A real vision for Labour
Extract from my contribution [scroll down to 3.09pm] to the Queen’s Speech debate, 14 November 2007
I believe the Government urgently needs some commanding themes by which its distinctive vision can be clearly understood. I want to propose three.
The first is democratisation which the PM himself adumbrated in his first statement to Parliament. But it has to stretch a great deal further than simply giving Parliament a vote before the country goes to war. Parliament needs real new powers on a much broader front – electing Select Committee members, ratifying (or not) Cabinet nominations made by the PM, approving (or not) the membership and terms of reference of Committees of Inquiry proposed by the PM, and setting up our own Parliamentary Commissions to investigate matters (like extraordinary rendition) when the Government itself refuses to do so.
But it isn’t just in Parliament where there’s a democratic deficit. A far bigger one now exists outside. Power has become so centralised over the last 30 years and the regulatory authorities so enfeebled that so far from regulating corporate power, the biggest businesses have increasingly co-opted the power of the State for themselves for their own commercial ends. The current loosening of controls over major power station, airport and incinerator developments, the failure to regulate unhealthy food advertising because of objections from the food industry despite the epidemic of obesity, the withdrawal of the SFO investigation into corruption allegations against BAE, and the relaxation of the gaming laws to permit a flood of gambling casinos are just a few recent examples.
Accountability today has all but vanished. Perhaps the most telling case is Northern Rock. It is now costing taxpayers £23bn in loans, plus a £2bn interest charge – almost equal to the entire annual defence budget – yet nobody is held responsible. The Bank of England, the Financial Services Authority and the Treasury are all blaming each other. What action is being taken, and by whom, to face up to the fundamental mistakes made that led up to this crisis, including the reckless lending practices of the chief executive of Northern Rock as well as the flawed structure of regulation put in place a decade ago? Why wasn’t Northern Rock temporarily taken into public ownership, as was done in the case of the secondary banking crisis in 1974, in order to avoid a run on the bank and to retain depositors’ confidence without this colossal haemorrhage of public funds? The answer to that of course is that the neo-liberal agenda of privatisation, de-regulation and unfettered markets is still, unaccountably, being imposed above everything else, even at phenomenal cost to the taxpayer so that public ownership, even temporarily, is ruled out.
And what action is the Government going to take over the mania for securitisation, collateralised debt obligations and all the other opaque and dodgy financial derivatives which have so dramatically and comprehensively destabilised the markets? Despite all its de-regulatory instincts, does the Government now acknowledge that stricter regulation of financial markets is now necessary if the frenzy for newfangled financial instruments, which are actually designed to be deceptive over risk and value, is to be curbed?
Equally, at the other end of society, the checks and balances against the arbitrary use of power have all but evaporated. Civil liberties have been drastically eroded, and the introduction of ID cards and 2-months detention without charge, both of which I deplore, are still being mooted. Workers who have been in their jobs less than two years can still be arbitrarily dismissed without any rights, and temporary and agency workers remain an exploited underclass – mainly at the behest of the CBI which this Government should be much stronger in resisting. Accountability, or indeed any redress, against alleged misdemeanours by the police, judges, banks, private utilities or big corporations is almost non-existent. Today powerlessness is widely felt to be endemic throughout society, and it will require an awful lot more than focus groups or citizens’ juries to put it right.
A second commanding theme which this Government should prioritise is a fair, balanced and participatory society. That means dealing with the scandal of excessive inequality which has now reached grotesque levels. A worker on a minimum wage is now paid £200 a week whilst his boss, if he works for one of the top 100 FTSE companies, is now on average according to the latest surveys paid more than £70,000 a week, 350 times more. With private equity excesses, capital and business taxation the lowest for a century, and both direct and indirect taxation now regressive, we are in danger of returning to the income-polarised class system of the Edwardian era.
Redistribution – a taboo word that has been banished from the political vocabulary for far too long – needs a comeback. It was not helpful when at the latest Pre-Budget Report the 6% richest in our society who pay inheritance tax were handed a gain worth some £1.4bn a year whilst working tax credits for the poorest children were increased by only 40p a week. That imbalance needs to change radically, and indeed it has to if the Government’s other laudable aims of reducing social disorder are to be achieved. This is because there is abundant cross-national evidence that where income differentials are smaller, there is less violence, including substantially lower homicide rates, prison populations are lower, community life is stronger and people are more likely to trust each other, health is better, life expectancy is several years longer, there is more social mobility, and educational attainment at schools is higher.
The truth is, there will be no vision to evince real political excitement until this fundamental divide is tackled. What is needed, first and foremost, is much greater transparency. This might involve a Pay Commission established to set down guidelines for what is a reasonable range of pay from top to bottom, with incentives applied consistently and fairly for everyone, not just at the top. Equally people should be asked if they think it right that in all large and medium-sized organisations, representatives of all the main grades from the boardroom to the cleaners should, at an annual meeting within the company, have to justify the pay claims they are making at the expense of potential pay increases for all other grades. And if people do think that is right and sensible, implementing it would inspire a vision of real fairness unmatched by all the rhetoric today.
The third component for a vision, to redress the slide into privatised power and money, is a renaissance of the high ideal of public service. Currently, putting some of the largest US healthcare corporations in charge of commissioning the bulk of NHS services and spreading privately sponsored academies throughout the education system, with distinctly mixed and counter-productive results according to the latest evidence, has much more to do with market dogma and business lobbying than with improving performance on the ground.
Equally in housing, where it is really scandalous that there are now 1,600,000 people on local authority waiting lists and 100,000 are homeless and the Government’s ambition to build another 40,000 homes a year is still far too low, the Government still seems to put far too much emphasis on owner occupation when the poorest quarter of the population will never have the level of wages and job security to pay a mortgage.
There are other areas too – privatising the probation service, outsourcing local government functions to private Strategic Services Development Partnerships, and swingeing cuts at the BBC which could put the whole future of public service broadcasting at risk – where calling a halt and undertaking a full-scale review, as the PM originally seemed to hint, is urgently needed. In all these areas, and others, I believe that restoring the ethos of public service – its accountability, equity, universality, fairness, professionalism and altruism – would resonate with the British people and politically be highly popular.
There is an overriding need for vision today, and I believe the three themes I have outlined would go a long way to meet that challenge.