by Martin Odoni

Can you imagine if what has happened over the last three days had happened in the 1970s?

Can you imagine what the Conservative Party and the media would be saying right now if what happened to Carillion today had happened under a Labour Government?

Can you imagine what the Conservative Party and the media would be saying right now if what happened to Carillion today had happened to a nationalised industry?

Can you imagine the rants and rage we would have to sit through from boorish right-wing ideologues likes Boris Johnson and Tony Blair about the obsolescence of ‘Old Labour’ and public ownership?

But of course, this would never have happened to a nationalised industry.

An industrial calamity

The cause of today’s calamity is that Carillion have done something very free market and capitalistic in nature. They repeatedly ‘under-bid’ for public service contracts. This is to say, Carillion kept hoarding jobs that were contracted-out by the Government, but so desparate were they to beat all opposing firms to the contracts that they charged dangerously low fees for carrying out the work. So low, it turns out, that they hardly made any real profit from them. The exact reason for following such an insanely, needlessly risky strategy is not yet completely clear. The ugly suspicion is that Carillion was playing ‘corporate hardball’; trying to starve its competition of work until they folded, wih the intention of massively increasing its fees when it had a virtual monopoly in place. But with the pressures of a frequently declining pound in a Brexit environment, the cost of importing necessary materials kept rising, faster than rival firms would decline. The company’s debts rocketed to a starling £1.5 billion. In the unnecessary race to the bottom, it seems, Carillion crumbled first. A last-gasp request for a Government bail-out was refused (perhaps because Carillion is not a bank). The conglomerate is now going into liquidation.

Carillion exploding

Carillion is immediately to blame, but this would not have happened to a public firm, as, even if it had to compete with a private firm for the contract, it would not be allowed to under-bid without permission from the Government.

Where the Government went wrong

The Government itself is also to blame though. Somehow, even when Carillion were quite openly declaring profit-warnings about how dangerously high its debts were climbing and how low its revenue was falling, and when the share-prices kept plummeting, somehow, somehow, somehow, the Government still kept awarding the conglomerate new long-term contracts.

To demonstrate what a bewildering saga of stupidity this is on the Government side, see from the graph below (from the BBC) just how dramatically Carillion’s share-value fell last year. It was around £2.30 as recently as May, and then slumped to around 20p by November, with a particularly disastrous plummet in July, on announcement of the first profit-warning. And all the way through that time, the Government seemed not to notice, and just carried on handing Carillion new contracts.

Carillion shares value graph

Why the Government went wrong

Why did the Government behave in this idiotic way? There are three possible explanations I have been able to think of so far, and all of them are bad.

First, and likeliest, is that the Government were just being unbelievably lazy and mechanical, and simply failed to notice how bad things were getting in the Carillion losses column. Therefore, when issuing contracts, the Government were only looking for the cheapest bid, and not verifying the viability of the bidder. They may even have just carelessly assumed everything was fine because “Hey, it’s Carillion, they’re huge, so they must be in good shape financially!” (EDIT TO ADD: This is close to Mike Sivier’s findings, although the Government behaviour he describes is slightly more complicated – but no less idiotic.)

A second possibility, and somewhat more intelligent, but still reckless beyond all reason, is that the Tories were deliberately trying to stabilise the company’s share-value and therefore stave off a total cave-in. A little like the way the Bank of England buys pounds at a high exchange-rate any time sterling’s value is depreciating, in an attempt to increase demand, the Government may have hoped that by throwing more and more contracts Carillion’s way, they would restore stockholder confidence in the firm, and convince them to stop dumping its shares. While this would be a less complacent explanation, it is still inexcusable. No Government is entitled to make such a gamble with so many public services and facilities. Whenever any Government behaves in this way, it is a classic symptom of a company that has been allowed to become ‘Too Big To Fail’ i.e. so large and with so much of society forced to depend on its continued function that if it collapsed, it would cause an industrial or economic disaster. This is why the Gordon Brown Government bailed out the banks ten years ago. In 2017, the Tories wanted to prevent the collapse of a firm like Carillion, because it runs such large sections of public services, and the knock-on effects would potentially be enormous.

Sure enough, what has happened today could cause a wide range of other companies to fold as well. Carillion has played the role of work-broker to them for many years; a lot of these firms are much, much smaller and lack the ‘reach’ to secure these contracts without a much bigger firm to play as the go-between. They could go to the wall as well without being able to maintain the same amount of business – and there are a lot of these firms. Many of them are already owed cash for work they performed on Carillion’s outsourced behalf, cash they will now probably never receive.

A third possibility, for which I have so far seen no evidence, is that someone at Carillion did a dirty deal with someone in the Government to keep the contracts arriving. By applying Occam’s Razor, it seems the least likely explanation – I usually subscribe to cock-up theory more than conspiracy theory – but it can hardly be ruled out as yet.

The Tories are too slapdash to run the economy

It is likeliest that the Government were just being negligent – where have we heard that song before? But should the real explanation for the Government’s stupidity prove to be carelessness, recklessness, or corruption, what are unmistakable are the echoes of the slapdash handling of Brexit. David Davis showed deceit and casual negligence over the non-existent Brexit impact-assessments, and now someone in Government has shown breathtaking negligence in dishing out contracts to a firm that was clearly on the brink of insolvency.

In rapid succession, the Tories have twice shown themselves to be too foolish to be trusted with the British economy and its industrial base. They are simply too impatient, too sloppy, too careless, to bother with necessary fine detail before making key decisions.

