Benefit cuts are not really about country vs party at all

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There is a mantra much-loved by politicians about ‘putting country before party’. It sounds pretty lofty and principled, but when broken down is ultimately meaningless, as we’ve seen over the benefit cuts being proposed by Sir Keir Warmonger’s government. The claim is, in essence, that the party doesn’t want cuts, but the country requires them because of the allegedly parlous state of the national finances. The reality is that Sir Warmonger is motivated first and foremost (like all PMs that I can remember) by what he thinks will win him the next election. His definition, when push comes to shove, of ‘the national interest’ is the continuation of his government. And for all the apparent disagreement with his own backbenchers, they also are motivated by the same thing. I’m prepared to accept that they honestly and sincerely believe that a Labour government is better for the UK than a Tory government, but in that sense, the interests of party and country, in their eyes, will always coincide.

The debate isn’t about any conflict between party and country, it’s about which approach is most likely to see the return of another Labour government at the next UK election. In that sense, party always comes first. That doesn’t mean that there is no serious disagreement, it just isn’t really about the substance of the proposals, it’s about their impact on voting intentions. The PM and those around him really seem to believe that their best hope of winning involves appealing to those who think anyone receiving benefits is a shirker and layabout, and are happy to see such people be pushed deeper into poverty as a result. The revolting backbenchers think that their best hope of winning involves placating those constituents who are besieging their offices and mail boxes with complaints about the proposed benefit cuts.

Whilst there’s surely no doubt that what the rebels are saying is closer to what many would see as traditional Labour values, it doesn’t necessarily follow that it is those values which are motivating them rather than a desire to save their own electoral skins. It’s a tragedy for the Labour Party that debate about visions for a better future has been replaced by venal considerations about which particular cohort of electors they need to attract. It’s an even bigger tragedy for those who will lose out that the proposed compromise isn’t about whether they’ll lose out or not, but which of them will lose out and by how much.

What makes a target meaningful?

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There is a mantra in management circles that anyone who has more than three priorities actually has none. ‘Three’ is entirely arbitrary, of course, but the basic point is that having too many priorities makes effective management impossible. We can substitute ‘targets’ for priorities, and the same mantra applies. Yet governments love setting targets, preferably for other people, as a means of measuring something or other, but it’s far from clear that they are actually measuring what they think they are measuring. Targets can often provoke behaviours which are more about demonstrating success than about achieving the aims underlying those targets.

I once sat through a meeting which was led through a spread-sheet detailing 93 key performance indicators for an organisation. Some were being met, many were not, and one or two were even being exceeded. Since the purpose of the discussion was to identify ‘efficiency savings’, part of the discussion turned on those targets which were being easily surpassed. It was an obvious opportunity: reducing performance down to the target level would lead to a saving in money and resources. On another occasion, I heard a suggestion in a discussion on primary school league tables that schools could improve their overall attainment levels in standard assessment tests by identifying the small number of individual pupils who were just below the target score and investing more time and effort in helping them. Two classic cases of the way in which setting targets can sometimes encourage the ‘wrong’ sorts of behaviour.

Those examples came to mind when I read Farage’s comments about scrapping the Welsh Government target for one million Welsh-speakers by 2050. He surely has a point, doesn’t he, when he talks about many government targets being meaningless and never being met? Both the date and the desired number of Welsh-speakers look to be essentially arbitrary numbers. In truth, the million Welsh-speakers has always looked like more of an aspiration than a target: a worthy aspiration, of course, but unless backed up by a detailed and achievable plan with adequate resources set aside over the next quarter of a century, it will be little more than a stick with which opposition politicians can regularly beat the government of the day for its lack of progress. And I see no sign to date of a plan which might actually stand a chance of delivering.

