we are “all in it together”.

And it’s a sign of Tory self-confidence and triumphalism.  I wonder whether the the events of last weekend’s Liberal Democrat conference were on Osborne’s mind as he contemplated the policy – a conference voting in two different ways on the NHS as their MPs and Peers prepared to trip happily through the Parliamentary division lobbies in support of a bill that effectively breaks up our National Health Service.  Perhaps he was reading the opinion polls, which showed that even when presiding over economic policies that have eviscerated the living standards of the vulnerable, hit Middle-England hard and enriched the 1%, or when presiding over the effective privatisation of Britain’s once-beloved NHS, the Tories are only a few percentage points behind Labour (with the added advantage that boundary changes and the deserved collapse of Liberal Democrat support will, in terms of seats in the House of Commons, greatly benefit the Tories).  Or perhaps the decisive moment was when Ed Balls signalled the raising of the white flag on economic policy, implicitly accepting the neoliberal economic agenda by effectively backing tax cuts.

Every one of these represents a Westminster political culture in which the Tories are utterly dominant.  Of course there is opposition outside the political class – all the evidence suggests that Coalition policies on health, on tax, on public expenditure are widely unpopular, although one of the most sordid aspects of the Coalition’s tenure has been its casual demonisation of the disabled, the sick and the vulnerable who depend on benefits.  But that is outside the Westminster bubble – and one can hardly avoid the conclusion that nearly all the most obnoxious aspects of Coalition policy – NHS privatisation, benefit cuts, workfare, tuition fees, the privatisation of public space – are simply the policies that Labour followed in office taken to their logical conclusion.  Ed Miliband wrote the 2010 Labour manifesto in which many of these policies – in a softer, cuddlier form – were advocated;  New Labour luminaries like Liam Byrne continue to trash the legacy of Beveridge and the welfare state.  No wonder Labour has been so utterly useless in opposition.  The Liberal Democrats, allegedly a moderating influence on the Tories (which they were never going to be – read the Orange Book), are in disarray.  The best they have to offer in response to the abolition 50p tax rate is Clegg arguing for raising tax thresholds at the bottom – which of course will ensure that the rich benefit twice – or a possible commitment to a Mansion Tax. In principle.  In the long term.  If it’s workable.  ”All in this together” is a slogan that accurately describes the position of the British political class.

It’s been sad to read some of the comments on Twitter to the effect that the Tories really have blown it this time.  They are not stupid – they are resurgent.  All they have learned from the events of the last two years in Government – helped along of course by their yellow-tied useful idiots, and assisted by Labour’s refusal to argue for a real alternative  - is how easily they can get away with it.

Miliband, Balls and the death of functioning democracy

These have been dispiriting times for those who oppose the ideology that the Coalition Government is enacting with a brutality that should surprise no-one, but somehow always does (mostly because they haven’t read the Orange Book). In the week that we have seen the House of Lords approve a huge cut in the living standards of thousands of vulnerable people through the abolition of Disability Living Allowance (DLA) – with Liberal Democrat lords leaping happily through the division lobby to ensure that yet another piece of Orange Book ideology is slipped into place – and in which we have seen Government Ministers debating whether to award the Queen a new yacht for her Diamond Jubilee – we see the official opposition throwing in the towel.

There has been some controversy about what Ed Balls actually meant in his comments about a future Labour government and cuts in an interview in last Saturday’s Guardian. The fact that so much ink has been spilt in trying to decipher Balls’ gnomic utterances is in itself part of Labour’s problem; an opposition that cannot express itself clearly has obviously got a problem. Those who defend Balls argue that he is simply being realistic – that by the time Labour comes to office it will confront a situation in which deep cuts have been made and which will form the baseline for what Labour does. But Balls went much further than that – he stated that public sector workers will continue to take pay cuts and public expenditure decisions that have eviscerated the living standards of the most vulnerable will not be reversed. It’s all very well to talk about the need to preserve jobs, but in doing so Balls has failed to notice that it is the economics of austerity that is putting jobs at risk. The clear message from Balls is that the poorest in society will continue to bear the costs of the failures of economic elites, and talking about tax evasion is no more than a cosmetic sop. He’s adopted the Tory axioms and assumptions and has allowed Cameron, Osborne and the Orange Bookers to drive the economic agenda.

