We need to retake control of the economy

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Figures announced this week show a rise in the level of unemployment, with young people being particularly hard hit. The government has responded in the way that all governments do, by talking about ‘helping more people into work’ (often a euphemism for cutting benefit payments) and inventing more, sometimes dubious, apprenticeships as a back door way of subsidising employers. The opposition has responded in the way that all oppositions do, by blaming government policies, especially those relating to wages, tax and regulation. The assumption underlying both of those positions – even if it drives them to propose different solutions – is that rising unemployment is a cyclical problem, which will be resolved if only we can get that magical growth they keep talking about.

It’s possible that they’re right; but it’s also possible that they’re wrong. What if, rather than growth and innovation solving the issue, that same growth and innovation, powered perhaps by AI, compounds it? There is a certain complacency surrounding that question. In a sense, it’s entirely natural – history shows us that the initial response to innovation and increased productivity is a loss of some jobs, which is usually followed by the appearance of new jobs, sometimes of a type and nature which nobody had foreseen. Maybe the same will be true of AI, and it’s overly pessimistic to believe that the job losses will be more permanent and generalised than we’ve seen in the past. It’s clear that the workers likely to be displaced by AI will include those in more technical and high-paid jobs than previous rounds of innovation, but the fact that the nature of any resultant replacement jobs is not currently clear doesn’t mean that there won’t be any. But the statement that ‘there always have been’ in the past can’t be taken as a certainty for the future either.

One junior minister in the UK government has already suggested that part of the response to the growth of AI might be the introduction of some sort of Universal Basic Income (UBI), although even he seems to be talking abut it as a temporary response, allowing people to retrain for the jobs of the future, whatever they may be. And there’s no doubt that any sort of UBI would be enormously expensive: even an income set at the less than adequate level of Universal Credit would be likely to carry a price tag of some £200 billion per annum. But what is the alternative that those objecting to the cost would propose in a situation where most work is done by automatons or AI? Are those people who have been displaced to be treated as disposable, and left without food or shelter as a result, whilst those lucky enough to still have work continue to live as normal (and those who own the machines and the software continue to accumulate wealth well beyond their capacity to spend it)?

It’s a scenario which raises questions about what an economy is for. Forget ‘invisible hands’ and market spirits – an economy is a social construct, and it’s up to the society in which it operates to determine how it works, who benefits from economic activity, and by how much. If an economy cannot supply at least the basic needs of all the people in that society, than it’s not performing its social function. From that perspective, tax is not some burden placed unfairly on those who own the capital or provide the labour, it is merely the mechanism by which the outputs of economic activity are used for the benefit of all. It is, in its very essence, a mechanism for redistribution. For the last four or five decades, we’ve increasingly lost sight of that and allowed the economy to be captured by a few, and corrupted to serve only their interests. If the resulting gross inequality hasn’t been enough to force a rethink, perhaps the impact of AI will be.

Will Farage let me drive on the right if I want to?

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Whether the 20mph default speed limit in built-up areas is a good thing or a bad thing is obviously a matter of opinion, depending on whether we prioritise reducing casualties or convenience and speed. The statistics show that it has reduced the number and severity of casualties on the roads, although a thorough evaluation might need a few more years to assess whether it is really working as well as it appears to be. On the downside, experience suggests that it has led to an increase in aggressive driving and risky overtaking manoeuvres, especially by those vehicles whose drivers are exempt from the law. I can’t find a definitive definition of exempt categories in the legislation itself, but simple observation over the past year leads me to conclude that it includes taxis, white vans, and BMWs.

