Labour doesn't need to be more Conservative to be economically competent. But the Tories do. A closer look at the data shows the Tories don't actually do what they say they are doing.

Far from being divisive, Jeremy Corbyn has been a startlingly unifying figure. Corbyn has successfully alloyed, if not allied, the political Left and Right. The Guardian, the Daily Mail, Neil Kinnock, a horde of sniggering Tory infiltrators and many more have all been whiskered into a frothy Anti-Corbyn smoothie. They have combined into a symphony of predictions of disaster, some in hope and some in fear, should Corbyn actually become Labour leader. Corbyn successfully brought Left and Right closer together than Liz Kendall (the Blairite one) could have ever hoped.

Corbyn achieved, ironically, what the anti-Corbyn Labour hierarchy wanted: a chance for Labour to be perceived as being closer to the Tories' economic stance by virtue of being further from Corbyn's. Should Corbyn lose, which he may yet do, the new "Anyone But Corbyn" leader can boast credentials freshly burnished into a sheen of economic competence from beating up the grizzled geezer. After all, as the Bill Clinton campaign once said about winning power: "it's The Economy, stupid".

So, let's take a look at The Economy. The question is actually not why Labour isn't more Tory, but why the Tories aren't more Tory. At least, why the Tories aren't what they say being Tory is about. And why Labour doesn't point this out more effectively.

1) The Economically Competent Party:
In July 2015 the Chancellor, George Osborne, tweeted:

GDP growth 0.7%. Shows Britain motoring ahead with economy producing as much per head as ever before. We must stay on road we've set out on

— George Osborne (@George_Osborne) July 28, 2015

Between the Banking Crash and 2015 Britain underwent the slowest recovery (measured by GDP) in recorded history. 

Could it be due to Osborne's steady hand bringing the economy around slowly but steadily? Actually, by holding down the wages of the many and reducing corporation taxes, it is corporate profits and the wages of the few that are recovering. As a result Britain's recovery is not "motoring along", as shown by the following graphs.

The "Global Wage Report 2014/15" by the United Nations' International Labour Organisation (ILO) shows how lamentably British workers have done compared to other big economies:


With the growing portion of FTSE quoted company shares owned by foreigners, a significant chunk of the 'recovery' is going overseas. 

Which has meant the share of GDP per head that stays in Britain (Net National Disposable Income, NNDI) far from recovering is still distinctly unwell.

2) The Low Tax Party:
Figures from the Adam Smith Institute show since 2010 the Tories have been taking a growing share of what the Nation makes in taxes. "Tax Freedom Day" approximates how long it takes for the average Briton to pay his taxes before he can keep his money. With his sneaky increases to indirect taxes (e.g. VAT) the chancellor takes more with one hand than he gives with the other in direct tax cuts (income and corporation). 

When announcing Tax Freedom Day for 2015 the Director of the Adam Smith Institute, Eamonn Butler, said :
"The Treasury hates Tax Freedom Day, because they don’t want us to know how much tax we really pay. They prefer to conceal the tax burden through stealth taxes and indirect taxes that we don’t even realise we’re paying."

 
3) The "Reduce The Debt" Party:
The OBR's analysis after the post-election 2015 July Budget shows the Tories borrowing more until 2018-19. Extra borrowing that closely matches the cost of those taxes that are being cut (which themselves are less than those taxes that are being increased). Extra borrowing that is exquisitely timed to disappear in time for the next General Election in 2020.

[RDEL = day-to-day (non-capital) spending on public services and administration]

4) The Productivity Party:
To a degree unseen in the aftermath of previous downturns, productivity in the UK has stagnated.

The Office for National Statistics comments:  
"The shortfall in the level of UK productivity has persisted for many years, and is often attributed to relatively low levels of investment in the UK." 

Does UK business lack confidence in the continuing strength of the economy to invest, after over five years of Tory stewardship? Or has low pay made it more profitable to employ more low-cost people than invest in new processes and technologies? Or is productivity drained due to the growth in low-skill low-value jobs? Where a worker used to spend a day making high value cars, he now spends it serving low value cappucinos?

There are not many ways of spinning chronic low productivity as a credit to Tory economic competence.

5) The Justice Party:
The Magna Carta includes a clause stating "To no one will we sell, to no one deny or delay right or justice." In the period since Cameron became prime minister two of the main pillars of Justice in Britain have been undermined:
[Next two graphs are from the House of Commons Library, Key Issues for the 2015 Parliament]
a) Cuts to the Police of around 11% of officers

b) Cuts to legal aid removed access to the courts unless you can pay for it:

King John promised not to sell justice when he agreed to the Magna Carta (though he subsequently backed out). Under Prime Minister Cameron if you can't pay for it you can't have it.

