Ozzy's Corner

A view from the Libertarian Left. With no spin


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The Old Ideologies Have Withered

Where does politics lie in 2012?

In this article I will argue that both Labour and the Conservatives both have a crisis of ideology. I also believe Labour in particular must look for a new framework to guide them, and that the answer to what shape a new Labour-led Government would take does not lie in the past.

Following World War 2, the post war consensus dominated all Governments until the 1970’s. This consensus was based on:

  • The nationalisation of key UK industries
  • A welfare state based on the Beveridge report
  • Keynesian economics

The 1970’s saw the UK economy come under pressure from the 1973 oil crisis, inflation and industrial action. The post war consensus was failing.

In 1979 Margaret Thatcher led the Conservative Party to victory. She was a protégée of Keith Joseph, with whom she created the Centre Policy Studies. The CPS promoted free-market economic and monetarism, and was influenced by the works of the Economist Milton Friedman and Friedrich Hayek.

The next 18 years saw the destruction of the post war consensus. By the time Tony Blair led Labour to victory in 1997, Labour had accepted much of this free-market model and moved to the centre of politics.

I firmly believe that the post war consensus had already failed by the time Mrs Thatcher had entered Downing Street. It was born of a nation rebuilding from the ashes of war. The UK had a different, tighter class system. The world and UK economy were a totally different shape, and less global in nature.

The new neo-liberal economy also failed, falling off the edge of a cliff during the banking crisis of 2008. Economic inequality been growing for years, but when the banks exploded the world financial system ground to a halt. The system that said that the market will always deliver what people need and is efficient simply overheated and blew up. The effect is still being felt, with years of austerity looming.

What is apparent is that as Labour looks for a new policy framework, trying recreate the past, a new 1945, is totally futile. The world of 2012 is unrecognisable from that of 1945. The world is a large, fast moving economy. Technology has made the world a small place, allowing diverse global relations to be maintained at the speed on an email. Recreating 1945 now is as impossible as recreating Victorian Britain in 1945.

New Labour’s triangulation of neo-liberalism and the post war consensus was trying pick the ‘best’ parts of two failed systems, joining them together and hoping they would work together. The result was a neo-liberal financial system, with some papering over the inequality cracks with policies such as the national minimum wage and tax credits.

A car made of the best parts of two wrecks is a ‘cut and shut’. Thus, New Labour failed – it’s ‘cut and shut’ ideology couldn’t prevent the inequality and shifting of power and wealth to a small elite that neo-liberalism always delivers.

So where does a new left go from here?

Firstly, serious reform of the financial system is needed, and on a global scale. Capital controls are required to stop global capitalists moving huge sums at the touch of a button that results in huge instability.

Secondly, the ever increasing movement of powers from the nation state to the EU, WTO and so on must be reversed. Power needs returning to the individual countries and the democratic rights of citizens enhanced.

Thirdly, consumerism must be replaced by sustainability. The world’s supply of oil and the other resources is being consumed at an unsustainable rate. Within a few decade they could run out. Global warming threatens the whole planet. We need to stop measuring growth simply in terms of the size of our latest LCD television and the model of car we own.

Fourthly, inequality must be reversed. Globally:

  • 1% of the world’s population owns 40% of global assets
  • 2% of the worlds’s population owns 51% of global assets
  • The poorest 50% own less than 1% of global assets

Nationally, inequality has also grown. Wealth needs to be shared more equally within nations and within the whole global community.

This is a difficult shopping list to deliver. It requires tenacity and standing firmly to principles in the face of vested interests. However, this is the only way. A policy of being Tory light is simply the path to electoral and moral oblivion.


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The Left Must Reform Public Services Too

The most feared word to our public services is reform.

Reform has become a by-word for cuts and privatisation. Take, for example, the NHS reforms currently going through Parliament, or the changes to DLA. Both are ideological changes designed to privatise one and simply reduce payments to the other.

However, while fighting these reforms, the left cannot rest on their laurels. Our public services do need reforms, but not the ones offered by the Coalition. They are needed to better serve the need of service users, in a way that maximises precious resources. They are needed to reaffirm to the United Kingdom that public services are the most cost effective way of delivering vital services, with the best outcomes for service users. Without changes, those forces that are pushing for privatisation will gain a stronger and stronger voice.

A major issue is the lack of intermediate community care. I have recently experienced this with a relative who is elderly suffering from early dementia and a heart condition. In the last 6 months she has been hospitalised around 10 times. Her heart condition and dementia are beyond the scope of her GP as her needs are complex. However, as there is no provision for community care, this resulted in her worsening on a number of occasions to a degree that required hospitalisation. This is invariably expensive and can result in people getting help when it is too late, so the intervention is less successful.

This is common with conditions like diabetes too. If managed in the community by more specialist community care teams, it is substantially cheaper than hospitalisation with much better patient outcomes. It would preserve hospitals for those matters that only they can handle.

We need to wean ourselves from too much concentration on hospitals. Many local hospitals provide a skeleton service, when nearby there is a larger, more equipped hospital with better specialists available. People do love their local hospital, but I believe diverting resources partially to bigger hospitals and to community services from local skeleton hospitals would result in better health care at a lower price.

