10 March 2020
David Purdy writes on politics and economics and is a member of Democratic Left Scotland.
More politics …
- Eva Schonveld and Justin Kenrick / Transforming toxic power relations (Part 1, Theory)
- David Beetham / Authoritarian populism versus democracy: the political challenge of our time
A period of reflection
Did Labour really “win the argument” despite losing at the ballot box in December? And where does the SNP go with Indyref2? David Purdy chews the post-election cud
SPEAKING on the day after his party’s bruising defeat in last December’s general election, Jeremy Corbyn insisted that although Labour had lost the election, it had “won the argument”. He also confirmed his previously announced intention to resign as party leader, saying that after a “period of reflection” there would be a leadership contest to choose his successor.
What are we to make of the claim that despite losing 59 seats and facing a government with a majority of 80, Labour had “won the argument”? In an election campaign dominated by a single issue – and in that sense almost a second referendum – Labour’s convoluted stance on Brexit held little appeal for voters in its former “red wall” strongholds, from West Bromwich and Wrexham to Workington and Wearside. Perhaps Corbyn meant that the party’s ambitious public spending plans had pushed the Tories into abandoning fiscal austerity. Both main parties had pledged to increase loan-financed public spending on infrastructure projects, and the promise Boris Johnson had made during the Tory leadership campaign to cut corporation tax and the top rate of income tax was conspicuously omitted from the Tory manifesto. Yet the manifesto also contained a commitment not to raise the rates of income tax, national insurance or VAT over the lifetime of the new parliament. Between them, these taxes bring in over 50% of total tax revenue, so day-to-day spending on the public services will continue to be constrained, especially if UK economic growth remains slow. In any case, to the extent that the Johnson government has loosened the fiscal reins, it was responding not to Labour’s 2019 election campaign, but to the outcome of the snap election in June 2017, when Theresa May lost her parliamentary majority and Labour’s share of the vote rose to 40%, nearly 10 points up on the 2015 figure. Brexit was not an issue in that contest. Both main parties had vowed to respect the result of the EU referendum, so voters, assuming it was going to happen anyway, felt free to give vent to “austerity fatigue”.
But if Corbyn was wrong about the influence of Labour’s policy offer in 2019, he was right to commend a period of reflection before a new leader was chosen, and to stay on in a caretaker capacity rather than stepping down immediately like his predecessors, Gordon Brown and Ed Miliband. For one thing, the hurly-burly of a leadership contest is hardly conducive to dispassionate inquiry into the reasons for Labour’s defeat or to careful deliberation about what is to be done. In the aftermath of a major defeat, party members need time to compose themselves, study the relevant evidence, weigh competing arguments and form considered judgments. And while the opposition is otherwise engaged, the new government is free to set the terms of political debate for years to come: witness the way George Osborne launched the “age of austerity” in the summer of 2010.
As bad as it gets?
It has become a media cliche that December 2019 was Labour’s worst election performance since 1935. The choice of this particular benchmark, however, based solely on the number of seats won, takes no account of the vagaries of first-past-the-post elections or of underlying political dynamics. In November 1935, the National government – a coalition dominated by the Conservatives and originally formed in response to the fiscal and currency crisis which brought down the second Labour government in 1931 – was re-elected with a majority of 244. Even so, Labour gained 100 additional seats and raised its share of the vote to 38%, slightly above the level achieved in 1929, thereby recovering ground lost in the catastrophe of 1931, when the parliamentary party was reduced to a rump of 52 MPs.
Labour’s vicissitudes in these years were due in part to the shifting alliances and internal divisions of the Liberals. At the 1929 election, Labour emerged as the largest party with 287 seats, enough for Ramsay MacDonald to form a minority government with Liberal support. More than 40% of these seats, however, were won on minority votes in three-cornered contests and were, therefore, vulnerable to a combined Conservative-Liberal assault. This is precisely what happened when the National government went to the polls in November 1931. Four years later, a weakened and floundering Liberal party was divided between the National Liberals, who continued to support the government, and the old-school, free-trade Liberals, who had crossed the floor to join their former leader Lloyd George on the opposition benches. It would take a world war to dislodge the Conservatives from power, but it was already clear that as long as elections continued to be fought under the first-past-the-post system, Labour was the only party with any chance of beating them. At the time, of course, this happy day seemed far away and no one could have foreseen that before it dawned Labour would join the Tories as equal partners in a wartime coalition led by the diehard imperialist and Tory rebel, Winston Churchill.