6) The Border Control Party:
In 2011 David Cameron said:  
"with us, our borders will be under control and immigration will be at levels our country can manage. No ifs. No buts. That's a promise we made to the British people. And it's a promise we are keeping."

Immigration figures released in August 2015 showed net migration for the year ending March 2015 was at a record high of 330,000 entering the UK.

Too many in the Labour Party are in the sorrowful position of believing their party is economically incompetent. For its first five years from 2010 in opposition Labour willingly (and incomprehensibly) took on the role of the bankers' whipping boy, taking the punishment for the Great Recession resulting from the banking collapse.  In spite of kindly reassurances from the former Governor of the Bank of England and the Permanent Secretary to the Treasury that Labour was not to blame, after all the floggings Labour seems to actually believe it themselves.

In August 2015 the Independent newspaper reported Oxford University’s Professor Simon Wren-Lewis, who has been advisor to the Bank of England and the Office for Budget Responsibility, saying: 
“Anyone who continues to describe what is happening in the UK as a ‘strong recovery’ either has not bothered to look at the data, or is being deliberately deceptive.”

The public perceive that Tory policies are more economically competent than Labour's. The public don't look at the data, but believe this through conviction more than evidence. 

You can't blame the Tories for being deceptive as that comes with being in politics. 

However you can blame Labour for wallowing in its self-esteem deficit and not looking at the data.

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Rip-off News round-up. Our pick of the last week's media (Thu 27th August)

WH Smith and M&S: Cards and flowers almost twice as expensive in hospital shops than on high street

Both companies admit they make mark-ups to account for higher rents and covering staff wages during longer opening hours. But Paula Sherriff, the Labour MP and former NHS manager on the health select committee, accused the retailers of taking advantage of a "captive" clientele. "It's absolutely wrong," she said. "It feels like exploitation." She said the argument that higher costs had to be passed on to patients and their friends and relatives was "laughable". Research by The Times newspaper found WH Smith charged £1.90 for a get well soon card at Bristol Royal Infirmary but only £1 in the city centre. Similarly, a large bunch of flowers in M&S in Falkirk town centre in Scotland was £10, but the same item was £17 in the nearby Forth Valley Hospital. M&S insists the price difference is no more than £2. TELEGRAPH

Sainsbury's to raise staff pay by 4%, the highest increase in more than a decade

Sainsbury's shop workers’ 4% pay rise will take staff wages to just above the average for the sector. 137,000 of its workers will see their pay rise from £7.08 an hour to £7.36 from the end of this month. The new rate will also apply to its 40,000 workers who are under 25. According to the British Retail Consortium the median wages for hourly-paid workers in the retail industry currently stands at £7.30 an hour. Tesco already pays its shop workers £7.39 an hour although staff are facing a pay freeze this year. Morrisons says it pays a minimum of £6.83, outside of London and several other locations. It has yet to set its new annual rate. Asda said its hourly rate of pay is currently £6.89, outside of London, a figure which will increase to £7.00 in October as part of its annual pay review. Under plans announced in the Budget, workers aged over 25 in the UK will be paid a minimum of £7.20 an hour from April next year, rising to £9 by 2020. This compares to a minimum wage of £6.50 at present. Some retailers, pub groups and care home providers have criticised the move, warning it could lead to higher prices, job losses or the closure of some care homes. BBC NEWS

Bailiffs sent in more than 2m times last year, up 16% since 2013

The Money Advice Trust (MAT), which carried out the study, said that sending in bailiffs was likely to make debt problems worse. Joanna Elson, CEO of the MAT, said: "On the front line of debt advice we know that sending the bailiffs in can deepen debt problems, rather than solve them - and it can also have a severe impact on the wellbeing of people who are often already in a vulnerable situation." Local authorities blamed cuts in government funding, and said bailiffs were only ever used as a last resort. Overall authorities have had to cope with a 40% cut in core government funding over the last five years, according to the Local Government Association (LGA). Enforcement agents, as they are officially known, were mainly used to collect Council Tax debts. Such debts are one of the fastest growing issues being handled by National Debtline, which is run by the MAT. BBC NEWS

