Labour
Gordon Brown’s answer to poverty in the UK is to appeal to charity. When Labour looks like it will have a massive majority soon that is pathetic.
Gordon Brown, the former Labour Prime Minister, had an article in the Guardian newspaper yesterday that plumbed new depths for the Labour Party.
Brown acknowledged that the UK has a poverty crisis, with vast numbers of people having insufficient income to meet their needs. As he noted, one million children now live in what might properly be called destitution, because absolute poverty does not seem an adequate description.
Having wrung his hands over this, and inevitably seeking to blame the Tories, he claimed to have a plan to address the issue.
There were two parts to this plan. In the first, he suggested a tiny pruning of the amount of interest paid by the Bank of England to the UK’s commercial banks each year on the deposits that they supposedly hold with our central bank. These sums actually represent the new money supply created by the Bank of England on behalf of the government during the 2008/09 financial crisis and 2020/21 Covid crisis, which the commercial banks did, as a result, do literally nothing to earn.
Approximately £40 billion will be paid in interest on these accounts this year. Brown suggested that between £1 billion and £3 billion of this sum might be redirected towards addressing extreme poverty in this country.
Having made this totally feeble gesture when the opportunity to do so much more with this wholly inappropriate enrichment of bankers was available to him, he then added his second suggestion. He did not, as any reasonable left-of-centre person might have expected, suggest that companies and people with higher levels of income might pay more tax to address the inequality that we now face as a country. Instead, he appealed to their charitable instincts and suggested that if only they donated a little more to food banks, the whole problem might be solved.
I have already suggested today that Labour’s frank admission that it does not intend to do anything about the power of the private sector, or the inevitable fact that the private sector does not allocate rewards appropriately within society, is recognition on its part of creeping fascism, about which it very obviously has no intention of doing anything.
Brown reinforces my opinion that Labour has altogether given up on challenging inequality, the power of the private sector, and the power of private, wealthy individuals within our society. Instead, it does now seem that it will tolerate any outcome that the market now dictates, however, undesirable that is for the people of the UK as a whole.
You could describe this as Labour giving up on its fundamental purpose, and you would be right to do so.
You could alternatively suggest that this is Labour tolerating the creep of fascism into our society, and again I think you would be right to do so, although I am sure that Labour itself would disagree. But, when it is doing nothing to stop that advance of fascism, what right have they got to do so?
As I have said before today, and will no doubt be saying many more times over the months and years to come, I have shown that none of this is necessary. The Taxing Wealth Report demonstrates that the money required to tackle the problem of poverty in the UK could be raised by simply reforming some of the existing taxes within this country. This would be easy, especially for a party in power possessed of a massive majority, which Labour is likely to have. Quite literally, nothing could stop them from reshaping the way in which rewards are shared within our society for the benefit of that society as a whole.
If Labour are not willing to do that with the power that they are likely to have then what are they for? Apart from enabling fascism, that is.
Will Thames Water finally force Labour to address the nationalisation issue?
As The Telegraph notes in an email this morning:
Thames Water took a further step towards nationalisation after shareholders said they would not provide it with a £500m lifeline.
The troubled utility company was told it had not satisfied the conditions to receive the first tranche of support outlined as part of its three-year turnaround plan.
It had been expecting the half a billion pound payment by March 31, but shareholders said they would not provide the cash as the regulatory requirements on the company make it “uninvestible”.
I believe those shareholders. I think they are right. Thames Water and the whole of the English water industry, is uninvestable. I made that case in a report that I published last summer, suggesting not just that this sector was in financial trouble, largely because of increased interest rates, but that it was also environmentally insolvent, because there was no practical possibility that it could adapt to the requirement that they both deliver clean water and clean rivers and beaches while simultaneously meeting net-zero targets.
My estimate was that this industry was not just a little short of the funding that it needed. Instead I suggested that it might be as much as £250 billion short of the money required to achieve these goals. The analysis was based upon official information produced for the government and commented upon in House of Lords reports.
It is, in that case, time for any government, including the one that we have in waiting, to wake up and smell the coffee. The idea that water can continue to be supplied by private companies seeking to make a profit from this activity is now so absurd that it must be consigned to history as one of the greatest follies of privatisation, ever. They should also acknowledge the enormous price that we have paid for this folly, represented in no small part by the vast quantities of human waste that now pollutes so many of our waterways and beaches.
