All 2 entries tagged Labour

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December 13, 2008

Welfare in the UK

The government’s latest welfare reform is a combination of providing help for the long-term unemployed to seek work, and punishments for those who refuse to search, ranging from loss of benefits to community service work.

Although welfare reform is long overdue the language surrounding the announcements has been focusing on the so-called culture of dependency, and has in my opinion tended to tar all benefit claimants with the same brush.  Although there are undoubtedly a number of people who ‘play the system’, in the words of Work and Pensions Secretary James Purnell, we must recognise that there is such a thing as involuntary unemployment.  Both the Conservatives and Labour are likely to back the plans, with the measures sounding in large parts like previous Conservative plans, however I hope that a Labour government is likely to put greater emphasis on helping the unemployed, back into work, rather than simply punishing those who ‘fail’ to find work.

In neo-classical economic theory we tend to assume work is a disutility, in which case punishments might be the better remedy.  However theory is moving on, and the work of economist such as Andrew Oswald here at Warwick, indicates that for many people work can be a utility, connecting individuals with society, and providing them with a sense of worth and status.  Therefore many people on welfare would be willing to work, but have lost faith in their ability or whose skills have been eroded by inactivity.  For these people, well targeted government help could be beneficial.

October 28, 2008

Labour losing liberties?

The Labour party have been taking a bit of a bashing in UK politics recently, if we disregard the praise Gordon Brown gained from Nobel Economists such as Paul Krugman and Joseph Stiglitz for his 'recapitalisation' (read temporary nationalisation), of some of Britain's major banks. 

Brown was originally criticised for dithering over the initial Northern Rock crisis, and his record as chancellor has been challenged by the Conservatives who have mocked him over what seems to be a return to the 'boom and bust' he promised were part of history.  Of course this was never going to be the case, economic cycles have been a fact of life from ancient times when they were caused by shock in agricultural conditions, to Soviet Russia under central planning.  Economic shocks cannot be simply tammed, they can only be managed.  Here is where one criticism of the former Chancellor holds true, Britain is unable to enact expansionary fiscal policy now because Labour failed to save some of the proceeds of the last seventeen years record uninterrupted growth.  Brown's recent attempt to make the country's record fiscal deficit seem like a proxy for action on the economy is pure smoke and mirrors.

However I would still consider voting Labour despite the economy.  Brown may have dithered over Northern Rock but it can be understood that a Labour PM would be hesitant to start nationalising banks, and he has moved quickly and efficiently since then.  It is unclear that the Conservatives had a clear strategy at the start of the crisis, they would probably have let Northern Rock go down rather than nationalise.  Only Liberal Democrats Treasury spokesman Vince Cable seemed to have a clear and coherent understanding of events as they unfolded, he backed nationalisation from the start.

I won't be voting for the current Labour administration however.  The reason is the erosion of civil liberites seen under this government in the name of anti-terrorism policies.  Attempts to increase police powers to detain citizens without trial for 90 and 42 days have been defeated, but plans for ID cards continue and the DNA database is rapidly filling with the information of innocent individuals.  So we have responded to terrorists who Bush and Blair claimed wanted to change our way of life by giving up one of the best features of western democracy, which took the struggle of generations to accomplish?

While Labour continue with these policies I'll be voting Liberal Democrat.

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