As the FT noted yesterday, Labour's chief executive, Sue Gray, has drawn up a short list of crises that might hit a new Labour government. The six most serious that she has identified are reported to be:
1. Potential collapse of Thames Water
2. Public sector pay pressure
3. Prison overcrowding
4. Universities going under
5. NHS funding
6. Bankrupt councils
As exercises in missing the point go, this one is quite staggering.
The solution to each of these supposed potential crises is quite remarkably easy to find.
Thames Water
- Nationalise the company.
- Wipe out the shareholders.
- Pay for whatever debt is considered to be of value with new long-term government bonds.
- Provide required new capital.
- Change regulation to require appropriate levels of capital investment to deliver rivers and beaches free of sewage from all water companies.
- Offer to buy out all English water companies on the same terms as Thames, with that offer diminishing in value as companies delay accepting it.
Problem solved.
Public sector pay pressure
- Agree to the pay demands that public servants have quite rightly made because their terms and conditions have deteriorated so badly over the last 14 years.
- Solve the problem of public sector recruitment overnight.
- Change the total morale and productivity of public sector services as a consequence.
- Exalt in the praise for having delivered an outcome that nobody considered possible.
- Relish the extra tax revenue paid by those public servants and the multiplier effect of their additional spending on other taxation.
- Enjoy the benefit of having a workforce able to deliver in every other sector of the economy.
Problem solved.
Prison overcrowding
- Stop sending people to prison for minor offences, like not having a television license.
- Decriminalise some parts of drug use.
- Stop pretending that prison works, when everyone knows that it does not. Treat prison, as it was always intended to be, as a place used to protect the public.
- Provide the funding to reform the failing prison service.
Problems solved.
Universities going under
- Encourage overseas students.
- Abolish the student loans scheme and the repayment of past loans because neither makes any economic sense whilst imposing intolerable burdens on younger people from lower-income households. See the Taxing Wealth Report 2024 for the data.
- Returning to a student grant scheme.
- Accept that providing education from the age of 0 to 24 is the basis of future prosperity.
- Fund it by those with wealth, creating vast new wealth as a consequence.
Problem solved.
NHS Funding
- Fund it.
- The Taxing Wealth Report provides numerous ways to do so. Finding the money is really not hard.
- Stop pretending there is any other solution. There is not.
Problem solved.
Bankrupt councils
- Fund them.
- The Taxing Wealth Report provides numerous ways to do so. Finding the money is really not hard.
- Stop pretending there is any other solution. There is not.
Problem solved.
Conclusion
In summary, it can fairly be said that every one of the crises that Labour thinks it might face when coming into office will be entirely of its own creation.
They will all arise because Rachael Reeves has demanded that a Labour government must not use the power available to any government of any sort to spend to solve the crises that it faces if it is to meet the needs of the population of the country that it governs.
They also arise because Rachel Reeves is refusing to use the power that any government has to tax in a fair and appropriate manner to recover the sums expended by it with the aim of preventing inflation when the opportunity to do so is readily available to her.
To put it another way, there is no crisis in this country that neoliberalism has not created, and that Rachel Reeves' dedication to that cause cannot help but perpetuate, presuming that is that Sue Gray has correctly identified the crises that Labour will face. I strongly suspect that she has not, but that will be the subject of another blog.
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The Labour Party has been infiltrated by those who want to represent the interests of the super-rich, they are not going to listen! They can do this because far too many voters lack the ability to do analytical thinking when it comes to understanding economic ideology and the mechanisms that underpin it.
Here is a good example of the current Labour Party burying its head in the sand in the interests of the super-rich:-
https://www.theguardian.com/world/article/2024/may/22/never-ending-uk-rain-10-times-more-likely-climate-crisis-study
The super-rich are going to leave the country anyway not wanting to live in a bog!
All good approaches to quite different issues….. with the same underlying theme. Money is not the problem, it’s lack of political will.
Carl Emmerson, Deputy Director of IFS on BBC Radio Scotland, Drivetime yesterday said this about the £10Bn-£13Bn blood scandal compensation, as a significant funding issue: “it’s not something we necessarily need to worry about …it’s a one-off payment ….. economics of it says, it’s not going to be a problem for the taxpayer …. Because it feels like a one-off thing”, Nor he says, should a Post Office scandal pay-off worry government or taxpayer.