Regulators launch new rules governing bankers' bonuses

The Bank of England's Prudential Regulation Authority and the Financial Conduct Authority say they want to "discourage irresponsible risk-taking and short-termism". Under the new rules, senior managers could have their bonuses clawed back for up to 10 years in misconduct cases. FCA boss Martin Wheatley said the rules were part of a wider campaign to "embed an accountable culture in the City". They were "a crucial step to rebuild public trust in financial services", he added. The new rules - which follow a near-year long consultation - apply to banks, building societies and some investment firms. The main rule changes mean: senior managers might not receive incentive bonuses until seven years after the performance measurement period has ended; non-executive directors being banned from receiving bonuses; bonuses could be clawed back for seven years, with an additional three years for senior managers; no bonuses for managers in taxpayer-supported firms; more explicit links between risk and reward. The rules relating to bonus clawbacks and deferrals will not come into effect until 1 January 2016, whereas the other rules will be applied from 1 July 2015. But the Bank of England said buyouts of unpaid bonuses by new employers would not be banned, although managers would not be able to receive the money any sooner than if they had stayed at their former company. BBC NEWS

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Should the Labour Party move to the Left or to the Right to win power? The Spine says Right, but the Brain should think a bit harder.

When it comes to survival we vertebrates often resort to instinctive knee-jerk reactions to get us out of trouble. If speed is of the essence we tend to think with our spines rather than our brains. However when it comes to political survival, with the high incidence of spinelessness among our politicians this can be problematic.

The Labour Party leadership election after the 2015 UK General Election provides a good example of this spineless political instinct. Having lost the election to the Conservative Party, Labour luminaries' survival jerk-reaction was to conclude Labour was not Tory enough. To avoid getting burned again, their instinct was to swerve to the Right and turn their party back into New New Labour. The Big Beasts concluded it isn't possible to win power from the Left.

Is this true?

To help the Labour Party engage its collective brain, we provide a few graphs about the 2015 General Election:

1) Compare the 2010 and 2015 General Elections, more parliamentary seats moved to the Left than to the Right:

2) Between 2010 and 2015 General Elections the Tories increased their share of the vote by 0.8% of votes. This was less than the increase for any of Labour (1.5%); Greens (2.8%); SNP (3.1%); UKIP (9.5%). Only the Liberal Democrats (-15.2%) had a less impressive change in support than the Tories.

4) The biggest gainer was UKIP, who increased its share by 9.5% of voters. According to a survey by the British Election Study UKIP voters are well to the left of the Tories when it comes to "Rich vs Poor":

3) While the Tories took more votes than any other single party, their support was less than 25% of the electorate (including registered voters who did not vote). Which is about average for election winners in recent decades.




5) The largest reservoir of votes for Labour to capture is those who did not vote at all:

According to a study by the Hansard Society, the majority of non-voters are likely to be of the C2DE social class, on lower pay, ethnic minorities, and live in rented accommodation. Voters who are unlikely to be attracted by Labour steering to the right.

IPSOS-MORI, in their own study, stated:
"There appears to be no significant increase in turnout among young people, with 18-24s almost half as likely to vote as those aged 65% (43% vs 78%; in 2010 estimated turnout for 18-24s was 44%).  Similarly, turnout remains lower among the working classes, renters, and BME communities."

6) According to the Electoral Commission, about 7.5 million people had not registered to vote in 2014.  It says in their report:
"Younger people, people living in privately rented accommodation and those who move home more frequently are less likely to be registered at their current address. The study with census data finds that people from specific ethnic backgrounds are also less likely to be registered correctly – Black African, Bangladeshi, Pakistani and mixed ethnicity." 

An analysis of the 2015 General Election by IPSOS-MORI shows these groups tend to vote Labour.

Labour luminaries are exerting their brains to find devious ways to avoid Jeremy Corbyn leading the party to the Left. Instead they should focus on how Labour can win an election by representing the Left Behind, regardless of whether Corbyn is leader or not. It seems likely that the years since 1979 have created enough of the Left Behind to win Labour the next General Election, if the Labour Party is true to itself.

Instead of trying to take Tory votes by being more Tory, Labour should apply its brains to:
a) Persuading those who are already voting Left to vote Labour.
b) Persuading those who don't vote at all that it is worth voting. The data suggests they will tend to vote Labour.
c) Get people who aren't registered to vote to register.
The data suggests they will tend to vote Labour.

Britain needs strong parties on the Left and on the Right. The Tories represent the Right with pitiless ruthless efficiency. Labour needs to represent the Left.

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What happened to our promise not to make future generations pay for the debt we created?

Chris finds out from his professor chum...

