Did you hear? There’s no money left. Apparently debt and deficit are terrible things that eventually need to be sorted out. And you can be darn sure that when the Labour Party get back into power that’s bally well what we’re going to. Well, here’s a slow hand clap for you, stalwarts of the radical progressive centre. Bravo. I suppose it only took eighteen months or so, but we got there in the end.
Now to make all this sensible stuff stick. First, I would recommend that you don’t answer every question about the economy like you were forced at gunpoint to talk about cutting the deficit by Anthony Painter, and that you don’t say that you’re doing it “to make the party credible” but instead that you are doing it because it is the right thing to do.
Then with that irritating reflex action out of the way, we can get on with the real stuff. The esteemed former blogging home of Luke Bozier, Labourlist, has recently been running a series called “When there’s no money left?”, an Opportunity Knocks for the various policy hobby horses of the kooks, waifs and strays that make up The People’s Movement. The winner is stunning, a real gem. It manages to combine the best qualities of the Labour Party – authoritarianism, intrusion and inverted snobbery – into one single policy:
I propose that all income tax returns of anyone living in the UK should be in the public domain. These should also include a nil return for those not paying any income tax at all.
There is surely nothing more likely to persuade the working class voters of Harlow to stick their cross next to the red rose logo than the prospect of all their neighbours knowing exactly how much they earn. Even so, I fear that if we think of policies like this as the only alternative to spending lots of cash on stuff, we are making an error. The alternative to not spending any money does not have to be isolated gimmicks. It could be far more ambitious than that. When you can’t redistribute money then maybe you could redistribute power.
By and large, people’s attitude to the cuts goes something like this: “I accept the need to spend less money, but I am sad to see local services I value being affected”. People feel they don’t have the power to affect those changes, to influence the choices being made about their local hospitals, schools, libraries, leisure services, even the bins.
So why not make a real commitment to local democracy the alternative? Put more power in the hands of councillors, leader and mayors who are doing this “In the Black” stuff every day of their working lives, give voters genuine democratic influence over their local services (perhaps through directly elected mayors) and lead a debate about making a heavily centralised bureaucratic state more local, more democratic, and yes, cheaper.
The Government’s deficit reduction strategy is like building a bridge. That’s what someone with far more knowledge that I about local government finance told me. And when you’re building a bridge you need to test the constituent parts so you know how weight they can bear. And to do that, you put them under immense pressure until they bend and break.
As far as local government goes, this isn’t only being done by the reductions in basic grant outlined in the comprehensive spending review, it’s also being done by making structural changes to the scale of funding local councils have to draw on. Today the LGA has indicated that local government funding is likely to be to adjusted take account of the public sector pay cap of 1%. Never mind that local government sets its own pay rates and hasn’t increased pay at all for two years. Government pay policy now dictates local government funding, and restraining pay restrains overall funding.
The proposals that came out of the local government resource review (with the full outcome due to be published any day now) sought to establish the principle that local government will be funded directly by business rates, and that councils can benefit from stimulating business growth in their areas. But also built into the system is the ability of Government to ensure that overall spending by local councils remains within a centrally-set limit by retaining a proportion of the overall business rates pot.
This is important because the scope for councils to raise their own funds is already drastically limited. Council tax rises are subject to a de facto cap of 3.5% (above which a council must hold a costly referendum to ratify the proposal). Even the Government’s council tax freeze ultimately does more harm than good to local authority budgets, providing some short term funding but reducing the tax base for years to come.
Now, local democracy isn’t only about the total amount of money it spends, and very many good councils will continue to thrive even with radically reduced resources. But the thing that is increasingly concerning those in local government is how long before this stress test leaves some councils in impossible budgetary positions, what happens when it does and if we can prevent that happening.
There has always been a conflict between the way local government claims (rightly) to be both the most efficient part of the public sector whilst at the same time in need of more money. This is not an easy argument to make. Local leaders pride themselves on their ability to cope, to manage budgets effectively whilst making a difference to their communities. But it’s essential to make the argument for more resources (or more realistically, more freedom to generate more resources) if local government is to be about more than providing the bare minimum of services and protection for the vulnerable.
And the politics? If the consequence of the Government’s policies is going to be a process of creative destruction, permanently reshaping what councils are fiscally capable of by permanently changing how they are funded, then that is not going to be reversed by simply reinstating investment, even if that were possible. The Labour Party’s challenge will be to explain what its plans are for public services that will have changed beyond all recognition.
The ‘In the black Labour’ authors are already the Smiths of the the post-Blairite sensible-hack-Labour centre-centre-left. In bedrooms across the land, weedy youth with posters of Matthew Taylor on their wall think “at last, someone else feels the way I do.” In the same vein, former party staffer Steve van Riel is liberated from saying nothing to saying all the sensible things he’s been saving up after the last few years of holding ‘the line’. Even Ed Balls this morning manages to write an opinion piece for the Times that doesn’t suggest the nation’s problems can be solved by a banker’s bonus tax (a lefty trope skewered by Sadie Smith here).
I’ll be writing a bit more about all this dangerously subversive stuff about balancing budgets and doing things that are popular soon. But it’s worth saying now that ‘In the black Labour’, and the calm and constructive debate it has triggered, could be a very important step for the Labour Party. Interventions like this put the party back on the path to reassuring the ordinary working voter that Labour is, to coin a phrase, ‘on their side’. That we offer practical solutions to the competing crises they see in their lives, and that we respond directly to their concerns.