The first problem with Farage’s words comes not with his proposal to abolish what he, and many others, might legitimately see as a meaningless and arbitrary target, but with the lack of any meaningful alternative. His vague words about protecting and encouraging the Welsh language are even more meaningless than the target he seeks to abolish. He has no plans, and no interest in the matter. The second problem concerns the extent to which his aversion to targets is specific or general. It seems unlikely that he is going to abandon his own targets for zero net migration (or zero net migration of poor people anyway; the rich are, apparently, welcome). His aversion to targets seems to relate only to things that he doesn’t like. The Welsh language is clearly one of those.

Not so very different after all

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They told us that it would be so different. After the chaos and confusion of a series of Tory PMs who all seemed to think, to a greater or lesser degree, that compliance with the law was optional (especially in the case of Johnson) the new Labour PM was a completely different animal. A man with a long and honourable background as a human rights lawyer, a man for whom the rule of law was part of the very essence of his being. The promise didn’t age well.

When it came to denying power, water and food to the people of Gaza, his initial response was that Israel had a right to self-defence, and he swatted away any suggestions that that right did not extend to mass killings of non-combatants, including children. Perhaps it stems from that other attribute of an experienced lawyer, obliged by the rules of his profession to take on either side in any case, and find the way of prosecuting or defending which gives his client the best chance of winning. From that perspective, whether or not what Israel is doing in Gaza amounts to genocide or not is a matter of opinion which can only be settled by a court case; whether bombing of hospitals was deliberate or not (and therefore whether it amounts to a war crime) is just an allegation until proven at a trial which is unlikely to happen any time soon. For a good lawyer, there is almost always some wiggle room in law, even if not in morality.

When we come to the bombing of nuclear installations in Iran, however, it’s difficult to see how any reputable lawyer could find a way to argue the case in favour of Trump and the US. The prohibition on attacking nuclear installations is there, in clear terms, and the miscreants have actively boasted that the targeting was entirely deliberate. There simply is no wiggle room; it’s a war crime, pure and simple. The government’s attempt to avoid answering the question as to whether they believe it to be a criminal act or not is shameful. The statements by Sir Warmonger after the event, claiming that the outcome (preventing Iran from developing a nuclear weapon, even though there was no real evidence that they were trying to do so) is a good thing is not so much a legal argument as an ‘end-justifies-the-means’ argument.

Even if it were true that preventing one insane man from joining the club of other insane men who already possess such weapons is such a good outcome that it justifies a blatant breach of international law, we don’t know – and won’t for some time to come – what the real outcome of Trump’s decision is. The destruction of the bombed facilities, even if it’s as complete as is being claimed (and the history of previous military adventures suggests that might turn out to be a dubious claim at best) is only one, short-term outcome. Nobody knows what comes next, but the idea that a single military attack can be considered and judged in isolation from both what went before and what will come after is just another form of madness.

It seems that even a long career upholding the rule of law doesn’t prevent a lawyer who transitions into politics abandoning that commitment in pursuit of the simplistic goal of not upsetting His Orangeness. The rule of law turns out to be considered optional after all.

Chickens, eggs, and overseas aid

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A number of different versions of the saying, “There go the people. I must follow them, for I am their leader” have appeared over the years. It’s usually attributed to Alexandre Auguste Ledru-Rollin, although it’s unclear whether he actually said it or not. Its origin isn’t really important, but it does express a particular political issue very well. Is it the job of politicians to follow, or to lead? One of the attributes of populist politicians is that they attempt to discern what people think, and reflect that back to them (albeit frequently in a distorted or exaggerated form) in an attempt to gain and exercise power, which is really their only objective. Politicians who are part of a movement seeking to change society are more inclined to set out their beliefs and try to persuade people of their merits. But parties don’t stay in one place, and the Labour Party is a classic example. Founded to change the world, it has ended up meekly following whatever it believes the latest trend in public opinion to be.