To reiterate, the problems do not stop with what happened today; a lot of smaller firms who received work via Carillion are now in bother, plus a wide range of public services could soon have to be suspended while alternative providers are found. The Government has only guaranteed it will pay Carillion’s suddenly-stranded workers until Wednesday. After that, the workers will be unemployed – around twenty thousand of them – and the services they provide may well be in limbo. If the next few weeks are not handled very precisely, there could be a serious collapse in UK industry.

Compare today to the 1970s

Recalling the occasional paralysis in British industry in the 1970s, and the neverending catalogue of right-wing warnings of how a return to that nationalised era must be avoided at all costs, it is noticeable that developments today in a strictly capitalised era could lead us to precisely the same paralysis. Trade union power is not causing it, corporate power is causing it. It raises once more the old doubts about what really caused the problems of the 1960s and 1970s. They may not have been due to nationalisation in and of itself. They may have been due to the phenomenon of an industrial body simply being too large – too large for the left hand to know what the right hand is doing, but also too large to be dismantled without causing severe difficulties across the wider economy. That can happen in either the public sector or the private sector. There is no reason to assume a private sector body that gets too big for its boots will be any less of a problem than a public one. And given that nationalised industries in the post-war era had a lot more autonomy than is often recognised, they also had far more in common with their private counterparts of today than neoliberal ideology would like us to notice.

If there is not a fundamental change of direction in the ownership of British industry after this, therefore, I do not wish to hear ever again about what went wrong in the 1970s. Because it will be all-too-clear that the people who keep feeding us these one-sided scare-stories about that era do not really care about how well or badly the British economy was functioning back then. Because it has not functioned noticeably better in the neoliberal era (it is often less sluggish these days but it is also far more chaotic with recessions and outright financial disasters more commonplace than before) and all the scaremongers were ever really upset about back in the day was that people like themselves could not have much power in a Keynesian economy.

I am not arguing for the old-style nationalisation model to come back, incidentally. There were significant problems with it, especially a cultural tendency it encouraged to try and maintain old practices when they were no longer viable. But the same problems, and more besides, happen with large private firms too. I cannot emphasise enough what an undiluted shambles the Carillion liquidation is, or the enormity of the damage it could lead to if the Government gets its response strategy wrong.  The Tories should be getting annihilated by the media right now for their stupidity. Typically, they are getting off fairly lightly instead. Labour, who would not be treated nearly so leniently, are doing their bit to hold the Government to some measure of account, with Jeremy Corbyn highlighting the toxic role of the Private Finance Initiatives that his ‘New Labour’ predecessors were so tragically fond of, and which the Tories had initiated under John Major. And Rebecca Long-Bailey has demanded a full investigation into the Government’s handling of public service contracts issued to private firms.

How right they are. Between this and the fiasco of Hinchingbrooke Hospital (the privatisation of which the Tories eagerly endorsed shortly before the Trust running it went bust – again, the Tories have never been taken properly to task by the media over it) it is quite clear that this ‘private company’ model for public services is unworkable.

We cannot keep on throwing money at it, it just is not working!

If that phrasiology sounds familiar, there is a very good reason why. The Tories have used it for most of the last half-century to demand the end of many public sector industries. They cannot have it both ways.

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by Martin Odoni

Kenny Dalglish, the former manager and perhaps greatest ever player to represent Liverpool Football Club, is the subject of a controversy not of his own making. With the New Year’s Honours List announced in the last couple of days, supporters of Liverpool have been getting very angry at the ongoing absence of their club’s most revered former star from Britain’s roll-call of Knights-of-the-Realm.

There has been talk for many-a-year about ‘King Kenny’ being overdue for a knighthood. Such talk is perfectly understandable. Not only was he one of the greatest footballers of all time – I personally rate Dalglish as even better than George Best – he was also a most shrewd coach for the team over two spells totalling seven years, which saw Liverpool win every trophy in the domestic game, including three Championships. His achievements as both player and manager were all the more remarkable given that he was witness to three of the four worst stadium tragedies in British history; the Second Ibrox Disaster, the Heysel Stadium Disaster, and the Hillsborough Disaster.

Dalglish was manager at the time of Hillsborough, and, still only in his thirties, he found himself having to lead the entire city of Liverpool through a grieving process for nearly a hundred lost souls. His handling of several dreadful months of despair across Merseyside was so sensitive and so dignified that his status as a legend on the field became matched by his legend off it. For more than any other reason, it is because of the way he led the city through the mourning process post-Hillsborough that Liverpudlians want Kenny Dalglish to receive acknowledgement in the Honours List.

One aggravation for many is that Dalglish continues to be overlooked (supposedly) while politicians with blemished histories – in the current instance the former Liberal Democrat leader Nick Clegg – receive gongs like chickens receive feed. Given Clegg’s shabby history of promises broken for the sake of power, the anger is quite well-placed.

I am not arguing with these points as such. I yield to none in my disgust that a second-rate, non-achieving promise-breaker with a very limp grasp of basic economics like Clegg is getting a knighthood. (For what exactly?) But some of the expressions of dissent I have read on social media have been a little wide of the mark. Not so much because of what is said about Clegg, but because of what is said about Dalglish.