However, can we really expect any such acknowledgement from the Conservatives? Frankly, I doubt it.
Can we also honestly expect Labour to admit that nationalisation might be an answer to a question, given its current heavily pro-neoliberal stance? Similarly, I cannot.
In that case, I have a horrible fear that both the Tories and Labour to come, will continue to pour money into absolutely useless franchise water operations that seemingly exist solely to reward the directors and shareholders of these operations for precisely no value added, and a complete lack of understanding or wisdom on their part.
That said, the crisis that is obviously unfolding at Thames Water provides a very clear litmus test for Labour. Will it, as I am expecting, stick to dogma over need? Or might it be that they finally come to terms with reality and realise that there is a role for the state? Their reaction to this issue might tell us what the answer to that question is.
I am not living in hope.
Labour is no student of the modern monetary theory
The title is from an article in ‘Left Foot Forward’ by Prem Sikka who is an Emeritus Professor of Accounting at the University of Essex and the University of Sheffield, and also a Labour member of the House of Lords. This article is rather impressive (do read it verbatim) – such that I’m afraid that... Read more
Evidence suggests that privatising healthcare services does not produce better health outcomes. So why is Labour so keen on doing this?
The medical journal, The Lancet has published a paper this month with the following heading:
The Summary of the piece is as follows:
Over the past 40 years, many health-care systems that were once publicly owned or financed have moved towards privatising their services, primarily through outsourcing to the private sector. But what has the impact been of privatisation on the quality of care?
A key aim of this transition is to improve quality of care through increased market competition along with the benefits of a more flexible and patient-centred private sector. However, concerns have been raised that these reforms could result in worse care, in part because it is easier to reduce costs than increase quality of health care. Many of these reforms took place decades ago and there have been numerous studies that have examined their effects on the quality of care received by patients.
We reviewed this literature, focusing on the effects of outsourcing health-care services in high-income countries. We found that hospitals converting from public to private ownership status tended to make higher profits than public hospitals that do not convert, primarily through the selective intake of patients and reductions to staff numbers. We also found that aggregate increases in privatisation frequently corresponded with worse health outcomes for patients.
Very few studies evaluated this important reform and there are many gaps in the literature. However, based on the evidence available, our Review provides evidence that challenges the justifications for health-care privatisation and concludes that the scientific support for further privatisation of health-care services is weak.
I added the paragraph breaks: there were none in the original.
Let me be clear about what this paper does not say. It does not suggest what form of state-supplied medical care might be best for a population. This is not, therefore, an article that by itself justifies the existence of the NHS in its current form.
That said, what the paper does suggest is that over a wide range of surveys, privatisation of whatever form of state-delivered healthcare there might have been has not improved health outcomes.
What the paper does, however, suggest is that the privatisation of previously state-provided services did deliver an improvement in the profitability of private healthcare companies. In other words, a clear winner from privatisation can be identified, but it is not the patient or the state that then funds the provision of privately supplied health services. Only health companies gain.
Is there, in that case, any reason for labour or anyone else to think that the answer to healthcare supply in the UK might rest with the private sector? The straightforward answer would appear to be, 'No, there is not.'
In that case, why are Labour so keen on using private medicine and privatising the NHS? Is it simply that the private healthcare lobby has got to them? Or is there more to it than that, about which we should know?
Will Hutton’s praise for Rachel Reeves’ Mais lecture is itself a pretty depressing foretaste of the disaster that Labour will be.
Like many, I was confused by Will Hutton’s arguments in The Observer today, in which he argued that Rachael Reeves has given Britain “the plan for economic lift off”. Unsurprisingly, I disagree with him.
Let me summarise my argument at the outset. I think Will Hutton is looking for a job. I cannot explain what he is saying in any other way.
Then let me move to the detail. Will is arguing, as I can see it, three things.
First, his suggestion is that those who have tried to impose policy on the economy have always got things wrong. He quotes Polanyi, who he interprets as saying that it was the imposition of centrally dictated policy that gave rise to the extremist backlashes of the 1930s. As a result, he seems to be applauding her for backing away from that central planning. Doing so, he ignores his own past demands, and what most would think to be the critical economic social democratic role of any government, which is to constrain the errors, excesses and inappropriate directions of market economics. Perhaps he is, however, revealing that he really has been a disciple of Hayek all along, whilst also revealing that he thinks she is. I really can’t work out what else he is trying to say.