Another area where co-ordination is poor is that between the NHS and social services. From September to October 2011 128,000 days delay were incurred by the NHS because of bed-blocking – when patients can’t be discharged as the services they need are not in place in the community [1] . This figure had been falling, but the impact of cuts to local social services budgets has reversed the figures. Each day in a hospital bed costs an average of £255. Therefore, the cost to the NHS of 128,000 days of delays amounts to nearly £33 million, annualised to nearly £196 million. This far exceeds the cost of providing care in the community.

In the last year or so, my Son has been going through the system for a diagnosis for a condition on the autistic spectrum. Quite frankly, no-one would believe how dreadfully poor this service is, and how badly under funded these services are. In this battle to find the required support at school, we are on our third school in year. Read any of the forums about parents battling this, and you get the same story time after time. It’s a national scandal every bit as poor as our national treatment of the elderly. The reform required here is a large increase in funding, much better training for teachers and a smoother journey between the different professionals involved.

Education services require reform too. Schools are in an excellent position to pick up problems with children who without intervention are likely to grow up into uneducated, workless adults who are at risk of getting involved with crime. Early intervention is far cheaper, as the right investment will be likely to produce a law abiding taxpayer. Without intervention the cost of benefit payments, the cost to the justice system, and most of all the personal cost, it is crazy to not intervene early. The transfer of resources from the justice system to the education system deals with the root cause and not the symptoms. The Coalition have promised to help 120,000 families at most risk, but this is not enough.

All this co-ordination and improvement is impossible with broken up and privatised services. The left should argue that these reforms are required and in the best interests of the country. Only a reformed truly public sector can deliver this.

Sources

[1] http://www.bbc.co.uk/news/health-15198431


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The Left Should Support Universal Benefits

The reignited row over the proposals to withdraw Child Benefit from higher rate tax payers in April demonstrates an important principle that the left needs to firmly grasp.

The basic issue is that if one parent is a higher rate tax payer, then the benefit is removed. This leads to a blindingly obvious ‘cliff-edge’, using a phrase coined by the PM. If only one parent works and earns £45,000 per year, the whole benefit goes. However, if both parents earn £40,000 per year, despite the family earning 77% more, they keep the benefit.

This is the simple problem with all means-tested benefits. They always have an arbitrary cut off point. Who can decide whether £35,000 or £40,000 is the right level? You can live in a small house in Middlesbrough, and a family income of £30,000 would leave you much better off after the mortgage has been paid than earning £45,000 in Kensington. Each city contains the variations within them too. Therefore, setting arbitrary cut off points is an endlessly impossible task.

Further, means tested benefits are subject to the law of diminishing returns. The more strictly that rules are applied, the more it costs to administer, reducing the size of the pot to pay out.

Also, such strict application procedures are known to put off genuine claimants. The DWP reported in 2005 that the level of fraud for DLA was a mere 0.5% or £40 million pounds. The benefit is hard to get and the procedure very complicated, and many who need it and are eligible for the benefit are simply are put off.

It must be understood  that the nature of humans creating a system for others to work to will always have the chance for fraud. I would rather have a 95% take up rate with a 3% fraud rate than have a 75% take up rate and 1% fraud.

Politically, means tested benefits are difficult too. If those who pay taxes into the system get less out, the political support for the system will decline. The poor will suffer most in these circumstances.

I support a system where the poorest pay nothing in, middle earners pay in about what they get  out, and higher earners pay more in than they get out. I understand that is redistributing income. While the highest earners still get the benefit, they have massively overpaid into the system to start with.

Tax credits are good in intention, but flawed in my view. Why? Ultimately general taxation is subsidising low wages. Low wages are part of our flawed neo-liberal economic system, and so to reduce the effect on the poor tax credits were developed. I would rather have a real living wage in place, and then we would not need to top up people’s wages from taxation.

This is an opportunity for the left to be principled and get support from a huge number of people by championing universal benefits. It must be understood that increasing the means testing of benefits will lead to the destruction of the welfare state as support for it declines, and the insurance based system present in the USA will come to us, with terrible consequences for those most in need.


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The Shape of General Elections Without Scotland

A Westminster General Election without Scotland is now a possibility. As a self-confessed election junkie, I was intrigued to see the outcome past elections without Scotland.

I decided to test out every post war election, so below I have tabulated every General Election, with and without Scottish constituencies, to see if they would have turned out differently.

Several notes:

  • I have not included the effect of Sinn Fein choosing to not take their seats
  • I have not included the effect of the Speaker being in a role above their respective parties

Sources:

 http://www.parliament.uk/documents/commons/lib/research/rp2004/rp04-061.pdf

http://news.bbc.co.uk/1/hi/uk_politics/vote_2005/default.stm

http://news.bbc.co.uk/1/shared/election2010/results/

  • The last election when no significant difference between the with and without data was 1959. This election was when the Conservatives in Scotland polled at 47.2%. They polled 40.7% in 1964 and haven’t been above 38% since
  • The 1964 election only the only post election one where the result would have changed the winning party
  • In the modern era Scotland has been a no go area for the Conservatives. In the elections since 1992 they won just three seats in a Westminster constituency in Scotland. They haven’t won more than 22 seats there in a single election since 1970.