Farage told us last week that it is a ‘looney’ policy, and went on in a Q&A session to describe it as being an example of government telling people what is right for them, adding "It is typical of control, control, control". In essence, his view seems to be that it has nothing to do with safety, and that the Welsh Government have introduced it solely with the aim of controlling what people may or may not do. It’s a particularly silly argument – if it applies to the 20mph limit, then it also applies to the 30mph limit, or to any limit set at 40, 50, 60 or 70. All of them control what citizens can and can’t do. Come to that, why should the government control on which side of the road I should drive? All laws set limits on what we can and can’t do, they all ‘control’ us to a greater or lesser extent. The question is – or ought to be – about where we draw the line, and how we balance safety against speed of travel – or, more generally, personal advantage against collective advantage. ‘Not liking something’ is not enough to distinguish between an arbitrary control of behaviour and a sensible safety measure.

Reasoned debate is not, though, what Farage and his ilk want. Their aim is to appeal to people whose minds are already made up, and to strengthen those existing prejudices. Not that reasoned debate would ever help anyway. No-one who has not arrived at a particular view in the first place through a careful and rational study of the evidence is going to be persuaded to a different view by a careful and rational study of that same evidence. And that doesn’t only apply to the question of speed limits. Believing that evidence can and will shift an opinion which was never evidence-based to start with is a mistake which many of us make. Overcoming prejudice and a willingness to disregard mere facts is more of a long term project, which involves teaching critical thinking as a key element of education. There is a reason why Farageists and their fellow travellers are hostile to the idea of an educated populace.

Who's going to check? And when?

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Whether the newly appointed leader of Reform Ltd in Wales actually lives in Wales or not appears to be an open question at present. It’s a question which Martin Shipton, at Nation.Cymru, is doggedly pursuing. If it’s really true that he doesn’t, then both he and Farage have been more than a little foolish in putting forward a story which falls apart after one day of scrutiny. Maybe they really are that stupid, but it’s more likely that they believe that they can game the system.

The requirement that candidates for May’s Senedd election should live in Wales, and be registered to vote in Wales, is entirely reasonable, especially after the experience of a predecessor party to Reform having had a resident of Wiltshire as its leader in the Senedd. It’s something of a departure for UK electoral politics, though: there is no requirement, for instance, for any candidate for Westminster to reside in the UK. They merely have to state that “they are at least 18 years old and be either: a British citizen, or a citizen of the Republic of Ireland, or a citizen of a commonwealth country who does not require leave to enter or remain in the UK, or has indefinite leave to remain in the UK”. They also need to provide an address where they can be contacted. But as far as I’m aware, there is no requirement for the returning officer to verify the information provided. Verifying the veracity of the information provided by candidates has never been part of their role; they merely verify that the relevant boxes on the form have been completed properly. It seems probable that the same approach will apply in the case of Senedd elections: if the candidate provides a valid Welsh electoral roll number, and gives an address where (s)he claims to live, is it any part of the responsibility of the Returning Officer to check that those details are true?

It is perfectly legal to be registered to vote at two different addresses (it’s not usually legal to vote at both, although there is no check on that), and the definition of ‘main residence’ is not as straightforward as it might sound. Reform Ltd may be about to ‘test the system’ by putting forward as a candidate an individual who may not meet the legal requirements. It’s not at all clear that there is any process in place to challenge the information provided by candidates, let alone pro-actively verify its veracity, other than by a court process after the election. Relying on ‘the law says’ amounts to assuming that all candidates are honest people of good faith. It’s just possible that some might not be.

Is poverty really the right way to save pubs?

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Not so long ago, I wondered whether capitalists and supporters of capitalism really understood the way it worked, a theme picked up again in relation to pubs in this post. Pubs, in particular, have been back in the news again over the last week, with Farage’s proposal that impoverishing 450,000 children and redirecting the money saved into pubs could knock 5p off the price of a pint and save thousands of pubs, and the suggestion from the First Minister, Eluned Morgan, that people should stop drinking wine and watching Netflix at home and get down to the pub instead. The opposition’s response to the First Minister was, sadly, more Farage than Morgan, claiming that the problem was for the government rather than citizens to solve, and lies in the system of rates and taxation. Both Farage and the opposition in the Senedd seem to be starting from the wholly unrealistic proposition – albeit a basic tenet of classical economics – that all consumer decisions boil down to cost comparisons. Under that tenet, people choose wine and Netflix over beer and pubs purely on the basis of relative cost.