SOURCE GUARDIAN: Soaring student rents push college accommodation to brink of crisis
Between 2010 and 2013, rents rose 25%, according to the student housing charity Unipol. This compared with rises in the wider rental market over the same period of 13%, according to Homelet. The latest Unipol data, to be published in November, is expected to show further rises of around 7%. A maintenance loan of up to £8,000 in London or £5,500 outside the capital is available to students for help with living costs, but the National Union of Students (NUS) is concerned that the sky-high costs of housing mean this is now being almost being completely eaten up by rent. NUS figures for the academic year just gone show a typical £8,000 a year shortfall between student living costs and their income from loans and the maintenance grant. The housing charity Shelter said: “Even when people do find somewhere, we too often hear from students dealing with issues like poor conditions, unprotected deposits and unfair terms in tenancy agreements.” The figures from Shelter’s Private Tenant Survey show that 50% of students are struggling with rent and 40% of student renters had borrowed money from any one of a range of sources to meet their monthly rental payments, in the last year. The majority of the new accommodation needed will be provided by private companies, which in 2013 provided 80% of new bed spaces, according to Unipol. Already this year private investment in student digs has reached record levels with billions poured into the market by Russian, Middle Eastern and Canadian investors. At the same time, the lower-cost rooms available from education institutions have got much more expensive, rising 23% in price since the academic year 2009-10, according to Unipol. This means some institutions no longer have any low-cost rooms for their poorer students.

SOURCE BBC NEWS: Most graduates 'in non-graduate jobs', says CIPD
Overall, 58.8% of graduates are in jobs deemed to be non-graduate roles, according to the Chartered Institute of Personnel and Development. It said the number of graduates had now "significantly outstripped" the creation of high-skilled jobs. The CIPD said: "The assumption that we will transition to a more productive, higher-value, higher-skilled economy just by increasing the conveyor belt of graduates is proven to be flawed." The report found the issue was leading to "negative consequences" including employers requesting degrees for traditionally non-graduate roles despite no change to the skills needed for the role. As a result, it found graduates were now replacing non-graduates in roles and taking jobs where the demand for graduate skills was either non-existent or falling. The trend was particularly prominent in construction and manufacturing sectors where apprenticeships have previously been traditional routes into the industry, the report found. The CIPD is calling for a "national debate" over how to generate more high-skilled jobs. It said government and organisations both needed to act to help graduates make better use of their skills, but said the report also highlighted that for young people choosing an apprenticeship instead of university could be a "much better choice".

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Rip-off News round-up. Our pick of the last week's media (Thu 20th August)

Iain Duncan Smith’s DWP admits using 'fake' claimants in benefit sanctions leaflet

A Department for Work and Pensions (DWP) leaflet featured one welfare claimant, "Sarah", who said she was "really pleased" a cut to her benefits had encouraged her to improve her CV. But after a Freedom of Information request by website Welfare Weekly, the DWP said they were not real claimants. The images used were "stock photos and along with the names do not belong to real claimants". The stories were for "illustrative purposes only". The DWP later said in a statement: "The case studies were used for illustrative purposes to help people understand how the benefit system works. They're based on conversations our staff have had with claimants... They have now been removed to avoid confusion". Under the sanctions system - introduced by Work and Pensions Secretary Iain Duncan Smith - people can lose benefits for anywhere between a few weeks and three years if they fail to meet the government's requirements for jobseekers. The system of benefits sanctions - introduced under the coalition government - has been accused of having a detrimental impact on some claimants. Earlier this year, the Commons Work and Pensions Select Committee called for an independent inquiry into the way the sanctions were applied, saying that in some cases they were causing food poverty and "severe financial hardship". BBC NEWS

Soaring student rents push college accommodation to brink of crisis

Between 2010 and 2013, rents rose 25%, according to the student housing charity Unipol. This compared with rises in the wider rental market over the same period of 13%, according to Homelet. The latest Unipol data, to be published in November, is expected to show further rises of around 7%. A maintenance loan of up to £8,000 in London or £5,500 outside the capital is available to students for help with living costs, but the National Union of Students (NUS) is concerned that the sky-high costs of housing mean this is now being almost being completely eaten up by rent. NUS figures for the academic year just gone show a typical £8,000 a year shortfall between student living costs and their income from loans and the maintenance grant. The housing charity Shelter said: “Even when people do find somewhere, we too often hear from students dealing with issues like poor conditions, unprotected deposits and unfair terms in tenancy agreements.” The figures from Shelter’s Private Tenant Survey show that 50% of students are struggling with rent and 40% of student renters had borrowed money from any one of a range of sources to meet their monthly rental payments, in the last year. The majority of the new accommodation needed will be provided by private companies, which in 2013 provided 80% of new bed spaces, according to Unipol. Already this year private investment in student digs has reached record levels with billions poured into the market by Russian, Middle Eastern and Canadian investors. At the same time, the lower-cost rooms available from education institutions have got much more expensive, rising 23% in price since the academic year 2009-10, according to Unipol. This means some institutions no longer have any low-cost rooms for their poorer students. GUARDIAN

Investors settle $2bn forex rigging claim in US court against nine banks including RBS, HSBC and Barclays

