Archive for the ‘Gordon Brown’ Category
What is the legacy of the so-called “loony left”? The conventional wisdom is clear; it was all their fault, for panicking the swing voters and preventing a sensible, Newish Labour solution emerging earlier. Well, how did that work out?
And it has always seemed disingenuous for the Labour Party establishment to blame local councillors for a period when the party’s central institutions were regularly totally out of contact with the public mood and spectacularly incompetent; it certainly serves the interests of the top officials and MPs to push responsibility onto an amorphous and vague stereotype essentially based on hostile newspapers’ take on the 1980s. Arguably, believing hostile newspapers’ take on itself has been the fundamental mistake of the Left since about 1987; the entire Decent Left phenomenon, after all, was all about demonising anyone who was right about Iraq in identical terms. Does anyone imagine that the Sun in the Kelvin McFuck era wouldn’t have savaged and libelled any non-Tory power holders?
In a comment at Dunc’s, Paul “Bickerstaffe Record” says:
I want to kick off a bottom up meets top down economic analysis of how Labour /Left leaning local authorities should now be challenging the Thatcherite orthodoxies of cost control/rate capping in a sort of ‘1980s no cuts militant’ meets 2000s grassroots-dictated economic policy. The institutional/legal framework has of course changed out of recognition since 1984, but heh, that’s a challenge rather than an insurmountable problem
He has a point. Consider the position; it’s still conceivable that Labour might luck into a hung parliament next year, cue Liberal and Nationalist (of various types) rejoicing, but any realistic planning has to include a high probability of a fairly rabid Tory government in the near future. Further, the financial position is not great – it’s nowhere near as bad as Gideon Osborne makes out, as a look at the gilt rates shows, but it’s very far from ideal.
So whoever is in charge will be looking for cuts, and it is a reliable principle of Whitehall politics that one of the best ways to get a policy implemented that you want for your own ideological aims is to attach it to a supposed saving. Only the special relationship and the police-media complex can beat this principle as all-purpose justifiers.
The possibility space includes a Labour government in coalition or under a toleration agreement with the Liberals, which is likely to still be strongly influenced by the Blairite stay-behind agents, a Conservative government heavily influenced by products of 80s Tory culture (the mirror image of the London Labour party in the same period), and some sort of grand-coalition slugthing. It is clear that the balance of risks is towards an effort to legitimise a lot of ugly hard-right baggage through an appeal to cuts.
The Tories are planning to make all spending departments justify their budgets at line item level to none other than William “Annington Homes” Hague; it’s certainly a first in British history that the Foreign Secretary will control the public spending settlement, if of course he finds the time to show up.
Therefore, even though there is a need to steer the public finances back towards balance once the recession is clearly looking over, there is a strategic imperative to push back and push back hard against the agendas the cross-party Right will try to smuggle through. After all, the nonsense industry is already cranking up.
Which brings me back to the importance of being loonies, and a bit of politics by walking around. One thing that strikes me about North London is how much stuff in the way of public services here was visibly built in the late 70s and the 1980s; there is a reason why Ken Livingstone hopped right back into the Mayor’s office. Despite all their best efforts, the Thatcherites were never quite able to shake the core welfare state; was it, in part, because down on the front line people were still pushing out its frontiers and changing its quality?
A lot of ideas (service-user activism, notably, environmentalism, a renewed concern for architecture and urbanism, and the whole identity-politics package) that were considered highly loony back then are now entirely orthodox and are likely to stay that way, especially given the main parties’ obsession with putting taxpayer funds into the “third sector”.
I fully expect that anyone who talks a good game about making black schoolboys click their heels in front of teacher – you know the stuff they like – will be able to secure reliable venture capital funding in the million class from a Cameron government, just as they have been able to from Boris Johnson’s City Hall, with remarkably little monitoring. William Hague will be snarky. Let him. Nobody cares what the Foreign Secretary has to say.