There you have it. Faced with the real world, economists and politicians suddenly re-write the script. Instantly. Nothing to see here. Sound familiar? Sounds like the kind of short-changing “candour” we are used to hearing? If a Government needs the money, and has a securely independent currency, it can always find the money. But there is another problem with Emerson’s specious economist’s rationalisation. His distinction between ‘one-off’ and ‘permanent’. Neither are permanent. Both are political. Both change. Income tax was originally temporary. Windfall taxes are temporary. All tax rates are temporary. These are not facts of nature we are dealing with. We are dealing with dynamic change in a subject area, candidly economists are ill equipped to comment on, have an atrocious record forecasting, and none at all in real scientific prediction. The only thing that doesn’t change here, is neoliberal guff.
For the deeper economic implications, do not look at the national debt; look at the balance of payments, the critical import dependencies of Britain, and the strategic issues that create them. Something else neoliberal economists and politicians do badly. What they do well remains something of a mystery.
Thanks
I hope this analysis is circled very widely, and picked up on by the TV news media’s economics editors who have been parrotting the “can’t afford it” message already.,
All these political problems have political solutions.
Just not neoliberal solutions.
Labour’s fear of the City and the media’s cultivation of the public’s fear of “debt ” are huge limitations to the obvious and sensible courses of action outlined.
The voting public, which includes 6m public sector employees, might well be very open to seeing their pay and working conditions not further eroded by the £30bn… ‘black hole’.
Thank you, Richard.
This sort of thing, https://www.theguardian.com/politics/2023/nov/30/son-of-labour-chief-of-staff-sue-gray-to-stand-for-party-as-london-mp#:~:text=The%20son%20of%20Keir%20Starmer's,to%20take%20place%20in%202024, won’t help when crises engulf Labour. One can add a loss of faith in and detachment from this sort of elite.
Nepotism is a live and well then
Thank you, Richard.
One can add Charles Falconer’s son Hamish as PPC for Lincoln, Wes Streeting’s fiance Jo Dancey in Stockton, PPC, and Wes Streeting’s former adviser Keir Mather in Selby, elected last year.
Meanwhile, in the Post Office Inquiry, the spotlight has turned at last to Paula Vennells, former CEO of the Post Office. This is a very British day of revelations; even the ceiling is leaking (as if to remind us of pervasive decay), and the morning ends closer to farce than scandal. It was not that by lunchtime the Inquiry counsel had dismantled Vennells, but that I literally heard a ripple of public laughter as the slapstick unfolded.
It transpired that the Post Office CEO, in charge for over four years 2007-12; did not know that there was a department of 100 people in the PO tasked with investigating fraud independently of Crown prosecution or any requirement for outside responsibility for investigation, recouping the money, and directly prosecuting PO staff. Counsel went though 2008 Board Minutes that clearly established the investigating process of £4.6m alleged fraud, and recouping of £1.6m; and Vennells still didn’t understand what the public implications for the Post Office of this heavy responsibility, still less that this ended in the PO prosecuting its own criminal cases.
The problem I wish to focus on, seems to me to be at the heart of this matter. The Government took an antiquated British public institution, the Post Office, with peculiar powers that could only be granted by Government; and in a surrender to Government’s own benighted dependence on free market ideology, determined that the modern ‘fix’ for the Post Office was to hand it to private sector, free market management to solve.
The problem is that private sector management in Britain is not nearly as good as either it, or government thinks it is. It is, typically unimaginative; lacks rigour or judgment, and relies on fashionable tropes and styles (and even language) of management, by following simple rules of management engagement and surrogate ‘leadership’, that require virtually no forensic thought, business insight, or problem solving skills to apply. I can say this with some confidence, having spent a working life with British executives. This morning we have simply watched an archetypical example of British senior management failing to understand or grasp the management brief; when it was as plain as pikestaff, on first reading. And, for the avoidance of doubt, I am taking the explanation offered – at its own valuation.
British government is the real responsible party here for this mess. British private sector management is simply Government’s inadequate foil, that inevitably failed to measure up.
Whatever mess you think we are in; it is far, far worse. I have little more to say.
Thanks John
Very much to agree with
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