For instance, the following image has been doing the rounds quite a bit; –

Dalglish myth

Now before I state my irritation with this tweet, let me make clear; Dalglish was one of my heroes as a child, and I have no hesitation in adding my voice to the chorus of praise he gets for his role in the aftermath of Hillsborough, as well as for his fantastic charity work. But Mr Gudgeon is not correct. He is quoting a very over-proliferated myth. Dalglish did not attend all ninety-six funerals of Hillsborough victims. We are unsure exactly how many he did attend – even Dalglish himself lost count – but it was certainly not all of them. I am fairly sure it would not have been possible for him to do so, as some of the funerals took place roughly simultaneously, and many of them happened in different parts of the country. Dalglish made sure that there was at least one representative of Liverpool Football Club at every funeral, but, formidable a man though he is, there was no way he could attend them all in person.

Another irritating refrain I keep reading is of the “Well-he-wouldn’t-want-it-anyway!” variety, from people getting angry on Dalglish’s behalf when they hear he has been snubbed once again. It would be something akin to a teenager asking a girl out on a friend’s behalf, and when she says no, saying that his friend never fancied her anyway. The people getting angry are making ridiculous politicised remarks about how Dalglish supposedly “will never be given an award because he is not part of the Establishment [always undefined], and he would never accept one anyway because it would be against his principles” or words to similar effect.

The assumption is nonsense on both counts. Dalglish may not have a knighthood, no, but he was given a Royal/Imperial Honour, way back in 1984, when he was awarded the MBE. Now, with Dalglish’s working class background and his not-altogether-articulate Glaswegian accent, it is fair to suggest that he cuts a very unlikely figure to be a part of the Establishment, true enough. However, the reality is that, in spite of his background, he was offered an Honour. Furthermore, he did accept it. So the assumptions are clearly untrue.

I am not judging Dalglish on that, by the way. While I would never even consider accepting a Royal/Imperial Honour (in the astronomically unlikely event that I would ever be offered one), especially any that bears the name ‘British Empire’, I see that as a matter of personal choice. So I respect Dalglish’s right to accept such an Honour if that is his wish, and I will not think any the less of him for it.

But those who claim on his behalf that he would not accept such an award are not only unaware of the real facts, they are also trying to exploit him and his good works in order to score ‘anti-Establishment’ political points. Throughout his public life, Dalglish has been, if anything, somewhat apolitical, and therefore it is disingenuous to use him in this manner.

Whether we like ‘the Establishment’ or not, is there really any merit in exploiting Dalglish and his work after Hillsborough in this shabby fashion? I will think less of anybody who does that.

by Martin Odoni

One tradition I do find fascinating at the close of every year is the publication of National Archives’ documents after their 30-Year-Rule protection expires. It is always a bug-bear of mine that this country does not feel its people are entitled to know much about what it does until three decades after the fact, but three decades later is better than a full lifetime later, I suppose. And it can be engrossing to learn more about the struggles that happened behind-the-scenes a generation ago.

One revelation in this year’s releases that got the BBC in its thrall is one that has been published a few years early – a row between Margaret Thatcher and her successor John Major, just weeks after he had taken over as Prime Minister in 1990.

By all accounts, when Thatcher had accepted the inevitable and resigned as Prime Minister in November that year, she had hoped Major would succeed and carry on her policy program. But in later times after he won the leadership, Thatcher increasingly undermined him as he moved in a (somewhat) more social-democratic direction. The row highlighted in the papers released this week – a row that took place on 3rd January 1991 – appears to have been the point that the divisions between them began.

The argument hinged on the issue of the Conservative Government of the time setting a very high minmum interest rate. Major had been Chancellor of the Exchequer before Thatcher had resigned, and had largely maintained the high interest rates around the 15% mark set by his predecessor, Nigel Lawson. Because of the neverending difficulties with high inflation, which had tormented the British economy since the late-1960’s, both Lawson and Major had become obsessed with getting it under control. A frequent cause of inflation is excessive demand for goods; the more people buy goods and the scarcer they become, the more suppliers can charge for them, meaning prices go up, and so money in effect becomes less valuable. So one way of attempting to combat inflation – one whose effectiveness varies quite widely – is to encourage saving and to discourage manic spending by raising interest rates: A higher interest rate means people are likely to get extra money when saving up, while anyone borrowing money in order to purchase unnecessary goods would find themselves paying more interest on their loans. A Chancellor raising interest rates also encourages currency speculators to buy more sterling, as they will know that if they hold large numbers of pounds in UK accounts, they will again get more interest on them, which therefore can increase demand for the pound, and in turn make it more valuable.

But to discourage purchasing of goods is only a sensible move when there is too much economic activity, and when that is the main reason inflation is high. Inflation can happen for other reasons though, which means that a slow-moving economy is no guarantee that the currency will not lose value. As it happens, in late-1990, despite annual inflation being up around 7.5%, the UK economy had been in a slowdown for over a year as the (massively over-rated) ‘Lawson Boom‘ of the late-1980s rapidly ran out of steam, and the country was now moving into a recession. In any recession, more growth in Gross Domestic Product is required, which means more spending activity must be encouraged. Thatcher was therefore right to criticise the high interest rates; they were too high for a country that was in a recession. They needed to be set lower so that people would be discouraged from saving up as much, and even encouraged to borrow-and-spend more.

However, it must also be noted that Thatcher was being a hypocrite about the matter, because it was substantially her own fault that the interest rate had to remain so high. It was not for reasons of high inflation or low GDP as such.