This creates both opportunities for action – perhaps someone should prepare a Creative Commons or GPL toolkit for citizen-initiated delivery quangos and thinktanks – and also targets for ruthless mockery, when the Tories’ preferred third sector entities fuck up. We’ve already had some very fine examples of this courtesy of Boris Johnson. Clearly, the only rational response to the times is to go mad.
Cameron today outlined his plans for economic responsibility to replace “irresponsible capitalism and irresponsible government” under Labour. He began his attack by accusing the prime minister of basing his financial decisions on “false assumptions” that he said had left the economy in ruins.
Among them were the ideas that a successful economy could be built on a “narrow base of housing, public spending and financial services” and “that you could abolish boom and bust, and that the good times would last forever”.
Eh? A Tory complaining that the economy is too dependent on housing and financial services? Yes.
“We’ve got to broaden our economic base to include more science, more hi-tech services, more green technologies, more engineering and more high-value manufacturing, drawing upon a much wider range of industries, markets, people, towns and cities.”
Did he just say that? Did Dave from PR just announce a medium-term industrial strategy? This is, by any measure, a political moment of the first order; the Tories, the people who decided UK plc should be a huge investment bank based in London, ran a high interest rate and strong pound policy that killed off most of engineering and high-value manufacturing, and whose pet thinktank apparently believes the North should be evacuated…they said that?
Perhaps they’ve realised that yes, Virginia, the UK is no longer an oil exporter because they pissed it all up the wall in the 80s and 90s, and that turn-London-into-a-huge-investment-bank thing ain’t looking so clever any more. Perhaps they’ve found one of Michael Heseltine’s old memos from his shakeout’n’invest period in the files. OK, then, where do I sign?
But what is this?
He dismissed critics who believed that “permanent state intervention” was the only way to avoid a repeat of the problems. Those who believed the change the country needed was a “turn to the left” were wrong, he said, as he promised to inject greater responsibility into the economy through a centre-right platform of measures
Responsible us back the DNA-sequencer activities of Amersham International plc, willya? Could you perhaps responsible up a wave power industry while you’re there? Anyway, before we slide into bitterness…there’s also this.
He promised a new debt responsibility mechanism, with the Bank of England required to write regularly to the Financial Services Authority about sustainability of the level of debt in the economy. “If the level of debt is growing unsustainably, the bank will instruct the FSA to ensure banks either slow their lending or put aside more capital.”
So no permanent state intervention….except for the bit where you take powers to intervene in the management of the entire banking sector, including the bits that are still independent of the state. Also, direct government controls on lending? Isn’t that the Sovietisation of Britain or something? What next, exchange control stamps in your passport?
But that’s apparently it. Cameron is planning to regenerate the entire industrial base (and “high tech services”, which I think means BT Global Services ‘cos we don’t have any other firms like that since Leo Computers in the 1960s), and he intends to do this simply by running a smaller budget deficit, and imposing a bank lending corset. He’s not even promising any tax cut ponies.
There is one actual measure in there, though. Apparently he wants to change the insolvency laws to protect “sound but struggling businesses” (and again, there’s a sick laugh from the 80s for you…). But how is this going to interrelate with the Cameron Corset proposal? Camorset for short, which sounds nicely like the sort of southwest-central shire where the buggers come from. If it’s harder to cut off credit to those “sound but struggling” businesses, but the banks have to reduce their loan books ‘cos Dave says so, where do they cut? Doesn’t that imply they’ll have to bear down on everyone else even more? Why should a sound business that’s not struggling quite enough to be protected take the punishment? (Why don’t any Tories seem to understand marginal economics at all?)
I think I’ve said before that I find public sector accounts incredibly weird. Here’s a great example; it’s a very good FT story on the bank nationalisation plan and how it affects the national finances. Bizarrely, the £25-50bn of government bond issuance required to raise the money probably won’t count towards the public sector net cash requirement (what used to be the PSBR in John Major’s days of sound finance…not!); it’s a “financial transaction” and these are excluded.