In 1935 Labour’s star was rising; today the party is in serious trouble. Since 2010 it has lost four general elections in a row and to reach the threshold of 326 MPs required to form a government without the support of other parties, it needs to win an extra 124 seats, more than 100 of them currently held by the Tories. No party since 1945 has ever managed such a feat at one go. And to pull it off, Labour would have to advance beyond its “new heartlands” in England’s big cities and university towns to take seats such as Basingstoke and Uxbridge (Boris Johnson’s constituency), as well as regaining ground lost in Scotland, the North of England, the Midlands and Wales.
This is a formidable challenge, which cannot be met if debate about Labour’s future is confined to arguments about who or what was to blame for last December’s debacle. Was it Jeremy Corbyn’s unpopularity with voters, the content of the manifesto, the conduct of the campaign or the unusual circumstances of the election itself? Probably all these factors played a part, though we can argue about their relative importance. Corbyn’s popularity rating was the lowest ever recorded for an aspirant prime minister; Labour’s overstuffed manifesto was four times longer than the one that the late Gerald Kaufman in 1983 memorably – if unfairly – described as “the longest suicide note in history”; the party’s campaign resembled an Advent Calendar, with every day bringing a previously hidden treat; and after holding out against the dissolution of parliament, at the end of October the opposition parties suddenly changed their minds and voted for it. Why?
Partisan calculation was one reason: all three parties reckoned that they had more to gain than to lose by taking their chances in an election, a judgment that turned out well for the SNP, but proved disastrous for Labour and the Liberals. The switch may also have reflected a belated recognition that the year-long stalemate in parliament was doing more harm than good, not least to the reputation of the political class. With the help of Tory dissidents, the opposition parties had been able to block the government’s various attempts to get its way on Brexit. But they lacked the cohesion and numbers required either to secure a second referendum or to defeat the government on a vote of confidence. There was, therefore, no other way to resolve the protracted constitutional and political crisis that had begun when Theresa May lost her parliamentary majority, but failed to rethink her strategy for getting the Commons to approve whatever deal she managed to negotiate with the EU. Instead of making a prompt and determined effort to secure cross-party support for some form of “soft” Brexit, she chose to court the DUP and appease the ERG, presumably for fear of splitting her own party. Of course, it takes two to tango, and Labour, itself riven by intersecting lines of division – left-right, leave-remain, liberal-authoritarian – and clinging to the comfort-blanket of its “six tests”, bears some responsibility for the logjam in parliament and the rising anger of the public outside.
Projects and programmes
It won’t do, however, to end the discussion about Labour’s future here. To see why, consider the argument set out by Owen Jones in his Guardian column on 19 December under the headline: “Self-inflicted errors and Brexit buried Labour in this election”. By no means an uncritical Corbynista, Owen insists that the party must retain the policies on which it fought the election. This view conflates two different things: the struggle to embed a greener and fairer economy within a more democratic and less divided society; and an election manifesto outlining a programme for government. The former is my one-line attempt to sum up a pamphlet-length statement – as yet unwritten, but sorely needed – setting out Labour’s abiding purpose: its raison d’etre or, if you like, its vision, the long-term project it intends to pursue through thick and thin, in or out of government. Manifestos are usually published near the start of an election campaign and indicate what the party intends to do if it wins. There is no presumption that an identical policy offer will be made at succeeding elections and, indeed, every expectation that it will not. A political project, by contrast, in the sense I am using the term, is not tied to the electoral cycle, but extends into the indefinite future. This is not to say that it is inscribed on tablets of stone: nothing lasts forever and from time to time – every twenty years or so – parties need to revise their mission statements as they absorb the lessons of experience and respond to a changing political landscape.
Ideally, the core policies contained in a party’s manifesto will be guided by its long-term project. Their shelf-life, however, is much shorter: five years at most. And the manifesto as a whole normally serves more than one purpose: besides appealing to voters, it may be designed to maintain party unity, confound the opposition, stake out the electoral battleground or frame the terms of public debate. In each case, however, there is one overarching objective: to win or retain the power that comes with being in government. The same goes for all the other tricks of the electioneer’s trade. Last December, for example, the Tories’ low-key manifesto played second fiddle to their campaign slogan,“Get Brexit Done”. This simple, but resonant rallying cry was on a par with Ramsay MacDonald’s appeal to voters in 1931 to give him a “doctor’s mandate”, authorising the National government to do everything in its power to get a stricken country back on its feet.
