#lab23

Labour’s macroeconomics

I was in Liverpool for Labour’s Conference this year, with a balcony credential i.e. I could enter the conference, fringe rooms and exhibition hall. As I was not a delegate, I spent a bit more time in the fringe and the bars, and much less time in the hall. Last year I was able to report on nearly every debate, I cannot do that this year, but I observed both Reeves (video | text) and Starmer’s (video | text) speeches and the platform’s control-freakery, some of which I reported earlier.

Interesting highlights include Reeves’ promise that she will chase the beneficiaries of the covid procurements (and other corruptions in the government procurement chain). I am concerned about the promise to reduce consultancy fees, because while some consultancy projects are wasteful and of questionable value, many are caused by the fact that the Civil Service and local government won’t pay the going rate for scarce skills.

Reeves continues to play her, “I am an economist card”, but there are those of us who feel that it means she is tied to one and only one theory of macro-economic management. This fear was reinforced by a video of Mark Carney, the previous Bank of England Governor, who wished her well.

Both of these speeches if anything was slightly to the left of speeches made previously, or at least since Reeves’ secureonomics speech in NYC; I thought I had commented on the latter speech but it seems not. I did make some notes, in which I quote, Prof. Simon Wren Lewis, as saying,

“What is arbitrary is having a target for debt to be falling regardless of whether that debt arises from current spending or investment”

which I believe sums up his argument well. I also quote Richard Murphy on independence of the Bank of England, and James Meadway who argues that taxes must be raised and that conceding to debt fetishism traps Labour’s policy freedoms. He argues for clarity on tax, clarity on the financial rules and detail on the investment plan. It’s possible, that conceding the need to reduce debt will enable attacks on the policy not defend it. I have some sympathy with Murphy, and have come to agree with Meadway.

Starmer announced the increase in housing new starts target by proposing changes to the planning permission process to make Nimbyism harder.

This line from the speech is excellent, “ [his] party would, in 2024, have to emulate its achievements in 1997 – “to rebuild a crumbling public realm” – 1964 – modernise an economy “left behind by the pace of technology” – and in 1945 – “to build a new Britain out of the trauma of collective sacrifice”.

He argues that the next Labour Government will need to do all three.

But I wonder if waste and brown field sites are enough to do what’s needed. Certainly, the corruption in the government supply chain if cleaned up should create some space in terms of fiscal management, but whether it’s enough is highly questionable. Admittedly they are hoping to replace the most profligate government in history and so eliminating waste may yield some benefits, but whether it can be recovered without a reduction in service levels will be more difficult to predict.

The economist, in an article entitled, “Britain’s Labour Party embraces supply-side social democracy” is happy, but with the acceptance of QMT they would be. In many ways, I sort of think that the headline sums up the macroeconomics of the current Labour Party; it’s a new supply side regime which is fine, but if they ignore demand, including export demand, then a mixed economy’s growth driven by the private sector will choke. There’s no point in pump priming investment if the new plant’s output can’t be sold (or otherwise used).

One tool to increase demand, would be to tax the rich and give to the poor, whether, through increasing the minimum wage and public sector wages or through increasing benefits since the poor spend more of any incremental income than the rich.

Rachel Wearmouth in her review, highlights Reeves increased credibility within Starmer’s team, notes the increased weight and support of business opinion; the article is subtitled with the prediction that the succession will be between Reeves and Streeting; the latter seems to have chosen the hard route, Labour always elects the most left wing person they think will win.

Ultimately while they have the goal to deliver high growth, and growth is the best, maybe the only way to rectify the public finances, how this can be done without reversing Brexit and inflating aggregate demand is a question to be answered. They choose to be restricted to supply side measures only and even funding these supply side measures will remain difficult while they maintain the harshest aspects of their fiscal responsibility rules and their promises on tax i.e. no increases in VAT, income tax and no new wealth taxes.

The Growth target is a worthy goal but lacks the means of achieving them. This could easily be corrected even if you think that fiscal rules are necessary.