Well, that makes a weird sort of sense; the liability on one side is matched by an asset (the stake in the banks) on the other, the net change in the government’s cash position is zero (at first, but even later, any dividend paid on the preferred stock would at least balance the interest payments). The next bit, however, gets really strange; although it’s not counted as new public borrowing, it is counted in the figure for the national debt. It’s debt, right? Yes, but if the government was anything else but the government, the increased debt would be matched on its balance sheet by the stash of bank shares. It being the government, however, it’s not.
Now, it gets really counterintuitive when it comes to the really big money – the £250bn guarantee for wholesale bank lending. Apparently, if the Government (as suggested) charges the banks a significant fee for the guarantee, this will force it to take the full wad on its books as a liability of the public sector. (Even though most of any transactions among the eight participating banks will add up to zero; if Lloyds lends Barclays £1bn and Barclays lends HBOS £1bn, and Barclays then goes bust, the state guarantee would only come into it if Lloyds and HBOS couldn’t agree to settle the transaction between themselves.) If the Government offers the guarantee free of charge, however, the rules on public sector contingent liabilities mean they can keep it off the books. Yes, you heard that correctly; it’s in some sense financially better for the state not to receive quite a lot of money.
Anyway, in these weird times, let me propose a weird solution. The Government has promised to put manners on the banks in return for the £50bn, pressing for executive pay restraint and measures to help small businesses. Some people are concerned that they won’t be able to make this stick because preference shares don’t come with a vote. I disagree; whatever the formal terms, anyone who fronts up as much as half of RBS’s capital base is going to have several billion votes, and indeed it looks like the CEO is going to be sacked as a condition of the deal. It’s a question of political will.
EDINBURGH, October 12th: Crowds cheered as the giant statue of Sir Fred Goodwin was torn from its perch by a Royal Engineers’ armoured tractor. As the news spread this morning, a mob gathered around the base of the monument, unavailingly beating it with sledgehammers and dragging at it with ropes. Eventually, Sergeant Mick Kelly’s Chieftain AVRE arrived. After a few minutes, its engine roaring, the huge vehicle succeeded where they had failed and the dictator’s figure crashed into the dust. In a sinister orgasm of rage and contempt, the mob beat it with their shoes, spitting and jeering as the ruin was towed through the streets….
Like I said, it’s a matter of political will.
However, it will be much easier to hold the Government’s feet to the fire about this if they do have formal rights to intervene, as well as safer, as unwinding the stakes in a hurry in order to punish a recalcitrant bank wouldn’t be easy. One option is to buy ordinary shares as well as the new preference ones, and have the Treasury Shareholder Executive manage them; the numbers involved would put the Government in a position to insist on a seat on the board and extensive influence over management. However, this would be riskier, as ordinary shares don’t have the charge over cashflow the preferred kind do, and it would also spook the market even more, as issuing the new shares would dilute the existing shareholders.
It would also be affected by weird public accounting, as this would make the banks into public-sector entities and therefore bring them on the Treasury’s books; in which case, only their liquid assets would be counted against their debts and the national debt would therefore reach unheard-of proportions.
But there’s another option. For many years after privatisation, the Government held so-called “golden shares” in a range of ex-nationalised industries considered to be strategically important. For example, that in Rolls-Royce gave the Government a veto over changes of ownership and the right to reserve the top management positions to British citizens. Some of them were abandoned in the early 2000s at the request of the European Commission; notably those in BAA plc. Now, these shares were legally structured as “special preference shares”, and the Office for National Statistics didn’t consider them to be sufficient state control to put BAE, RR, National Grid plc, BAA and the rest on the books – but they certainly granted the Government special rights over these companies. In fact, they still do at BAE Systems and Rolls.
Update: Oh well, here comes the shock and awe. Sod golden shares, preference shares, whatever – it looks like we’re in for the whole hog, 75% of RBS’s market cap, voting stock, Government directors, sack the board, don’t open the London Stock Exchange…fuck, did they just say that? Looks like the opening of the books must have been quite a dramatic event.