Like much of theoretical economics, it’s utter nonsense. It is an established fact that young people, overall, are drinking less and that traditional pubs are considered increasingly unattractive to many of them. Cutting the price of a pub visit so that more people go, or encouraging people to drink more when they get there – which is what subsidies, whether direct or in the form of tax concessions, actually set out to do – might delay the inevitable, but if supply outstrips demand by an increasing margin, and if that falling demand is the result of demographic change rather than price considerations, then capitalism decrees that the supply should fall. Put another way, closing pubs is the natural and rational outcome of a change in consumer choices.

Whether that’s a good thing or not is another question. I’m certainly not a fan of leaving all decisions to the dictates of capitalist markets. There are some pubs – particularly, but not exclusively, in rural areas – which also provide a sort of community hub, and act as a centre for other (not necessarily alcohol-related) activities. There is a case, in terms of social cohesion rather than dry cost-benefit analysis, for government action to keep such places open. That, though, requires rather more effort in identifying criteria and assessing locations against those criteria than some sort of blanket aid to the sector (which is what changes to the taxation regime provide). Setting out to save all pubs may be popular with those who use them, but it’s not good policy, and nor is it a good use of resources. And proposing to impoverish children to achieve it is about the best illustration one can think of as to why it’s wrong.

It shouldn't be down to the wrongdoer to take action

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It’s unclear whether Mandelson has committed any crimes or not in relation to his friendship with Jeffrey Epstein, although – to date, at least – I’ve seen no serious suggestion that he has. Folly, yes, plenty of that. Failing to declare income to parliament, maybe: he says that he can’t remember receiving money from Epstein, and it’s just about possible that there’s some other explanation for the relevant lines on bank statements. Lobbying other ministers to reduce the tax bill for a friend, yes, that seems pretty clear cut. Leaking sensitive government documents to his friend, again, yes that also seems pretty clear cut. None of it, however, appears to be criminal. It’s enough, though, for people to be demanding that he should be stripped of his peerage as well as standing down immediately from the House of Lords.

It is a ‘feature’ of the English system of governance that people appointed to the Lords cannot easily be stripped of either their membership or their title. Apparently, it requires a specific act of parliament in each and every case, and Sir Starmer appears to have concluded that that is just too much trouble and is instead simply appealing to Mandelson to voluntarily relinquish his seat, and voluntarily stop using his title, while formally retaining it. It’s the sort of compromise and cop-out which bedevils a constitution which assumes that all parliamentarians, in whichever House, are inherently honourable people.

It’s a silly assumption to make – and it’s not as if there haven’t been previous cases to underline the point. The one which immediately leaps to mind is, of course, Jeffrey Archer. Unlike (so far) Mandelson, Archer really did commit criminal acts and was sentenced to four years as a guest of Her Majesty as a result. On his release in 2003, and although not a very active member, he remained a member of the House of Lords until he voluntarily stepped down in 2024. He remains a peer today.

It’s true that the law was subsequently changed – but it took more than ten years, until 2014 – to make it easier to sack a member of the House of Lords for serious crimes (although being sentenced to prison for less than twelve months, which one might think is still rather more serious than anything Mandelson has so far been found to have done, is still considered insufficient grounds for expulsion). The point here is not to defend Mandelson – on the contrary, he deserves to be kicked out. It is, rather, to highlight the arbitrary and inconsistent way in which things work, and the laziness and incompetence which means that successive governments would prefer to leave things alone than address an obvious failing. Demanding that the man accused of poor behaviour takes action himself rather than ensuring that he could be dealt with swiftly and effectively is a less than honest political response.

When is a benefit not a benefit?