Between the two speeches, conference debated and carried a motion entitled critical infrastructure which called on the next Labour Government to renationalise energy and the railways. Of course, the shadow cabinet immediately repudiated this policy. It’s fortunate for them they were able to keep the anti-privatisation in the NHS motion off the order paper. It’s highly likely that if the SHA motion had been debated, like the nationalisations, it would have been carried. I say fortunate, they had to break the rules in order to keep it off the order paper.

The leadership will be very happy with the conference, at least they did not say go back to your constituencies and prepare for government.

For various reasons this took several days to write and post, I have backdated it to the day of Rachel Wearmouth’s article i.e. 13^th October. Six days later Labour won two crushing by-election victories in middle England, bookending the Conference which had opened shortly after Labour won the Rutherglen and Hamilton West by-election in Scotland. ; the leadership will argue with good evidence they are doing something right. …

Treat members fairly and involve them in policy making

I am standing for the election to the National Constitutional Committee (NCC) because I believe in the principles of natural justice.

All Party members deserve to be treated fairly and where a member is subjected to a complaint, or makes a complaint, the investigatory process that follows needs to be entirely objective and impartial. I also believe that our rules should be interpreted in the context of UK law and human rights law. Wrongdoing should be sanctioned but forceful argument must be permitted.

From my experience as a CLP Secretary and more importantly as a trade union accompanying representative, I am aware that partisan, authoritarian disciplinary processes, run by under-trained and often badly motivated people undermine unity and effectiveness in an organisation; they also wreck lives. Unity and a reputation for justice is vital for our Party in our many electoral battles ahead and in delivering an effective government.

Many members currently have concerns that disciplinary processes lack impartiality. These concerns are echoed in the Forde report and this is a problem the Party has to address.

Similarly in policy making, party members need to be listened to. The Conference this week sadly pushed the views of members to the margins. Insufficient time has been allowed for delegates to contribute to the very brief discussions of important subjects and other important subjects have been excluded from the agenda.

I am standing for the election to the National Constitutional Committee (NCC) because I believe in the principles of natural justice.

From my experience as a CLP Secretary and more importantly as a trade union accompanying representative, I am aware that partisan, authoritarian disciplinary processes, run by undertrained and often badly motivated people undermine unity and effectiveness in an organisation; they also wreck lives. Unity and a reputation for justice is vital for our Party in our many electoral battles ahead and in delivering an effective government.

Many members currently have concerns that disciplinary processes lack impartiality. These concerns are echoed in the Forde report and this is a problem the Party has to address.

The country needs a Labour government to solve its problems, of the cost of living crisis, infrastructure decay, wealth inequality and corruption. Labour’s leadership needs to unite the party and recognise that its membership have good ideas. The clamour for clarity on the policy offer is growing, but the leadership is effectively closing down and ignoring the views of the membership and undermining conference sovereignty.

I am standing on the left slate and if you are a CLP delegate, then I’d ask for your vote and that you vote for my running mates, Annabelle Harle, Marion Roberts, Jabran Hussain, and Harry Stratton.

This a draft of the article published in today’s CLPD Yellow Pages. The featured image belongs to me, and is quite old. …

Labour’s defence promises

Labour to win ensured the motion topic “Defence” was debated at labour conference 23. There were only two CLP’s and only one motion within the topic and as one comrade pointed out the words are at least similar to words that have been put into the Ukraine topic, although I am of the view that these things are better debated separately. The motion states that Labour will continue to support NATO, the need for a nuclear deterrent and that its support the armed forces will be absolute, whatever that means. It also argues that’s a labour government will continue to meet the UK’s NATO commitments, 2.0% of GDP. It also states that a Labour Government will invest in the UK’s defence manufacturing capability, continue to support Ukraine, engage in a ‘new’ EU-UK security pact and develop the AUKUS partnership. It also commits to engaging in multilateral disarmament talks. I suggest its selection as a unique topic was designed to exclude other issues from debate. In this article, I review the debate and then make some criticisms of the way in which the issues are being handled.