I am beginning to think I was a little harsh on Simon Heffer yesterday. After all, it’s got to be tough; not only has the entire structure of policies, assumptions, and style he’s devoted his entire working life to just been demonstrated to be utter drivel, but who else is even trying?
Seriously. I’m sure there used to be a Conservative Party somewhere around here. You know – blue rinses, die hards, wets, dries, One Nation, Policy Exchange, Eurosceptics, backwoodsmen, Notting Hill set, John Redwood. That lot. Hey, only last week, they were still trying to save the Bradford & Bingley with magic central bank ponies. But now? Not a peep.
In fact, you’ll find far better commentary on the crisis from the Daily Mash than you will from anyone even vaguely on the Right. The field has been left entirely to the professional economists, and the broadest possible Left.
But it’s not just that; it’s the whole of world conservatism. The US Department of the Treasury, the Federal Reserve, the Bank and the Fund, the Republican Party – none have the least credibility.Who now remembers when the IMF was feared by all right-thinking people? If you want to know about the world economy, you ask some random blogger called “Tanta”; if you want practical advice you ask Tom Scholar of HM Treasury and, well, Gordon Brown, who is suddenly basking in international respect. If you want cash you ask the Bank of Japan. And we’re asking the Afghan government for assurances over the fate of POWs we might hand over to them….assurances that the Afghans won’t let the Americans have them, because we don’t trust them not to commit a war crime.
Again, the Daily Mash is more cogent than the global conservative movement:
Emma Bradford, an office manager from Luton, said: “Whenever things were going well there was always this voice in the back of my mind saying, ‘make the most of it because sooner or later it’s all going to be completely fucked by some bastard Americans’.
“I just assumed I’d be horribly maimed as a knock-on from one of their insane, catastrophic wars, but instead they have, in the most beautifully co-ordinated fashion, demolished the system that provides me with a job, a home and the vague hope that life may not an elaborate waste of time. I’d applaud them, if only I wasn’t so weak from all the nauseating terror.”
I mean, what do you do as a British Tory if you can’t credibly speak for the City, the Landed Interest, or the Americans? Perhaps you do what Greasy Phil Hammond just did:
“This accelerating decline in house prices will inevitably lead to wider negative equity and more repossessions .”
In other news, the shadow chief secretary to the Treasury and one-man real estate lobby said that heat flows from a hotter to a cooler body, 2+2=4, and that he is a pathetic excuse for a politician who doesn’t deserve to lick the boots of the civil servants at his putative department who are putting this lot back together.
I can’t be the only one who’s noticed that Brown’s “national economic council” is built exactly on the traditional civil service handbook for a war cabinet, nor that it looks a lot less like a gimmick now than the week it was born. Nor that spotting the possible use of ATCSA2001 to recover Landsbanki UK assets is just the kind of thing we pay them for. Bank bailouts: expensive. Depression: worse. The Home Civil Service: priceless.
OK, someone’s left an armed UAV in the changing rooms. Is it you, Harrowell? No? Speak up? America? Turkey? Italy? Well, it would be interesting to ask somebody how many Predators the RAF possesses at the moment, compared to a few weeks ago.
Relatedly, this is wrong:
Pakistan, Afghanistan, nuclear proliferation and trans-national Islamic terrorism are now fully enmeshed. They are one and the same, and a failed state, Pakistan, is the linchpin to them all.
No. Not you either, John. Pakistan isn’t a failed state in any reasonable sense of the term; it’s misgoverned, frequently with the assistance of the Western alliance in various forms, it has problems. but its systems function, its economy has been doing well, it is well able to defend its borders and it is making this very clear – 7.62mm clear.
PPB says that it was getting there just before Musharraf’s coup and it’s only offensive to say so if you’re Nawaz Sharif. But that’s not the point; the problem is that the US is horribly likely to behave in Pakistan as in Somalia if the failed-state meme takes hold. And nothing makes states fail like the perception of state failure – it’s very like a bank in that sense. Nobody can afford this in a country with (as everyone, hackneyedly, clichedly says) nuclear weapons, with the Indian and Chinese dimensions, with the coast on the tanker routes, and the MSR to Afghanistan.