The politics of the long haul
For a party with a project, there is more to politics than fighting elections. There is also more to a project than being in government. People have all sorts of ideas about what is wrong with the world and how to put it right. But proponents of radical reform – an unconditional basic income, a green new deal, proportional representation, employee directors on company boards, the redistribution of paid and unpaid work between men and women – must answer three questions: Is the idea desirable in principle? Would it work if, somehow, it could be achieved? And what are the chances of achieving it? These questions form a logical sequence: if a proposed reform is undesirable, there is no point in considering whether it would work; and if it won’t work, there is no point in trying to make it happen. In a democratic society, of course, the tribunal that must be satisfied on each of these counts is the court of public opinion.
Typically, the progress of schemes for making the world a better place from initial inspiration to accomplished fact by way of heated debate, trials of strength and practical problem-solving is long, winding and arduous. Ideas that challenge established orthodoxies and conventional wisdom often spend years in the intellectual “underground” before coming to wider public notice: some never emerge at all. Suppose, however, that a radical proposal has crossed this threshold and is being debated in various forums: online platforms, university seminars, television studios, workplaces, perhaps even the corridors of power. Suppose further that the weight of opinion is against it: too many people are too strongly opposed to the idea on moral or ideological grounds and/or believe it would never work. At this point, reformers must either refresh their arguments and powers of persuasion, go back to first principles or give up. Assume that being deeply committed to their cause, they take the first option.The resistance they face stems from two sources: on the one hand, values and beliefs underpinning the judgments people make about what is the right thing to do, what makes life worthwhile and how society should (or must inevitably) be organised; on the other, beliefs about the economic and social harm that would ensue if the reform were to be enacted. In the former case, the challenge for reformers is to come up with more cogent moral arguments – or ways of presenting them – while taking issue with false or questionable beliefs about human nature and the human condition. Issues of this kind form the subject matter of moral and political philosophy. In the latter case, the challenge is to disabuse their opponents of false or questionable beliefs about how the economy works or how the proposed reform will affect society. For questions of this kind, the relevant intellectual disciplines are the study of history and the social sciences. In either case, since deeply held values and beliefs do not yield easily, radical reformers must be ready for the long haul.
Whether an idea for making the world a better place is achievable depends, in a democracy, on whether it can attract sufficient public support to be taken up by a political party or alliance of parties capable of winning a general election, forming a government and successfully implementing its programme, even in the face of determined opposition. This is a matter of judgment about the prevailing balance of political forces and the prospects for shifting it by suitable political action – winning a critical vote, forming an alliance, organising a campaign – within some specified timeframe: the next month, year, five years or whatever. History and the social sciences can offer only limited help in making such judgments because no one knows or can know for certain how the future will turn out, and the further ahead we look, the more uncertain it is. Politics is an art, not a science. As a rule, the longer the time horizon, the greater one’s room for manoeuvre and hence, in principle, the greater the scope for turning an adverse balance of forces around. There are, though, exceptions to this generalisation: moments of meltdown or breakthrough, anticipated or unforeseen, when what was previously unthinkable suddenly becomes thinkable and even doable. The art of politics consists of analysing the elements of a situation or problem, deciding which can be changed in the time available and which must be taken as given, and then making the right moves. What we can say with some confidence, however, is that it is foolhardy to fight a general election on a radical platform unless the ground has been prepared beforehand by sustained efforts to win hearts and change minds. As Gramsci once remarked: “The counting of votes is merely the final ceremony in a long process.”
Labour, taxation and public spending
For the Labour party, which needs to raise its electoral game, avoid schism, rethink its purpose and overhaul its machinery all at the same time, the distinction between project and programme offers a lifeline. For one thing, it provides a potential area of common ground on which the party’s various factions and fractions can continue to co-exist. Social democrats and democratic socialists might well disagree about specific policies or the next election manifesto, but as long as adherents of both traditions subscribe to a shared long-term project, the risk of a formal split is reduced. (And if they cannot agree on that, it is idle to talk of Labour as a “broad church”.) In the absence of electoral reform, a split at the present time would be a gift to the Tories, just as the fracturing of the Liberal party in the inter-war period helped to keep the Conservatives in power for all but three of the years from 1918 to 1940. Conceivably, secession by the party’s social democratic wing might lead to the emergence of a new centre party, as happened when the SDP was formed in 1981, but judging by the tone and conduct of the current Labour leadership contest, this seems unlikely. In any case, it is not clear how realignment on the left and centre of British politics would help to solve the problems of purpose, direction and strategy which have been exposed by Labour’s repeated electoral defeats. For some two decades now, the German left has been divided three ways between the SPD, Die Linke and the Greens, but this has not ended the long ascendancy of the Christian Democrats or prevented the rise of the national-populist AfD (Alternative fur Deutschland).
