Something for Gordon Brown to be proud of

The Times has an article praising Hackney Council for all of its improvements over the last few years, and contrasting it with the government nationally:

"Hackney could be a poster child for new Labour. In sharp contrast with the party's performance in national government - where public sector waste is endemic, taxes rising and Mr Brown's tax credits system is a byword for fraud and mismanagement - Hackney has shown that it is possible to improve public services while helping business to thrive, holding down taxes and providing genuine value for money.

What a tragedy that Mr Brown seems hell-bent in travelling in the opposite direction."

What a tragedy that the Deputy Business Editor of the Times doesn't understand about how local or national government works. The reason Hackney can hold down council tax, for example, is precisely because it (quite rightly) gets so much money from central government, from the £25 million in 2002 for the fresh start to the plethora of different funding streams in the Area Based Grant.

And Hackney's success is indeed credit to the local Labour mayor and councillors, but it is hardly unique. Across the nation, places that became notorious for crumbling infrastructure, high poverty, crime and decline in the 1980s and 1990s have been transformed, such as Liverpool, Manchester, Newcastle and many more.

At different times, each of these areas had some very poorly performing councils delivering terrible services. But in the UK it is the central government, not the local council, which has the most power over whether an area flourishes or not. And under Maggie Thatcher and John Major areas like Hackney and the northern cities were left to rot and under Tony Blair and Gordon Brown they have been revived.

It's no coincidence that all of these councils have got better since they started getting masses of extra funding from the Treasury, nor that the local economies and businesses with the highest number of people who have benefited from 'Mr Brown's tax credit system' have flourished as money has been redistributed to those who need it and will spend it. The real threat to these areas over the next few years are that big cuts in spending will undo the progress of the past ten years, not that a small handful of their residents have to pay slightly more income tax.

I guess probably every Times journalist has to fit in to their stories about how bad the modest extra taxes for the highest earners are, even if this means the overall article lacks any logical coherence. And it is too much to expect that they might mention anywhere outside of London. But the caricature of wasteful national Old Gordon Brown Labour versus efficient local New Labour Hackney is absurd. However badly things are going for him at the moment, the revival of Hackney and so many other areas will be one of Gordon Brown's greatest legacies.

Tories plan cuts for families

Senior Tory David Davis wrote an article in the Financial Times about what he thinks his party should do if they win power to save the government money.

The main saving which he proposes is to end what he calls 'welfare for the well off' by means testing child benefit and winter fuel payment and free TV licenses for pensioners. He says this will "save" £9-10 billion per year, by which he means that the government will take £9-10 billion off parents and pensioners.

Means testing child benefit so that only the poorest families get it would cost the average, middle class family with one child more than £1,000 per year. It would require the government to hire a load of bureaucrats to decide who is eligible and who isn't, plus extra spending on advice and information to make sure people who are eligible actually claim it. Based on data from take up of other means-tested benefits, about a quarter of the poorest families would not receive the benefit if it were means-tested. It is also a directly anti-family policy to make those with children contribute more than those who earn the same but don't have children to raise.

So cutting 'welfare for the well off' involves a massive raid by the government on the money which middle class families have to live on and look after their kids; hiring more bureaucrats and taking money away from the poorest families who need it the most. The spin is very different from the substance.

But, of course, from the Tories' point of view, it has one big advantage over, say, raising income tax by 2p. For a single parent earning £25,000 per year, or a couple with combined earnings of £45,000, losing £1,000 or more is a heavy blow. But for those earning £100,000 or more, it's much less of a problem. And when it comes to tough decisions about who needs to pay more in the years ahead, Tories like David Davis know exactly whose side he is on.

Celebration, not despair

The Daily Telegraph reports that Tony Blair has 'privately expressed his despair' at the new 50% top rate of tax.

This doesn't sound remotely plausible to me. While Tony Blair was Prime Minister, two of his favourite sayings were 'more nurses, teachers and police officers' and 'supporting hard working families'.

And as a result of this budget, Mr and Mrs Blair will be able to increase the amount of support that they personally offer to hard-working families through their taxes. Apparently he earned about £12 million in the year after leaving Downing Street. Including Cherie's work as well, that means that they will be able to contribute an extra £1 million or more in taxes every year.