This is serious, but not surprising. Labour has long since ceased to be a party that challenges the neoliberal ideology, but in the past the complicity has gone by default rather than being explicit. It seems to mark something of a turning point, though, in the tone of political debate; after a year and a half of coalition government, the Tory party is resurgent and appears to dominate debate.

But there’s a subtext too – one that is reflected in the current debate about independence for Scotland. I have spent quite a lot of cyber-ink on this blog talking about crises of democratic legitimacy; this appears to be the moment at which Westminster politics finally took leave of its democratic pretence. It’s not just the fact that a ruling party which dared not expose the extent of its ambitions to the electorate, and which achieved a little more a third of votes cast in 2010, is now left without any meaningful opposition to its imposition of  a feral neoliberal agenda – it’s that the ethos of the ruling coalition is defined, not by what it told the electorate in 2010, but what it tried to conceal. And now the official opposition has joined in.

Whatever that may be, it is not a healthy democracy. The large majority of the electorate did not vote for this – which is why the Westminster neoliberals use the language of necessity, of realism, of common-sense to describe a set of ideas and values which are largely unsupported by any empirical evidence. Austerity is failing and the burden of that failure is falling overwhelmingly, and in some cases almost exclusively, on the people who are least able to bear it, while the perpetrators of the latest round of crisis continue to enrich themselves. It need not and should not be like that, but there are no voices in the political mainstream with the courage or insight to say so.

The obvious implication is that opposition to neoliberalism must now take place entirely outside the Parliamentary process. Three mainstream political party share the same assumptions and debate across ever-shrinking territory while the real questions facing our society are all about the validity of their consensus.  It is impossible to see any realistic prospect of change within the three-party system that is not forced from outside (and which depends on the mainstream media). The neoliberals realise this – the closing down of public space, the criminalisation of protest and the active promotion of hatred for the poor and vulnerable demonstrate this. Consider the case of the students – many of whom voted Liberal Democrat in 2010, the first time they were able to vote, on the basis of Clegg’s promise on tuition fees; when Clegg and his party of fools and liars pissed on their idealism they took the path of legitimate protest only to find themselves collectively punished by kettling and beating. Of course there was a strong element of self-interest in the student movement; but what I remember from that first demonstration in November 2010 was a belief that they were upholding democracy and had yet to learn that this was how Westminster politics worked.  Or we could ask why the neoliberals are so afraid of the Occupy movement and have, especially in the United States, deployed such extreme violence against it.  The threat is not about a few dozen people establishing camps; it’s about the risk that questions will be asked and answers proffered that blow apart the fictions on which the elite justifies its power and wealth.

Above all, this is the Government – and now the opposition – that chose to abandon evidence. I mentioned the way on which the political elite has sought to demonise the vulnerable. It has done this through a combination of spin, insinuation and downright dishonesty.  Its guiding principle is not truth but pandering to the prejudices of a mass media which is, at almost every level, a fantasy factory. Those of us who have long understood the evidential base for climate change, or watchers of the US Republican primaries in recent weeks, or even followed the genesis of the Tea Party, will recognise the methods; it seems that all mainstream Westminster parties are striving for a politics of unsupported ideological statements in which victory goes to the producer of the most attractive lie. For all the language of realism and common-sense it is those who criticise neoliberalism from the Left who remain grounded in the world of evidence.

The sight of a political elite abandoning wholesale the intellectual disciplines of empiricism is deeply disturbing.  It’s very easy to criticise the position of the Republican Right; but our political mainstream is, in essence, no different. What Labour has done is make that abandonment of empiricism public and obvious.

Returning to Miliband and Balls, I for one am getting very fed up with hearing special pleading by people whose loyalty to Labour as an institution is greater than to the people on whose behalf Labour used to speak. Labour, after all, began as a movement to give a voice to the voiceless – to bring the trade unions, with their everyday experience of the daily lives of working people, into Parliament.  It now joins in a political consensus that diminishes those authentic voices, and spins away the witness of ordinary people about their lives.

Abusing Beveridge’s legacy

According to the Daily Mail (NB clicking on that link will contribute to the Mail’s advertising revenues), Ed Miliband and Liam Byrne are about to launch an attack on the “evil” of benefit scroungers.  The Left blogosphere and Twitterati have been driven into overdrive by this; some condemning the way in which an alleged party of the Left bows to cheap populism and lets Tories and their papers drive their agenda; and Labour loyalists trying to dissemble.  My own view is that a political system in which politicians jockey for votes by demonising the poorest and most vulnerable in society is badly broken, and those politicians who do so are beyond condemnation; it’s cheap, cowardly and even New Labour should know better.