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‘Cutting the benefits bill’ is an answer often trotted out by politicians when asked how they are going to pay for something. They don’t often spell out precisely how they will do that – identifying who will go without food or shelter isn’t exactly the most certain way of winning electoral support. Far better just to leave people with the impression that it will affect someone else, not them, and that it’s a painless way of saving money. There is a question, though, of how we define what a benefit payment is. It’s obvious which side of the benefit/ not-benefit line some payments fall, but rather less obvious in other cases. Pensions are a case in point – whilst some see them as a benefit payment, others see them more as a contractual obligation in return for the NI contributions made over many years.

Yesterday, the Tories in the Senedd proposed a new payment for grandparents to look after their grandchildren. Superficially, it’s presented almost as though it’s a payment for work done. Whether it would be taxable or not is unclear, but added to the full state pension (and non-working grandparents able to do child care are quite likely to be pensioners), it would push most of the eligible pensioners into paying income tax unless it were to be exempted. If it is, in effect, a non-taxable payment for care provided, then that would surely make it a benefit payment (not dissimilar, perhaps, to Attendance Allowance) in the views of many – and a universal (paid regardless of other income or ‘need’) one at that. And even if it is not regarded as a ‘benefit payment’ to the grandparents concerned, if the objective is, as the Tories claim, to improve childcare provision for working parents, isn’t that simply a backdoor form of benefit payment to those parents?

I raise these points not because the idea is inherently a bad one. On the contrary, good affordable childcare is a problem and this is an interesting proposal for a fairly cheap extension, although there is a lot of detail not yet spelled out. And I’m not opposed to benefit payments either. The point is, though, that it is more than a little hypocritical for a party which has spent years bemoaning the fact that a millionaire can theoretically get a 35p packet of paracetamol for nothing to propose to give any millionaire who happens to be a grandparent a couple of grand a year for doing what they may well be doing for free currently. It’s difficult to avoid concluding that the benefit payments they’re against are those which go to people unlikely to vote for them (usually the poorest), whilst they support a new benefit which is likely to go to those more likely to vote for them.

How did we get to here?

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Thatcher once said that she thought that her greatest success was Tony Blair’s Labour Party. Subsequent history shows that her success wasn’t so much an event as a process; a process which continues to reverberate today. Underlying the creation of Blairism was the way in which she, and those around her, succeeded in moving the parameters of acceptable political debate, often referred to as the ‘Overton Window’, sharply in one direction, and it’s a process which has been continued by her successors. Osborne’s creation of the Office for Budget Responsibility was another event during the process, an event which locked into ‘acceptable’ political discourse the utterly false notion that governments must seek to balance their income and expenditure over the long term, and pay down any accumulated debt. It’s a shibboleth which the Reeves's and Starmers of this world have adopted with enthusiasm.

They’re still at it today. Views within Labour which might have been regarded as being rather to the right of the party’s centre just a few decades ago are now routinely described as ‘soft left’ or even ‘hard left’. And Kemi Badenoch announced yesterday that there is no room in her Conservative Party for views which would have been seen as entirely mainstream until very recently. It isn’t only a success for the likes of Thatcher and Badenoch, of course; it’s also a success for a media which is owned by, and seemingly exists mostly to promote the interest of, those who own the wealth and in whose pockets and bank balances money continues to accumulate under neoliberal economics.

It didn’t have to be this way. In the immediate post-war years, a Labour government, which was rather more radical than it is often given credit for, actually shifted the Overton Window in the other direction. Whilst there was some pushback from the ‘right’ over some issues (such as nationalisation), it became generally recognised over two or three decades that the state had a role to play in industrial policy, that more homes – including council houses – should be built, that the NHS should be funded, that there should be a decent system of benefits. Albeit in a mild form, what one might call ‘social democracy’ became established as the accepted norm. Thatcher may have been the instigator-in-chief of the rupture, but Labour then played along, facilitating the conversion of an event into a process. That has brought us to a position where someone like Macmillan, Eden, Douglas-Home – and maybe even Heath – would be unwelcome in the party they once led, and where the Labour leadership seems to draw more on the thinking of Enoch Powell than of Bevan or Beveridge.

