Low wages and spiralling household debt fuel Britain’s unsustainable recovery.

The Bank of England voted against raising interest rates earlier this month in light of disappointing wage growth figures and falling inflation. With household earnings at a standstill, a raise in rates could have disastrous effects on borrowers.

Record low interest rates, spiralling household debt and stagnating wages have defined this recovery from the 2008 financial crash. While Conservative and Liberal Democrat ministers have been able to boast of a successful recovery through growing GDP figures, the government narrative is criticised for ignoring the structural faults in the UK’s economy. The most glaring of these faults, as admitted by the Bank of England governor Mark Carney, is found in our housing market – which is already starting to show the warning signs present in the decade running up to the financial crisis.

With house prices rising at their fastest pace since 2007, there is growing concern that another asset bubble could be forming in the market. As well as the possibility of another ‘burst’ bubble, the fact that house prices are outpacing wages mean that mortgages are becoming unaffordable for a growing number of families. Those that already have mortgages are now struggling to keep up on payments as real wages stagnate (or in some cases fall). The knock-on social effects such as falling living standards and food poverty mean that the government’s optimist rhetoric about the economy seems increasingly out of touch. Politically, there needs to be a recognition that there are measures of economic success other than GDP, such as wage growth, living standards and the overall ‘activity’ within the economy.

Can the government honestly say that our economy has been cured of the ills leading up to the financial crisis?

The short answer is no. Recent figures that show record-high house price rises and growth in the financial sector suggest that the same forces that caused the crisis are now being used again to create growth in our economy. Instead of using an industrial policy to bring up both employment and wages, we are continuing to rely on the free hand of the market that offers no direction or guidance for a country heading to another crisis.

Without real growth in wages, increased consumer spending can potentially be a worrying economic sign. This is because without any extra disposable income, households need to start borrowing more to purchase more. In the worst case scenario, families are turning to payday loans – such as those offered by Wonga or Quick Quid – that come with extortionate repayment demands. Just three days ago, the Financial Ombudsman Service reported that it had been contacted by over 10,000 people with complaints or worries in regards to the expansion of payday loan companies.

A radical economic policy is needed to mend the UK economy; a policy that is focussed on raising wages and creating stable jobs with clear entry routes. We need a sustainable recovery, not one driven by asset bubbles, debt and insecure part-time employment.

Centre-left candidates secure most seats on Labour’s NEC.

Four out of a possible six seats on Labour’s national executive committee have been awarded to the Centre-left Grassroots Alliance, representing important gains for socialists as the agenda for 2015 is finalised. Ken Livingstone, former Mayor and CLGA candidate, secured the most votes, followed closely behind by Ann Black (also a grassroots candidate). The victory of the left in this all-party NEC election contrasts starkly with last month’s decision to remove Dennis Skinner from the committee by MPs last month. In a period of growing support for left-wing, socialist and grassroots activists, the parliamentary Labour Party consciously made the decision to remove one of the most iconic and supported socialists from the NEC; the results from this election suggest that there is a widening opinion gap between Labour leaders and ordinary Labour members.

A new member, Kate Osamor, was elected for the first time onto the NEC. Osamor is well respected within the labour and trade union movement, working with campaigns such as ‘Save our NHS’ and ‘Hands off Public Sector Workers Pensions’. Her background is typical of many of the rising grassroots campaigners who have been politicised as a result of cutbacks and attacks to vital community/health services. In addition to the four centre-left grassroots candidates, Councillor Alice Perry was elected onto the NEC as a left-wing candidate for local government.

Overall, these results are excellent news for socialists and grassroots campaigners within the Labour Party.

The Mesmeric Power of Neoliberalism.

