Next Labour Leader

[The Don]

I'm beginning to wonder if anything you write is ever serious, Craig. To some it might appear that your only interest is to have a silly argument as often as you can.

Please let me know when I'm patronising you, but I'm going to spell this out really, really simply in short words:

If Labour goes left it will not get elected. If it doesn't get elected, the left in Britain will be less well represented in our national discourse.

Following so far?

So, if Labour wants to represent the left effectively, they also have to appeal to left leaning centrists, otherwise they (Labour) will remain permanently in opposition. Labour being permanently in opposition does no-one any good, and would make for poor governance of this country.

Similarly, on the other wing of UK politics, the Right. If the Conservatives move too far to the right, they will be unelectable (presuming this doesn't happen at the same time as Labour are hard left). If the Conservatives sit on the opposition benches for too long as a result, those with a right wing agenda in this country will similarly be frustrated by their lack of representation or power. Therefore, if the hard right want adequate representation in government, they have to accept that the Conservatives should be a centre right, rather than a hard right party.

Relative extremism on either wing results in time out of power, to the detriment of the very people who are most closely associated with the more extreme views. Is that clear now?

I suppose the question that Labour need to answer is whether, to appeal to the centre-ists (and maybe not just the left leaning ones, there may not be enough of them) they have to adopt policies which not only make them functionally indistinguishable from the Conservatives but mean that they fail to attract the core voters who don't solely vote on the basis of party loyalty.

It's comparatively easy to imagine a scenario where, to establish their financial credentials they "out Tory" the Conservatives when it comes to austerity measures, ensure their military support by increasing defence spending and show that they're not soft on crime by introducing draconian laws.

There's a stage where they're no longer anything other than the Conservatives. IMO Blair with PFI regularly overstepped the line and was, in effect, a Tory prime minister.

 

[MikeG]

I suppose the question that Labour need to answer is whether, to appeal to the centre-ists (and maybe not just the left leaning ones, there may not be enough of them) they have to adopt policies which not only make them functionally indistinguishable from the Conservatives but mean that they fail to attract the core voters who don't solely vote on the basis of party loyalty..

This is forever the balancing act, on both sides of the centre ground. One Nation Tories, like Ted Heath, quickly lost their right wing.

It's comparatively easy to imagine a scenario where, to establish their financial credentials they "out Tory" the Conservatives when it comes to austerity measures, ensure their military support by increasing defence spending and show that they're not soft on crime by introducing draconian laws..

The next 5 years will remove the necessity for austerity. Under every party's figures, we'll be back to "normal" by 2018 or thereabouts. That hands Labour something of an opportunity. They won't have to upset their left by tightening the belt, and they can appeal to centrists by promising to run a low-debt economy. They may choose to avoid claiming the end to boom and bust, but I'll leave up to them.

There's a stage where they're no longer anything other than the Conservatives. IMO Blair with PFI regularly overstepped the line and was, in effect, a Tory prime minister.

I think that only a theoretical problem. Labour seem permanently wedded to their trade union membership, and that is ground which the Conservatives will never enter into. I, like you, dislike PFI, but probably for a different reason. It just looked like a way of getting our kids to pay for what we wanted. I don't have any problem at all with the private sector getting involved in the delivery of public services, even if they make a healthy profit from it, but I do have a problem with borrowing to live beyond our means.

 

[Darat]

...snip...

The next 5 years will remove the necessity for austerity. Under every party's figures, we'll be back to "normal" by 2018 or thereabouts. That hands Labour something of an opportunity. They won't have to upset their left by tightening the belt, and they can appeal to centrists by promising to run a low-debt economy. They may choose to avoid claiming the end to boom and bust, but I'll leave up to them.

...snip..

Leaving aside that "austerity" is defined differently by different groups so whether it is a necessity or not the tories have made it quite clear that at least one of their goals is to reduce the size of the state (personally I think it is their primary goal and their "austerity" was their smokescreen) and drastically and permanently reduce government spending. At the end of this parliament I strongly believe the country will be fundamentally changed with effects that will pass down the generations.

Now we have a fixed term parliament and along with the change to the "no-confidence" voting it matters not one iota who is the Labour leader nor even what their policies are.

 

[LondonJohn]

I suppose the question that Labour need to answer is whether, to appeal to the centre-ists (and maybe not just the left leaning ones, there may not be enough of them) they have to adopt policies which not only make them functionally indistinguishable from the Conservatives but mean that they fail to attract the core voters who don't solely vote on the basis of party loyalty.

It's comparatively easy to imagine a scenario where, to establish their financial credentials they "out Tory" the Conservatives when it comes to austerity measures, ensure their military support by increasing defence spending and show that they're not soft on crime by introducing draconian laws.

There's a stage where they're no longer anything other than the Conservatives. IMO Blair with PFI regularly overstepped the line and was, in effect, a Tory prime minister.

I think it's eminently possible for the Labour party to be firmly centre-left and still distinguish itself sufficiently from a centre-right Conservative party, such that the majority of the population are offered two alternatives which both have potential mass appeal.