Then, entirely paradoxically, he endorses her claim that this is an inflection point where what he describes as “a new productivist economic paradigm is emerging” which he argues is “vital for economic growth and social cohesion through higher public investment, an active industrial policy and quality public services.” Anyone who can reconcile this second argument with his first, noted above, deserves a prize.
Third, he then argues that adopting Jeremy Hunt’s fiscal rules, as she is, will not in any way constrain her ambition to deliver this plan for growth. His reasons for saying so are, as far as I can work out, twofold. First, he seems to suggest that the rule is just for show because the figures can always be fudged to make it work. This might be a frank recognition of reality, but it does not constitute either a fiscal plan, or economic sense. Then, the paradox continues, because having firstly condemned central planning, and then praised it, he then seeks to reconcile his positions and the use of this fiscal rule by suggesting that the job of government will, in Rachael Reeves opinion, be to direct the way in which private capital will be invested, because the government is not going to make any available. In that way the fiscal rule is upheld but the desired growth is delivered in accordance with a plan for which Reeves can then take credit. Quite why he thinks that this might be possible he does not say, because very obviously Rachael Reeves does not know either, if that is what she really thinks.
But then, there’s a great deal that Rachael Reeves does not know or say. She does not say how she will tackle poverty. Nor has she got a plan to save local government. The NHS can only be presumed to be up for sale. There is no money for education. Devolution, as ever, got no proper mention from Reeves. And apparently, all this can be ignored because the right wing press would criticise Reeves if she did discuss such issues, so Will Hutton thinks she need not do so.
I am sure, as I mentioned at the outset, that Will Hutton had a reason for writing this article, but the piece is itself profoundly confused in an attempt to endorse Reeves’ own incoherence. If this is indication of the current level of centre-right thinking around Reeves (where she, herself, is located on the political spectrum) it is a pretty depressing foretaste of the disaster that Labour will be.
Growth in the economy creates wealth that never trickles down, but is what Labour says it wants. What is it going to do for the 12 million people in absolute poverty in that case?
The Guardian reports this morning that:
Overall, during the year [2022-23] 12 million people were in absolute poverty [in the UK] – equivalent to 18% of the population, including 3.6 million children – levels of hardship last seen in 2011-12 after the financial crash.
Growth will not solve this. We know that wealth never has and never will trickle down.
In that case, nothing will change under Labour without radical reforms to benefits, minimum wages, worker rights, trade union rights, and the probable creation of wage councils. So far, I am not hearing nearly enough about those reforms, which instead already appear to be at risk of being watered down.
We do, however, keep hearing from Labour about the need for growth.
As I argued yesterday, this is the wrong policy for this era in history. Meeting everyone's needs within sustainable limits should be our priority now. Unless that change happens, 12 million people will continue to live in absolute poverty in the UK.
Is that what Labour wants?
Rachel Reeves’ fiscal rule is the same as John McDonnell’s and Jeremy Hunt’s. All three offered austerity.
In 2018, I wrote a blog post making clear that I profoundly disagreed with the fiscal rule that was proposed at that time by John McDonnell, when he was shadow Labour Chancellor.
You will not find that fiscal rule on a Labour website anymore, but I happened to screenshot it . This is what it said:
A few sensible, and admittedly sensible, words on what happens in a crisis and when interest rates are at the zero bound apart, you literally could not put a fag paper between what is said there and what Rachel Reeves is saying now or, come to that, what Jeremy Hunt says. The commitment is to:
- Match current expenditure with taxation revenue.
- Borrow only to fund investment.
- Cut the deficit as a proportion of GDP over a five year period.
These three commitments are exactly what Rachael Reeves is saying now, which guarantee us austerity.
I stress, they also offered austerity when John McDonnell endorsed these words in 2018, when he even referred to a crass credit card analogy in the process of doing so.
Why make the point now? There are three good reasons for doing so.
First, this shows that John MacDonnell was nothing like the left-winger that he claimed to be. He was as captured by neoliberal thinking on these issues as Hunt and Reeves are. That is why I could never have worked with him.