However, one of the stranger aspects of the whole business is that Liam Byrne makes these comments in the context of a forthcoming lecture on William Beveridge, and tries to portray himself as Beveridge’s legitimate heir.  It’s an interesting parallel to Nick Clegg trying to do the same in front of the Liberal Democrat conference last March.

It’s strange because Beveridge was a powerful advocate of universal benefits. And, following Beveridge, there are two types of  arguments; the practical and the political.

First, the practical – obviously if a benefit is universal it cannot be claimed fraudulently.  The moment you means test a benefit you have to set up an apparatus to evaluate claims, process paperwork, manage changes in circumstances, enforce against abuse (the last of which turns the state into enforcer where it should be enabler).  Universal benefits are cheap to administer, fair and in principle free of abuse.  Indeed the very act of means-testing introduces abuse into the system – abuse happens because people try to beat the rules and the suggestion that you can exclude abuse by tinkering with those rules is asinine.  More seriously – since there is little hard evidence of deliberate abuse – you introduce the risk of mistakes in the system, and you raise barriers that make it more difficult for people to claim their entitlement.  That is the position in Britain, where the amounts of benefit that go unclaimed are vastly greater than the amount of fraud.

Second, there is a serious political point about how universal benefits emphasise what one is entitled to as a citizen – the citizen is not a supplicant, and although some of those benefits may go to the middle classes who do not, in the strictest sense, need them they help make society more cohesive and ensure that those who depend on those benefits are not stigmatised.  It emphasises that we are, to coin a phrase, all in it together.  It is about society establishing that everyone is entitled to a decent minimum as a matter of right.

Where would Beveridge stand today? It’s worth remembering that for Beveridge, enforced idleness was a terrible social evil.  The level of mass unemployment among young people in particular under the Con Dems would have horrified him; the idea that mass unemployment was a price worth paying for clearing a deficit caused by the fecklessness of the bankers would have repelled Beveridge’s old-fashioned sense of morality and probity. And he saw a National Health Service as an absolute condition of a decent society.

The narrative of benefit scroungers is an ideological myth. Yes, there is undoubtedly abuse, but compared with the £16 billion of unclaimed benefit each year and the squalor and despair of mass unemployment, it is minor.  If Labour was a decent party, true to its roots in Trade Unionism, in Christian socialism and Fabian improvement, and retained a shred of the decency and compassion that drove its founders, it would have the moral courage to stand up to the myth and debunk it.  As R H Tawney wrote in his great essay on the choices before the Labour Party following the split of 1931, “to kick over an idol you must first get up off your knees.”

But Labour’s leaders no longer have that decency – the latest pronouncement reflect their policy in Government and in opposition.  They’re quite happy it seems to dance along to the Tories’ ideological tunes and abandon the people on whose behalf they once spoke.  The poorest in society – single mothers on benefits – have seen their real income fall by nearly 20% in the past year. There are many people for whom Miliband and Byrne’s latest pronouncement are enough, and have packed up their Labour membership.  Others who choose to stay should examine their consciences – and understand why a growing number of people on the Left see Labour as part of the problem, and nothing to do with the solution.

And, please, could they, and Clegg, have the decency to leave Beveridge out of this.

From Red Ed to Ramsay Ed

Today’s strikes by public sector workers against changes to their pensions (which amount to a 3% pay cut) are important.  It’s not just that strikers turned out in large numbers, and were well-supported; or that opinion polls show sustained and substantial support for the strikers; or that the Government’s intellectual case for pensions changes is in tatters, not least after a truly disastrous performance by Francis Maude on the Radio 4 Today programme this morning, in which he showed himself desperately out of his depth when challenged on the detail of the Hutton Report and on the entirely false proposition that the cost of public sector pensions is unaffordable (there’s a transcript here).  Add this to the half-million people who marched through London on 26 March, and the mounting wave of protests; there is a popular upsurge, a potentially vast grass-roots movement waiting to be led.