I agree with your point about Blair and PFI (though actually this was almost entirely Brown's remit and responsibility - in the deal between the two, Blair more or less promised Brown total autonomy in managing the UK economy and public spending). I think the problem here is that the general public did not - and still do not - understand the mechanics of PFI and its long-term implications. I think that this is why a calculated decision was made by Labour to do something which should be anathema to its principles.

The huge political attraction of PFI to Brown and Labour was this: they knew that the public would see nice new hospitals and schools etc. being ostensibly built "by a Labour government", which chimed perfectly with a Labour narrative of generous public spending. And at the same time, they knew that the public wouldn't properly understand how these projects were financed, and that they wouldn't therefore understand that the Labour government wasn't really building these things at all in the strict sense of the term. Plus there was the added attraction of taking all this off the government's balance sheet, which had further economic and political implications.

I actually think that the the way the Labour government of 97-10 wholly embraced PFI was one of the most deeply cynical pieces of political chicanery of modern times. The government turned a blind eye to what were supposed to be its guiding economic principles, in order to play a sleight-of-hand trick on an unassuming public. And we'll all be paying the price of these projects for the next 20-30 years.

 

[Darat]

...snip... It just looked like a way of getting our kids to pay for what we wanted. ...snip...

That has always been the case (in modern parliamentary history) but I fail to see what is wrong with that approach, the future generations directly benefit by the services and infrastructure such public spending provides.

 

[MikeG]

......Now we have a fixed term parliament and along with the change to the "no-confidence" voting it matters not one iota who is the Labour leader nor even what their policies are.

Until the next election, of course, and then both will matter a great deal.

 

[LondonJohn]

I, like you, dislike PFI, but probably for a different reason. It just looked like a way of getting our kids to pay for what we wanted. I don't have any problem at all with the private sector getting involved in the delivery of public services, even if they make a healthy profit from it, but I do have a problem with borrowing to live beyond our means.

I partly agree, and I certainly agree with the wisdom of PPPs (if they're properly set up and managed). But the problem with PFI's (as I see it) is twofold:

1) As you point out, they can be extremely seductive to a government, in that a government can instigate lots of shiny new infrastructure projects during its tenure, without making much of a dent at all in the balance sheet and without troubling the debt markets. That has tremendous political appeal, and also feeds politicians' egos as "the great builders" (and the metaphors that this suggests). But the very seductive nature of the scheme has the obvious potential to lead to too many PFI projects being taken on - and the last Labour government is a poster child for this "kiddies in a sweet shop" problem.

2) While PFI's are (in my view) an extremely good idea in principle, they can be (and almost always are) far from ideal in practice. That's because governments and their civil servants - many of whom are not overly business-savvy and who are equally seduced by the idea of instigating shiny new infrastructure projects - tend to be very poor negotiators/managers in comparison with the private companies on the other side of the deal. That's why so many PFI deals end up being unfairly skewed in the favour of the contractors - which automatically means that the public doesn't get as good a deal as it should have got.

 

[LondonJohn]

That has always been the case (in modern parliamentary history) but I fail to see what is wrong with that approach, the future generations directly benefit by the services and infrastructure such public spending provides.

But PFI is "buy now, pay later" in a far, far more extreme incarnation than "normal" public spending on infrastructure.

 

[MikeG]

The Labour party announce that the leadership election will be on September 12th.

 

[Francesca R]

Leaving aside that "austerity" is defined differently by different groups so whether it is a necessity or not the tories have made it quite clear that at least one of their goals is to reduce the size of the state (personally I think it is their primary goal and their "austerity" was their smokescreen) and drastically and permanently reduce government spending.

Austerity tends to mean reducing general government spending as shorthand. I think a more balanced definition is reduce the general government deficit (net borrowing), which is fiscal contraction. Raising tax is also fiscally contractionary (and normally reduces deficits) but "anti-austerity" parties have few qualms about proposing tax increases. Usually these are touted as "not having much of a negative impact on growth", the justification being because these taxes are typically on the rich (mansion tax, 50% on income over a hundred and fifty grand). But anti-austerity is also a smokescreen, see below.

Neither of these two have to necessarily involve shrinking the state, which typically means a reduction in general government revenue (IE tax) and outlays (spending) as a fraction of output (that's total income or total spending).

I agree that reducing the size of the state is the Tories' primary objective.

I don't think that the primary objective of the left-leaning parties (those that are left of Labour in particular) is to grow the size of the state per se. Or to be particularly "anti austerity". I think it is to achieve greater state redistribution of income and wealth (egalitarianism / reduction of inequalities). But the latter is difficult to do without growing the state.

And I don't think that the Tories' have an objective of increasing inequalities either--but that their doctrine of the state "getting out of the way" tends to often rank higher with them than redistribution does.

 

[LondonJohn]

The Labour party announce that the leadership election will be on September 12th.

It's extremely telling that the party changed its leadership election rules to "one member one vote". It's hard to see how this change wasn't influenced at least in part by the stitch-up Ed Miliband managed to concoct with the unions last time round.