That's a lot of nurses, teachers and police officers, and sounds more like a cause for celebration, not despair.

Good point of the day

From here:

"The increase in the top rate of tax might not raise much money but might encourage some recalcitrant emigres to keep their promises.

Before the first Labour victory in 1997 I remember four august notable and "wealth generating" individuals stating publicly that they would leave the country if the Labour Party was elected to power and hiked the top rate of tax to 50%. They were in order of cod-talent: Andrew Lloyd Weber, Paul Daniels, Frank Bruno and Jim Davidson.

When floating voters heard this declaration a vast swathe of them were pursuaded immediately to support Labour Party and the Party enjoyed a landslide election victory as a consequence. As far as I know only Davidson has moved abroad (to Dubai in his case which isn't nearly far enough away for my liking). The other three stayed in the UK. I'm really hoping now and keeping my fingers crossed that the remaining trio of entrepreneurial excellence will also finally be persuaded to jump ship."

Budget thoughts

According to the calculator, I'm going to be about £100 better off as a result of the Budget. So yay for that.

And it's quite right that the people who earn the most are being asked to contribute a little more. So yay for that.

And there are some good policies on a whole range of policies from helping people get jobs to international development. So yay for that too.

But the one thing above all that I'm really gutted about is not that overall these are small things and timid-politics-as-usual when that's manifesly inadequate in the current situation. It's not even that this was Labour's last chance to have any hope of winning the next election, and they've blown it. It is that the government decided, completely unnecessarily, to break their promise to halve child poverty by next year.

Back in 1999, Labour said that by 2010 they would halve the number of children living in poverty, and by 2020 reduce child poverty to the same levels as the countries with the best levels of child well-being.

And they nearly, nearly did it. If they'd decided today to increase spending by £4 billion on benefits and tax credits, they'd have managed that achievement, in spite of all the economic crisis. But they didn't. So now it won't happen.

There are big challenges in years ahead. It would have been a constant source of inspiration as we try to reduce carbon emissions by 2020, for example, if Labour had delivered in 2010 on a seemingly impossible pledge made in 1999. And it would have meant that the next few years would have seen hundreds of thousands of children growing into adulthood having a fair start in life, rather than struggling to get by without the essentials that others take for granted. These are the citizens, workers and parents of the future who Britain will be relying on in years to come.

On the radio news just now it was reported that 'top earners will be hit hardest' by the budget. That's a load of nonsense. The people who will be hit hardest are not those earning a quarter of a million a year whose tax bills have gone up by a few thousand, but those for whom the problems caused by the economy started long before 2007, who rely on our government for help when they need it, and who haven't had that help from Labour's last meaningful budget. And I'd much rather that instead of making me £100 better off, that money had gone to where it could have done the most good.

Budget priorities

Tomorrow is the Budget. Here's three things I'd like to see, with reasons why:

Increase benefits and cut taxes for people on lower incomes

This is essential for our economic recovery, as it puts more money in the pockets of people who need it most and will spend it, which helps all of us.

It is also good politics. The key 'swing voters' in the marginal constituencies who will decide whether the Tories win an overall majority, or whether Labour wins more seats than the Tories, live in places like Morecambe, Dudley, Cleethorpes, Halifax, Ipswich, Carlisle, Dewsbury, Keighley and Stockton.

Policies such as halving child poverty by raising tax credits and child benefit, raising Jobseekers' Allowance or cutting income tax for basic rate taxpayers will help more people in these areas than in some of the more affluent constituencies which have been the focus of the last three elections. We've been told by commentators and politicians alike that the important thing is to concentrate on the 'swing voters' in marginal constituencies, we'll see whether that is still the case now that these swing voters have rather different economic interests from the political elite.

Modernise the welfare state

To bring the welfare state into the 21st century, reforms are needed to reflect the fact that people are living longer than in the 1940s, and most women work rather than staying at home and looking after their children. Both child care and care for the elderly is unaffordable for many people and also frequently of poor quality or unavailable when needed, just as healthcare was in the 1930s.