Efforts to unite the Labour party around a shared project would also encourage serious reflection on the battle for hearts and minds which is central to the pursuit of radical reform in a democratic society. A prime illustration is the issue of taxation and public spending. In its 2019 election manifesto Labour promised big increases in public investment and day-to-day spending on the public services: the former to be financed by additional borrowing, the latter by imposing higher taxes on business companies and the rich. This fiscal formula, it was claimed, would enable a Labour government to launch a “green industrial revolution” and refurbish the country’s decrepit infrastructure, especially outside London and the south east of England, while at the same time redistributing income – whether in cash or in kind – from the “few” to the “many”; and all this without breaking Gordon Brown’s “golden rules” (now, it seems, to be reinstated by the Johnson government): borrow only to invest and balance the current budget – not every single year, but on average over a complete economic cycle – making sure that day-to-day spending is covered by tax receipts.
The scale of extra spending proposed was ambitious: £83 billion a year for public services, £50 billion for public investment, taking total public spending as a proportion of GDP from 39% to 44%, somewhat higher than the corresponding German figure, but well below that of France. In the British context, however, the policy marked a radical bid to end not just 10 years of fiscal austerity, but 40 years of neo-liberal hegemony. All the more reason, one might suppose, to spell out its implications for macroeconomic stability in the short-to-medium term. On this, however, there was a resounding silence. Borrowing an extra £50 billion a year at exceptionally low interest rates in order to boost public investment was exactly what the UK economy needed back in 2010 when recovery from recession was feeble and fragile. But today the economy is operating close to full capacity: the gap between potential output and actual output has narrowed, leaving little room for firms to respond to a rise in demand by producing a greater quantity of goods and services rather than raising their selling prices or letting their order books lengthen. Over the past decade, the growth of potential output has slowed to an average rate of only 1.5% a year, compared with the long-term trend of 2.5%. This is largely because, in the long aftermath of crash and slump and despite rock-bottom interest rates, private firms have been reluctant to invest in capacity-enlarging or productivity-enhancing equipment and on-the-job training, preferring instead to meet any rise in demand by hiring more workers or extending hours worked. (In a flexible, deregulated labour market, payrolls and hours worked can easily be reduced again should demand subsequently turn down.) In these circumstances, a surge in public investment risks stoking up inflation, obliging the Bank of England, under its current mandate, to raise interest rates, which in turn risks denting business confidence and causing private investment to fall, precisely the opposite of what is needed to expand capacity and raise productivity.The alternative would be to curb private consumption by raising tax rates on personal incomes or consumer spending. But if this was Labour’s plan, the trade-off between higher public investment and lower private consumption should surely have been explained to voters in advance, so that they could decide which they prefer. To spring tax rises on them after the election is asking for trouble.
As so often in the past, Labour’s generals were still fighting the last war. The proposal to give an even bigger boost to recurrent public spending posed less of problem for macroeconomic management since this part of Labour’s fiscal plan was to be financed from tax revenue. True, some of the £83 billion Labour hoped to subtract from company profits and the incomes of top earners would have been saved rather than being spent, whereas all of it was to be spent by the government, producing a net addition to aggregate demand. But in all probability, the effect would have been small: only £16 billion a year if, for example, businesses and top earners save £20 out of every additional £100 they receive in income.There were, however, other problems with the proposal. Roundly condemned by employers’ organisations and the tabloid press, it failed the test proposed by Jean Baptiste Colbert, Louis XIV’s Minister of Finance: “The art of taxation is to pluck the maximum amount of feathers with the minimum amount of hissing.” But hissing apart, would raising the top rate of income tax bring in sufficient additional tax revenue?
“To make the poor to work harder, pay them less; to make the rich work harder, pay them more.”
The relationship between the top rate of income tax and tax revenues is hotly disputed by economists: estimates of the “optimum” top rate – which in this context means the revenue-maximising rate – vary from 24% to 62%, a range that could comfortably accommodate most political views in Britain. (The current top rate, 45%, levied on taxable incomes over £150,000, is close to the middle of this range, but that is mere co-incidence and does not mean that the UK has, in some sense, “got it right”.) As the late Tony Atkinson (2015, p186) points out, the studies on which these estimates are based assume that there is no interdependence between the incomes of different people. The recent history of managerial remuneration casts doubt on this assumption. In the past, with high marginal tax rates, top business executives saw little point in negotiating higher pay. Instead, they sought untaxed fringe benefits or indulged in wasteful corporate spending, but they may also have favoured ploughing back profits into securing faster expansion of their firms. Cuts in top tax rates in the 1980s meant that they switched their efforts back to increasing their remuneration or bonuses, and the cost of this was met by shareholders. So against the increase in managerial pay has to be set the smaller amount paid out to shareholders, which – if in the form of lower dividends – means lower tax revenue.