The death of John Smith, MP, and his replacement as Labour Leader in 1994 by Tony Blair, marked a turning point in the history of the Labour Party, and of British politics.
In many ways, the latter event – the election of Blair as John Smith’s successor – can be seen as inevitable, given the Labour Party’s fourth successive defeat at the hands of the Conservatives at the General Election of 1992. The choice was between Blair and Gordon Brown, but it was recognised, almost universally within the Party, that Blair was the more personable and charismatic of the two, and more likely to be attractive to the electorate. In any event, there were few, if any, substantial policy differences between the two men, and not many minor ones.

Just as Neil Kinnock had made it his personal crusade to expel the (allegedly) Trotskyite Militant Tendency from the Party in the 1980s, now Blair made a strenuous effort now to excise Clause 4, Part 4 from the Party’s Constitution[1], the one that had been drawn up by Sidney Webb, and which committed Labour to ‘secure for the workers by hand or by brain the full fruits of their industry, and the most equitable distribution thereof that may be possible, by the common ownership of the means of production, distribution and exchange.’ That he succeeded in this task is historical fact.

But why did he and his supporters within the Labour Party – the ‘Blairites’ – want to do this? The answer is simple: he, and they, were all, without exception, converts to Thatcherism, or – as we call it now – neoliberalism.

And what are the teachings of Thatcherism, or neoliberalism? Firstly, that capitalism is good, and that free markets are very good. The State should interfere with them/intervene in them as little as possible. The State, or the Government (we’re not too sure about the difference, if we’re neoliberals) should not be very large – preferably, it should only be large enough to maintain national defence (an essential function of the State) and law and order (another essential function. As many State-run industries, services, etc., as possible should be privatised or contracted out to the private or voluntary sectors – prisons and probation service included.

[Read more...]

Renationalisation will guarantee success for Labour in next year’s election.

Labour activists, while pleased with the steps taken toward rail renationalisation, have ultimately been left baffled by the decision of Labour’s leaders to compromise with calls for the complete nationalisation of British railways. After discussions with union leaders and representatives from the grassroots labour movement, the party’s leaders opted for a new law that would see the creation of a new state-ran rail company to compete alongside private firms; intending to increase competition and fix yet another one of Britain’s broken markets.

Ed Miliband’s proposals of market reform offers a refreshing alternative to the laissez-faire consensus, however many will argue that Labour’s policies lack the radicalism needed to end the exploitation of both consumers and employees within an increasingly unequal British economy. Even if state firms are able to compete against their private counterparts, our railways would still be ran with business sense (i.e a constant need to make profit) instead of operating as a public service (i.e for the needs of the taxpayer). Investment in our rail infrastructure will only keep coming if the market conditions are right, and it is therefore impossible to guarantee a sustainable future for a transport service that over 3 million people rely on each day.

renationalisation, rising faresLike the NHS, British Rail was a valued public service that delivered to meet the needs of the public. Since the privatisation of rail, fares have risen almost year on year above the rate of inflation. It is easy to justify why your energy bills might have gone up (the rising cost of fossil fuels), however there are few credible explanations for why fares are outpacing inflation. The failure of the privatised model to deliver cheaper services to the British people has contributed to the rising cost of living and has (for over 3 million people) made the daily commute to work significantly more expensive.

The economic drawbacks of higher fare prices should be reason enough to bring our rails back under state control, yet Labour are still too hesitant to even to talk about abolishing the privatised model. Unfortunately, Ed Miliband is failing to deliver the Thatcherite revolution in reverse that many of his supporters were hoping for; the compromise on rail is just another example of this. Whether this political timidness stems from Miliband himself, or senior Blairites such as Peter Mandelson, remains under question.

Ironically, the same fear of sending Labour back into the electoral pitt of the 1980s is stopping party from making much needed gains before the next general election in 2015. British people, from all walks of life (including Conservatives) support railway renationsaliation – 60% of people in the UK want to see a return to the public model [YouGov poll]. Naturally, the vast majority of Labour supporters would also support renationalisation. Again, nationalised railways have support from both the general public and activists within the labour movement, giving Labour leaders little electoral justification for their decision to compromise with unions over the policy.