The law firm that brought the claim in New York’s southern district court added there was scope for cases to be brought outside the US. Anthony Maton, a managing partner at the law firm Hausfeld in London, explained: “There is no doubt that anyone who traded FX in or through the London or Asian markets – which transact trillions of dollars of business every day – will have suffered significant loss as a result of the actions of the banks. Compensation for these losses will require concerted action in London.” The case comes after banks were hit with record fines for manipulating forex markets, where £3.5tn a day changes hands from Sydney to London and New York. The fines topped £6.3bn, with the Financial Conduct Authority (FCA) issuing penalties alongside US regulators including the Department of Justice. At least seven other banks are still being pursued in the continuing case in the New York court, where the allegation is that they conspired to manipulate prices in the foreign exchange market since 2003. GUARDIAN

Ex-council flat in central London sold for record £1.2m

The three-bedroom property near Covent Garden has been sold by the original buyers, who bought it from Westminster council in 1990 for £130,000 under the right-to-buy rules introduced by Margaret Thatcher. That makes the return on their investment more than 800%. The 1,118 sq ft flat boasts its own private front door entrance, a third bedroom and an eat-in kitchen separate from the main reception room. The property is not the first ex-council flat to be marketed for more than £1m this year. In May a two-bedroom home above Stella McCartney’s boutique in Fulham came on to the market for £1.15m. Last year, two large houses were sold by Southwark council for almost £2.96m and are now back on the market for more than £3m each.  Since right-to-buy was introduced in the early 1980s more than 2m properties have been sold off across the country. Currently, council tenants in London can get discounts of up to £103,900 on their property if they decide to exercise their right to buy. Under new rules being brought in by the Conservative government the right to buy will be extended to all housing association tenants, while councils will be forced to sell off their most valuable stock to pay for replacement homes. Councils in London have warned that this could lead to the sell-off of thousands of homes in the capital. Tracy Kellett, a buying agent for wealthy house-seekers, said ex-council homes were of interest to homebuyers and investors: “Any stigma is waning fast as there’s a whole generation of people who don’t even know what a traditional council house is or was. Investors are keen as they often give great yields as purchase prices are lower than average.” GUARDIAN

Sky-high London rents prompt calls for new controls on landlords

In 18 of London’s 33 boroughs, the median rent for a one-bedroom flat is more than £1,000 a month. In Greater London, the rent for a one-bedroom flat has risen by an average of 22% over the past five years. The gap between what Londoners should pay – economists most commonly say 30% of their salary – and what they actually pay is among the highest in the world, according to a report by McKinsey Global Institute. To rent in Bexley, the cheapest of London’s suburbs, a nurse or teaching assistant on a salary of £19,700 a year with monthly take-home pay of £1,373 would be looking at paying £700 a month for a one-bedroom flat, according to the Valuation Office Agency data – 50% of their pay. Go north to Barnet and the rent rises to 75% of take-home pay, while the rent in Camden would leave a teaching assistant in debt. The figures have prompted David Lammy, one of Labour’s prospective candidates for London mayor and the MP for Tottenham, to warn that the capital risks civil unrest similar to that in the ghettoised suburbs of Paris unless rent controls are imposed. Rent controls – or rent stabilisation, as it is referred to in New York – are not caps on monthly rent: they are usually restrictions on in-contract rent increases and lease conditions, such as length of tenancy. This prevents landlords pushing rents up to overheated levels. Separate data from 2014, supplied by City Hall, shows that London is becoming like New York and Berlin, where the majority of homes are rented. In the early 1960s, 36% of Londoners owned their homes, the data shows. The figure peaked at 59% at the turn of the century, but by 2011 fell below 50%. GUARDIAN

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Corbynomics. Old solutions to old problems? Not when old problems are today's problems

SOURCE TELEGRAPH: Autumn Statement: George Osborne to shrink the State to its smallest since the 1930s
The Chancellor's spending plans mean the public spending relative to the whole economy would be the smallest in 80 years, the Office for Budget Responsibility (OBR) said. The OBR, the independent government forecaster, said that Mr Osborne's tax and spending policies will require an austerity programme in the next Parliament much bigger that the one implemented by the current Government. That will mean far-reaching new reductions in "day-to-day" public services, including those provided by local councils, the forecasters said. It calculated that between 2009-10 and 2019-20, spending on public services and central government will fall from £5,650 to £3,880 per head in 2014-15 prices. Around 40 per cent of these cuts will be delivered during this Parliament, with around 60 per cent to come during the next, the OBR estimated. With major items of spending like the NHS and the state pension protected from cuts by political promises, independent economists say that the scale of the cuts that would be required in unprotected areas would be unprecedented and potentially leave the State unable to deliver some of its current services. The budget for Whitehall departments, not including health and education, would fall from £188 billion at the start of this decade to £86 billion in 2020, the OBR suggested. If Mr Osborne's plans are realised, public spending in 2019/20 will be 35.2 per cent of gross domestic product. It currently stands at 40.5 per cent. The lowest level achieved by Margaret Thatcher's governments was 37.3 per cent in 1988/89. The current post-war low was set in 1957/58 towards the end of an economic boom that led Harold Macmillan to declare that "most of our people have never had it so good." Mr Osborne has suggested that the Conservatives would try to find many of the post-election cuts from the welfare budget. He also promised to find £10 billion of savings in public sector “efficiency.” He gave few details of how the £10 billion will be found, but signalled it would mean at least another two years of pressure on public sector wages. Matthew Whittaker, an economist at the Resolution Foundation, said that none of the parties has been candid with the electorate about “just how much more fiscal pain there may be to come after the election.”