Of course, it’s a crappy cliche to assume that the Pakistani military elite doesn’t keep the nukes very close. But cliche seems to drive policy here. Pakistan doesn’t need gap shrinkers, assault ships, setting up the precinct or any other Thomas Barnett bollocks. What it needs is respect, and specifically respect for civilian government.
But don’t imagine that there won’t be people who want to burn shit down. For example; I don’t believe this, even though Sean Taylor’s Not a Good Day to Die was good. Note the total lack of direct evidence. Gordon Brown was apparently in Washington over the last couple of days, so he had the opportunity to take my advice; but then, as a comment says, you want to talk to America, but what phone number do you call?
OK, so I’ve been off line quite a bit due to a weird perversion called “moving house”. This means that my constituency MP is no longer Philip Hammond, which almost makes it all worthwhile by itself. Hammond was one of the most annoying features of living in wonderful Runnymede & Weybridge; an immensely self-satisfied and superbly mediocre greaseball who was invariably unhelpful on every occasion I had any dealings with him.
For some strange reason, Hammond has risen to a mysterious prominence in politics as Shadow Chief Secretary of the Treasury. Now this is no small thing; the Chief Sec is probably the most-underestimated job in government, being the gatekeeper for the Treasury’s dealings with all other government departments. So it is a sad comment on the shallow Conservative talent pool that it is filled by a waxwork like Hammond; in more normal times, he would no doubt botch the job and be dropped, but for various reasons entirely beyond his or anyone else’s control, the economic and more importantly financial climate has left him with an open goal. If you’ve seen Kes, it’s his Brian Glover/Bobby Charlton moment.
As far as I can make out, the only reason for Hammond’s success apart from the desperate shortage of alternatives is that he can be relied upon to repeat predetermined talking points without stumbling over often. He is, as the essay at the end of Nineteen Eighty-Four would say, literally a doubleplusgood duckspeaker – one who quacks out the party line without the least deviation. This may not be much of an achievement; you could, after all, replace him with a simple Python script without much trouble. But he’s done well with it.
The problem is the content of the duckspeak; after all, duckspeakers will always be with us. Hammond insists on reciting that “Gordon Brown failed to repair the roof while the sun was shining”; this appears to mean that the budget deficit ought to be lower, or something. Leaving aside that everyone, always, believes that if only they were in charge the budget deficit would be lower; it just isn’t true. Public debt as a percentage of GDP is significantly (about six percentage points) lower than it was in 1997. If the roofing is not complete, then Brown at least put on quite a few new slates.
National Debt as % of GDP, 1997-2008
But the problem is worse; what on earth is the Conservative proposed macroeconomic framework? What would they consider as sufficient roofing? Indeed, what on earth was it all these years? I can’t remember that the Tories ever promised to run a primary surplus during the period 2002-2008, and the only policy of theirs I can think of that was explicitly intended to reduce public debt was William Hague’s half-bright brainwave of using radio spectrum sales to fund the universiti….hold on, that wouldn’t have reduced the public debt, would it? Hague came up with it because he didn’t agree with the Government using the UMTS 2.1GHZ band auction to reduce the public debt.
Not that telcos in 2001-2 would, or even could, have bid that kind of money for spectrum; they didn’t have it. They never will bid that kind of money again, either, as anyone in the trade could tell you. Which is a pity, given that I think Hague’s brainwave is still part of the Tory platform. The Tories do not appear to have any idea what fiscal rules they will use, if any.
Complaining about the Tory legacy (if the roof needed fixing, perhaps it had something to do with the PSBR running between £28-46bn for each of the last three years up to 1997? Just a thought) is widely held to be a pathetic tactic; but you’d be wrong. It was only this spring that a government warehouse – the so-called Work in Progress Store – that had held the backlog of unresolved immigration files since 1994 shut down without fanfare, as Michael Howard’s legacy was finally processed and transferred to the archives.