The obstacle that Thatcher and Major had put in their own way was that the UK had joined the European Economic Community’s Exchange Rate Mechanism in October 1990 – just weeks before Thatcher was deposed. She had always opposed joining the ERM, but had finally given in to the inevitable when Major spoke out in favour, and having accepted it, she just decided that the UK would join the very next day – no planning, no calculations, no negotiations with the rest of the countries in the Mechanism. On 8th October, sterling entered the ERM.

Unfortunately, Thatcher’s timing was pretty awful. Joining the ERM was not necessarily a bad idea in itself, and might have worked pretty well if it had happened, say, in 1987, when the UK economy was near the height of the ‘Lawson Boom’. But by late-1990, the economy was back in its second annual recession in less than ten years. The Treasury therefore needed to cut interest rates to boost economic activity, but under ERM rules, the conditions of the time – the inflation-rate of the pound was fluctuating quite wildly and was at some stages roughly three times higher than the inflation-rate of the German Deutschmark – required higher interest rates to stabilise sterling’s relative value.

Joining the ERM in 1990 was therefore bound to pull the economy in two diametrically-opposed directions. The need to stimulate growth was at odds with the primary aim of the ERM, which was to fix the relative values of the currencies within it at roughly the same levels – the pound was meant to peg itself to the value of the Deutschmark.

With far higher inflation rates in the UK (almost 11% early in 1992) than in Germany (2.7%), but also with a high exchange-rate of 2.95DM to the pound, the British Treasury was giving itself a very difficult target exchange-rate to maintain right from the outset. The far higher rate of UK inflation meant that, right from the moment of joining the ERM, the pound’s value was already drifting away from the required valuation.

It was possible for the UK to join the ERM in 1990 and make it work, but only by artificially devaluing the pound first, say to a more manageable rate of 2.75DM. An artificial devaluation might well have slowed depreciation of sterling; any holders of large amounts of sterling who might have been planning to sell it off would suddenly find there was nothing to gain by doing so, and hence retain them, while any speculators would find a cheaper pound more appealing to invest in, increasing demand for the pound. More pertinently, a devaluation would also set a more realistic target exchange-rate to try and maintain. But at the time, devaluation of the currency was still seen in rather jingoistic “don’t-insult-our-beloved-pound!” terms by a wider British public who had little-or-no understanding of how currency exchanges work, and therefore would have seen such a move as somehow ‘sullying’ the country.

Thatcher never even paused to consider such matters in any event. Having lost Lawson as Chancellor of the Exchequer largely over the matter of joining the ERM less than a year earlier – he was heavily in favour while she was dead-set against – she could hardly risk losing Major from the role as well when he swiftly announced that he was in favour of the idea too. Clearly wanting the argument just to go away, Thatcher decided simply to leap in feet-first, without making sure conditions were right.

So Thatcher has to take a big chunk of the blame for the very problem she was complaining about. But Major also should not be let off the hook for the calamity that would eventually follow, as he too did not appear to consider the implications of joining the ERM during a recession with a much higher inflation level than the ‘target’ currency. Once that decision was made, Major’s hands were rather tied by ERM rules by the time that he took over at 10 Downing Street. Of course, he could have un-tied his hands at any time by suspending the UK’s membership of the ERM, but to compound the intial mistake he had shared with Thatcher, he stubbornly refused to suspend due to his narrow fixation on getting inflation down at any cost – something Kenneth Clarke and Gordon Brown were able to do more consistently in later years from outside the ERM.

To add to the UK’s ERM woes, international conditions became even less favourable. German state spending had increased markedly since 1990 due to the inevitable strains of reunification between East and West Germany, and this extra spending had led to a (relative) upswing in inflation of the Deutschmark. This caused the Bundesbank to increase interest rates to combat the effects, and under ERM rules, that made it impossible for the UK Government to lower its own interest rates. Britain’s finances were in a long-term double-deficit (exports lower than imports alongside public spending above tax income), made worse through early-1991 by a startling depreciation in the value of the US dollar, in which many British export goods were valued.

With the recession showing no signs of abating, speculators became convinced by September 1992 that suspension from the ERM would be unavoidable, probably followed by a devaluation of the pound to make sterling more attractive to purchasers and imports of British goods cheaper in other countries. The rise in German interest rates had lured currency speculators to start buying Deutschmarks in order to cash in on the higher dividends, often in exchange for pounds. This drop in demand for sterling and increased demand for the Deutschmark meant the pound was under growing pressure. Worried that their holdings would soon become less valuable, on the 16th, speculators brought about a familiar self-fulfilling prophecy; they dumped sterling in a frenzied rush of selling – a run-on-the-pound so notorious that it was given the nickname ‘Black Wednesday‘. As demand for the pound went through the floor, its value tumbled out-of-control.

The Bank of England spent billions in gold and foreign currency reserves to buy up pounds at the high ERM rate, in a frantic struggle to prop up sterling’s value. It did little to slow down its nosedive. Major ordered two large increases in interest rates during the course of the day, up to 15%, to tempt holders of sterling to resist selling with the reward of higher interest dividends on their pounds. Again, the rises failed, while also increasing the pain of the ongoing recession.

The pound lost 15% of its value in a single day, and it was clear that more was to come if drastic action was not taken immediately. Therefore, that very evening, the UK officially withdrew from the ERM, and the pound was artificially devalued, deterring holders of sterling from selling any further. Interest rates were eventually cut, giving the economy the breathing space to start growing again.