What does this mean?

Firstly, an independent Scotland would be damaging for the Labour Party in Westminster. The key to Labour forming a Government would be winning more seats in England. In  post war England Labour won more seats than the Conservatives in  1945, 1966, October 1974, 1997, 2001 and 2005. It is not impossible by any means.

Secondly, the Conservatives have no electoral reasons for getting in the way of the movement for an independent Scotland. They need a miracle to even partially recover to any level.

A Scottish referendum looks very, very interesting.


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The Case for Localism

The fuse for the Scottish referendum bomb has been well and truly lit.

As Westminster and Holyrood battle over the wording, timing and authority of an SNP proposed referendum, perhaps it is the time for the nation to reflect on the case for localism.

Over decades political power gravitated towards Westminster, and economic power to the South East of England. This accelerated during the Thatcher years rush to neo-liberalism. As the regions became more estranged from the South East, they became centres of a strong anti-conservative movement, principally led by Labour. Wales and Scotland made Conservative MPs rarer than hen’s teeth and the large northern conurbations were run by left wing Councils.

Power drained away to Whitehall as fast as economic power flowed to the Square Mile.

Alongside the growth of globalisation, politically the EEC transformed into an ever greater influence over it’s member states. A club became a single market, and the single market became a monetary union for most countries. The Euro crisis has been taken as evidence that political integration is the next step. The G7, G20 and WTO have become increasing significant.

As a democrat who believes firmly that people have the right to self determination this never rested easily with me, nor others across the political spectrum.

The creation of the Welsh and London Assemblies, and the devolution of Scotland were very welcome to reverse the tide of centralisation. All have been successful, and should be welcomed by any democrat.

The debate about an independent Scotland is interesting, as it follows the Welsh debate about more powers for their assembly, discussion by some of the merits of an English Parliament and the strong view by many that the UK should wrestle more powers back from the EU.

The link is clear – people increasingly want more power over their own lives and politicians to be more accountable to those who vote for them. This is why any attempt by Westminster to curtail the demand for a Scottish referendum will be totally counter-productive. The Scottish genie is out of it’s bottle.

If any Westminster Conservative doesn’t support a genuine referendum, it would be total hypocrisy, as the Scots are using an argument in reality no different than that used by Eurosceptics when wanting to pull out of the EU.

Westminster Labour should accept that what the Scottish people want is up to them alone. It would be loss of a Labour power base, but that has to be accepted gracefully.

So I appeal to all democrats to accept that localism and self-determination are both welcome and good for people. A Scottish referendum will happen, and I hope it is fought over with politeness and good grace, and the expressed democratic view of the people accepted.


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A Scottish Referendum – David and Alex Win, Ed Loses

Today the Government considered transferring the power to hold a formal and binding referendum to Holyrood.

This sets up a very interesting position that has major implications. The creation of an Independent Scotland would involve the division and transfer of resources. What would happen to the oil fields and the tax revenues from them, for example?

An Independent Scotland would need a whole new framework for its defence and currency.

The issues around implementing an Independent Scotland are too complicated for this post, so I will focus the politics.

In many ways, the devolution of Scotland was one of the finest moments of the last Labour Government. The history books will clearly show that it was Labour who first gave Scotland it’s first taste of independence, when no-one will remember about an independent Bank of England or the introduction of tax credits. The real irony is that it is Labour who stands to lose most as the devolution they set free evolves in an ever greater independence.

The SNP has gone from strength to strength since devolution, forming a distinctive Scottish  flavour. The SNP took policy positions which were far closer to the traditional Scottish Left than New Labour ever was. Donald Dewer’s death in October 2000 was a huge loss, and no Scottish Labour Leader has chimed with Scotland like Donald since. Labour simply didn’t understand that a new Scottish identity was taking shape – confident, distinctive and not wanting to be run like an appendage of England

This rise of the SNP and the decline of Scottish Labour resulted in the Scottish Parliament Elections of 2011, where the SNP captured 69 seats, and Labour netted just 37.

In a December 2011 poll IPSOS Mori reported the SNP voting intention at 51%, compared to 26% for Scottish Labour, with Alex Salmond having an approval rating of +35%

This poll also showed the Scottish Conservatives at 12%, and the Scottish Liberal Democrats at 8%

Scotland has been barren for the Scottish Conservatives for decades – they are simply an irrelevant political force.

Against this backdrop, a row between David Cameron and Alex Salmond suits them both. David Cameron knows that Scotland is simply a no-go area for the Conservatives, and if Scotland does vote for independence, Labour loses a large chunk of MPs in Westminster. A Labour Government based on English and Welsh Constituencies looks very, very hard to achieve. David Cameron would see politically the loss of Scotland the same way as Ed Miliband would see the loss of Surrey, Berkshire or Cornwall.

Conversely, the SNP can use any attempt by the Westminster Government to control, delay or intervene in an independence referendum as further evidence of London thwarting the self determination of Scotland.

This is why any war of words between Downing Street and Holyrood helps everyone but Ed Miliband’s Labour.