The elusive search for the optimum tax rate springs from the obsession of mainstream economists with economic incentives, the presumption being that at some point the extra revenue the Treasury gets by taking a larger share of whatever people earn in excess of the top-rate threshold will be outweighed by the disincentive this creates for top earners to devote their time and effort to paid work or entrepreneurship, together with the incentive it creates to engage in tax avoidance or evasion. But tax policy needs be viewed in a wider social perspective, going well beyond revenue maximisation. Atkinson (op. cit. p187) makes the point well:
“A frequent complaint about taxation is that it is not ‘fair’. Tax rates are not just a matter of economic incentives: the change in take-home pay as a consequence of an increase in earnings is also judged in terms of its intrinsic fairness. And fairness [among other things] involves a perceptible link between effort and reward: people deserve to keep at least a reasonable proportion of what they earn through increasing their working hours, taking on more responsibility or doing a second job. This is dramatised in terms of the ‘poverty trap’, according to which people on low incomes are unable to improve their situation because an increase in their earnings causes them not just to pay more in tax, but also to lose income-related benefits. On the addition to their income, they face a high implicit marginal rate of tax. It is the marginal rate because it applies only to additional income; this is not the same as the average rate of tax: that is, total tax divided by total income. The objection to the poverty trap is not just that it discourages work (and savings), but that it allows people to keep too little of what they earn: it is unfair.”
One of the stated aims of the UK government’s Universal Credit scheme – an income-tested transfer for low-income households – is to limit the withdrawal rate to 65%. But if it is to be fair, such a maximum marginal tax rate should be the same for everyone, across the whole range of incomes. This suggests a different criterion for deciding what the top rate of income tax should be. The marginal rate at the top of the income scale should be the same as the marginal rate at the bottom. If the poor are allowed to keep 35p out of every extra pound they earn, the rich should not be allowed to keep more. To be sure, 65% represents a big increase on the current top rate, but by historical standards it is not high. The UK has had a top rate of 65% or higher for nearly half of the past 100 years.
What if the additional revenue yielded by putting up the top rate of income tax to 65% falls short of the estimated cost of re-invigorating Britain’s emaciated public services, put at £83 billion a year in the Labour manifesto? Would that be a reason to cap public spending at a lower figure? Would it not be better to say that since not enough can be found by “soaking the rich”, the rest will have to be paid, in one way or another, by taxpayers whose incomes are below the top-rate threshold and who, in that sense, are part of the “many”, not the “few”? This would, of course, be an uncomfortable admission for a party which has taken the closing line of Shelley’s famous diatribe against the Peterloo massacre and turned it into a slogan. But campaigning for parliamentary reform in 1819 is not the same as campaigning to repair the ravages of fiscal austerity in 2019.
Labour’s goal was laudable. But it was trying to reach this goal without having previously won the battle to forge a new “common sense” on taxation and the “proper” role of the state. In the 1980s, Ronald Reagan famously summed up the spirit of the neo-liberal revolution when he declared that “government is not the solution to our problems: it is the problem”. One might suppose that after the near-collapse of the banking and financial system, the worst recession since the 1930s, 10 years of fiscal austerity and a marked slowdown in the UK’s long-term rate of economic growth, amidst daily reminders that the consequences of climate change are already upon us, people would be ready to reject Reagan’s dictum and accept that government has to be part of the solution to our problems. We may hope to get there in the end, but we are not there yet and we won’t get there simply by repeating the old verities: that taxes are the price we pay for a civilised society, and that those with the broadest backs should bear the heaviest load. Nowadays these maxims are anathema to free-market libertarians and even to some conservatives, who see taxation as a form of legalised theft; and while national populists are not tax-averse on principle, they rail against governments which, as they see it, spend “other people’s money” on interest groups, causes or public institutions favoured by the “ruling elite”: witness the Johnson government’s incipient campaign to abolish the TV licence fee – a tax by another name – and convert the BBC into a reduced public broadcasting service financed by voluntary subscriptions.
Indyref2 and the case for independence
Labour is not alone in wanting a fairer society, but failing to win – or sometimes even to make – the case for it where it matters: in the court of public opinion. Exactly the same charge can be levelled against the SNP, which is frequently, and rightly, accused of wanting to build a Scandinavian welfare state with US tax levels. In this respect at least, there is some truth in the adage that Scotland has two social democratic parties, just as Liverpool has two cathedrals. But there the similarity ends, for besides having no long-term project – a fault it shares with its sister-parties in England and Wales – Scottish Labour, with only one Westminster MP and a dwindling share of the vote, is on its knees. The SNP, by contrast, is Scotland’s ruling party and has a clear long-term project, which since last December’s Westminster election has begun to look eminently achievable.