Ejection from the ERM was a complete reversal of the central pillar of Major’s entire economic policy, which had been built around the pound staying in the Mechanism, and on which he had staked his whole reputation. Black Wednesday was therefore a political disaster for the Conservative Party as much as it was an economic disaster for the country. Thousands of people lost their homes in the fall-out, and the Major Government’s reputation for economic ‘soundness’ was irredeemably destroyed. Even though economic growth did finally recover healthily under Ken Clarke’s Chancellorship, Labour would win the 1997 General Election with the biggest landslide for any party since before the Second World War.

The story of who officially got the blame for the chaos instead of either Prime Minister is quite unjust. Norman Lamont, Major’s immediate successor as Chancellor, had lost his job within a year of Black Wednesday, scapegoated for an economic policy that he had faithfully tried to implement but with which he had never altogether agreed, and for a disaster that he was powerless to prevent. It is therefore perhaps ironic that one of his special advisors at the Treasury at the time would become a Prime Minister seventeen years later; –

Norman Lamont and a young David Cameron in 1992

Norman Lamont was Chancellor of the Exchequer during the notorious ‘Black Wednesday’ financial crash of 1992. Look who was one of his special Treasury advisers…

It should be noted that joining the ERM had not been a complete failure; inflation of the pound was brought down very substantially over the two years Britain was a member, and it paved the way for a new economic framework over the next ten years that helped keep a lid on sterling’s depreciation.

inflation-89-600x433

But the real drawback was that the pound had joined the Mechanism at least two years too late to get the most out of being part of it – by joining at the end of an economic boom rather than near its beginning – and then stayed in it at least three months longer than the time that it was able to provide the economy with any benefits while in the midst of a recession. Britain only joined when it did because of Thatcher’s bludgeoning impatience, and only stayed in as long as it did because of Major’s stubbornness. Both of which are examples of economic policy formulated by letting the heart rule the head. Cold, hard numbers seldom co-operate with that.

Britain’s dabbles in the ERM were not all that far from working well, but the mistakes of timing turned the whole exercise into a humiliating fiasco. Black Wednesday is therefore just one more example of how nonsensical is the notion that the Conservatives are ‘better’ at running the economy than Labour.

by Martin Odoni

Just before Christmas, journalist and Labour campaigner Abi Wilkinson confessed in the Guardian to having temporarily ‘lost faith’ in her party’s current leader.

Though I was too pessimistic to publicly back [Jeremy Corbyn], a part of me started to wonder, what if? What if the conventional wisdom was wrong and it really was possible to win a general election from the left? What if the tide of hope that was sweeping the party could be replicated at a national level? … … … But I came back down to earth with a bang… there are several reasons for the struggles the party initially faced under Corbyn’s leadership. By the time of the 2016 leadership challenge, almost every committed Labour supporter I knew was in a state of despair – no matter what faction of the party they belonged to. A few kept their hopes up – how I scoffed at their naivety.

I feel compelled to point out that Ms Wilkinson has made more than the one wrong assumption she is aware of.  In fairness, the other is a mistake a great many in the British public make, and one I subscribed to for a long time myself.

The Myth

That assumption is that Labour has a history of getting hammered in General Elections when campaigning from the left, and does better from the centre ground. On close examination, it is quite clear that the only time Labour truly tried to get elected from the left since the Second World War was under Clement Attlee in 1945 – and they won in a big landslide.

Contrary to popular myth, no Labour leader between Attlee and Corbyn (with the possible exception of Michael Foot, but his 1983 General Election campaign does not count for reasons outlined below) has been a ‘Real Leftist’.

Labour leaders since WWII

The leaders of the Labour Party since World War II.

Gaitskell, 1955-1963

Attlee’s successor, Hugh Gaitskell, spent much of his fruitless time in charge of the Labour Party fighting against the left wing as much as he fought the Tories, and he never won an Election. Gaitskell was the first Labour leader to attempt to abolish Clause IV, due to his centrist policies meeting with frequent opposition from Trade Unions.

Wilson, 1963-1976

Harold Wilson won three General Elections (arguably four, depending how one chooses to view the Hung Parliament of early-1974), as a social democrat who managed to unite the Labour Party, largely by fooling the left into believing he was a socialist. Like Gaitskell before him, Wilson was, in practice, frequently at loggerheads with the likes of Tony Benn, and had a notorious dislike of Marxists. Wilson, always far more effective as a Labour leader than as a Prime Minister, governed Britain for roughly eight years, but beyond his establishment of the Open University, radical – or even significant – policy achievements in his time are barely detectable among long periods of treading water.