Britain wants renationalisation, but will the next government deliver? If that government happens to be Tory, we will only ever see an acceleration of privatisation, however a Labour government can only be guaranteed if the party chooses to embrace the policies chosen by the public.

Britain needs new social housing schemes to end the scandal of private rentals.

graph.004In a country with an economy increasingly defined by its housing market, we need to start asking ourselves who are the main benefactors of rising house prices over the last three decades? At least, this is the question Mark Carney needs to answer when tackling our re-emerging housing bubble. While rising property values might put smiles on the faces of Britain’s suburban middle class, higher prices mean higher rents for Britain’s working majority. Furthermore, lower income families will find it almost impossible to get onto the housing ladder – forcing them into privately rented property (that, in most cases, will work out to be more expensive than the cost of a mortage). Without the option of social housing, super-rich landlords hold the monopoly on all almost all properties being provided for working class families in most parts of the country.

According to the Office for National Statistics, the number of people renting their homes has increased from 6.7m in 2006 to 8.3m in 2011. Interestingly, the ONS attributes this huge growth in private rentals to the fact that house prices are rising faster than wages. This factor, combined with the harshest welfare cuts in British history, has meant home ownership has become something reserved solely for the middle class.

For monetarists such as Mark Carney, the answer to Britain’s housing bubble is to raise interest rates and use their tools to ‘cool off’ the housing market. However, further data from the ONS suggests the number of people borrowing to buy houses has fallen since 2006 – if the number of people taking out mortgages to buy houses has fallen, why have house prices risen?

This evidence tells us that increasing demand for housing is not a consequence of more people jumping onto the housing ladder, but rather a result of existing property owners purchasing more houses. Such people might include foreign investors who’re looking to profit from UK asset bubbles, as well as the growing number of landlords wanting to buy up more property with the intention of expanding their rental empires. I’d argue that both ‘types of buyer’ are detrimental to the health of the UK economy, as they deny lower income families access to housing and drive up rental prices for people already burdened by an increasing cost of living.

If interest rates alone can’t fix our housing market, what does Britain need to do? Firstly, we need a government that’s willing to promote and rejuvenate the concept of ‘social
housing’ for the 21st century. There are now 100,000 less people living in social housing than there were in 2006, and it is very likely that almost all of those 100,000 people are now living in privately rented property.

From 1945 to 1970, the UK was building over 100,000 socially owned properties each year. Due to the privatisation of social housing under Thatcher, we are now building less than 2,000 council-owned homes each year. During a time in which demand is growing at alarming rates, we have chosen to rely on the private sector alone to meet the needs of an entire nation. Is this is a sensible approach? Or has it been driven by an ideological fear of state intervention?

 

What is driving working class disaffection?

If anything, UKIP’s much anticipated victory in the European elections has put the political spotlight back onto the working class – the support of which will be vital for a 2015 victory.  While disaffected Tories can easily flock to Nigel’s People Army, lower income families in the Northern Labour heartlands have a much tougher choice to make.

As a result of the trade union link, as well as over a century of labour movement history, the Labour Party spans generations across thousands of working class families. However, this historical attachment with Labour has been put under great strain during the last 10 years for quite obvious reasons stemming from New Labour – Tony Blair’s compromise with Thatcher came at a great cost in terms of the party’s working class vote.

Progress, the New Labour pressure group, now want a review into the party’s immigration policies based on the “best evidence available”. While evidenced-based policy is certainly a good thing, this continued focus on immigration is fuelling the politics of fear, distrust and misguided nationalism. Instead of fixing the real issues at hand – e.g the harsh austerity regime, rising inequality and worker exploitation – Labour are still trying to beat the Tories at their own game. This is why we need brave Labour politicians willing to fight for fairness, equality and the rights of working people, rather than technocratic centrists who want move the party permanently away from the socialist left.