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What shall it profit the Labour Party if it shall gain the whole world and lose its own soul?

Margaret Thatcher's greatest achievement, according to Margaret Thatcher, was "Tony Blair and New Labour. We forced our opponents to change their minds." 

Two symptoms of this mind-change were:
a) Jeremy Corbyn being the only left-wing candidate nominated for the Labour leadership election in 2015.
b) Jeremy Corbyn's extreme difficulty getting nominated at all by Labour MPs. 

The Guardian newspaper reported that 15 minutes before close of nominations for the leadership election Corbyn was still 3 votes short of the 35 needed to get on the ballot. In the end he scraped in with 4 more last minute nominations. Corbyn admitted some of his nominators only wanted him in the arena to be eaten alive during a full debate with the other three righter-wing candidates. Corbyn said:

"I fully acknowledge and recognise that those colleagues who nominated me – MPs who nominated me – may not necessarily agree with me on the pitch I’m taking or my views on many things...But they also felt there needs to be a full debate on policy in the party"

A former Blair advisor described the 36 MPs who did nominate Corbyn in order to have an inclusive debate as "morons" who needed their "heads felt" and "should be ashamed of themselves". Some of the 36 would probably, with hindsight, agree with him.


So what did Thatcher convert the New Labour mind to? According to the BBC's "What is Thatcherism" article:
"At its most crude, Thatcherism represents a belief in free markets and a small state. Rather than planning and regulating business and people's lives, government's job is to get out of the way."

Thatcher's conversion of New Labour meant the political tug-of-war was reduced to the Tories pulling to the right at one end, and New Labour pushing to the right at the other. Less a tug-of-war, more a sprint for the cookies and orange squash on the benches of power. 

New Labour, during its years in office, edged the government even more out of the way of "business and people's lives". New Labour presided over the chronic decline of the manufacturing industries and enthusiastically pursued the ultimately catastrophic Tory policy of unleashing the finance industry. 


The illuminating graph below from a report by the Open University and Manchester University, "Rebalancing the Economy (Or Buyer's Remorse)", illustrates the decline of manufacturing in Britain from the rise of Thatcher to the fall of New Labour. Note that Western Europe, and not the low cost countries in the East, was the biggest gainer from the UK's loss:

The report states: 
"the British economy boomed from 2002-07 but there was no cyclical upturn in British manufacturing output as there had been in the general economic recoveries of the late 80s and 90s."

New Labour swallowed the idea that the economy is best left to the private sector, chanting the Tory mantra that business owners becoming 'filthy rich' would, by their benevolence or by the unintended consequences of their selfishness, enrich everybody. The reality was inequality in the UK that had risen rapidly under Thatcher, continued to drift to even greater inequality under Blair and Brown.

http://www.ifs.org.uk/publications/4637

National inequality figures don't expose what happened at a regional level. During the New Labour government London remained the big economic winner. According to a report by the Resolution Foundation's Commission on Living Standards, between 2003-2008 even though UK GDP per head went up by 7% Gross Disposable Income Per Head (money left after expenditure associated with income, for example taxes and social contributions) still fell everywhere except in London, Scotland and Northern Ireland:

The same report shows that the rewards of increasing worker productivity were not reflected in increasing wages for much of the period of the New Labour government. 



Those who say Corbyn would never attract Tory, LibDem and UKIP voters may well be correct. But they miss the point. A more left wing Labour Party, led by Corbyn or whoever, does not need to win power by convincing the Tory or any other party's voters to change to Labour. Labour needs to convince those who don't vote at all, who feel left behind, that Labour offers them something worth voting for. 

Adrian Beecroft, a venture capitalist who advised the previous Tory led coalition, recommended allowing employers to sack workers on a "no fault" basis. Beecroft said this approach would:

“produce an instant improvement in performance in a significant part of the national workforce”.