In some ways, though, getting the debate back on that territory is the easy bit. The real difficulty is in identifying what policies can accompany the ‘In the black…’ fiscal rules to promote the innovation, efficiency and reform required meet them, whilst still pursuing a social democratic mission. In contrast to the salami-slicing policies of the present Government, ITBL* suggests a ‘zero budgeting’ approach, fundamentally questioning each element of spending – an ambitious approach that, although the authors don’t say so directly, would mean taking significant decisions about what it is the business of government to be doing.
This is the right place for Labour to be. In his Purple Book essay, Douglas Alexander said the 2010 election was not about the role of the state, an abstract debate ordinary voters rarely engage with. Instead, it became a ‘referendum on the public sector’. Labour was seen as the party of an often wasteful, frequently bureaucrat state sector. One of the Tories minor ideological strengths is their general suspicion of vested public sector interests. I am not suggesting Labour treats the public sector with the contempt many Tories often reserve for it. But we do need to be far more willing to question the necessity of certain Government functions and not retreat to the easy assumption that because money is being spent on something then it is essentially A Good Thing.
But as I said, saying all that is the easy bit. Picking those things we no longer want to do, or those things that can be reformed to make them dramatically cheaper is where the challenge starts.
*Guys, would it have killed you to think of a snappier title?
Process aside, the most remarkable thing about the interview was his breezy reaction to the figures. Imagine if he was a health minister announcing a 97% fall in cancer survival rates, or an education minister admitting to a 97% drop in GCSE passes, or a Home Secretary announcing that 97% of all passports were not being checked at our borders? He’d at the very least get a harder time from John Humphrys.
The point of a housing minister is to build houses for people. What is the point of one whose ‘reforms’ cause a collapse in house building within a year of taking over?
Nor, despite efforts by ministers to hang next Wednesday’s action around Ed Miliband’s neck, is this essentially a political dispute. It’s a good old fashioned dust up about pay and conditions. Or specifically what the TUC is calling the “Triple Squeeze” on public sector pensions; namely the shift in calculating uprating from RPI to CPI, the increase in individual contributions and the proposed increase in the retirement ceiling.
Some may see these as perfectly sensible changes, which reflect modern economic and social realities. That’s a matter for debate. But what’s not debatable is they mean an erosion of the existing pension entitlements of public sector workers. And however moderate or far sighted, trade union general secretaries get paid to improve their members conditions, not sit idly by as they decline. Again, some may question why trade unionists should expect better pension provision than the rest of the population. But that’s the whole point of collective bargaining; to obtain better terms collectively than you can individually.
I first heard Bruce Springsteen’s music (and I mean really heard it, not caught a snatch of Dancing In The Dark on Magic FM) when I bought Born To Run when I was at college. If a more perfectly formed, complete album has ever been released I’ve never heard it. But the thing that really captured was the visceral, driving piano at the start of Backstreets, a sound described by Rolling Stone at the time as “so stately, so heartbreaking, that it might be the prelude to a rock & roll version of The Iliad”. The power, the sheer epic-ness of it just carries you away.
And as you explore his catalogue further, listen to and understand the songs you realise that it’s not just about the grandeur of the music, but it’s also about the stories he tells, of youth, dreams, hope and faith. The River is practically a novel in itself, the story of teenagers torn out of their care-free lives by pregnancy, marriage, and the need to provide for a family. Is a dream a lie if it don’t come true, or is it something worse? In that context Springsteen’s most grandiose moments avoid glibness or cheesiness. The endless dreams of Born To Run are brought low by the darkness and despair of Darkness On the Edge Of Town.
And that’s the final piece of the Springsteen puzzle for me. In a sense, Springsteen sings about solidarity. His songs aren’t overtly political, but they paint a picture of lower middle class working life, the dreams and aspirations that we all have, the difficulties we face, the mistakes we make, and the hope and faith that things get better. The song in the video above, Racing In The Street, is superficially about drag racing in Asbury Park, NJ. But set against the unbearably sad piano of Roy Bittan, it becomes a hymn to escapism, the reality of home life, and of youthful dreams disappearing.
There’s a story that after 9/11 someone pulled up to Springsteen in the street in New Jersey, wound down the window and simply said “We need you now.” In the midst of an economic crisis build on the backs of the working poor, I say we still need him.
In the light of the previous post, I thought these poll findings in the Times yesterday might be illustrative of something (full story behind the Hugh Grant-stalking paywall here). The five point bump for the Lib Dems is just as likely to be statistical noise as anything else, especially when their poll ratings are comparable to the number of people who believe the Loch Ness Monster exists.
But let’s use it as a jumping off point for a mindless bit of speculation. What if, with the initial shock of the early cuts dissipating, the Lib Dems are actually starting to benefit electorally from being in Government (or at least beginning to claw their way back to where they started)? Not because what they are doing is wildly popular or even because they have forged a particularly attractive identity in government, but because the very fact of being in Government gives them a degree of credibility.
I would not be surprised if with a bit of laying low and a not-exactly-fair-but-not-actively-destructive wind, absent them being hoodwinked into taking the rap for another Coalition wet job like student fees, the Lib Dems came out of the coalition looking to the general punter for all the world like a party who can cut it with the big boys. And once you have a bit of credibility, the sins of the past can easily be forgotten. Every party has been there.