According to opinion polls, from indyref1 in September 2014 until last summer, support for Scottish independence was stuck in the low-to-mid 40s. But once Boris Johnson became Tory leader, support crept up to 50% and over, prompting Nicola Sturgeon to announce her intention to seek a Section 30 order, authorising the Scottish government to hold a second independence referendum. With the backing of the Scottish parliament, a formal request has now been duly issued and rudely rebuffed by Johnson, sparking a phoney war of words about how to interpret the “will of the people”. In private, SNP strategists accept that the most likely – and indeed, most desirable – route to independence is to win a majority at the Holyrood election in 2021, giving the party an undeniable mandate for indyref2. Before then they need to deepen and extend support for independence, driving it well over the 50% threshold and keeping it there. Their model is not the Brexit vote in 2016, but the devolution referendum in 1997, which was won by 74–26. The aim, to coin a phrase, is to show that independence is the “settled will of the Scottish people”. In her speech to the SNP conference last October, Sturgeon promised that “we will win our independence, but not the Brexit way. We will win by inspiring and persuading.” And while it suits her to denounce Unionist resistance to pressure for indyref2 as a denial of the right of the Scottish people to determine their own destiny, like any smart democrat, she doesn’t want to have the fight until she is sure she can win it.
Indyref1 was lost largely because supporters of independence, a broad coalition assembled under the banner of the Yes campaign, failed to convince enough voters that breaking away from the UK would bring economic benefits. Survey data indicate that hardly anyone who thought that Scotland would be worse off in economic terms voted Yes. Accordingly, in an effort to strengthen the economic case for independence, the Scottish government established a “sustainable growth commission”, whose members included academics as well as politicians. In May 2018 the commission issued a report. This was, in part, an update of the blueprint published by the Scottish government in 2013 in the run-up to the referendum and still contained a lot of wishful thinking. In particular, it invited readers to believe that independence would boost the rate of growth of Scottish GDP from an average of 1.3% per annum between 2009 and 2018, a figure slightly below that recorded for Britain as a whole over the same period, to 3.5% per annum, a full percentage point higher than Britain’s long-term historical average.
In reviewing Scotland’s public finances, the commission struck a more measured note. Its forecasts for the Scottish government’s budget deficit no longer relied on revenues from North Sea oil and gas, which in 2013 were expected to bring in £7–8 billion a year. As it turned out, thanks to the slump in oil prices after 2014, the tax-take from oil and gas was negligible. The commission recommended that any future return from the North Sea should be invested in a sovereign wealth fund rather than being used to finance recurrent public spending. It also acknowledged that in 2016–17, Scotland raised about £13 billion less in taxes than was spent by the government. So an independent Scotland would inherit a budget deficit equivalent to about 6% of GDP, more than twice the size of that currently run by the UK government. In the long term, this is not sustainable. To bring the deficit down to below 3% over a period of 5–10 years, the commission recommended limiting the growth of public spending to one percentage point below the rate of GDP growth. Such restraint might be tolerable if independence were indeed to bring about a rapid and substantial uplift in the trend of economic growth. Conversely, if economic growth were to remain sluggish for any length of time, it would be a recipe for continued fiscal austerity.
The commission offered little detail on the question of Scotland’s currency, suggesting only that the country should remain in a UK-wide currency union, at least until the budget deficit had been reduced to manageable proportions. Thereafter, other options could be considered: notably, adopting a separate Scottish currency, perhaps initially pegged to the pound sterling; or if Scotland were to become a member of the EU in its own right, joining the eurozone. The Commission had even less to say about Brexit and, in particular, about whether the border with England could really remain frictionless if Scotland was in the EU, while England was outside it.
This combination of sunny optimism about Scotland’s growth prospects, sober realism on fiscal policy and agnosticism on currency and trade is surely not what Nicola Sturgeon meant when she spoke of “inspiring and persuading”. Perhaps she should echo Winston Churchill in 1940 and urge her fellow-citizens to support a noble cause that demands sacrifices all round: not this time of blood, to be sure, but certainly of sweat, toil and tears. Such unwonted candour in a political leader might just succeed, where conventional economic wisdom has so far failed, in winning the battle for independence, and winning not by a bare margin, but by a decisive margin. There is too much talk nowadays of “getting it over the line”, as if political contests were like a rugby match where, when the whistle blows for full time, a lead of just one point is sufficient for victory. If Scotland is to make success of independence in the face of challenging economic conditions, a bare majority is not enough: what is needed is a resounding victory that puts the issue beyond doubt, persuading the losers to accept defeat and unite with the victors in the next stage of the nation’s journey. That surely is the lesson of Brexit.