In plain English, Beecroft reckoned "a significant part of the national workforce" is slacking and could do with a bit more fear to perk them up.

Jeremy Corbyn would have the same effect on British politics. To paraphrase Beecroft, fear of a left wing alternative would produce an instant improvement in the treatment of a significant part of the national workforce. 

Britain needs effective parties on the Left and on the Right. If Labour decides to move Right in order to win elections, then it may gain power but will lose its soul.

His critics say Corbyn lacks the guile required to lead the Labour Party effectively. But will any of the other three more guileful candidates shake off their fixation on doing whatever is needed to achieve power, and achieve power by doing whatever is needed to represent the Left Behind?

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Rip-off News round-up. Our pick of the last week's media (Thu 13th August)

Pfizer and Flynn overcharged NHS by £40m+, says Competition and Markets Authority

Drug companies Pfizer and Flynn Pharma are facing claims that they breached competition law by abusing their market dominance to charge “excessive and unfair” prices for an anti-epilepsy drug. The Competition and Markets Authority (CMA)says that for years industry giant Pfizer, which is listed in the US, and Flynn, a Stevenage-based company, between them sold the drug at a price up to 27 times higher than it had been previously priced. Before September 2012, Pfizer manufactured and sold phenytoin sodium capsules to UK wholesalers and pharmacies under the brand name Epanutin. Pfizer then sold the UK distribution rights for Epanutin to Flynn, which 'de-branded' the drug and started selling its version in September 2012. Pfizer continued to manufacture the drug, which it sold to Flynn at prices the CMA says were “significantly higher” than those at which it had previously sold Epanutin. If the companies are found to have breached the law, the CMA has the power to fine then up to 10pc of their global annual turnover - last year Pfizer had revenue of almost $50bn. Before Flynn bought the rights for Epanutin, the NHS spent about £2.3m on phenytoin sodium capsules a year, according to the CMA. After the deal this spend rose to just over £50m in 2013 and more than £40m in 2014. TELEGRAPH

US adopts rule to reveal CEO-to-staff pay ratio

The Securities and Exchange Commission, the US market regulator, voted by 3-2 yesterday to adopt a rule that requires listed companies to disclose the pay ratio between chief executives and their median employee. The rule is supported by unions and Democrats worried about persistent income inequality, but opposed by companies that call it a costly and time-consuming gimmick. John Engler, president of the Business Roundtable, a lobby group of chief executives, said: “It’s costly, meaningless, and all it does is create compliance risks for business and talking points for people trying to score political points.” Richard Trumka, president of the AFL-CIO (the US’s biggest union federation), commented that complaints about the difficulty of implementing the rule were nonsense: “Employers should already have this information on the books. Dodd-Frank asks companies to do some simple calculations, not put a man on Mars.” He noted that Walmart’s chief executive Doug McMillon earned $19.4m in 2014 — although that included performance-related stock grants not yet vested — while the retailers’ typical employee starts on $9 an hour. “American consumers and workers . . . have a right to accountability and transparency when it comes to the pay practices of corporations,” Mr Trumka wrote. “Wage and income inequality has spiralled out of control.” US presidential candidates from both parties have pointed to inequality and middle-class wage stagnation as one of the most pressing issues in the 2016 election. FINANCIAL TIMES

Sixth form colleges left on starvation rations by government cuts

Almost four out of every 10 sixth form principals say it is likely their college will cease to be a going concern within five years, while seven out of 10 say they cannot provide students with a quality education with the money they are set to receive next year. The research was published by the Sixth Form Colleges Association (SFCA), which represents England’s 93 sixth form colleges. In contrast with schools, where the government has largely protected budgets, sixth form colleges have been subjected to three separate funding cuts since 2011, with the threat of more to come as the treasury seeks further savings. As a result students are being taught in larger classes, courses are being dropped and enrichment activities slashed. Steve Oxlade, principal of Reigate college and executive principal at Coulsdon college, said: “The situation is as dire as you can imagine. My guess is that by 2020 no more than 10 sixth form colleges will be financially viable unless they take drastic action now.” There were more than 120 sixth form colleges in 1992. Seventy-two per cent of sixth form principals say they have had to drop courses, with 39% forced to do so in modern foreign languages. A-levels in German, Spanish and French have been the main casualties. Almost a quarter (24%) have cut STEM subjects (science, technology, engineering and maths), regarded by the government as vital in ensuring that young people are equipped for a modern workforce. In addition, 76% of colleges say they have cut extracurricular sport, music, drama and educational visits, and 81% have larger classes as a result of recent cuts. At Reigate college, Oxlade has seen his annual budget shrink from £12.1m in 2012 to £9.7m in 2016; as a result, students now have less teaching time, teacher workload has gone up 18%, and 15% of staff have gone part-time. GUARDIAN