Just as the Labour government introduced the NHS in 1948, so this government should expand the welfare state by making high quality child care and care for the elderly affordable for all, and raising wages for care workers. This would create thousands of good quality jobs and be incredibly popular.

Prioritise what's important, and cut what isn't

There is talk of "efficiency savings" through "cutting waste", which is largely a load of old nonsense. Instead, it would be better to announce that there are some projects and organisations which were affordable in the good times, but which aren't priorities now.

One very interesting area for this is quangos. There are some quangos which would not be sensible to cut the funding of, such as Jobcentre Plus, but there are a whole host of others which do some quite good and worthy things, but ones which just aren't a priority at the moment. For example, Ofsted or the Commission on Equality and Human Rights are both organisations which should reasonably be expected to get by on, say, three quarters of their current budget.

Cutting spending on quangos by an average of 25% over three years on its own would free up the cash to enable the government to keep its promise to halve child poverty. This is quite simple 'language of priorities' stuff. Other savings include proposals which were never worthwhile even when they were affordable such as identity cards.

There are many other good ideas and worthy causes for the budget, but those are three measures which I'll be looking out for.

Bridget Phillipson selected for Houghton and Sunderland South

Some excellent news, Bridget Phillipson has been selected as Labour's candidate for Houghton and Sunderland South.

I wrote in 2007, after Bridget narrowly missed out on being selected in the neighbouring constituency, that:

"It's really heartening to see someone seeking selection in the area that they grew up, campaigning on their ideas for the area and do so well. Hopefully, one of the other seats in the North East will be lucky enough to have Bridget as their MP when there is next a vacancy, and other people who are thinking about trying to become a Labour MP in the future will adopt this sort of approach."

Bridget currently manages a women's refuge, she's bright, down to earth and hard-working and will be a fantastic MP. It's people like her that make me proud to be Labour, as I'm sure anyone who's met Bridget would agree. She'll be doing great work as a Labour representative long after all the depressing news of the past week has been forgotten about.

Our ethic of progressive blogging

I signed up to a statement drafted by the Fabian Society, snappily titled 'our ethic of progressive blogging' which is about not using the internet to make up personal smears about our political opponents but instead write earnest and lengthy posts about policy ideas.

To my genuine delight, when this was posted on the 'Liberal Conspiracy' site, it enraged some Liberal Democrat activists for reasons that I find completely impossible to fathom and has generated (at time of writing) over 100 comments of complaints and insults.

Tories, energy saving and debt

George Osborne announced a new Tory policy which I don't understand:

They want to give every household a new entitlement to £6,500 of energy saving technologies. They provide government guarantees to enable companies to borrow the money to install this energy saving equipment in homes across the country. This money would be repaid through savings on energy bills resulting from the improved energy efficiency. So homeowners would be given the opportunity to have energy saving equipment fitted to their homes without any upfront costs. They claim this will unleash £20 billion of private investment if half of all households take this up.

So if I've got this right, homeowners can in effect borrow £6,500 to get energy saving equipment installed, and then pay it back over the next few years out of savings from lower energy bills.

The thing I don't understand is how this fits with the Tory economic argument that Debt is Bad. The average yearly energy bill, according to moneysupermarket.com, is £1,350, so it is going to take people an awfully long time to pay back £6,500 out of the savings from lower energy bills. So either a large chunk of this £20 billion is going to be paid upfront by the government and not recovered (which means in effect higher government spending, which the Tories oppose) or it means people taking on extra debt and paying it off over ten or more years (the Tories say private debt is currently too high already, so it is strange that they would have policies which encourage more of it).

I think that with some considerable tweaks, the government funding the installation of energy saving technologies in homes is probably a good idea (though, for example, it seems a bit harsh that under the Tory plans people like me who rent can't get it installed and it is only for people who own their own homes). But it is interesting that this new flagship Tory policy contradicts their overall economic strategy and analysis and instead appears to be more influenced by Labour's and Barack Obama's approach of the government spending more money in the short term in order that we can all reap the benefits in the longer term.

It's not cheating to run a good campaign

Journalist John Harris has many admirable qualities. For example, he once wrote a long article in the Guardian about how great my friends in Oxford are.

