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October 06, 2008

Mandelson's Return: Brownites against Brown?

Amid the forest of pages dedicated to Gordon Brown and Peter Mandelson’s rapprochement few have asked exactly how cordial relations will be between Mandelson and Brown’s hitmen.

Charlie Whelan, Brown’s pugnacious former press spokesman, has recently been flexing his muscles again as political director of super-union Unite. Immediately after Brown’s conference speech, Whelan could be found swaggering around telling anyone within earshot that the Prime Minister’s ‘novice’ line was aimed directly at David Miliband. Prior to this, it’s widely thought that Whelan ordered Derek Simpson’s blast against the “smug” and “arrogant” Miliband. Whelan’s stock has risen once more as Labour has become ever more reliant on the funds of trade unions in general, and on those of Unite’s two million members in particular.

It’s worth recalling therefore that it was an incredulous Whelan who in 2004, writing on Mandelson in the New Statesman, declared, “Can you believe, then, that some hacks are suggesting the twice-disgraced ex-minister will make a third comeback?”

Well, now he has, and it’s likely Whelan is infuriated by the return of a figure he perennially dubbed ‘Trousers’, at the hands of the man whose cause he has championed for over fifteen years. Nor is Whelan’s the only Brownite nose put out of joint by Mandelson’s appointment.

Kevin Maguire, political columnist for the vociferously loyal Daily Mirror and the man who Brown unsuccessfully headhunted as his Communications chief, “called the appointment a “grave error” and wrote that “Bringing the Prince of Darkness over from Brussels makes him look weak.”

Meanwhile, rumours abound that Mandelson is set to usurp Douglas Alexander as Labour’s general election coordinator. Alexander, one of those who Mandelson undoubtedly had in mind when he testified that Brown “wasn’t surrounded by the easiest people either”, may still be raw from taking the rap for the aborted election, and Brown is now risking further alienation. Labour put out a press release earlier today confirming that Alexander remained election coordinator, an act which perhaps brings to mind the late journalist Claud Cockburn’s adage that one should “never believe anything until it is officially denied.”

Ed Balls, another implacable Brownite, put it very mildly when he declared that Mandelson’s return was a “risk”, and after years of combat with him throughout the nineties it’s no surprise to learn that he pleaded with the big man to think again.

The key to all of this is that Brown has put himself on the other side of a key political decision to his chief union fixer, his main press supporter and his two most historically loyal cabinet members. It’ll probably take more than pragmatic assertions that you should “Keep your friends close and your enemies closer.” (Michael Corleone) or that “It’s better to have him inside the tent pissing out, than outside pissing in.” (LBJ), to placate these figures.

In the past Brown would often hit Mandelson by proxy, the stories are best documented in Tom Bower’s damning biography of the PM, and so inevitably many of the sharpest exchanges took place at this level.

It’s for this reason that Mandelson felt it important to stress in his Observer interview that he “could work-not just with him (Brown), but with those closest to him, with whom I’ve had a difficult relationship in the past as well.”

This has a whiff of the Panglossian to me and now Mandelson’s occasional forays from Europe have been replaced by a full-time residency in the cauldron of Westminster I don’t think it’ll be long before the screaming matches start again.

October 22, 2007

Taxing Times

It is a truism of British politics that New Labour changed the terms of debate on tax-and-spend. Where once John Smith’s tax-raising budget hamstrung Labour in the 1992 election, the last three elections have seen the party convince the electorate to opt for increased spending over Conservative tax cuts.

After last week’s pre-budget report one can no longer assert this with the same confidence. Alistair Darling’s transparent act of political cross-dressing muddies the divide. Labour could have mounted a robust defence of inheritance tax based on equality and meritocracy. Instead they pandered to the same populism that infused George Osborne’s original proposal. Now Labour has entered this sweepstake, there is every chance that floating voters will opt for the opposition and that extra £300,000 on the inheritance tax threshold.

And yet there remain reasons to be hopeful. It is dispiriting that it took the Tory party, of all groups, to bounce Labour into action on non-domicile residents, but welcome all the same. With the tax debate in such a febrile state, now is the time to push harder than ever for Gordon Brown to grasp the nettle on inequality and tax. For Blair progressive taxation was an Old Labour shibboleth, firmly lodged in the dustbin of history. By contrast, privately, Brown is yet to rule out eventually raising the top rate of income tax. A slight hope this remains, but hope all the same.

While the government has succeeded in lifting over 500,000 children out of poverty-although Darling’s report showed no sign of hitting the target of halving child poverty by 2010- and in enacting modest redistribution, it has also presided over an ever-rising inequality between the richest and the poorest. The top 10 per cent now hold 54 per cent of national wealth, up from 47 per cent. Yet no sector of society can shield itself from the ramifications of inequality. Inequality corrodes social cohesion, saps social mobility, rouses crime and breeds economic inefficiency.

