Friday, August 27, 2010

Higher benefits, more jobs

Right-wing think tank boss Neil O'Brien writes that:

"If you give people more benefits, they will be better off today. But if that encourages them to stay on benefits, rather than find work, they will be poorer tomorrow. "The question to ask," as Nick Clegg wrote, "is what its dynamic effects are, particularly across the generations. How does it increase opportunities? Will it unlock the poverty trap or deepen it?""

Let's have a look at what these dynamic effects might be.

Between 1996 and 2009, benefits for lone parents were increased substantially. So according to the Clegg/O'Brien theory, we would expect more of them to be encouraged to stay on benefits. Over the same time period, benefits for single adults of working age decreased in real terms. The same theory would suggest that this would mean that more would find work.

Here's what actually happened:

In 1996, during a time of economic growth, 45% of lone parents were in work. In 2009, when Britain was in severe recession, 57% of lone parents were in work.

In 1999, 30% of single adults without children were "workless". In 2009, 29% of single adults without children were "workless". If you look at a longer time period, the value of out of work benefits has nearly halved over the last forty years, and unemployment has more than doubled.

If you give people more benefits, they will be better off today. But what the evidence shows is that higher benefits also helps people to find work and be better off in the future.

If you are a millionaire politician, this might be hard to understand, particularly when it is politically inconvenient to grasp the point. But it's not that difficult.

If the government pursues a strategy of class warfare, of demonising poor people and cutting their benefits, then people will concentrate on day to day survival, on trying to keep a roof over their heads and coping with ill health and all the other problems that are caused when you don't have enough money to live on. In consequence, they will find it harder and harder to get a job or stay in work. And, in any case, there will be fewer jobs in their community as benefit cuts suck money out of the local economy.

In contrast, if the government provides everyone with a decent safety net and enough money to live on, then more and more people will be able to think about more than just getting through to the end of the week. They'll get the confidence to apply for jobs, they'll be in better health and even have a little bit of money to spend on studying and developing their skills. They'll see their friends and neighbours getting jobs and help each other to be able to lift themselves out of poverty.

This isn't some wild-eyed theory, this is what actually happens in the real world. And Clegg's comments and those of his right-wing supporters just show, yet again, that they are the ones in denial.

Wednesday, August 25, 2010

David Miliband's dilemma

Jonathan Cox, one of the organisers of David Miliband's "Movement for Change", argues that:

"To build a movement you have to put the development of people before policies. So the answer to the rejuvenation of the Labour Party’s grassroots is not to adopt other organisations’ campaigns and turn them into Labour campaigns, but to invest in the development of our members and harness their desire to tackle local issues."

This is an attempt to resolve the dilemma at the heart of David Miliband's campaign. On the one hand, Miliband (like his brother) believes that Labour needs to rebuild from the bottom up, involving tens of thousands of people in campaigning for Labour and shaping the party's priorities. But at the same time, many of his most influential supporters are determined to make sure that they keep control of deciding the priorities of the Labour Party, and to achieve that are briefing the newspapers about the dangers of "pandering" to Labour Party members and the importance of remaining in the radical moderate modernising centre.

I don't think the formulation of "putting people before policies" addresses this conflict. For example, community leaders trained by London Citizens identified a cap on interest rates and an amnesty for illegal immigrants as two of their top priorities - yet these are exactly the sort of policies which powerful vested interests and political opponents would claim show Labour 'lurching to the left'.

The examples that Cox gives of the Movement for Change in action are of autonomous action to address local injustices, such as cuts by a local council, or getting a developer to tarmac a road. But these are the kinds of campaigns which could be (and often are) led by groups of any political persuasion. Most local injustices pose bigger political dilemmas than this. When local community leaders called for tough regulations on buy to let landlords, David Miliband and allies of his such as Hazel Blears listened to civil service advice that sought instead to minimise "excessive regulations". How do campaigns against local cuts, or for more social housing or youth facilities fit with Miliband's economic policy of halving the deficit over the next four years? How does this approach avoid the Lib Dem franchise problem, where local Lib Dem parties campaign on whatever they think is popular, with essentially no reference to the policies of the national party?

And this line of thought leads to the most troubling section of Cox's piece. He mocks the idea that people join the Labour Party "to pass resolutions at GC", but he doesn't suggest any other mechanism by which the knowledge and ideas of local Labour members and activists can contribute to shaping the policies of the Labour Party. Passing resolutions at a GC isn't my idea of a good night out either, but there doesn't seem to be any way in which the Movement for Change either has influenced, or could influence, the policies which the Labour Party would adopt if David Miliband were elected leader.

I think the Movement for Change is a fantastic idea, and I fully support investing in developing the skills of Labour's grassroots members and supporting them to take action to improve their local communities. But it is important to recognise that there isn't anything particularly new about any of this. The Labour activists who have spent years in developing the skills of grassroots leaders and campaigning against local injustices are exactly the ones who some of David Miliband's anonymous supporters warn against "pandering" to.

