Bring Back the 70s?

Simon Jenkins writing in The Guardian sets out a serious critique of Labour's new found love for state intervention in almost every area of the economy, from the proposed takeover of AstraZeneca to the use of zero hours contracts.

Yet the Labour programme has nothing serious to say about equal pay or the benefits to be gained from introducing independent regulation of the trade unions. So while the banks are to be cut down to size, trade unions in the UK are allowed to become ever bigger and more politically partisan which means they become increasingly remote from their members,

So while Ed wants to be on the side of every consumer interest in the land, his enthusiasm seems to vanish when it comes to improving the ability of ordinary union members to hold their trade unions to account - because there is no independent referee to adjudicate in disputes.

Which I find intriguing I have to say and can only put this down to the fact that the Labour leader is not keen to pick a fight with his party's major financial backer, even though this would undoubtedly strengthen the hand of the 'little guy' over the 'big guy'.

But I thought the most telling comment in Simon Jenkins' argument is that Labour is promising to micro manage so many different things these days, that what's really on offer, in policy terms, is a return to the 1970s - the last period when Labour was in power Pre-Blair.        

Ed Miliband must give up his love of state intervention

The Labour leader's stance on AstraZeneca is beyond silly. He needs a route map to cash in on the coalition's chaos


By Simon Jenkins - The Guardian

'While Ed Miliband’s cost-of-living crisis is losing traction as wages begin to overtake prices, he should be able to capitalise on the chaos of many coalition policies.' Photograph: Andy Rain/EPA

Ed Miliband is opposed to the Pfizer takeover of AstraZeneca. I do not recall if in 1999 he also opposed Zeneca's takeover of Sweden's Astra or the location of its US operation to low-tax Delaware. But with a slump in his poll rating and 64% of Britons reportedly against the Pfizer deal, chauvinism clearly trumped free trade, and to hell with hypocrisy.

The ideological mood of Miliband's approach to government is becoming clear, everywhere a return to state intervention. This is intended to open "clear red water" between himself and the Tories. In the past six months Labour's leader has advocated controls on energy prices and private rents. He will intervene in the labour market against zero-hours contracts and in favour of a living wage. He will nationalise local housing land, in effect confiscating land from developers "who just hoard it".

Miliband displays a French enthusiasm for state corporatism. He will ban foreign takeovers if "against the national interest". He will reform the entire banking sector and even proposes "a network of regional banks across Britain" – of uncertain ownership. He has mooted rail renationalisation, evoking dreams of low fares and pre-Beeching branch lines. He intends to slap yet more cement on the crumbling monolith of the NHS by micro-managing surgery waiting times.

In Birmingham last month Miliband gave the traditional opposition leader's speech on why he is a true localist. He wants to restore power to local government and "the people". But even here, where he could have the coalition on the run and local Labour parties crying for freedom, he would say only that "the biggest economic devolution of power to England's great towns and cities in a hundred years" would come with conditions. There was no mention of devolving tax-raising powers, only of slashing business rates. Cities could "access central resources" only if they showed "stronger political governance to drive economic leadership". Tony Blair's localism speech in 1997 at least offered elected mayors, which he half-heartedly introduced.

Even the stalest pizza has a few good nibbles. There is something to be said for regional rail nationalisation. Housing land desperately needs a new approach. Tax relief for "living wage" employers is ingeniously extravagant. As for tentative devolution to city regions, Miliband's proposal may be Augustinian – "make me localist, but not yet" – but it is at least better than none.

On the other hand there are policies where Miliband, as a former energy secretary, cannot hope to be convincing. He left the country so under-invested in power stations as to bequeath a generating capacity margin down to 2%. Ofgem states that it needs over £100bn worth of new capacity by 2030. Yet just the prospect of a Labour price freeze has driven away both domestic and foreign investors. There is just one new station under construction. This is crazy intervention.

Meanwhile presenting AstraZeneca as a British treasure threatened with purchase by a dastardly foreigner is beyond silly. The company is not a Van Dyck portrait but the cobbled-together home base of a globalised pharmaceuticals industry. It swallowed many small fry itself and is run by a Frenchman and a Swede (while Pfizer's challenge is led by a Brit, Ian Read).

The business secretary, Vince Cable, has Miliband's support in running a low corporation tax regime in Britain to attract foreign investors. Yet when they come, Cable howls, "I don't want Britain to be a tax haven". In that case, stop being a tax haven and don't fix corporation tax at American levels.

Britain's car industry was a disaster when run domestically, under constant state interference. Foreign ownership has meant that within two years it should make more than 2m cars, beating its last record production year, 1972. Free trade works.

Miliband is not without supporters. When Labour's elder statesman, Alan Johnson, was asked about his leader's stance on energy, housing and banking, he said: "I don't think he has gone far enough." Of the Blairites' love affair with the City, Johnson added: "The 'comfortable with the filthy rich' time has gone." The Guardian letter on Labour's manifesto from 19 thinktankers was at least clear on this: amid all the waffle about sustainable and holistically transformative policies, they wanted no "playing safe". The same message comes from Miliband's radical policy chief, John Cruddas.

Yet just as the right lost its ideological way after the 2008 crash, so it appears did the left. The idea of returning to an old Labour platform is hardly radical. Here a voice of caution comes from the surviving Blairite, Caroline Flint, who warns (in Prospect magazine) against price freezes and one-size-fits-all policies. "We should campaign as we intend to govern," she says. If hoping that the coalition will implode of its own ineptitude was always a high risk, so too is going forward by going backwards.