The debate was preceded with an address from Bodan Ferens , the founder of Ukraine’s Social Democratic platform and then opened by speeches from David Lammy (Shadow Foreign Minister) and then John Healey (Defence).

David Lammy spoke, starting by deploring the Hamas attack, standing for Israel’s right to defend itself, although putting this in the context of rescuing hostages and degrading the military capability, he also committed to support a two state solution. Was he channelling Penny Mordaunt with his calls to ‘stand up’ for the military and to ‘wake up’ on Europe? While his comments on Europe and the EU were aimed at the Tories they could equally be aimed at Starmer and Reeves, but he loyally repeated the mantra, of no return to the EU, or its single market but we will improve our relations with the EU. He ticked off a recognition to a new military pact with the EU; I am unsure that the EU will be willing to co-operate closely on security issues with non-members not bound to the EU’s charter of fundamental rights and there’s also the French and their suspicion of the US & NATO.

Healey, the shadow defence secretary, spoke next, he decried the Tory reticence to spend the agreed budget leading to delays in rearming the services after the donations to Ukraine, and the delay in the new equipment programmes for all three services. He noted that the last Labour government had been spending 2.5% GDP on defence, thus exceeding the NATO commitments, the army was over 100,000 people strong and that since 2010, the Tories had retired 200 warplanes and half^[1] the navy’s ships. He finished his speech by stating the need to have a capability well East of Suez and that a Labour Government would invest in the defence manufacturing economy.

The debate from the floor was in my opinion quite poor, with the exception of Lucy Rigby, PPC for Northants North whose pleas for an international war crimes tribunal to investigate Russia’s war crimes in Ukraine and for Labour to support the rule of law had a necessary prescience.

The movers of the defence motion started with the same first line and basically read the motion out. One of the other speakers said that we were committed to multi-lateral nuclear disarmament, but we need to build more submarines. One speaker claimed that there were UK troops in Ukraine^[2]. One speaker came up with the old canard of “fighting for peace”. Of the six floor speakers, three were PPCs although several of the speeches were very parochial as were the movers of the defence motion. The speech was closed by a speaker from Ealing, with an important last line, we need to work for “peace, prosperity and shared progress”.

With the exception of the conference chair, Luke Akehurst and the two front bench speakers, no-one mentioned the middle east nor the terrorist attack by Hamas on Israeli citizens on 7^th October, two days previously.

The debate was closed by Lisa Nandy, shadow spokesperson for international development. Key quotes from her speech include the idea that policy should come from, “right thing to do”, and that “human rights are non-negotiable”.

What doesn’t the motion say?

Gross targets are useless, the fact is the Army is too small, and arguably the Navy now planned to be too large. The last Tory defence white paper represented a restatement of the UK’s military capability to encompass a ‘global’ reach with a secretive, undebated and underwhelming rejection of the policy of withdrawal from “East of Suez”. The white paper and motion both fail to articulate why we need a military and who the enemy is or likely to be. Some might argue that the Tory’s white paper suggest the enemy is everyone and Russia’s threat is obvious but our armed forces are clearly not optimised for fighting a war in Europe. This need was not so obvious when the White Paper was conceived.

The motion reads as if it’s designed to troll the left, who often have a naive attitude, accepting a choice between guns and butter. It is also designed to reassure the British people that Labour takes defence seriously. Unfortunately, examination of the motion does not allow informed critics to take this latter claim seriously.

We should not be thanking the Tories for their custody of the UK defence capability over the last 15 years. While in a better state then Cameron’s white paper left it, Russia’s invasion of Ukraine has proven that the UK needs an army capable of supporting its European allies, rather than acting as America’s mercenaries in the rest of the world, noting that the Americans assessment of the British Army’s capability has been seriously damaged by its record in Afghanistan. Mind you I am not averse to a bit of military hardware porn, but we should be suspicious of the claims that we have the best in the world. The US spend so much more than we do and the UK army’s record in Afghanistan was, for the fourth time, poor.