To win the leadership election, I think that David Miliband needs to follow through on the logic of the Movement for Change. It's no good focusing on "people not policies" if the only people who get to shape the policies of the Labour Party are a small elite at the top of the party. Labour's future housing policies need to be shaped more by Movement for Change leaders like Liza Harding, and less by people like Hazel Blears.

Tuesday, August 24, 2010

The libertarian guide to strengthening the family

Shorter Eamonn Butler, Director of right wing think tank Adam Smith Institute:

State pensions and the NHS weaken the bonds between us and lead to the break up of the family. Older people would receive better care and there would be wider social benefits if we cut back the welfare state and made pensioners dependent on their families for their income and healthcare.

Friday, August 20, 2010


Two very annoying local by-election results last night:

In one, Labour didn't even stand a candidate, even though we got 360 votes last time we stood, and the Tories only won with 466 votes.

In the other, we lost by 26 votes to the Tories, and only delivered one leaflet (which went out after the postal votes had already gone out).

One is in a constituency which has a Labour MP, and the other is in a seat which we lost by fewer than 400 votes. Not good enough.

Elected police commissioners: an opportunity for lefties?

The government are planning to introduce directly-elected police commissioners. It is easy to see the problems that this might cause. It will politicise the police, and could open the door to authoritarian right-wing populists or even fascists being elected to run police forces. After all, fighting crime is traditionally perceived as an issue where people favour right-wing solutions, with right-wing newspapers promoting fear of crime and ever more authoritarian policies.

But I think there is an opportunity here, and that lefties should develop strategies to win these elections and show how our ideas are better at reducing crime. There are several reasons why this might be possible.

Firstly, the policies of the Coalition government are likely to see crime increase. They are sacking police officers, making people unemployed, closing schemes which help ex-offenders, scrapping pilot projects which would help survivors of domestic violence, cutting benefits for the poorest and most desperate, shutting down activities for young people, removing regulations on slum landlords. Any one of these policies would probably see crime increase, all of them together is likely to have a devastating impact.

Secondly, there are plenty of good examples of leftie policies which work in cutting crime. From setting up City Safe Havens to providing diversionary activities for young people, Neighbourhood Policing Teams to Domestic Violence Prevention Orders, charities helping young prisoners and their families to regulation for private housing, the Left is fizzing with ideas which are rooted in real, grassroots experience about how to cut crime.

Thirdly, our approach to cutting crime fits well with our grassroots campaigning approach. Running community campaigns to raise funding for youth activities in places where families can't afford to go on holiday, persuading shopkeepers to sign up to become City Safe Havens, volunteering for local charities - these are all things which many lefties do anyway, elections or no elections. These elections are likely to have a low turnout, by getting involved and backing candidates who share our values, we can make sure that people get into the habit of voting and see the benefits of doing so.

Fourthly, when they are given the chance, people like the leftie approach to cutting crime. I saw some of the Participatory Budgeting events which the Home Office ran recently on letting local people choose how to spend money to cut crime. Given the choice between CCTV or funding an outreach worker for street drinkers, they picked the latter. Youth activities scored higher than graffiti removal - just because people read the Daily Mail doesn't mean that they won't support good ideas.

And lastly, it is a really powerful way to show how Labour has changed for the better. Although crime fell dramatically under the last Labour government, most people didn't believe the stats. These elections offer the opportunity for us to make a real difference to people's lives through grassroots-led, effective campaigning on one of the most important issues affecting people.

Tuesday, August 17, 2010

Facts show Darling is wrong on borrowing

Alastair Darling:

"We rather lost our way. Rather than recognising that the public were rightly concerned about the level of borrowing, we got sidetracked into a debate about investment over cuts.

"By failing to talk openly about the deficit, and our tough plans to halve it within four years, we vacated the crucial space to make the case for the positive role government can play.

"You will only convince people you've got the answers if they believe you know what the question is in the first place."

British Election Survey Facts:

"It’s the economy I – Concern with the economy dominated the issue agenda. This should have been a major opening for the major opposition party – the Conservatives.

It’s the economy II - the Conservatives did not capitalize on the economy as well as they might have. Emphasizing austerity measures as the cure for Britain’s economic woes failed to generate voter enthusiasm.

It’s the economy III – the Conservatives’ emphasis on government debt did not resonate especially well. Only one in ten of the BES CIPS respondents ranked government debt as most important in a list of 8 issues and two-thirds did not rank government debt as one of their top 3 most important issues.


Alastair Darling may well think that there should have been a greater emphasis on cutting the deficit then there was. But this is just another example of "To win again, Labour must do as I've always said", and it is worth noting that the fact that Alastair Darling and the Treasury think that something is important does not mean that the majority of people agreed with them.

Monday, August 09, 2010

Opposing the Tories on welfare

John Woodcock continues the series of "To win again, Labour must do as I’ve always said" with an article about how Labour must be the party of radical public service reform.

He argues that "we were at our best in government when we showed we were resolutely on the side of the users of public services and when we avoided being captured by the concerns of the producers of those services, valid though those concerns may have been" and that "if the British people detect that we no longer have the zeal to embrace real and difficult change to our schools, hospitals, and welfare system, they may not show any great zeal for renewing their embrace of us."