But it’s a movement that has no voice in mainstream politics.  On a day when the people that Labour was created to defend took strike action to defend their hard-won pension rights, Labour spokesmen queued up at the microphones to condemn the actions. To the fury of union leaders, Ed Miliband chose to follow the same line as David Cameron, Nick Clegg and the Daily Mail – that the strikes were wrong.  In a passage that hit heights of imbecility that should have the whole Labour party hanging their heads in shame, Miliband condemned the strikes with the sentence:

“The Labour Party I lead will always be the party of the mums and dads who know the value of a day’s education.”

Such sentiments were of course set aside for the Windsor family wedding in April.  It’s abject nonsense – and this from a man who was once regarded as the Unions’ choice for Labour leader, or Red Ed in the words of the tabloids.  But what we now have is Ramsay Ed, Cameron’s echo chamber, making speeches in which he does the Tory party’s dirty work by claiming that teachers and other public services are doing themselves a disservice by standing up for their rights, in language that directly mirrors that of Ramsay Macdonald at the time of the 1926 General Strike.

I think if I were a radical in the Labour Party right now, I’d want to find a quiet corner and weep.  As a Green Party member I can point to the fact that my party leader (and, as it happens, my MP), Caroline Lucas, stood foursquare behind public sector pensioners today.  But it’s not enough.  The Green Party has one MP, leads one local authority and has a substantial presence in a handful more; the problem is way bigger than that.  The people on strike today – and the vulnerable people they serve, and who have traditionally looked to the Labour Party to protect them – and, yes, we on the non-Labour left – need a Labour Party that is better.  A Labour Party that is passionate, committed, fearless, forthright in protecting the poorest in society.  How many of those did you manage today, Ramsay Ed?

The position we face in Britain is simply this.  We have a Government which is pursuing a feral neo-liberal agenda in which the poorest and most vulnerable are forced to pay the price for the stupidity and greed of the financial sector, at huge human cost.  And we have three political parties which continue to advocate that neo-liberal agenda and are utterly blind to the economic and human carnage it created, fighting over an ever-smaller scrap of political ground, while more and more people are left outside the parameters of mainstream political debate.  In other words, we have a profound crisis of political legitimacy in Britain today.  Ed Miliband today showed that Labour remains part of the problem, not the solution, and as long as it fails to stand up for the people it was founded to support that will remain the case.

Cameron and the economics of the family

You can tell the Tory Party is in trouble.  Dreadful economic numbers, NHS reforms in tatters, public sector workers declaring that enough is enough.  So, once again, David Cameron uses Father’s Day, that annual festival for the greetings card industry, to make pronouncements on family issues in a piece in the Sunday Telegraph today.

At one level you have to hand it to the Tories.  In the old days, kicking a few single mothers would have been enough.  Now it’s more sophisticated – now it’s fathers who run away from their responsibilities who are in the firing line and there’s even a reference in Cameron’s piece to heroic single mothers.  Progress of a sort, I guess, but Cameron’s argument still shows overwhelmingly that he doesn’t get it on the family, and what his chosen economic ideology does to them.

Cameron’s article is couched almost entirely in terms of the economic role of fathers, and underlying it is a potent but nonsensical myth – that families can and should be supported by a single male income.  Pernicious, because it involves an economic determinism of gender roles that has no intellectual support, but also mendacious because it ignores how the balance of economic power has shifted against those on average incomes in the neoliberal decades – indeed, how it has shifted from wage-earners to the holders of capital.

My father was a skilled worker earning quite a bit more than the average wage.  Growing up in the 1970s that allowed us to live comfortably, as homeowners in a pleasant suburban semi.  In other words, on one income we had a lifestyle that increasingly now takes two full-time incomes to maintain.  Moreover, we had the expectation of things like a free university education – I was the first member of my family to go to university as a result.  I guess we were pretty normal.  We certainly – apart from the mortgage – never used credit – to this day my father refuses to have a credit card.  It’s quite hard to think that how recent that all is, and how different it is from the economic struggle families face now, balancing their working lives and sinking scarce resources into childcare.  I don’t want the old split of men earning, women at home; I want both parents to be able to make their own choices about how they raise children, without both being forced into full-time employment.