At the bottom of this lies a major question – should politicians lead or merely follow public opinion? Clearly the leaders of the UK’s three right wing parties all believe that public opinion is further to the right than they are. If they’re correct (and I’m not at all sure that they are – the most vocally-expressed opinions aren’t always the most popularly-held), then how do they think that we got from there to here? Blaming the media is a soft option, although that doesn’t make it entirely inaccurate. Ultimately, weak politicians, prepared to sacrifice any beliefs or principles in the pursuit of power, and anxious to secure the endorsement of the worst elements of the media, must take at least as much blame. It’s a tradition in which Starmer firmly sits.

Where is the challenge to conventional thinking?

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Although we don’t yet have the full details, the police reorganisation announced this week by the Home Secretary is already looking like a bit of a mish-mash – and a major missed opportunity for a more thorough debate around the best way of organising policing. Leaving aside the obvious own goal of not taking the opportunity to devolve policing to Wales, and the way that ends up undermining the First Minister and Labour’s Senedd election campaign, there are other ideas which seem not to have even been considered by what has shown itself to be a centralist and centralising government.

At the heart of the issue are two demands which appear to be in direct conflict, but that conflict is more to do with being wedded to the idea of single police forces than any practical necessity in terms of policing. Those two demands are: firstly, for a more local and accountable approach to policing; and secondly for the rationalisation of more specialist areas of policing. Even if policing were to be devolved to Wales, we would still face the same issues when debating whether to have a single Welsh force or multiple forces. However, there are plenty of international examples of an approach which does not put all ‘policing’ under a single organisation, but there seems to be a lack of willingness to learn from them. The Home Secretary’s intention to set up a national force to deal with certain crimes makes sense (although whether it should be a single EnglandandWales body or two separate bodies is an area for disagreement). But taking out those activities where a rationalisation of specialist resources is beneficial should reduce rather than increase the need for a reduction in the number of forces. An area like Dyfed Powys, for instance, is already too large for any serious degree of local control and accountability – an all-Wales force would be even less so.

Why could we not, instead, split policing between: smaller, more local forces – at county/ county borough level perhaps? – responsible for bobbies on the beat and the sort of low level activity which is most people’s experience of crime; regional forces responsible for investigating more serious crime; and a national (Welsh) force responsible for more specialist activities? And why does traffic policing have to fit into the same structure? The UK seems to be hung up on the idea that ‘policing’ is a single activity which has to fall under the remit of a single body, but abandoning that view opens up the possibility of reconciling the demand for more local accountability for community policing whilst still having resources and expertise in depth to respond to other needs. It’s what happens in many other countries, and it generally seems to work, but the centralising mindset seems unable to consider it. It’s the sort of different approach which a Senedd with control over policing could follow, although it would still require politicians willing to challenge convention.

What is to be defended - and how?

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It was reported a couple of weeks ago that there is a £28 billion ‘funding shortfall’ for the UK’s military forces. It underlines the way in which a careful choice of words can frame any discussion. The substance of the story is that the military needs a lot more money to do all the things that it wants to do, and is presenting the lack of that money as a ‘shortfall’. It’s not the only word that could be used. The same gap could equally be framed as a deliberately planned overspend: the expenditure plan has been drawn up in a way which requires more money than the budget has allocated. A ‘shortfall’ is the responsibility of government, but an ‘overspend’ is the responsibility of the defence chiefs. It’s all about blame avoidance.

The more substantive underlying question is about what the UK’s military needs are; establishing that is a prerequisite to talking about how the expenditure is funded. It’s not a question on which either the government or the military really wants any sort of debate, because an open discussion on the question must inevitably put the question of the Trident upgrade on the table. This enormously expensive project is a major element of the UK’s planned military spend, yet it is, in essence, a weapons system which could only ever be used as a posthumous act of revenge following a nuclear attack on the UK. Even then, there’s considerable doubt as to whether the UK could really decide to fire any of the missiles without US authorisation. The UK government always claim that it can be so used, but the phrase attributed to Mandy Rice-Davies applies. Scrapping Trident completely would free up enough funding to overcome the alleged shortfall, even if we collectively decided that we still wanted to do everything else on the military shopping list.