The Defence white paper confirmed the principal axiom of defence policy which has been supported by Labour and Tory governments, that the UK will defend itself with allies. Actually, this policy is centuries old. Another long-term policy, at least since 1998 is that the UK will maintain the capability to mount 1½ expeditionary forces. (I say 1½ because it has been conceived that one of these forces will be a rapid response force not designed to engage with tier one military opponents.) Such a force might be effective, or might have been effective, in defending or retaking the Falkland Islands but it’s the evidence of its capability in more sustained engagements such as Afghanistan that proves that the expeditionary capability of the British Army is not what is required. An effective defence policy needs to talk about the Army, which is the smallest it’s been since 1790. We also need to talk about its equipment and the security and capacity of its supply chains.

When considering defence manufacturing, we need to recognise that the design and manufacture of some weapons systems is now beyond the UK techno-economy. Not only that, but the UK’s needs are also insufficient to provide a sufficient production run on such systems. It is for these reasons the UK has entered multi-national consortia to build such systems as the Typhoon, a war plane, and AJAX, an armoured personnel carrier. It’s also why the UK buys so much from the US, including HIMARS and helicopters and this co-operation even goes to the extent of jointly funding the F35 Lightening.

The other problem the UK has in a potential over-reliance on foreign owned supply chains is that of obtaining ammunition and the flexibility of ownership transfer. We can see from the slow speed at which the US agreed to substitute US warplanes for Poland’s MiGs, and Germany’s agreements to resuse its exported Leopard IIs that it is not always desirable to be reliant on the permission of other countries although as I argue earlier, it is possibly the only way these systems can be afforded.

Again, a defence policy needs to be based on an effective threat analysis, not on the needs of worker’s jobs nor of business profit. A private weapons supply industry doubles the criminality of war

How reliable is NATO?

NATO is the only organisation available capable of co-ordinating western Europe’s response to the invasion of Ukraine, but describing it as foundational is nonsense and ignores its inglorious 30 year “out of theatre” operations. It also ignores the threat of a Trump presidency and the current US priority in the Pacific. Further evidence of its unreliability and the US dominance is illustrated by what was in effect a unilateral withdrawal by the US from Afghanistan.

Lammy ticked off a recognition to a new military pact with the EU. How will this work with the EU even with a multi-speed Europe. The leading EU military states have been seeking to increase their co-operation, can NATO transition to a European defence capability? And if so, why would the EU want to work on an other relationship outside the Strategic Compass? The French have had a historic reticence to work with NATO and vetoed the Iraq 2^nd resolution in the UN. The Brexiteers, including those in the Labour Party have always under-estimated the EU’s requirement that police and intelligence gathering activity is subject to the rule of law, and that they prefer to co-operate with full members of the Justice pillar, committed to the Charter of Fundamental Rights because “Human Rights are non-negotiable”.

I am of the view that the Labour front bench will try and trade military co-operation for single market cakeism with the EU. We’ll see what happens but I would prefer that we approached both issues from a matter of principle and not a fearful electoral strategy.

The lines on AUKUS serve two roles, the first is to trolling the left, and also illustrates the problems with production line run lengths. The Australians want to buy nuclear powered (non-ballistic) subs. If the EU has worked more quickly towards common supply chains there might have been an anglo-french offering. I am of the view that if you need a combat oceanic Navy, you need hunter killer submarines as they are they key anti-ship weapon in today’s navies. However, the second reason, is that the US focus on the pacific required them and not the French to be the suppliers of this technology to Australia and the UK’s engagement is part of its return to “East of Suez”.

Once again, I believe the UK will try and punch above its weight, which will mean it fails in both theatres. There are serious problems to solve and jingoistic slogans will not be the answer.

[1] This doesn’t sound right, but is what he said.