Callaghan, 1976-1980

Jim Callaghan epitomises one of the enduring myths of the 1970s. The popular notion long espoused by the British right, including most particularly by Margaret Thatcher in the 1980s, was that ‘Labour socialism’ was the cause of the industrial chaos and economic stagnation of the 1970s. The notorious ‘Winter of Discontent‘ industrial unrest of 1978 almost certainly guaranteed Callaghan’s defeat by Thatcher in the following year’s Election. But in reality, the problems of the 1970’s had become a crisis far earlier, under the Conservative Government of Edward Heath during 1972-to-1973, and spiralled out of control due to international conditions created by the OPEC Oil Shock. As for the suggestion that Callaghan’s administration was ‘socialist’, this is insanity. He would have been better suited to the Liberal Party, and during his brief time as Prime Minister, he effectively laid the foundations for Thatcherism by following the International Monetary Fund’s demands for drastic cuts in Government expenditure, to combat the hectic inflation-rates of the previous few years. As the late Tony Benn revealed in subsequent years, Callaghan and his Chancellor of the Exchequer, Denis Healey, were well aware that these cuts were no longer necessary, due to the potential ‘inflation-brake’ that could be applied via North Sea Oil e.g. the Government could have insisted that all oil exports from the UK had to be paid for in sterling, increasing demand for, and by extension the value of, British pounds. The spending cuts that Healey insisted on carrying out anyway in fact arguably provoked the Winter of Discontent – and the cuts were effectively anti-socialist, and began the nationwide move to the neoliberal right. It was not the ‘socialist’ nature of the Labour Party in the 1970s that was causing the hardship, it was its centrism.

Foot, 1980-1983

While Michael Foot was a left-wing party leader, Labour’s 1983 General Election campaign cannot be realistically viewed as a true attempt to win power on a left-wing platform. This is partly because Foot never had any real control of the party in the three years he was in the role, but mainly because the party’s National Executive Committee of the time were not really trying to win. Thanks to long in-fighting between factions led by Healey and Benn, and the break-off of the Social Democratic Party, Labour was in no shape to return to Government, while Thatcher’s success in the Falklands War the previous year had given the Conservatives a massive boost in chest-banging, jingoistic popularity. The Labour NEC therefore realised, even before their Manifesto was written up, that the Election was already lost, but that it also presented them with a perfect opportunity to discredit the left wing for generations to come; by campaigning on a very left-wing ‘Bennite’ platform in an Election that was already lost, they could then blame the platform for the defeat when it was confirmed. And that is precisely what happened.

Kinnock, 1983-1992

Neil Kinnock might have been a left-winger before becoming leader, but as soon as he was voted into the job to succeed Foot, he moved the party even further to the right than it had been under Wilson or Callaghan, by effectively cutting off the left wing altogether. He is especially vilified by the miners of the 1980s, after he effectively abandoned them during the Miners’ Strikes of 1984-85, during which he left them with nobody prominent to speak up for them in Parliament.

Smith, 1992-1994

John Smith is sometimes held up as a real socialist whose premature death in 1994, after two years as leader, somehow deprived the UK of a proper left-wing Prime Minister. (Apologies to the Angry Yorkshireman, but his endorsement of Smith earlier this year is based almost entirely on one speech, doubtfully taken at face-value.) Smith is a little like many loved political/leadership figures of the past – such as Richard The Lionheart or Vladimir Ilyitch Lenin – in that he is only assumed to be a man of wise and benevolent Government because he died before the full effects of his policies could be felt. “If only he had lived on, his country would have been a much better place…” is the classic refrain. But if the world had had more experience of what their governance was really like, it is doubtful that we would be able to see much difference between them and the much-vilified successors who ruled in their stead. (Judging by his actions on Crusade, morally, Richard the Lionheart is difficult to distinguish from his maligned brother ‘Bad King’ John, and it was Lenin, not Joseph Stalin, who was responsible for the ‘Red Terror‘ of the Chekhists in 1918.) The clue that should lead us to doubt that Smith was greatly different from those who followed him is that, for better or worse, he made constitutional changes to the party,  weakening the Trade Unions, and saw Tony Blair and Gordon Brown as his natural successors. Given he knew them better than anyone else in party circles, and effectively mentored them both, he could only have seen them as his successors if he was roughly as far from the left as they were.

Blair, 1994-2007, & Brown, 2007-2010

So when Tony Blair established ‘New Labour’ in the 1990s, yes, he was even more conservative than any of his predecessors, but he was really just formalising an unspoken reality; that the Labour Party was a centrist political faction that was manipulating and controlling the British Left. ‘Old Labour’ as he called it – by which he meant left-wing-and-soft-left socialists in the Labour Party – had never really been in charge in the first place. And despite the personal animosity that developed between them, Gordon Brown was much the same. All ‘New Labour’ were really doing was making the party’s portfolio glossier while reducing the scope for the ‘Real Left’ to rebel against them effectively.

Miliband, 2010-2015, & Corbyn, 2015-?

As for Ed Miliband, he did try to move the party a little to the left while he was leader, but by his own admission, he was still a member of New Labour and needed to be more radical than he dared to try. Other Parliamentary Party members tried to blame the calamitous defeat in the 2015 General Election on his move to the left, when in truth it would have been wiser to blame his failure to move far enough to the left. And while Jeremy Corbyn in this year’s General Election was making a very strong attempt to get elected from the left, an awful lot of his party were clearly doing no more than going through the motions.

Centrism keeps failing

The long years of electoral under-achievement by the Labour Party were more to do with centrist failure than socialist ‘dreaming’, and stretch decades further back into history than the emergence of Blair. ‘Old Labour’ and ‘socialist Labour’ have not been synonymous since at least 1950, and the peculiar economic turbulence of the 1970s had nothing to do with socialism going wrong, but with underlying weaknesses in British core industries that had needed phasing out and replacing during the long-running feud between Wilson and Heath. (Wilson’s failure to try, and Heath’s foolish-but-understandable attempt to prop up these industries early in the 1970s, demonstrate the former’s lack of daring and the latter’s lack of imagination.)