Incidentally, did anyone see the Newsnight piece the other day (or read about it), where they asked the head of the GMB (one of the UK's largest unions, for those who might not know) whether any potential Labour leadership candidates had yet contacted him to try to gauge their chances. He replied not only that several had indeed contacted him, but also that the first of these phone calls took place at 6.05am last Friday........

 

[Darat]

But PFI is "buy now, pay later" in a far, far more extreme incarnation than "normal" public spending on infrastructure.

And how does that contradict what I said?

 

[Darat]

Austerity tends to mean reducing general government spending as shorthand. I think a more balanced definition is reduce the general government deficit (net borrowing), which is fiscal contraction. ...snip...


...snip...

Good example of my statement that "austerity" is defined quite differently for different people.

 

[Francesca R]

I, like you, dislike PFI, but probably for a different reason. It just looked like a way of getting our kids to pay for what we wanted. I don't have any problem at all with the private sector getting involved in the delivery of public services, even if they make a healthy profit from it, but I do have a problem with borrowing to live beyond our means.

If borrowing is to acquire durable assets, then the debt that is inherited in future is offset by the inheritance of those assets. If it is used to acquire dodgy assets then the eventual inherited effect is the same as if cash (future inheritance) was used. This is where the principle of borrowing to finance capital investment is correctly deemed to be fundamentally sound. At issue is whether more dodgy decisions are made due to the ability to borrow compared to the absence of that ability. But the ability to borrow is not going to go away and is certainly not dependent on private borrowers being involved.

What is much more eggregious from the standpoint of fleecing unborn generations is the (lack of) borrowing to finance (unfunded) consumption promises like defined benefit pensions and a range of other thinks that diligently voting older generations continue to support.

 

[Craig B]

... What is much more eggregious from the standpoint of fleecing unborn generations is the (lack of) borrowing to finance (unfunded) consumption promises like defined benefit pensions and a range of other thinks that diligently voting older generations continue to support.

Are you saying that state pensions should not be paid? Or that they should be funded in some other way than by taxation?

 

[MCel58]

Austerity tends to mean reducing general government spending as shorthand. I think a more balanced definition is reduce the general government deficit (net borrowing), which is fiscal contraction. Raising tax is also fiscally contractionary (and normally reduces deficits) but "anti-austerity" parties have few qualms about proposing tax increases. Usually these are touted as "not having much of a negative impact on growth", the justification being because these taxes are typically on the rich (mansion tax, 50% on income over a hundred and fifty grand). But anti-austerity is also a smokescreen, see below.

Neither of these two have to necessarily involve shrinking the state, which typically means a reduction in general government revenue (IE tax) and outlays (spending) as a fraction of output (that's total income or total spending).

I agree that reducing the size of the state is the Tories' primary objective.

I don't think that the primary objective of the left-leaning parties (those that are left of Labour in particular) is to grow the size of the state per se. Or to be particularly "anti austerity". I think it is to achieve greater state redistribution of income and wealth (egalitarianism / reduction of inequalities). But the latter is difficult to do without growing the state.

And I don't think that the Tories' have an objective of increasing inequalities either--but that their doctrine of the state "getting out of the way" tends to often rank higher with them than redistribution does.

I think your definition here really only applies to the UK, elsewhere in Europe every major austerity approach has included cuts in public sector spending combined with increases in taxation either direct and indirect and a raising of the age when pensions can be claimed.

 

[The Don]

Are you saying that state pensions should not be paid? Or that they should be funded in some other way than by taxation?

Well from my perspective promising the "triple lock" on pensions without any clear idea of how much it will eventually cost or how it will be funded is electioneering in an attempt to secure the grey vote.

As the population ages and the number of working people supporting each pensioner falls (a problem which is likely to be exacerbated if there are further restrictions on immigration) then IMO the universal state pension will consume a progressively larger amount of government spending.

This will put greater strain on other spending and in particular other welfare spending which will have to decrease significantly to accommodate the increases in pension spending.

 

[Francesca R]

I think your definition here really only applies to the UK, elsewhere in Europe every major austerity approach has included cuts in public sector spending combined with increases in taxation either direct and indirect and a raising of the age when pensions can be claimed.

And it does in the UK as well but in all cases (even Greece) spending cuts are larger than tax hikes.

The point is that "anti-austerity" movements don't generally seek to repeal tax hikes unless they affect low income groups (like bedroom tax). And in many cases they want more tax rises (on the wealthy). Their primary objective is more redistributive than anti-austerity IMO.

Raising state retirement age is a reduction in spending (state welfare).

 

[Francesca R]

Are you saying that state pensions should not be paid? Or that they should be funded in some other way than by taxation?

I refer to public and private sector defined benefit schemes.

But I do not think the state pension should be universal, so that for some it should be removed completely.

 

[Craig B]

I refer to public and private sector defined benefit schemes.

But I do not think the state pension should be universal, so that for some it should be removed completely.

It should become a means tested payment? You apply this principle with absolute generality don't you? If for some it should be removed, for others it should be reduced, presumably. So it would simply become part of means tested social payments to the poorest individuals. If their income increased while they were in receipt of a pension, would it be withdrawn?