There are few things for which I’d give Blair, Brown, or Cameron any credit, but the move to boost overseas aid to 0.7% - set as a target by Blair/Brown, in accordance with international targets, and achieved and legislated for by Cameron – is one of them. To their shame, both parties have been equally complicit in reversing the decision – Sunak took it down to 0.5%, and Sir Warmonger has further reduced it to 0.3%. And both have diverted significant sums from the overall total to expenditure within the UK on handling refugees and asylum-seekers. Both blamed a ‘lack of money’, and in both cases that was based on the fallacious argument that there is a finite amount of money available, and we have to make choices about how to use it.

Today, a Labour Trade Minister has told us, by way of justification, that the public no longer supports the idea of foreign aid. It’s a chicken-and-egg question, though. Have the public spontaneously turned against the idea of providing foreign aid allowing the politicians an excuse to cut funding, or is the change in public attitudes a result of years of propaganda telling people that the UK ‘cannot afford’ to help others? It’s probably best described as a vicious circle, with the original driver as unclear as whether the chicken came before the egg. The notable thing, though, is the lack of any effort by self-styled ‘progressive’ politicians to attempt to break out of that circle by showing some leadership. Following public opinion is just another excuse.

Making people poorer really isn't 'compassionate'

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There is a traditional image of a vicious headmaster, about to deliver a good thrashing to one of the boys in his ‘care’, declaring that ‘this will hurt me more than it hurts you’. It’s not true, of course; and it looks like an effort to turn the abuser into an unwilling victim of circumstance, in his own mind at least. I doubt that any of the recipients of such ‘loving care’ ever believed it, and if it doesn’t work on terrified boys, there is no reason to believe that it will work on adults. It is, though, the chosen strategy of the Labour Government when it comes to welfare cuts. They want us to believe that driving people deeper into poverty is something that they really and truly don’t want to do, but are left with no choice because … well, because of an arbitrary financial rule which they themselves invented, and which magically doesn't apply to spending on weapons and destruction.

This week, the Work and Pensions Secretary told us that reforming the welfare system is an act of ‘compassion’, which will restore ‘opportunity and dignity’ to those relieved of benefits to pay for their food and housing. She also told us that, “Unless we reform [the social security system], more people will be denied opportunities, and it may not be there for those who need it”.  In plain English, which it’s easy to understand why she would want to avoid, that amounts to saying that the government will deliberately choose to see some people going without the basics of life in order to save money on the budget. There is nothing inevitable or pre-ordained about that; driving more people into poverty is a wholly deliberate choice that the government is willing to make.

There is nothing wrong with some of the specific elements of the proposals: helping more people to find suitable work and easing the transition from benefits to employment are sensible investments, although they don’t differ greatly from what governments of all colours have been claiming to have been doing for years. But what previous efforts have taught us is that it isn’t as simple as looking at numbers in a spreadsheet might suggest. People have complex needs, which are often only obvious when looking at individuals, and looking at individuals rather than numbers is not what governments do. There’s also an element of distraction: the changes to Personal Independence Payments have little or nothing to do with getting people back into work, yet government statements seem to be deliberately conflating the two.

It would be hard to fault a government which came up with serious and specific proposals to reduce the need for welfare payments by matching more people with suitable and worthwhile employment, and which was prepared to follow through on those in the hope that the welfare bill would be reduced in the end. That isn’t what they are doing, however: they are starting with an arbitrary target for the amount of savings that they want to make, building those savings into their forward budgets, planning to cut payments to achieve that, and then assuming that enough people will either move into employment or be deprived of the essentials of life. Maybe they have polling evidence telling them that such an approach would be ‘popular’, but when Sir Warmonger talks about doing the ’right’ thing, it’s not at all clear that he understands that there is a difference between the two words.

Trump will look after his friends - until he doesn't

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It’s probably better for the UK to have a trade deal with the US than not, even if the deal isn’t as good as some of its proponents like to claim. Still, there’s something of an achievement in finalising a deal of any sort with Trump, so Sir Starmer is probably right to feel at least a little pleased at getting the thing formally signed yesterday.