Labour’s working class support fell most rapidly in the early New Labour years. Can we blame this solely on immigration? It is far more likely that Tony Blair, and his Thatcherite tendencies, had a far greater impact on lower income families than his immigration policy – which continues to be exaggerated by UKIP as uncontrolled and open door. While the white working class certainly has mixed feelings on immigration, it is undivided on issues such as austerity and privatisation. For millions of lower income families, the effects of austerity and welfare cuts are harsh, brutal and unforgiving – surely this is the fighting ground for Labour in 2015?

Grassroots Labour activists would support a clear cut anti-austerity, anti-privatisation agenda, but the fighting force of Lord Mandelson and his New Labour pressure group continue to propel the party further away from its groundings in fairness and equality. In 2015, Labour needs to turn a new page and convince working class voters that it is a party that will stand up for the poorest and most vulnerable people in Britain. Ed Miliband, for all the criticism he receives, has the conviction necessary to rebuild a labour movement that fights for the working class – rather than patronises it with the right-wing anti-immigration propaganda.

Referendum on the NHS: The European Fight to Save our Healthcare

Our National Health Service, considered one of the world’s most efficient healthcare systems by experts, is valued as somewhat of a national treasure here in the UK. Rich or poor, the NHS is free at the point use for everyone – paid for by progressive taxation on the richest and most fortunate in our country. Should we proud of our NHS? Absolutely. However, our NHS is undergoing a crisis that makes its future increasingly uncertain. And the driving force behind the current crisis? The privatisation of healthcare.
Clive Peedell, leader of the National Health Action Party and respected Co-chair of the NHS Consultants Association, tells us why he believes privatisation is driving failures in the NHS:

1. Private companies, on average, deliver a lower quality of care than NHS providers.

2. Commercialisation leads to the ‘cherry picking’ of patients to help private contractors meet government targets. A consequence of this would be that a patient needing a quick standard procedure would be prioritised over a patient with a more complex/urgent health problem.

3. Privatisation breeds internal competition that can potentially bankrupt NHS hospitals – a destructive process that had has already forced one in three foundation trusts into deficit.

4. The ‘internal market’ found within our NHS promotes complex legal arrangements that take “NHS money away from frontline care” and line the pockets of lawyers and business executives.


The last four decades have painted a rather bleak picture of our NHS, one dominated by top-down reforms, wasteful private-finance agreements and market-led commercialisation. These reforms, started by Thatcher and continued by New Labour, have transformed our hospitals into businesses that are forced to keep on top of an ever dwindling budget. Moreover, Clive Peedell tells us that this budget is put under pressure even further by the constant need of private contractors “to make a profit for their shareholders”.

Just this year, it was reported over 70% of healthcare contracts are being awarded to these private firms; companies that Clive Peedell says are more than willing to cut corners. With their shareholders in mind, private companies are found to employ fewer and less qualified staff than the NHS – raising key questions about the quality of care delivered by contractors.

Our interview shows that the private sector has not only capitalised on economic crisis but, in terms of the NHS, it is capitalising on the personal crises of the patients that use it.

Dr Peedell quite correctly identifies that the need to please shareholders and meet profit demands has seen the “cherry picking of the easiest and most profitable cases by the private sector, whilst the NHS must continue to provide a comprehensive range of services to the entire community.” However, in a bid to increase investment in our NHS, this ‘cherry-picking’ is allowed to continue to the detriment of service users.

As well as the patients, this privatisation is having a devastating impact on those employed by the NHS. As this article (http://www.nursingtimes.net/nursing-practice/clinical-zones/management/nhs-using-increasing-number-of-zero-hour-contracts/5061074.article) shows, increased use of zero-hour contracts and part-time work is becoming foundational in the NHS. Dr Peedell accurately states that “since the greatest expenditure in healthcare is on staff pay, private companies have an incentive to drive down costs by employing fewer and less qualified staff.” The use of precarious employment is an increasingly beneficial tactic for private companies, allowing them the use of a malleable and desperate workforce, at any convenience.