Corbyn therefore differs from the past to which he is often accused of trying to return, whereas the likes of Blair were always more consistent with that past than his own rhetoric would have us believe. Abi Wilkinson is far from the first person, and very unlikely to be the last, to be taken in by the fiction that the Labour Party of the 1980s-and-before was left wing, and centrist thereafter. But it is another of those fictions that is in sore need of being combatted. Neoliberalism did not solve the problems left behind by socialism, because the British Governments of the 1960s and 1970s were not socialist, and the problems were caused by a mix of obsolete industries and international fuel crises. And far from being a solution, neoliberalism simply added rapid recession-cycles to the other problems.

Can socialism, even of the mild variety that Corbyn stands for, resolve the chaos of monetarism and the limitations of Keynesianism? Maybe, maybe not. But we will never find out the true answer to that so long as people wrongly imagine that the economic and industrial policy Corbyn is proposing is merely something that has ‘already been tried’.

“RESIGN!”

December 13, 2017

by Martin Odoni

Did you hear them?

Theresa May has lost a binding vote in the House of Commons tonight. You suspect that will happen to her again soon, unless she does something she was being advised to do in the aftermath.

Did you hear them, offering said advice?

Here is the big moment. Listen to the Opposition benches. Listen as they call out, “Resign!”

Yes, it has started; the chorus that has echoed down the centuries when a Government’s mast has toppled over. The demand that its leader should resign. It is often a very bad sign for the incumbent party when Opposition parties start making that demand.

May will have some serious thinking to do after tonight. She’s been hamstrung by her own hubris for over six months, and tonight the precariousness of her position was cruelly exposed. A small rebellion on the Government backbenches of just eleven was enough to defeat the Prime Minister, and force a Commons vote on the final deal as the UK leaves the European Union. That small number is doubly remarkable when one considers that seven Labour MPs supported the Government, who still lost by 309 to 305.

This is no small matter for the Government; the Conservative upper echelons were clearly desperate not to lose this vote. The Tory Whips are understood to have reduced one woman MP to tears today as they tried to force her into line. A last-gasp concession was also tabled to lure potential rebels to support the Government, or at least to abstain. Stephen Hammond, one of the rebels, was sacked as Deputy Chairman of the Conservative Party within an hour of the vote. Oh, it matters all right.

The loss means that the pro-Brexit fanatics on the extremist fringe of the Tory party will now be wondering whether there is much point in supporting May any further. Not now that it looks a dead certainty that she cannot deliver a complete severance from the EU, in line with what they want. She also has yet more talks with EU leaders tomorrow, who will sit opposite her at the European Council table in full knowledge that this woman does not really govern, she merely presides. Meanwhile, Dominic Grieve and his fellow pro-Remain rebels have seen that when they dare to speak out against May’s handling of Brexit, it can have an effect. A bruising effect.

So with the Opposition benches now emboldened enough to call out, “Resign!“, with the anti-Brexit faction on the Government benches emboldened by seeing how effective they can be, and the pro-Brexit faction looking increasingly unimpressed by what May has to offer, why does May not do as suggested and resign? All she has to look forward to if she stays on is more powerless chaos.

In the 1840’s, Benjamin Disraeli, a rebellious Tory MP in his own right long before becoming a Tory Prime Minister, was at loggerheads with his leader, Sir Robert Peel, over the proposed repeal of the Corn Laws. During the spat, Disraeli famously described Conservative Governments as “organised hypocrisy”. But as tonight has demonstrated, that description is nonsense.

There is nothing “organised” about Conservative Governments.

by Martin Odoni

Irrespective of whether we think Brexit is a good idea or a bad one, there can be no escaping the reality that its execution is going incredibly badly. After Monday’s utterly shambolic wall-crash over finding a new settlement for the Irish border – perhaps the single most important conundrum that needs solving – matters somehow plumbed even danker depths today. David Davis, Secretary of State for Exiting The European Union, finally revealed in Parliament what many of us had been suspecting for weeks.

Answering questions from the House Of Commons Exiting the EU Committee, Davis admitted that neither he nor anyone else inthe Government had carried out the so-called ‘Brexit Impact Assessments’ i.e. the many complex and detailed calculations about how leaving the EU is going to affect British society, particularly its economy. This was after over a year of his repeated assurances to the House and the wider country that over fifty such assessments had been completed.

This deceit amounts to Contempt-of-Parliament, and could have dire repercussions for Davis’ future as an MP. Quite rightly, other MPs such as David Lammy, anti-Brexit campaigners such as Gina Miller, mainstream media commentators such as Rafael Behr, and many left-wing bloggers such as my old comrade-in-arms Mike Sivier of Vox Political, are calling for Davis’ resignation, and for the DExEU Committee to press for formal charges of contempt.

Brexit

Yes, David, that’s pretty much everybody else’s reaction, to every aspect of Brexit.

I certainly do not oppose such demands. Davis’ behaviour has been outrageous, and in most industries it would not only mean summary dismissal, but also possible legal proceedings. Thanks to Parliamentary Privilege – neither House of the Palace Of Wesminster is subject to the Law of the Land – fraud charges may not be possible. But the Speaker of the Commons, John Bercow, does have it in his power to suspend Davis from the House, or possibly refer the matter to the public under the Recall Of MPs Act of 2015.

Parliament is already a bad comedy thanks to its domination for decades by shallow, media-friendly, image-obsessive automata. For it to retain any credibility it has left, it has to sanction Davis, and sanction him hard. If an MP can be found to lie casually within the House of Commons on this scale, after all, what point will Parliament have at all? Its first purpose is to hold incumbent Governments to account, and that cannot happen if the precedent is set that there are no consequences for measurable deceit.