The excitement that Blair and Gordon Brown were able to generate among the electorate in the mid-1990s was strategically shrewd. It involved understanding and exploiting the appeal of the prevailing Thatcherism, an appeal that had led John Major in 1992 to the largest popular vote in history (over 14m). Blair cunningly concealed his enthusiasm for Thatcherism with a new Labour rebranding, privatising and freeing markets where even she had feared to tread.

Whatever the reason for the current Tory surge – the predictable benefit of economic recovery – Miliband must find a contrasting narrative. Most serious, he must show he has a route map through the policy morass that followed 2008. The credit crunch may have delighted the left in proving that liberating markets and indulging banks can herald catastrophe. But how to regulate those markets without killing the golden geese remains as elusive as ever. It is still the central challenge of modern western government.

Miliband is an unknown quantity to most voters and it shows in his poll ratings. Some facets of a politician's personality are beyond correction, and his carping, undergraduate tone of voice and wooden presentation seem irredeemable. But a Labour leader can at least dictate his own programme. While Miliband's "cost-of-living crisis" is losing traction as wages begin to overtake prices, he should be able to capitalise on the chaos of many coalition policies, such as education, planning, local government and the environment. Every day offers him a new open goal.

Above all, Miliband has yet to give an intelligent indication of how a Labour government would discipline modern capitalism and fashion a modern welfare state. All we get at every turn is a default into more intervention. Surely Labour's path to post-Blair cannot be to pre-Blair.

Smaller Banks, Bigger Unions (8 March 2014)

I watched the BBC's Daily Politics programme the other day which included an interview with Margaret Prosser, now Baroness or Lady Prosser, a former deputy general secretary of Unite, the trade union, if I remember correctly.

Now setting aside for the moment the business of senior trade union figures accepting seats in the unelected House of Lords, my ears pricked up when I heard Margaret say that something had to be done about the trend towards ever bigger trade unions.

Which I've been banging on about for years, of course.

But it's good to hear that other people share my point of view because 'super sized' trade unions are bad for ordinary union members if you ask me, because they tend to become increasingly remote and unrepresentative of their members. 

And if these unions recruit staff at senior levels who are drawn from a very narrow band of party politics, then the results are all too predictable - you end up with a chum club instead of a body which reflects and represents the views of the wider union membership.   

Supersize Me (21 January 2012)
Britain's union bosses (the Bubs) are always banging on about the need for healthy competition on the high street - and the benefits of cutting the big banks down to size.

But the unions are allowed to play by very different rules themselves - seems like they just keep on getting bigger and bigger - and growing in size.

The latest union merger on the cards is one between Unite and PCS (the civil service union) - both of whom are on a collision course with the government over public sector pensions.

A new union would have a combined membership of 1.8 million members - in effect a new super union would be created - which would dwarf second placed Unison with only 1.3 million members.

But of course Unison and GMB have already been in merger talks for some time - and if they agree to tie the knot - then only two unions would represent 3.6 million people - the bulk of the UK's union membership.

At a time when big monopoly suppliers of services - generally speaking - have acquired a pretty bad name for being able to dictate terms to their customers - because of the lack of choice and inability to take their business elsewhere.

The creation of these ever-bigger 'super-size' unions also has big implications for the Labour party.

Because as everyone knows the trade unions effectively decided the outcome of the recent Labour leadership elections - both Ed Miliband and Johann Lamont owe their positions to union votes - from GMB, Unison and Unite.

So in future only two Bubs may have this level of influence and if the trend continues, who knows - maybe there will be just one.

Now there are some arguments to be made for 'big is best' - including the usual ones about economies of scale and so forth.

But the problem with the trade union sector is that it is almost entirely unregulated - ordinary union members have nowhere to go if they have a complaint - in terms of an independent outside body at least.

If these mergers were taking place in the private sector - they would be referred to the Monopolies and Mergers Commission - which happened recently when News International trying to buy Sky TV.

In addition other parts of society - both public and private - what goes on is regulated by a whole host of public watchdogs - and while you can argue about their effectiveness in some cases - at least they exist.

Here's what I had to say on the subject back in November 2009.

Smaller Banks, Bigger Unions (November 6th 2009)

Much has been said - and written - this week about cutting the big high street banks down to size.

Apparently everyone now believes that smaller banks are good for us. Because smaller banks means more banks - that have to compete with one another - and the resulting competition is good for customers.

The big guy always finds it much harder to beat up on the little guy - if the little guy can just take his or her business elsewhere.

So far, so good - sounds reasonable enough.

But isn't it interesting that while the big banks are being forced to become smaller - to get closer to their customers - that trade unions in the UK are becoming ever larger and more remote from their members.

The latest move towards another super union - see post dated 16 September 2009 - is the planned merger between GMB and Unison - which would create a union of around 2 million members.

But Unison itself is the product of an arranged marriage of what used to be three separate unions - COSHE, NALGO and NUPE - which tied the knot to become Unison in 1993.

And this latest giant union is all about keeping up with the Joneses, in the shape of Unite - currently the largest union in the land with 1.5 million members - and itself the product of a previous merger between Amicus and the old transport union, TGWU.

The fact is that these new super unions are run just like giant businesses - except that they are not as well regulated as businesses - arguably they are subject to less scrutiny than your average corner shop.

In terms of service standards - ordinary union members do not have an independent body to turn to for support, if they have a problem or complaint - there is no equivalent of the Financial Services Ombudsman, for example.

In future, union members will get even less choice from these mega unions - which all give huge sums of money to the Labour Party - despite the fact that the great majority of union members support other parties - or no party at all.

The present government has no interest in making the union more accountable to their members - because the Labour Party is so heavily dependent on the trade unions for financial support.

But it will be interesting to see what happens after the next general election - maybe the unions will be forced to move with the times. A healthy dose of external and independent scrutiny - would certainly help the unions become more accountable to their members.