The tax system only compounds this problem. The popular focus on income tax masks the fact that the wider system is regressive. While the top fifth pay 35.6 per cent of their income in tax, the bottom fifth actually pay 36.4 per cent. A genuinely progressive tax system, with a new top rate of 50 per cent kicking in at earnings over £100,000, is not a sufficient reform but it is a necessary one.

Against this proposal four arguments are commonly raised. Firstly, that it damages the economy by weakening work-incentives. Yet the Nordic countries, where taxes are both higher and progressive, have long been more economically competitive than the UK. There is staggeringly little empirical evidence linking taxation to economic performance.

In the second case, others point to the phenomenon of globalisation and the risk of ‘tax-flight’ at any increase. This apparent ‘risk’ grossly overestimates the actual opportunities abroad for British business, and forgets that the more motivated, productive workforce linked to equality is just as important.

Thirdly, while conceding the desirability of reform, some argue that in practice the backlash would be too great. In fact, the most recent Social Attitudes survey found that when offered a range of tax-and-spend packages, 89 per cent preferred the redistributive options. An apt reflection of individual’s intuitive sense of a fair society, in spite of the failure of Labour to make the political case.

The final argument, that all this is motivated by ‘envy’ of the rich, is matched only in its commonality by its desperation. Never mind that most of those who hurl this charge also claim that the left is dominated by the rich; the real envy is of flourishing, egalitarian societies, the emulation of which would benefit all, including the wealthiest.

This hackneyed ‘envy’ trope is often bookended with the claim that we’re returning to the days of ‘taxing the rich till the pips squeak’. Those who imagine they’ve just quoted Denis Healey are wrong; the words never left his lips. However, he did declare at the 1973 party conference, “I warn you that there are going to be howls of anguish from those rich enough to pay over 75 per cent on their last slice of earnings.” Yet a new top rate of 50 per cent is far from the eventual rate of 83 per cent under Jim Callaghan. Even Margaret Thatcher managed to live with a top rate of 60 per cent for nine years.

In a conversation last year with Ed Miliband, the man charged with drawing up the next Labour manifesto, I put the case for progressive taxation. Miliband replied that firm political foundations had to be laid down before this; the problem was when ultra-Blairites like Stephen Byers dragged the debate to the right. Faced now with similar difficulties, Labour must act before debate is entrenched on the right.

Nye Bevan’s dictum held that “the language of priorities is the religion of socialism”. A decent tax system should embody the priority of social justice. Without remembering this, the sea change in the polls will leave Labour marooned.

Published in the Warwick Boar, 18/10/07

January 31, 2007

Labour Must Challenge Cameron On Progressive Grounds

Gordon Brown has now entered his 13th year as Prime Minister in-waiting; such a sustained advantage is unprecedented in modern British politics. Milburn, Blunkett, Clarke, Johnson, all previously touted as potential challengers have fallen by the wayside, with Reid set to follow them. The big clunking fist has not even been needed; they have all variously suffered self-inflicted or departmental wounds. That Brown has himself avoided any of these is testimony to his political strengths.

However, the strengths of Brown’s position come with attendant difficulties. The years he has had to prepare are matched by the weight of expectation. He has a tricky balancing act to pull off; he must distinguish himself sufficiently from Blair’s errors without discrediting the governments of which he was an integral part. Finally, in David Cameron he faces a Conservative leader with a significantly better chance of winning the next election than his predecessors.

Labour’s scattergun approach to Cameron has been inadequate and even contradictory. He has been portrayed as an essentially vacuous politician but also as a secret Thatcherite, red in tooth and claw; described as a liberal conservative but also hit with that dusted-down epithet ‘same old Tory’. Of course, in part these reflect Cameron’s own ambiguities, yet to be resolved, but the negativity of these attacks weakens them. Labour needs to project a message which simultaneously challenges Cameron and offers positive reasons to vote for Labour. One of the problems for Labour in recent years has been a shortage of positive, innovative policies, reflected in the haemorrhaging of members. As deputy leadership candidate Jon Cruddas has noted, between 2000 and 2006 the party lost 160,000 members- one every 20 minutes.

Brown must adopt a more fruitful position. Firstly, he must recognise that Cameron is sincere in his attempts at mapping out a modernised conservatism. Although to call it modernised is to miss the ways in which Cameron’s conservatism harks back to the more liberal and pragmatic conservatism that reigned before Thatcher. From this Brown can argue that while Cameron may will progressive ends he is still insufficiently equipped with the progressive means to make good on them. There are potentially significant political divides for Brown to mark out on Europe, climate change and social justice, but he will need to refashion Labour to do so.