Much of the change is due to housing costs.  The idea that you could buy a family home for a little more than twice the national average wage is laughable now – if Cameron is sincere in looking for factors that have had a serious impact upon family life he might want to consider the house price inflation of the past decades, in which we have become brainwashed into thinking that rising house prices are a symptom of prosperity.  Home ownership was once the bedrock of Tory social ideology, reaching its apogee in what we now know was the disastrous policy of selling off social housing – now, for a whole generation, it is an impossibility, while renting has none of the security that legislation provides to tenants in mainland Europe.  And lifestyles are increasingly funded by the rolling over of credit.  And this is increasingly a cause of economic instability – as David Harvey has convincingly argued, every economic crisis since the 1970s has originated in a credit bubble fuelled by speculative property-price inflation.  Speculation, house price inflation, economic instability and credit-fuelled consumption have meant that economic life has become more and more difficult for people – families – who are earning average or above-average incomes, while wages continue to decline as a proportion of total income.

So Cameron’s vision of father going to work to provide economic security is no more than a piece of nostalgia – the sort of nostalgia that survives in the most economically privileged Cabinet for decades but has no relation to daily life as lived by the vast majority of citizens.  Yes, marital breakdown is an issue and of course there are men who run away from their responsibilities, economic and otherwise – but let’s stop making easy judgements about individuals when the system is stacked so firmly against them.  And New Labour, locked in its free-market mindset, is guilty of exactly the same simplifications.

Most of all, this is about allocating blame for poverty to the poor themselves.  Children and single mothers do not, in Cameron’s view, live in poverty because the economic system has failed them and because the ideology of market economics is stacked so overwhelmingly against them, but because of the actions of feckless individuals.  We are back to the ideological distinction, so important to neoliberalism and the intellectual core of the Big Society, the contrast between the deserving and the undeserving poor.  It was a lie that Beveridge and his successors nailed more than half a century ago, but ideology, the illusion of prosperity, the growth of evangelical religion and the cheap moralism of the media have allowed its return.  It’s as toxic as it ever was and it’s the duty of anyone who believes themselves to be on the left  – are you listening Ed Miliband – to fight it with every weapon they have.

So … why isn’t Caroline speaking?

Saturday’s big London demonstration against the cuts matters.  It matters more in the face of a Budget that, predictably enough, has favoured big business and non-doms at the expense of ordinary people – and following economic indicators showing that Osborne’s slash-and-burn economic policies are failing.  Yes, marches don’t change the world. The biggest demonstration in London in recent years didn’t stop Blair going to war in Iraq.  But they can and do send important messages – especially where there is more than one party of Government.

So it’s unfortunate that, by playing party politics, the TUC appears to be setting itself up to reducing the impact of that march. It appears that the only politician invited to address the rally is Labour Party leader Ed Miliband.  Whether deliberate or not, the effect of that decision is to give the impression that the march is linked to the Labour Party.

But it needs to be bigger than that.  The movement against cuts is vast and inclusive – involving public sector workers, people defending their libraries in small towns in middle England, passers-by cheering on activists closing down Vodafone stores.  Many of those people voted for parties other than Labour – not a few voted Liberal Democrat, some will even have voted Tory on the basis of Cameron’s lies about defending the NHS.

Moreover, as the student demonstrations in London late last year showed, the game is changing.  Those who said that those demonstrations meant that we were entering post-party politics were, I think, wrong; but they did show that politics, especially the politics of opposition, is being re-moulded in a way that transcends traditional party politics.  The way in which the Liberal Democrats ditched overnight almost every commitment on which they fought the elections and became eager supporters of the Tory economic shock doctrine is part of that dynamic – the fact that their betrayal hit hardest an emerging generation of new voters was a key factor.

And this is about uniting all those who reject the economics of cuts and deficit extremism, and taking the economic debate into a different and new place. It’s actually a place where the Labour leadership – which fought the last election on a manifesto drafted by Ed Miliband that proposed cuts – is not yet comfortable, and is probably lagging behind its activists.

So, why just Ed Miliband?  Why not Caroline Lucas, who has become a far more consistent critic of the deficit consensus than Labour?  Why not other political groups like UK Uncut who have transcended the party system?  It seems to me that either you have a pluralism of party political speakers, or none at all.  I freely admit I have an interest in this; I’m a Green Party member (although circumstances mean my activism is about pounding the keys on my laptop than pounding the streets), and I’m proud that Caroline Lucas is my MP.  But what seems to me crucial is that the TUC recognise the strength that comes from diversity and pluralism in a situation where the big issues do not split along easy political lines.