Atkinson, A.B. (2015), Inequality: What can be done? (Cambridge, Massachusetts: Harvard University Press)
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1 July 2020
The radical future overtakes the ‘realistic’ past, via the crisis present
I welcome David Purdy’s typically thoughtful and detailed chewing of the post-election cud. However, we are now firmly in the territory of an horrific crisis of monumental proportions, in terms of death and economic collapse, that we must use to our advantage.
Therefore, in response to his points the current crisis allows and urges us to be far more radical:
an unconditional basic income: is massively more expensive than Universal Basic Services, not as effective in tackling inequality or need and vulnerable by being based on money/exchange value not need/use value (Coote 2019; Coote & Percy 2020; Duffy 2018). Countries like Luxembourg (public transport) are making public services free – which has moved UBS firmly into the territory of “realistic”, certainly popular. We need to build on the original proposal (UCL-IGP 2017) as one of the bases for a new left praxis. This also needs to explicitly sketch out a left response to automation/robotics/a-future-with-far-less-work-in-favour-of-previously-working-people, making the compelling case for people “taking back control” of time; something that the appallingly under-prepared, weakly understood and rapidly dumped four-day week in Labour’s 2019 manifesto squandered.
a green new deal: is necessary, but greatly limited if not accompanied by structural change – replacing financialisation (the dominance of everything from money and derivatives trading to hedge fund disaster capitalism) with production for need (use-value over exchange-value), in other words an end to globally destructive consumerism, economically, practically, socially and culturally. The limitations of and reliance on just-in-time global supply chains, that have proved so catastrophic for the UK during the pandemic, now coalesce with a long-term call for an expansion of indigenous manufacturing (albeit partly a nostalgic return to a Fordist past by hard left and right – most recently David Starkey, 2020) particularly of strategic goods, that now include PPE and medical equipment. Food insecurity will be the next big issue and in that, a potential alliance between traditionally Tory farmers and urban workers who value locally and ethically grown food and are prepared to pay a “realistic” price for it – in contrast to the prospect of the looming post-Brexit “free trade” deal with the US threatening food standards and UK farming viability.
proportional representation: is necessary, but to be radical this must be accompanied by a new era of participatory and deliberative democracy and democratic shift away from national elections (producing “selfish” national outcomes, e.g. protecting jobs rather than the environment – whereas we know these are not mutually exclusive and the latter is literally the only guarantee of the former, in the long term) to local and regional democracy and international co-operation on things like averting climate-systems-breakdown/catastrophe. The left must significantly shift the popular understanding of the nature, purpose and power of democracy – away from the “lite” version of neoliberalism, to our rich and deep praxis.
employee directors on company boards: this is linked to the above, but a distraction and is not a priority. Yes there should be a process from here to worker control, but a radical policy should be socialisation (not nationalisation) without compensation of all utilities and public goods and services, put in mutual hands of those who produce and benefit from the goods/services – with internationally (before that, locally) determined regulation and oversight (worker control is no guarantee of good practice). Socialisation and greening of pension funds is also a high priority that is almost a no-go area for left policy debate.
the redistribution of paid and unpaid work between men and women: is a small and inadequate step in crushing patriarchy and its dominance firstly over children, inculcated by both parents and wider culture; and thus perpetuating it throughout people’s damaged lives. Abolishing child poverty, sexual abuse and exploitation, physical and mental health crises and damage caused in infancy following people throughout their lives, must be top priority for any radical party, alliance/coalition and government. Using the latest advances in neuroscience to revolutionise parenting (individual-extended families and collective, as a society) will be the foundation of enabling people to achieve their potential, by eventually “nurture” leading to wellbeing, instead of psychological, physical, social and cultural harm (Teicher 2000).
The fact that the right can in any way exploit the issue of child abuse for their own gain, is testimony to the dismal record and failure of the left on this issue. Increases in child poverty are often invoked as an indicator of Conservative callousness, but – apart from in this general ”wicked Tories” sense and almost a “trickle down” approach: if we improve adult incomes and childcare, etc., children will benefit – children have not been a real priority for the left. This has, in part, led to some gross neglect of children in Labour and Liberal councils’ care and a failure to treat scandals such as child sexual abuse and exploitation with anything like the seriousness it deserves. Children literally are our future and everything to do with them must be top priority for the left. I expand on this elsewhere.