The German presidency is moving Europe slowly up the political agenda and with a new French President elected in May the ‘period of reflection’ may finally end. Cameron has been wary of discussing Europe since his botched plan to pull Conservative MEP’s out of the European People’s Party; he is also distinctly averse to European integration. Brown must exploit this opportunity to argue that only an engaged, stronger Europe can tackle climate change. He has been noticeably warmer in his words on Europe recently, and his closest confidant, Ed Balls, last month spoke of the need for a tighter EU emissions trading scheme and of his hopes of using the EU as a platform for a world emissions scheme. On the diplomatic level Brown must court Spain’s Zapatero and Italy’s Prodi both alienated by Blair’s alliance with their predecessors.

One of the impacts of Cameron’s leadership has been to ratchet climate change up the domestic political agenda. The Conservatives and the Liberal Democrats- with their green tax proposals- have been making the political running in this area. Brown has been reluctant to push green taxes that risk hitting the poor. But the opportunity for Labour to seize the mantle on this issue is being explored by David Miliband in the form of personal carbon trading. Individuals receive an allowance for their energy use, perhaps stored on a card, with those who wish to exceed their quota buying off those with a surplus. Brown should seriously consider this proposal its appeal being two-fold; it utilises the power of the market to provide incentives for environmental efficiency, and it redistributes wealth from the rich- who use more energy- to the poor who use less.

Which brings us to social justice; following on from the recent embrace of Polly Toynbee, Cameron ended the year by declaring his aspiration to become the “party for working people.” He hopes to reduce poverty by harnessing the energies of the voluntary sector and social enterprise, as reflected in his maxim,”‘there is such a thing as society, its just not the same as the state.” Compare this to Brown’s argument that “fairness can be advanced by but cannot, in the end, be guaranteed by charities, however benevolent, by markets, however dynamic…but guaranteed only by enabling government.” and we have a telling divide on the role of the state. The problem for Cameron is that the evidence is against him. The most equal societies in Europe- and in a recent poll the happiest to boot- are the Nordics with high public spending and redistributive taxation. The under-funded voluntary sector can be a partner for the state but not a substitute. The two Ed’s, Balls and Miliband, have both shown flashes of the potential for Brown, speaking of launching a ‘Make Child Poverty History’ drive.

Cameron’s words on the environment and social justice should neither be lampooned nor dismissed. Instead, positively grasping the political openings that he is providing may offer the centre-left the best chance of fulfillment for a generation.

Published in the Warwick Boar, 30/01/07

July 09, 2006

The First Challenge?

The idea of a 'coronation' for Gordon Brown as Labour leader was surely always a rather naive one. Such thoughts neglected to recognise the significant minority in the PLP who saw Brown as as much of a representative of New Labour as Tony Blair, and whom were quite prepared to put forward an alternative view of Labour values.

Yesterday that alternative view lifted itself above the parapet once more in the form of John McDonnell (pictured above), MP for Hayes and Harlington, and Chair of both the socialist Campaign Group of MPs and the Labour Representation Committee. As McDonnell declared at the annual Old Labour jamboree that is the Durham Miners Gala: "Some are saying that there needs to be a smooth transition, a coronation, but that would mean no change because Gordon Brown is the architect of many current policies…There will be no coronation." Although McDonnell refrained from personally declaring a leadership bid, using the old Bennite aphorism, "It's not about personalities but policy", it is implicity accepted in left–wing circles that McDonnell, with his formal bases, will stand.

It would be easy to dismiss McDonnell as another token 'hard left' MP but the reality is somewhat more complicated. Up to a point it may be politically expedient for Brown to contrast his centrist views with a left–wing alternative, as in his recent support for Trident, but the articulate and confident McDonnell with the chance to put forward a distinct programme could well win support from outside traditional hard–left circles. Centre–left MPs such as Clare Short, who following Brown's Trident declaration will no longer back him , Frank Dobson, Michael Meacher and Glenda Jackson may in the end chose to rally behind an anti–war, anti–privatisation, anti–Trident platform. McDonnell has also been cannily laying the groundwork for potential trade union support (40% of leadership contest votes), chairing the Public Services Not Private Profit campaign backed by 16 unions.

While still very unlikely to win, McDonnell may well be the MP to open up a real debate about the direction forward, bringing an end to what Blair in The Guardian called 'coded critiques'. May a challenger from the left also inspire the re–emergence of a Blairite outrider?

The potential situation reminds me in a strange way of the dispute over Labour's candidate for London Mayor. That time it was a left–wing alternative in the form of Ken Livingstone who won through in the final contest. Interestingly enough, Livingstone's deputy on the old GLC? John McDonnell.

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