However, he is also capable of writing some terrible rubbish, like today's article, which tells the Terrible Tale of the latest Blairite Stitch Up.

Erith and Thamesmead are choosing their parliamentary candidate for the next election, and the Blairites are apparently supporting Georgia Gould. Apparently, her supporters are doing shocking and devious things like encouraging Labour Party members to vote in the selection and producing leaflets to support her. This is kind of like cheating, apparently, because it might look bad to unspecified members of the general public (this is actually Harris' argument).

In a super classy way, John Harris also manages to find space to repeat all the smears about Georgia which he has read on the internet and not managed to find any actual evidence for (this is in the same article as his condemnation of Damien McBride for, um, passing on smears about his political opponents).

I'm not a Blairite, but I have met and campaigned with Georgia and I think that she will make an excellent MP. Harris mentions that Erith and Thamesmead only has 279 members. If they select Georgia as their candidate, then she will be able to use her extensive experience from campaigning in Mitcham and Morden and Oxford East (two constituencies where the local Labour party is very active, and where she has spent a lot of time over several years volunteering as a campaign organiser) to make sure that the local party spends its time getting new people involved, and in keeping in touch with local people, listening to them and helping with their problems. Those are exactly the skills which, in my view, any constituency with a large majority but a small membership should be looking for when choosing their parliamentary candidate.

It would also be good if we could kill off this idea that it is somehow cheating for aspiring parliamentary candidates to encourage members to vote in selection processes, or to produce effective campaigning leaflets. These are exactly the campaigning skills that we need Labour candidates to have, and are far more useful than, say, the ability to make a speech in a room full of activists. John Harris should know this, because my friends in Oxford explained it to him last year very patiently and clearly, and he wrote it all down for his article in the Guardian. But he's obviously forgotten it.

There is an ocean of difference between bright, committed young Labour activists like Georgia Gould and poisonous individuals like Damien McBride or other members of the Nasty Party Tendency. In contrast, there is no meaningful difference at all between New Labour spin doctors briefing against their political opponents and self-proclaimed left-wing journalists repeating smears that they've read on the internet against their political opponents.

Making Labour the Nasty Party

More on this another time, but Damien McBride and Derek Draper are not just two idiots who don't understand how e-mail works, but members of a particular tendency within the Labour Party which aims to make Labour into the new Nasty Party.

The same tactics which they discussed in their e-mails were ones which were on display a few years ago in the Birmingham Hodge Hill by-election. In the aftermath of the Iraq war, the Labour team running that by-election campaign decided that the way to defeat the Lib Dems was a combination of personal smears against the Lib Dem candidate and attacking the opposition for being "soft", in that particular case on so-called "bogus asylum-seekers". That by-election launched the career of Liam Byrne, now a member of the Cabinet.

Labour has traditionally had a reputation for being the party of the underdog and sticking up for the vulnerable and powerless. The deliberate aim of some of Labour's current ministers and advisers, including not just Liam Byrne but also others such as Immigration minister Phil Woolas, is to change that. They introduce policies which, whether they work or not, enable Labour to criticise its opponents, whether Tory, Lib Dem or Scottish Nationalist, as "soft", "weak", and on the side of unpopular minority groups, whether asylum-seekers, people who have been out of work for a long time, or people addicted to drugs or alcohol.

The key thing to note is that "giving the vulnerable and powerless a kicking for perceived electoral advantage" and "making up smears about their political opponents for perceived electoral advantage" are part of the same overall political strategy.

Not only it is morally reprehensible, there is no evidence that this approach is electorally successful. Indeed, quite the opposite. Hodge Hill, for example, saw a 27% swing against Labour, one of the worst by-election performances in Labour's history. As a political strategy, it is suicidal for Labour, as for any party of the centre-left, to adopt a strategy of dividing its supporters into "deserving" and "undeserving" and trying to win the support of the former at the expense of the latter.

And it's got to stop.

In many ways, the way that the Nasty Party Tendency goes about its business is similar to the Militant Tendency back in the 1980s, who were also known for their aggressive bullying and personal viciousness to others in the Labour party who disagreed with them, combined with dogmatic, electorally repellent and outdated politics. But in some ways, that comparison is unfair.

After all, at least the Militant built some council houses.