Given Trump’s propensity to change his mind without even waiting to drop a hat, there is an obvious question mark about how long the deal will last before Trump decides that he wants more. From a Trumpian perspective, any deal concluded quickly probably doesn’t extract as many concessions as he might get by reneging on it later. Assuming that he will honour his word would be very silly, and even Sir Starmer is surely bright enough to understand that.

What should particularly concern Sir Starmer were Trump’s own words about why he was doing a special deal for the UK: “The UK is very well protected, you know why? Because I like them. That’s their ultimate protection.” History shows that Trump always looks after his friends right up to the point where he decides they’re not his friends after all. As his former ‘first buddy’, Elon Musk is only too well aware. There seems to be a prevailing belief amongst the echelons of the English Establishment that Trump is so besotted with the English Royal Family that he has a soft spot for the UK. One of the reasons why they find it so easy to believe that is that it fits their own preconception of English exceptionalism. The more sceptical amongst us might just conclude that, however much he likes the odd royal (and some of them are very odd), when push comes to shove he likes money even more.

Unilateral actions can have global consequences

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In defence of his decision to launch a series of attacks on Iran, Israel’s Prime Minister has said that, by preventing Iran from ever possessing nuclear weapons, he is acting not only in the interests of Israel, but also in the interests of the world as a whole. There’s an obvious attraction in that statement: the world would indeed be a better place if a deranged old man who is crazy enough to use such a weapon is prevented from having access to one. There is a certain flaw in the logic, though: Khamenei isn’t the only leader of a state for whom the description ‘deranged old man who is crazy enough to use such a weapon’ might be appropriate. And they are not all orange-hued either. Indeed, there’s even a reasonable argument that words like ‘deranged’ and ‘crazy’ could legitimately be applied to anyone who even wants to possess such weapons, let alone solemnly announces a willingness to use them, as Sir Keir Warmonger has done in the past.

Even if we disregard such caveats and accept the basic truth that a nuclear-armed Iran is generally not a brilliant idea, on what basis should an individual state – especially one which is itself widely believed to have illegally developed its own nuclear weapons, and which (unlike Iran) refuses either to sign the non-proliferation treaty or to allow inspections of nuclear facilities – be free to decide to act unilaterally? Whilst the theoretical answer might reference international law and treaties, the de facto answer is much simpler – whenever the US government sees fit to allow it. It’s not much of a basis on which to build a peaceful rules-based world, and underlines humanity’s collective failure to find a way of living together on a shared planet. And, whilst Netanyahu couches his justification in terms of acting on behalf of the world, most observers suspect that it has more to do with his own political survival. Venality usually seems to trump humanity.

Leaving all of that aside, and abandoning principle for practical efficacy, the biggest question is the simplest of all: will it have the desired effect? On that, there is no consensus. For every ‘expert’ who claims that it will set Iran’s nuclear programme back years and deter it from ever seeking a nuclear bomb in the future, there is another who claims it will actually accelerate Iran’s progress in that regard, by encouraging a belief that only the possession of, and threat to use, an atom bomb will deter Israel (or anyone else) from attacking again. I don’t even pretend to know which analysis is correct; worse still, I don’t believe that anyone else ‘knows’ the answer to that question either. It’s all opinion and conjecture. The more certain someone is about the answer, the less I trust their judgement. What I am certain of is that the outcome of a unilateral action will be significant way beyond the boundaries of the state undertaking it, for people and countries given no input into the decision.

Even if Netanyahu’s opinion of the effect on Iran turns out, with the benefit of hindsight some years from now, to have been correct, it cannot be acceptable for one leader of one country to imperil so many with no input from those who might be affected. For that reason alone, Israel deserves to be sanctioned by the rest of the world, but the chances of that happening are vanishingly small. Humankind still has a long way to go to achieve real civilisation.