Before Covid-19 we were told constantly that some of the things that 90+% of people are now doing out of a perceived necessity were not possible: driving less, not flying, not putting their immediate consumer wants as first priority, etc. Of course we were; there are enormous pressures to enforce and reinforce the status quo and belittle radical ideas for much better ways of living and sustaining all life. This is the time for us to overcome our “pessimism of the intellect”; being “realistic”, which equals self-censoring our vision and values, imagination and creativity because we think that “the chances of achieving it” are slim. This is the time to “ramp up” (never, ever use that phrase again!!) our “optimism of the will” and vision of an equal, peaceful, collective, sharing, caring, sustainable future.
However, I completely agree with David in that “What we can say with some confidence, however, is that it is foolhardy to fight a general election on a radical platform unless the ground has been prepared beforehand by sustained efforts to win hearts and change minds.”
Also that Labour “was trying to reach [an election victory] without having previously won the battle to forge a new ‘common sense’ [in a Gramscian sense and not just] on taxation and the ‘proper’ role of the state” – but on a radical vision for a very different future than exists now. In fact, in my view most of the Labour left’s vision of socialism is a suburban semi, or downtown flat if you prefer, two cars and two “foreign” (sic) holidays a year for the many. Their conception of rural life, agriculture, or the importance of wilderness is as absent as an understanding of and commitment to environmental sustainability was in the 1990s and still is for many. They are deeply non-radical and even calling them “reformist” is generous. The recent, woeful “Northern Discomfort” (Lavery and Trickett, 2019) is a prime example and needs a robust critique from northern Marxists, like us.
If they don’t understand race enough to withstand a Big Lie campaign like the anti-Semitism one and end up totally capitulating to the Israel lobby, how on earth would they win a battle against the forces of capital flight and tactics used against countries as diverse as Venezuela and Iran? Looking back to the Italian Communist Party’s “historic compromise”, to prevent the Italian people suffering a version of the Chilean coup, it would be much better if a badly prepared, overly optimistic, staggeringly naïve, left-wing English (sic) Labour government did not come to power with 45% of the vote and an 80 seat landslide in a first-past-the-post election victory, with the accompanying “the people have voted for socialism” (probably/definitely) catastrophic delusion.
Not that I think that excuses any of the alleged anti-democratic treachery of the right-wing Labour general secretary and executive staff in 2017. In my view that has been seen, even by the left, as an internal Labour issue, where I would see it as a national democratic scandal that all parties and everyone in the UK and EU (of which we were a member then) should take very seriously.
It is time for a thorough rethinking of how we can simply and concisely define a Gramscian (i.e. radical-democratic – in the very best sense and traditions of the term communist: Makin-Waite 2017) vision and approach to “the politics of the long haul”, recognising that it must be rooted in the now, struggle to define the emerging “new normal” and have some very immediate answers to the urgency of climate catastrophe.
- Coote, A. 2019, https://neweconomics.org/2019/04/universal-basic-income-new-study-finds-little-evidence-that-it-can-live-up-to-its-promise on 29.04.20
- Coote, A. 2019, https://www.theguardian.com/commentisfree/2019/may/06/universal-basic-income-public-realm-poverty-inequality on 29.04.20
- Coote, A. and Percy, A. Eds 2020, The Case for Universal Basic Services, Polity, Cambs. UK
- Duffy, S. 2018, https://www.centreforwelfarereform.org/library/basic-income-or-basic-services.html on 19.05.20
- Gordon, L. 1985, “Child Abuse, Gender, and the Myth of Family Independence: A Historical Critique”, Child Welfare, May/Jun 1985, Vol. 64 Issue 3, pp213-224
- Lavery, I. and Trickett, J. 2019, “Northern Discomfort”, Tribune https://tribunemag.co.uk/2020/03/northern-discomfort on 19.05.20
- Makin-Waite, M. 2017, Communism and Democracy, Lawrence & Wishart, London
- Starkey, D (2020), “Covid-19: Britain’s Disastrous Response Will Have Devastating Consequences”, The New Culture Forum Channel, https://www.youtube.com/watch?v=8S8Js-tEmlg on 19.05.20
- Teicher, M.H. 2000, “Wounds that time won’t heal: the neurobiology of child abuse” https://www.dana.org/article/wounds-that-time-wont-heal/ on 19.05.20
- UCL-IGP 2017, https://www.ucl.ac.uk/bartlett/igp/news/2017/oct/igps-social-prosperity-network-publishes-uks-first-report-universal-basic-services on 29.04.20