[2] It seems there are. …

Control freakery at #lab23

Sunday’s conference was not a good day for Labour Party democracy. Amongst all the debates on rule changes, and speeches and a sofa session on winning the coming election and despite a rules based promise to be able to refer back sections of the National Policy Report, Conference was only offered the opportunity to accept the NPF report as a single document.

Labour needs a manifesto that offers hope and change to address the problems that the British people face. The NPF report was finalised in a secret session earlier this year and it is typical of this leadership that the vote to accept it was the first item of conference business and occurred before any debate and vote on the members and affiliates motions. The priority ballot results were announced and nothing challenging was prioritised by the CLPs.

The British people need a Labour government to solve its problems, of the cost of living crisis, infrastructure decay, wealth inequality and corruption. Labour’s leadership needs to unite the party and recognise that its membership have good ideas. The clamour for clarity on Labour’s policy offer is growing, curiously from unexpected sources but the control freakery of the leadership is effectively closing down and ignoring the views of the membership and once again violates the rules based promises of conference sovereignty. …

What’ll be debated at #lab23

The two leading factions have announced their recommendations for how CLP delegates should vote in the #lab23 conference priorities ballot. Only 12 motion topics are debated, six of which are the result of a ballot of the CLP delegates. The rest of this article looks at the factions' recommendations and laments the likelihood that important contrarian views will not be debated. To read the article in full, use the 2Read More" button ...

Labour Conference 23, a preview

I am about to set off for Liverpool, for Labour’s 2023 annual conference, probably the last before the general election.

I am concerned about three policy issues. Rachel Reeves’s new golden rules are an unnecessary constraint and harsher than even George Osborne ‘s so-called fiscal prudence guidelines, which even he decided to break when he saw the effect on aggregate demand. The language and commitment to these rules, which require a government current account surplus every year of the parliament has significant problems. Firstly, it’s unnecessarily harsh, and the shadow treasury team led by Reeves fail to offer an adequate definition of investment i.e. what expenditure will not be constrained by the rules but funded by borrowing or QE. These rules will also continue the austerity applied to public sector pay and thus in a second fashion reduce aggregate demand.

The challenge to the leadership on relations with the European Union is also weak and unlikely to be debated.

The whole approach of developing a policy programme that banks the 2019 vote and appealing to augment it by winning back what we might summarise as “blue labour” voters is risky. Even if it works there may not be enough of them, and Labour’s ‘core’ vote and those attracted by the social democtatic content of its 2017 manifesto may well decide that its not worth supporting. The loyalty of the new youth vote is particularly vulnerable. Assuming people have nowhere else to go is a proven fallacy, amply demonstrated by the 2019 general election. Those people that support this strategy need to ask themselves, what makes them think the coalition they are seeking to build will be bigger than that in 2015. This strategy is one of the reasons why the leadership think they are being clever by triangulating with the Tories on a number of issues.I worry that they are wrong and I am not alone.

Most importantly to me is that of UK EU relations; I wish to rejoin but economically we need to join the single market to improve foreign investment, exports, and immigration, to allow EU citizens to come here to work. We need the customs union to reduce business paperwork. Brexit remains fixed in Labour’s strategists minds as a totemic “red wall” issue; their position is as likely to lose votes even if only to abstention as win them. …

Brexit/Brejoin is on #lab23 agenda

As a member of the AEIP National Committee, I have been campaigning to reverse Brexit. The personal politics that led me to stand for their NC is based on both an abstract commitment to what the EU could be and a detailed observation of the economic and social advantages of common citizenship, together with the economic advantages to the nation of belong to the European Union. The absence of the EU’s freedom of movement to work and the common citizenship rights do not affect the rich. Overleaf, the full article looks at the arguments to rejoin the single market, and charts the last act of Lewisham Deptford CLP in sending a motion to #lab23 calling to rejoin the single market. It also documents the speech I made.

To see the full article overleaf, use the "Read More" button. ...