Second, this shows that Labour has really not changed, and will not when in office. Austerity is its core belief. It is a fundamentally neoliberal party, and has been for thirty years now. Nothing is going to change.
Third, what that makes clear is that there is no viable political option now being offered by the two main political parties to the vast majority of people in this country who want the needs of the people of this country to be met above all else. None of the politicians leading those parties think that is the job that they will ever be asked to do. They see their role as being to deliver growth even if, as we know, that almost entirely benefits the already wealthy. They are, as a consequence, of no use to our our society and we have to now look elsewhere for answers.
Israel and its allies – including the UK – are going to deliver a planned famine in Gaza
The IPC describes itself as follows in its website:
The Integrated Food Security Phase Classification (IPC) is an innovative multi-partner initiative for improving food security and nutrition analysis and decision-making. By using the IPC classification and analytical approach, Governments, UN Agencies, NGOs, civil society and other relevant actors, work together to determine the severity and magnitude of acute and chronic food insecurity, and acute malnutrition situations in a country, according to internationally-recognised scientific standards.
The IPC has issued a report on Gaza, based on its scale of crisis assessment, which is as follows:
They say the situation in Gaza in the last month was as follows:
And then they note that they expect things to change as follows over the next few months:
Israel controls food supply into Gaza. No one else can.
Israel is not permitting sufficient food into Gaza. As a result 50 per cent of its population now face famine. Most of the rest face a food crisis.
International law does not permit Israel to do this. Its actions are clearly illegal. But countries like the UK and USA permit it by supplying the arms Israel needs to crush Gaza and impose this famine.
It is my hope that not just those in Israel imposing this famine should be punished, but so too should those in this and other countries that let it happen, knowing it was going on.
What is the point of power if it is not to help the most vulnerable and least well off, which there is no sign that Labour will do?
As the Observer noted yesterday:
Schools are finding beds, providing showers for pupils and washing uniforms as child poverty spirals out of control, headteachers from across England have told the Observer.
School leaders said that as well as hunger they were now trying to mitigate exhaustion, with increasing numbers of children living in homes without enough beds or unable to sleep because they were cold. They warned that “desperate” poverty was driving problems with behaviour, persistent absence and mental health.
They added a headteacher reporting that
The school had many children living in “desperate neglect”. “Kids are sleeping on sofas, in homes with smashed windows, no curtains, or mice,” he said. “I come out of some of these properties and get really upset.”
The details come from:
report published on Friday by the Child of the North campaign, led by eight leading northern universities, and the Centre for Young Lives thinktank, warned that after decades of cuts to public services, schools were now the “frontline of the battle against child poverty”, and at risk of being “overwhelmed”. It called on the government to increase funding to help schools support the more than 4 million children now living in poverty in the UK.
There is no point now thinking that we have a Conservative government. They are in such disarray that they no longer function.
Instead we have to ask what Labour might do about this, and the answer we are told, time and again, is that they will say there is no money left.
That is because they will not tax capital gains fairly, as if they are income, which is exactly what they are.
And it is because they still want to massively subsidise the savings of the wealthy by providing excessive tax relief on the pension contributions of the wealthiest in our society.
It is also because they refuse to tax income from wealth at the rates paid by those with income from work.
And it is because they still think that those on high earnings should pay much less, proportionately, in national insurance than those on low earnings should.
Just put those right and you have round £50 billion (or more) to tackle this issue.
If Labour will not do that let’s be quite clear about what it will be doing: it will be choosing to perpetuate poverty. So far, that seems to be its plan.
Nothing will ever make Labour acceptable to me until they say they they are going to really tackle the issues arising from poverty, and to root out its causes. Why should I tolerate them when they could do that, and so far say that they will not?
What is the point of power if it is not to help the most vulnerable and least well off?
It seems that we live in unprecedented times
I suspect that many readers here might have already seen this polling result, published yesterday:
Every time I think the Tories can do no worse, they do. But then, that only reflects what actually happened this week.
If (and that is a maybe ‘if’) this was reflected on a polling day Labour would get well over 500 seats. The Tories would have 24, behind the LibDems and maybe the SNP. The former would be the official Opposition with 48 seats.
I sincerely hope that this does not happen. Such a Labour majority, dedicated to austerity, would be as disastrous for this country now as a National government was in the 1930s.
However looked at though, it seems that we live in unprecedented times.