The Chancellor's double ended telescope only produces mirages

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When, as a child, I first discovered the wonder of telescopes, it was like a form of magic. Making far away things seem closer, or small things look bigger, was fascinating enough, but then to discover how the opposite happened when I looked through the ‘wrong’ end of one of these marvellous devices was an added bonus. But nothing that I ever discovered about telescopes could have prepared me for the amazing lenses possessed by the Chancellor of the Exchequer, which were on display yesterday as she announced the outcome of the spending review. She – and, apparently, most of the others around her – are in possession of a device which enables them to look through both ends simultaneously, magnifying those things which she wants to magnify, and minimising those which she would rather forget.

There can surely be no-one, not even the Chancellor herself, who seriously believes that the nuclear power station which she announced (or should that be ‘re-announced’?) will be built in anything like the costs or timescales quoted. One doesn’t need to be some sort of Nostradamus to be able to predict, with a degree of confidence indistinguishable from 100%, that the eventual costs and timescales will be higher, and considerably so, than any figure which escaped her lips yesterday. The degree of confidence that the sums quoted for all the other infrastructure projects announced yesterday will be exceeded might be slightly lower, but still a pretty safe bet. All the timescales and costs announced yesterday have been examined through the wrong end of the telescope.

When it comes to the advantages, however, the right end of the telescope has been deployed with a vengeance. The improvements to people’s standard of living, the number of jobs created: these are things which have been miraculously magnified. There will be no surprise if, like another announcement from recent years, they are quietly revised downwards in due course.

Some of the government’s over-excited comments on the flood of electricity which the new power stations will generate come close to the promise in the 1950s of electricity ‘too cheap to meter’. Even if the phrase has been misunderstood, and its original author was actually talking about fusion rather than fission, the phrase was widely used at the time – including by proponents of nuclear expansion – to describe an impossible energy utopia. In yesterday’s announcements, the costs of decommissioning the stations at the end of their lives, and of handling and storing the radioactive waste seem to have been subjected to their customary level of examination: none. Those issues remain where they have always been – a problem for future generations. Unlike the national debt, however, these are foreseeable liabilities which are not balanced by matching assets; they really are a financial black hole. Throwing good money after bad on nuclear power might look good on a spreadsheet keeping a running total of ‘investment’ spending, but the real cost is in not doing the other things that could be done instead. And probably more quickly.

If I had to pick a stand-out impression of what the government had to say yesterday, it would revolve around that timescale issue: it’s all jam tomorrow, with the lack of butter today being glossed over. The timescales – let alone the consequent benefits – of the capital spend are largely beyond the event horizon for the current government. If there’s one thing that’s almost as certain as the cost and timescale over-runs which are going to occur, it is that future governments (even if, by some miracle, of the same party) will delay or cancel some or all of the projects for which funding was announced yesterday. None of that means that some of the announcements are wrong in themselves: both Wales and the UK need the investment in infrastructure such as rail, for instance. But the belief that promising such investment over a lengthy timescale will somehow persuade people to tolerate the austerity measures baked in to yesterday’s review suggests a complete lack of connection and empathy with people who need relief today.

Rachel Reeves is no Dick Barton.

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It was 45 years ago that the Commercial Union insurance company used the slogan “we won’t make a drama out of a crisis”. In fairness, given that she wasn’t born until 1979, the Chancellor of the Exchequer has a plausible excuse for not remembering the slogan. But not being old enough to remember the advert is not much of an excuse for not understanding the meaning of the message. The handling of the winter fuel allowance (WFA) for pensioners has now gone beyond simple drama, and is rapidly becoming a long-running soap, with a cliff-hanger at the end of every episode as viewers attempt to work out how on earth she will extract herself from this week’s latest plot twist. Where’s Dick Barton’s “one bound” when you need it?