Tories plan to build fewer homes, reward bad landlords

I've just read the Conservative Party's Green Paper on Housing. Housing policy is a vitally important issue, affecting the lives of millions of people. It is arguably nearly as important an issue as one politician sending an e-mail to another politician with gossip about some other politicians. It is also quite stunningly awful.

The green paper says that we need to build more houses. It then lists a range of policies designed to reduce the number of houses which will be built. Councils will no longer be required to build a certain number of houses (because this is central targets and is bad), it will be easier for councils to prevent developments (e.g. by designating land as green belt or stopping eco-towns), and opponents of housing developments will have more opportunities to try to stop housing developments in their backyard.

But more houses will be built, because The Market Will Provide. The Planning Delivery Grant which allocated £510 million to local councils will be scrapped, and instead the money will be used to give councils an amount equal to the council tax for the property for each new house built in their area.

So the way to build more new houses, according to the Conservatives, is to allocate the same amount of money in a different way to local councils, while making it harder for developers to build houses. And instead of lots of nasty flats being built, this will also result in larger houses suitable for families being built, with gardens, and a pony.

On page 8, the paper "proves" that the building of flats cannot have been a reaction to market demand because an opinion poll found that half of people aspire to live in a detached house, and only 3% in a flat. This is a point that only even begins to make sense if you believe that unregulated markets always deliver the goods and services which people would like to receive, and ignore the fact that converting family houses into flats has been an extremely profitable activity for quite a number of people over the past few years. And if you believe that in this day and age, I've got a Credit Default Swap that you might be interested in.

Moving on, there are pages of drivel about social housing and dependency, and a consistent confusion between homelessness and rough sleeping, but the private rented sector merits only a brief mention (page 34). It praises the role of private landlords and claims that the Conservatives will look to see how the burden of regulation on them can be eased.

This is interesting because it is an example of the Conservatives sticking up for the rich (buy-to-let landlords) against 'Middle England' (the people who suffer from bad landlords who are only interested in making a profit, regardless of the effect on the area). Not all landlords are like that, but you can guarantee that the Conservatives won't be publicising this policy in marginal constituencies where there are high levels of multiple occupation housing - as it is absolute political poison with private tenants and home-owners alike.

Taken together, these two policies reveal a lot about the Conservative approach. There is a desperate need for more housing, but the effect of their policies will be to reduce the number of homes built, causing more misery and suffering. They place their faith that less regulation and leaving things to the market will magically solve problems, in defiance of the evidence. And the only group of unpopular people who they are prepared to stick up for and shower with praise are those that spent most of the last decade enriching themselves at the expense of local communities.

Lessons from America

Does anyone remember Iain Duncan Smith's "compassionate conservatism"? Or "welfare expert" Frank Field and his policies to "think the unthinkable"? Or David Cameron's suggestions that we should reform our welfare system to make it more like America's?

Recent statistics from America show quite clearly how its welfare system is failing those who need its help.

More than 3 million people lost their jobs in the past five months, and the unemployment rate is up to 15.6% (or nearly 1 in 6 adults). And yet in 2008, only 36% of unemployed Americans received unemployment benefits. That means 64% who were either using up their savings, living on handouts from charities, trying to cope without the essentials or turning to crime for survival (the growth sector of the American welfare state is in locking people up in prison). Some of the biggest new housing developments are 'tent cities', where people who can't afford anywhere permanent to live put up temporary dwellings along railway tracks and underneath freeway overpasses. Other families rely on the generosity of friends or family, moving in for a few days or weeks with others into grossly overcrowded housing.

It is one of the most basic functions of a welfare system that if someone loses a job, they get help to pay the bills and support to find another job. In the 1990s, the welfare support offered by states in America were re-designed by 'experts' who thought that the supply of jobs would always grow and that benefits caused people to become "dependent" and "idle". As a result, the help and support that people need is no longer there for millions of Americans.

I can't honestly see anything "compassionate" about the people who argued loudly that Britain should have introduced this wretched and failed system. And when its advocates claim to be "experts" in welfare policy, we should remember that they are "welfare experts" in the same way that Fred Goodwin is an "expert" in how to run a bank.