Meanwhile the Lib Dems have come up with an alternative funding mechanism – the issue of what they are calling ‘war bonds’, based on what the government did during the two world wars. According to Ed Davey, this could raise an additional £20 billion for military purposes, and it’s clear that he thinks that the target market is individuals across the UK, so it would be giving the public a chance to "support patriotically our defence". I suspect that he’s right in saying that the government could raise that sort of money, although it’s more likely to come from the wealthiest in society rather than the man in the street, and they’re more likely to buy such bonds for the security of the capital and the interest they would attract than out of any great patriotic fervour. Given that the government (and there is no indication that a Lib Dem government would take a different view on this) regards all bond sales as ‘borrowing’, it would blow a massive hole in any fiscal rules. But they are correct in identifying that there is a market for more government bonds, which gives the lie to the idea that bond-holders are demanding that the government redeem existing bonds, aka ‘pay off debt’.

What they are all doing, though, is talking about the issue as though the constraint is a lack of money, when it really isn’t. The constraints on government spending on the military are firstly whether the spare physical resources (labour, materials, etc.) exist, and secondly, if they don’t, to what extent do we wish to prioritise weaponry over wellbeing by redirecting those resources. Treating money as the constraint serves only the few in society, and makes it more or less inevitable that the cost of increasing military expenditure falls, ultimately, on the wellbeing of the many. Destroying that which we wish to defend is no defence at all. It’s easy to see why the purveyors of war all want to avoid that question.

Labour needs more than a better story-teller

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Nobody really knows how much impact an individual has on the outcome of an election. I can say from experience as a candidate that a number of electors will tell candidates something along the lines of ‘I don’t usually vote for your party, but I’m going to vote for you’. I can also say from experience as a canvasser on behalf of other candidates that a similar number of electors will tell canvassers something along the lines of ‘I usually vote for your party, but I won’t vote for X’. Whether they net down to zero is an unanswered – and unanswerable – question, but the overall effect is that most candidates (guilty as charged!) end up believing that their own personality and ability is having a greater effect than it actually is. What we simply can’t do is run the same election twice and see what the impact of different candidates might be. Martin Shipton, on Nation.Cymru, wrote a timely reminder last week about the dangers of believing in political Messiahs.

It’s clear that Andy Burnham, to say nothing of his friends and supporters, believes that he is uniquely placed to win the pending by-election in Manchester – or would be, if he were allowed to stand. Those same friends and allies are now warning of the dire consequences of blocking his candidature, claiming that the seat will be lost to Labour as a result. There is a danger, for Labour, of it becoming a self-fulfilling prophecy, which will leave Burnham and pals on the sidelines declaring that it all could have been so different if only he’d been allowed to stand. He might well have lost anyway, of course; which outcome we choose to believe depends on the extent to which we believe that the personality and profile of candidates makes a net difference in one direction or the other. In blocking the candidature of one individual, Sir Starmer and his allies might well have blocked one potential source of challenge at the expense of making a challenge from another direction even more probable. It was a gamble either way.

For those of us not party to the drama, intrigue, and machinations of the Labour Party at its worst, the bigger question is about policy rather than personality. Clearly, Burnham is a more effective communicator than Starmer, although most would probably agree that that is not a particularly high bar. But how different is he really in terms of a policy agenda? Not as much as the spin suggests, would be my assessment. That is the real problem for Labour – they’re so committed to their self-imposed fiscal rules that a minor tweak to those rules would make little real difference; they need to do more than tell the story a bit better. Those who are arguing that the answer is a change of leader are asking the wrong question.