In the case of the welfare system, I would certainly agree with this. The Tory minister Lord Freud has said he would like the welfare market to mirror that of the supermarkets’, with about four dominant providers each given multi billion pound contracts to run services in different regions of the UK.

The people who use these services will be compelled to go to the welfare provider in their area, and will be fined if they don't. Following on with Freud's supermarket analogy, this would be like the government giving Tesco's a license to run all the supermarkets in the North West of England, and then fining people if they didn't do their shopping at Tesco's. A more blatant example of a government being "captured by the concerns of the producers of services", at the expense of their users, would be hard to imagine.

That's even before you consider that one of the main companies which is likely to win some of these contracts has had to pay back thousands of pounds after an investigation found examples of benefit fraud, and that one of their sales reps apparently accompanied David Cameron on his trip to India.

So when Lord Freud announces the government's plans for the Work Programme, which will favour the producers - including convicted benefit fraudsters - over the users of this service, I agree with John Woodcock that Labour should come up with an alternative of radical reforms which put the people who use employment support services first.

I just wish that John Woodcock had been around at the time when some idiot Labour minister and his special advisers had the chance to introduce welfare reforms which would have put the users first, and mysteriously and incomprehensibly instead decided to hire David Freud to do a report on welfare reform, even though by his own admission he 'knew nothing about welfare'.

Thursday, August 05, 2010

Ending the housing crisis

The latest subject of the government's Two Minute Hate are people who live in council housing when a government bureaucrat thinks that they should move out.

I think it is sheer fantasy to suppose it is any kind of solution to the housing crisis to evict people from their home if they get a decent job, or if they are a lone parent who meets and chooses to live together with someone they love. But I can also understand why someone having to cope with sky high rents and a bad landlord in the private rented sector might wonder what all the fuss is about and feel that council tenants have it easy. This is what happens when you have a residual, heavily means-tested public service only for the poorest - it is easy to divide people who need the service against each other and cut it.

Let's try and sketch out an alternative:

The only people who benefit from the current housing crisis are slum landlords, who charge low paid workers extortionate rents, and get billions of pounds in handouts from the government in housing benefits.

Communities all over the country have been damaged by landlords who don't look after their tenants or maintain their properties. Meanwhile, thousands of people who aspire to live in council housing, or to own their own home, have been denied the opportunity to do so, and many are living in overcrowded or unsuitable accommodation.

At a time when the costs of construction are at their lowest in years, we have a housing shortage and mass unemployment. Savers who are trying to put aside money for their retirement are incentivised to invest in property, driving house prices higher, while British businesses are desperate for loans to help them grow.

None of these problems will be sorted out by the current government's policies of driving poor people into debt by cutting housing benefit while scrapping regulations which would protect tenants from bad landlords.

Instead, we could get people off benefits and into work by building the new council homes that people need. This would create thousands of skilled working class jobs, and help young (and not so young) unemployed people learn a trade. Building these homes would mean that, as in many other countries, people on lower and middle incomes had a genuine choice. Those that wanted to could buy their own home, while others who preferred to rent from the council or privately could do that as well. Rather than ghettos where only the poorest live, council housing would have a wider mix of people.

Meanwhile, the economic and housing crisis means that the boom times should be over for bad landlords. New regulations - supported by good landlords and tenants alike - could be introduced, and private sector rents could be capped and reduced, to make renting more affordable and cut the housing benefits bill. And savers who got into property speculation to try to provide for their retirement could be given incentives by the government to invest their money in British business, helping them to get the credit they need to grow and employ more people.

Expensive in the short term, but there would be colossal long term savings. Rather than spending money on unemployment benefits, governments handouts to wealthy landlords and the costs of picking up the pieces and supporting families who are homeless or living in overcrowded housing; we'd be spending the money on people doing necessary jobs, preventing the problems caused by bad housing, and encouraging people to invest in British businesses.

If nothing else, it has to be better than pretending that everyone can (or even wants to) own their own home, that social housing should be only for the most needy, or that the best use for your savings is to invest in property - and then trying to distract people from the consequences of this by blaming council tenants for causing the housing crisis.

Tuesday, August 03, 2010

Demos poll: only 15% want to be part of "Big Society"

Here's what the think tank Demos said about their latest piece of research:

"Labour’s next leader needs to support public sector cuts and embrace the ‘Big Society’ agenda if they are to be heard by the public."

And here's what their polling showed that people actually thought about the 'Big Society' agenda:

If you can't read that, the poll found that 35% of people said that "I'd like to be more active in my community but I don't have time what with the pressures of work and family", 19% 'it's not my job to look after my community, that's what we pay our taxes and elect politicians for", and 15% "I enjoy being active in my community and get involved whenever I have the time and feel it is worthwhile to do so". 25% picked "none of them", with 7% "don't know".

Funnily enough, these stats weren't included in Demos' press release. They've got a lot of media coverage for their claims that Labour needs to support cuts and back the Big Society, but their own polling doesn't support their claims. If a think tank commissions opinion polling, I think there is something quite dubious about only picking the results which fit with their prejudices. It makes me wonder what other inconvenient facts they decided not to release.