But they are very good at repeating utter bollocks over and over again.
Jamie Zawinski links to a campaign to have a Californian sewage works renamed after George W. Bush. I disagree, strongly. Who on earth would associate something as civic, egalitarian, and useful as sewage treatment with the Commander Guy? Not just that, but it’s a publicly-owned sewage plant, part of the San Francisco Public Utilities Commission. Hunter S. Thompson thought Richard Nixon should have been flushed into the Pacific through the sewers; he didn’t confuse the sewer with the shit. As he so wisely said, politics is the art of controlling your environment.
Yer man knows better: like this.
Whilst we’re on the subject of public works, by the way, may I point out that hitting up Centrica with a windfall excess-profits tax would be completely stupid if the intention is to fund a pre-election sweetie special winter fuel payment. The causes of high natural gas prices are well known – we used the North Sea gas to screw the miners and get Lord Wakeham a seat on the Enron board, and now we’re stuck with a lot of gas-fired power stations and noninsulated Victorian buildings, while the import infrastructure consists of three pipes, two of which pass through about six middlemen before getting to the big tap next to Vladimir Putin.
Even if Chris Dillow’s perfect power ponies plan had a chance of being put in effect, it still wouldn’t actually solve the problem. Just giving people more money to spend on expensive fuel doesn’t actually get us any more fuel or any more heating; in fact, in so far as the recipients spent the money on fuel, it would go right back to the gas merchants.
What would help would be to use the money to, ah, fix the problem. I therefore refer everyone to my proposal to upgrade every home in the kingdom as close to passivhaus standard as possible, starting with the poorest (say, current fuel payment recipients as a kickoff). Of course, there are a lot of buildings around that you can’t do much to (see above), so instead we could fit air-source heat pumps. Strangely enough, there is actually a small government project that already does this in the Yorkshire ex-coalfield, which has a lot of houses built on the assumption coal would always be very cheap, with poor people in them. And here’s a bloke in Sheffield who makes them.
Well, actually he doesn’t; in fact he imports cheap ones from China. But this does mean that he can supply one big enough to provide your space heating as well as hot water for £1,895 + VAT; which is less than the government’s existing Low Carbon Buildings Programme grant. So yes, we are already giving away enough money per LCBP grant to buy one outright. The only problem is that LCBP grants are directed at people who own their homes and care about selling them in the future. This excludes, of course, precisely those people who can’t afford their gas bill and usually live in houses with the insulating qualities of a mankini. Further, the price is now in the rough area where the existing value of winter fuel payments could be capitalised over a reasonable period of time – so it could be close to budget-neutral.
You want a workable, egalitarian, green policy for this autumn, Gord? One that actually combines wonkosity with bashing? Or you, Nick? It’s become almost routine to read about the search for ways to combine bottom-up development and environmental protection in Africa, say – but perhaps we should apply some of the same thinking here. It is, after all, very much the case that society offers solutions to the problems of the rich but only relief from the problems of the poor.
I’ve been tagged with a Gordon Brown-related meme by Tom “The Green Ribbon” Griffin.
2 things Gordon Brown should be proud of
A sensible monetary policy, based on rules rather than “judgment”.
A sensible fiscal policy, based on rules rather than “judgment”.
2 things he should apologise for
Supporting the war in Iraq, while pretending that drawing down the whole contingency fund to pay for it every year means “it doesn’t cost anything new”.
Mulcting the poor to fund tax cuts for the less poor in the last Budget.
2 things that he should do immediately when he becomes PM
Withdraw from Iraq, yesterday.
Start an urgent scenario planning exercise on what to do if/when Pakistan falls apart.
2 things he should do while he is PM.
Kill ID cards and the associated database mania – send the Treasury devils to dig through it.
Restore the fuel-duty escalator, and redistribute the cash.
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