Her reluctance to give a handout to millionaires is understandable in principle, although her initial attempt to prevent that by limiting the payment to only the very worst off pensioners was something of a sledgehammer approach. Her latest approach – setting the cut-off at £35,000 a year – isn’t a whole lot better. Given that the average full time earnings before tax in the UK are a little over £37,000, the new cut-off point is going to exclude a lot more people than those who are really millionaires – unless the definition of ‘millionaire’ is now being changed to include everyone on average earnings or above, a definition which will come as something of a surprise to most working people, let alone pensioners.

In order to implement this ‘new improved’ version (as the advertising companies would surely try and present it), she’s inventing a whole new tax rate of 100% which only applies to a tiny part of people’s incomes and which comes into effect at a completely new threshold, unused for anything else in the tax system. It’s hard to envisage any approach she could have taken which would be more complex to implement, and probably end up costing a significant chunk (in terms of staff and IT costs) of the claimed savings to implement – as well, potentially, as requiring a couple of million extra pensioners to file annual tax returns which someone will then need to process.

I’ve never been a fan of the WFA anyway; it’s always struck me as a bit of a gimmick. Simply adding £300 a year to the state pension (even if paid once annually rather than as part of the weekly pension) would mean that those who most need it get it tax-free, whilst pensioners with other income would effectively pay tax on it at up to 45% anyway. It’s true that ‘millionaire pensioners’ would still end up pocketing 55% of £300 (£165), but it would be a great deal easier and cheaper to administer using existing systems. I don’t know how many ‘pensioner millionaires’ there are, but given that a cut-off at £35,000 (well short of millionaire status) will only exclude around 2 million people, we can reasonably assume that it’s a lot less than 2 million. Even 2 million net payments of £165 would only cost £330 million – a drop in the ocean for the Treasury. And lower administration costs reduce that further.

Still, for fans of long-running dramas, where the heroine of the piece finds herself tied in ever more complex knots at the end of every episode, why cut the serial short when the pain and agony can so easily be prolonged?

Debt, per se, is not bad

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There was a story a month ago about a report from the Institute of International Finance that the total amount of global debt had reached a record height of $324 trillion. It’s a huge sum, so large as to be beyond comprehension in terms of our own daily interactions with money. It’s an estimate, of course. It could not be otherwise; human record-keeping is neither precise nor transparent enough to know for certain. Let’s just accept that it’s a very, very large number.

Whether we should be worried about it or not is another question. Since all money owed by one person or body is owed to another person or body, it is inevitably the case that a total financial debt of $324 trillion is precisely matched somewhere by a total financial asset of $324 trillion. It’s just that the debt and the asset are in different hands. And whilst estimates of how much money exists in the world vary significantly, one thing we can say is that, since ‘money’ is, in its very essence, simply a way of denominating and trading debt (“I promise to pay the bearer on demand” etc.), the amount of money in the system must match, if accurately calculated, the amount of debt. An over-simplification, for sure, but if every individual and organisation were to repay all their debts tomorrow, the world would indeed be debt-free – but it would also be money-free. There would still be a pile – many piles – of physical notes and coins somewhere, but they’d be essentially worthless. And the economy would grind to a halt. Asking how much debt is the ‘right’ amount for the world economy is like asking how much money should exist. It’s a question which has no correct answer; the only thing we know is that, as the world’s population grows and becomes more affluent, the amount needed will increase. Worrying about how much debt there is, and by how much it is increasing, is focussing on the wrong question.

The right question is about who is in debt and to whom they are in debt; it’s about the underlying economic power relationships. The reason that it worries some is not the existence of debt, nor the amount of debt, nor the increase in that amount: it is about potential default – whether those in debt will be able to repay their debts. It is a concern by the rich that the poor will not be able to continue transferring their few assets to the rich, because (almost by definition) much borrowing is by those who have no money from those who have lots. What concerns politicians about the debt mountain facing the poorest – whether individuals or countries – should not be whether they are taking on debts that they can’t cover, but how and why the need for them to do so arose in the first place. And since that inevitably leads to discussion about how resources and wealth are distributed in the world, it’s easy to see why they prefer to avoid it.