Potentially an even more damaging effect of employing less qualified staff however, is the eradication of ‘care’ from the profession. Countless documentaries and covert footage of abuse in private care homes – and increasingly, in NHS hospitals – represent the devastating effect that cost-cutting has had in terms of care in our health system. But if contracts for work become increasingly insecure, how can we possibly expect the best qualified people to take up employment?

The European elections represent a chance for change. The rise of UKIP shows that a lot of people recognise this. But if this is indeed the year of fringe parties in the UK, we would be better placed to send a statement of defiance against continued austerity, privatisation and employment insecurity, and begin by protecting the cornerstone of our welfare system.

“The main issue for us in the Euro elections is to highlight the threat of the EU/US TTIP trade deal to the NHS. Unless the NHS is exempted, it could be locked into irreversible privatisation and left at the mercy of large US health corporations, which can bid for contracts to deliver NHS care. We intend to make the Euro elections a referendum on the NHS.” – Dr Clive Peedell

By Samuel Mercer and James Gibson

An independent Scotland could escape Westminster austerity.

Perhaps the convincing case for Scottish independence is the prospect of Scotland never being ruled by a Tory government ever again. Years of Westminster-centric policy and pro-business Thatcherite reform have alienated the Scottish electorate from the British political system; an arrangement that seems increasingly in favour of cut-backs, austerity and tax breaks for the richest. While Conservative and New Labour governments might have secured votes in England, most people living in Scotland have no sympathy for career politicians bidding for power in a seemingly corrupt playground for the elite. In 2014, with Tory austerity plans guaranteed regardless of which party wins office, independence seems like a sure bet for the Scottish to withdraw from Cameron’s race to the bottom.

Despite the fact that there has only ever been one Conservative MP in Scotland since 1992, Scotland has found itself subject to the policies of one of the most extreme Conservative governments in history – one that has sold-off the Royal Mail, fast tracked the privatisation of the NHS and introduced record cuts and reforms to the welfare state. The Scottish people did not vote for these policies, yet social programs in Scotland face being torn back even further by the next government as Wesminster pushes its fiscally responsible but morally bankrupt agenda.

Does this mean that the left, both in Scotland and the rest of the UK, should support the Yes campaign? At a glance, there are obviously some clear contradictions that a nationalist platform might have with the usually internationalist leftist platform. However, Alex Salmond is not your typical right-wing nationalist. Rather than being a tool to promote national barriers and cultural tensions, his particular brand of Scottish nationalism is more of a campaign to give Scotland the national freedom to embrace a social democratic, rather than neoliberal, agenda. In the eyes of many nationalists in Scotland, it is the firm grasp of Westminster rule that restricts Scottish politicians from introducing and protecting new and current social programs, welfare provisions and publicly owned services.

With an increasingly confident UKIP and far-right reactionary movement here in England, it is very possible that Scottish independence would allow millions of people to escape the rampant nationalism that is booming south of the border. As the UK moves towards more privatisation, poverty and inequality, independence could very well grant Scotland the powers it needs to bring about progressive and left-wing policies – ones that would previously have been thwarted by politicians in Westminster.

It is vital that campaigners for Scottish independence remember the reasons for which they’re campaigning, or else they might fall into the trap of the meaningless, xenophobic nationalist rhetoric that has plagued England for decades. At the price of breaking the British union, an independent Scotland would have the chance build international ties and embrace immigration and freedom of movement. What might seem like destructive nationalism could actually be the key to opening up a new internationalist platform in Scotland.

Tony Benn – let’s remember what he stood for.

Political giant. Brilliant speaker. A man with conviction. These are the things the likes of David Cameron, Nick Clegg and the Daily Telegraph will remember Tony Benn for – rewarding his delivery but condemning his message. Of course Tony Benn was an excellent speaker and a politician that had managed to garner an unusual level of respect across the spectrum, but that is not what makes him one of the most important British socialists of the 20th century.