But I would not stop at Davis. Nor would I stop at his department. The entire administration now has to go.

Every MP on the Opposition benches, in Labour, in the SNP, in the Liberal Democrats, in Plaid Cymru, Caroline Lucas of the Green Party, and all the ‘Others’, must now unite to demand that the whole Government of Theresa May resign. The position of the entire administration is untenable, and not just because of Davis’ fabrications. The Government’s position has in fact been indictable since the day Article-50 was activated in March, and so the whole Government has to stand down.

What Davis has admitted is even more serious than some people realise; no one in the Conservative Party has been making necessary assessments of Brexit’s likely effects. The Referendum was effectively called in May 2015 when the Tories won that year’s General Election, including it as a gesture to ‘buy’ up assurances of support from the party’s extremist fringe. Since then, two-and-a-half years have passed, during which the Referendum has been and gone, the Leave vote won, Article-50 has been activated, and we have had approximately six months of fruitless negotiations in Brussels. In all of that time, no one in either Cameron’s Government or May’s has even bothered to assess what the actual impact of Brexit will be?

That admission is even more appalling than Davis’ fictitious boasts about what a thorough assessment his department had carried out. After all, if the country does not know what impact ending the current settlement with the EU will have, how can it know what it will need from the new settlement? Little wonder therefore that negotiations with the EU’s representatives are going so badly, when British officials and politicians do not even know the implications of anything they ask for, or even precisely what they need to ask for, or for that matter what will happen if they do not get what they ask for. They have been driving in the dark without headlights for half a year, which has meant progress has not only been difficult, it has been logically impossible; how can progress be made towards a destination that has not even been identified or defined?

These details were central to everything about how Brexit is to be carried out, and until they were properly calculated, it was insanity on Theresa May’s part choosing to activate Article-50 so soon. It started a two-year countdown, and over half of the first year of precious negotiating time has been wasted on a reckless General Election backfire, and aimless thrashing-about when finally at the table. There is no point in childishly continuing to blame EU officials for the logjams, the fault is entirely on the British side.

Have we ever known chaos in Government quite like this? In living memory, the UK has seen infighting, economic tribulations, weak Governments and social unrest. But the current instability is something of a quite unusual order, and as yet, we have not even withdrawn from the EU. Can you imagine what will happen when we do? Brexit has exposed incompetence unprecedented in any British Government since before the World Wars, and Theresa May’s whole administration is implicated in it from top to bottom.

By failing to carry out the Brexit impact assessment, the Conservative Government is guilty of dereliction-of-duty, and so must resign and call a fresh General Election for early in the New Year.

by Martin Odoni

Observe this characteristic moment of childish petulance from Boris ‘Bojob’ Johnson in 2013, during his time as London Mayor…

…when Andrew Dismore was simply stating the facts about fire safety policy in the capital. See what happened to Grenfell Tower in the summer, and then perhaps we can ask Johnson to explain to us why Dinsmore is the one who should ‘get stuffed’.

Now compare the above with Jeremy Corbyn’s endless patient dignity in the face of a two-and-a half year barrage of insults and false accusations from every corner of the media and every shade of the political spectrum. Such as this. Or this. Or this. Or this. Or this. Or this. Or this (by Johnson himself).

(NB: The above links are just taken from the first couple of pages of a Google search. I could make the list about a hundred times longer if I thought it worth the bother, and still not exhaust the possibilities.)

As the Skwawkbox blog highlighted yesterday, Corbyn has risen above the waves of abuse and never retaliated. Indeed, he almost never loses his temper during debates or interviews, even when being personally insulted. The aftermath of the very low insult thrown by Andrew Griffiths across the House of Commons during the Autumn Budget debate on Wednesday was the first time I have seen Corbyn get angry in well over two years (the only previous instance being during a Channel 4 interview with Krishnan Guru-Murthy, in 2015, in response to a measurably false accusation). And as Skwawkbox noted, Corbyn’s anger was not at the insult, but at the arrogant, trivialising attitude of Conservative MPs to the victims of budget cuts in social care.

So Corbyn genuinely does not care about being insulted. What he cares about is ensuring discussions critical to many of the nation’s most vulnerable people are not derailed by the usual descent into puerile House of Commons slanging matches – which Tory MPs are now being instructed to do every time he is at the despatch box. (On a side-note, that they are resorting to this sort of dirty tactic shows that the Tories are clearly now terrified of Corbyn, because they can find no effective way to combat him.)

These last two years prove that when Corbyn claims he wants a new way of doing politics, he is not just soundbiting; he is living up to that aspiration.

Johnson, as his behaviour when questioned by the London Assembly four years ago demonstrates, measurably wants to continue the obsolete fashion of throwing insults around in order to evade accountability and to silence criticism.

Theresa May, the lamest duck to sit in 10 Downing Street in over a century, is almost certainly nearing the end of her unhappy time as Prime Minister. When she finally falls from an office she has merely occupied rather than governed from for nearly six months, she will either be replaced by Johnson – if the Tories can somehow form another minority Government – or by Corbyn, if instead another General Election is called.

The above comparison clearly demonstrates that the country will have a choice between Johnson’s selfish childishness and Corbyn’s altruistic maturity.

In that light, is there really any choice to be made at all?