Unlike many on the right, my respect for Benn comes not from his good character or partisan etiquette, but his relentless commitment to socialism and common justice. Without pandering to sectarian divisions, Tony Benn put forward the most coherent case for socialism during one of the most violently right-wing and Thatcherite periods of British history. As even Labour politicians were contemplating borrowing some of Thatcher’s free market policies, Benn was not afraid to propose a radical alternative.

What would the Labour Party look like in 2014 if Tony Benn had won the leadership election in 1981? More importantly, what would Britain look like? Benn’s leadership case sought to challenge capitalism, bring nationalisation onto the agenda and introduce industrial democracy across the country. Tony Benn lost by less than one percent of the vote to Dennis Healey; beginning a journey that would eventually lead to the introduction of free market ideals into Labour’s manifesto. The left had a fantastic chance to completely undo the damage done by successive Thatcher governments, but today we need to ask ourselves this – will we ever get that chance gto reverse the damage done by David Cameron, George Osborne and to some extent, Tony Blair?

If we can tear down the sectarian walls that divide us, then I am positive that we’ll able to challenge the power of big business and the financial elite. If we can share even a fraction of Tony Benn’s passion and conviction, I am sure that the future is the people’s to claim.

Don’t pander to UKIP’s nationalism.

Nigel Farage proudly claims that his party is a serious ‘threat to the political establishment’ – and now even progressives are starting to buy into his propaganda. However, once you remember that Nigel is just a City stockbroker with charisma, you’ll soon find that UKIP’s nationalism is precisely what makes it the most pro-establishment party in British politics.

It’s a shame that columnists for both the Guardian and New Statesmen are starting to blame UKIP’s rise as a failure of the left. In one piece in the Guardian, Matthew Goodman paints UKIP voters as neglected working class men, potentially dissuaded from Labour by Tony Blair and the new Thatcherites. UKIP’s growth has become rather lacklustre as of late, failing to make a dent in the northern Labour strongholds, yet even progressives are starting to give this Tory-faction more credit than due.

Firstly, let’s try to remember that 60% of UKIP’s current supporters voted Conservative in 2010. This immediately disproves Farage’s claim that UKIP’s voters are mostly people alienated by Labour. Farage is trying to brand UKIP as a party for the ordinary working man – a tempting offer if you forget about Nigel Farage’s history as a public-schoolboy born to a wealthy London stockbroker. When you put his background into perspective, UKIP’s leader has credentials that could be easily confused with any Tory frontbencher.

Like the Tories, UKIP’s support comes mainly from the South-East. Like the Tories, UKIP’s voters are much older than the average age – its voters are more than twice as likely as the general population to be over 60. UKIP’s ageing electorate feels abandoned by Cameron’s liberal stance on marriage and his failure to ‘get tough’ on immigration. UKIP voters want more than just an EU-exit, they want a return to traditional values and a rejuvenation of our national strength and identity.

In my mind, UKIP is simply a nationalist force – a knee-jerk reaction to the UK’s shrinking role in the world’s political and economic systems. UKIP is a party for those who feel threatened by the increasingly liberal population – a population who oppose military spending and who support gay marriage. As even the Tories start to support liberal policies on minor social matters, conservatives (with a small ‘c’) are isolated in the political arena. UKIP is the product of that isolation.

We shouldn’t panic over UKIP, and we certainly shouldn’t start pandering to their nationalism. Unfortunately, UKIP’s bloated media presence is turning the national debate all toward immigration, away from poverty, inequality and the bludgeoning cost of living crisis – an issue millions of working class families are battling every single day. Immigrants didn’t cause inflation, and they certainly didn’t freeze real wages in both the public and private sector – we have David Cameron and aggressive free market economics to blame for that.

Let’s forget about UKIP and build a radical alternative to austerity instead.