Pizza Express: angry staff launch protests over slice taken off their hard-earned tips

Pizza Express keeps, as an admin fee, 8p out of every £1 paid when tips are given by card. The chain, which has 430 branches around the UK and is particularly popular with families, makes an estimated £1m a year from the practice, according to the union Unite. Protests are being organised by local branches of Unite and the first will take place at the British Museum branch of Pizza Express in London. The union has also written to the restaurant chain’s CEO, Richard Hodgson. Unite began the campaign following a survey of its Pizza Express members after the chain was sold to a Chinese private equity firm, Hony Capital, last year. One of the top issues was the 8% deduction from their tips. Pizza Express joins restaurant chains Ask and Zizzi in siphoning off 8% of the tips paid by card, but other chains deduct even more. Café Rouge, Bella Italia and Belgo deduct 10%, as do Strada and Giraffe, which is owned by Tesco. But other restaurant groups do not deduct an admin fee from tips. Wagamama, Pizza Hut and TGI Friday all take nothing. The Restaurant Group, which owns Frankie & Benny’s, Chiquitos and Garfunkels, used to charge 10% but dropped this policy several years ago. A spokesperson for Pizza Express said that its admin charge was to cover the cost of running a “tronc” – a standard pay arrangement used to distribute tips among staff. Conservative MP Andrew Percy, who has called for a change in the law that would give restaurant staff more control over tips, said he plans to raise the issue in parliament after the summer recess. GUARDIAN

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Rip-off News round-up. Our pick of the last week's media (Thu 6th August)

Leicestershire police 'ignore' attempted burglaries at odd-numbered houses, to cut costs

Attempted break-ins at odd-numbered houses were not fully investigated by one police force as part of an experiment to save money. Leicestershire Police said the pilot scheme had had no adverse effect on public satisfaction or crime rates. Results of the three-month trial are being evaluated and could see it rolled out throughout the East Midlands. Due to cuts in central government funding, the force has cut £33.9m - about 17% of the entire budget - over the four years to March this year, but is expecting more savings to be needed. Eric Tindall of Melton Mowbray Neighbourhood Watch said: "It does announce to the criminal element, that they can go down one side of the street not being so cautious as to what they get up to, but on the other side they are going to be more cautious." Police and Crime Commissioner Sir Clive Loader said he was unaware of the idea but would have advised against it. BBC NEWS

NHS told to fill only essential vacancies due to 'almost unprecedented' finances

NHS trusts have been told by Monitor, the health service regulator, to fill vacancies “only where essential” as it warned that current financial plans are “quite simply unaffordable”. In a letter to NHS trusts, Monitor’s chief executive David Bennett warned of an “almost unprecedented financial challenge” as he said no stone should be left unturned to find savings. Bennett wrote in the letter, which was seen by the Health Service Journal, that financial forecasts for 2015-16 are unsustainable as he called for greater savings. The HSJ has reported recently that the provider sector has forecast a deficit of £2bn in 2015-16. In his letter, Bennett wrote: “We are already reviewing and challenging the plans of the 46 foundation trusts with the biggest deficits. However, it is clear that this process will not close the funding gap and so we need all providers – even those planning for a surplus this year – to look again at their plans to see what more can be done.” Bennett added: “... of course, all actions should be consistent with your responsibilities for safety and the delivery of constitutional standards.” GUARDIAN

Osborne panned over RBS sell-off as taxpayer suffers £1bn loss

The Government confirmed it has sold 630million shares at 330p each, raising £2.1billion and reducing its stake from 78.3 per cent to 72.9 per cent. But city analysts argued it had demonstrated spectacularly bad timing, with shares trading hands at 404p at the end of February. Selling the shares at 330p therefore resulted in a loss of £1.1billion for taxpayers, who paid 502p per share in the £46billion bail out of RBS almost seven years ago. Just under half the shares were bought by investors in the UK and around 40 per cent by US investors. Around 60 per cent of the shares were bought by hedge funds. George Osborne said ‘while the easiest thing to do would be to duck the difficult decisions and leave RBS in state hands, the right thing to do for the economy and for taxpayers is to start selling off our stake.’ Despite being accused by Labour of selling off RBS shares on the cheap, the chancellor was backed by business groups and campaigners. Jonathan Isaby, chief executive of the Taxpayers’ Alliance, described it as ‘a positive step forward, even if at first sight it looks concerning.’ Simon Walker, director general of the Institute of Directors, said: ‘The exact timing of the sale was always going to be a matter of judgement, but the overriding principle is that banks should be in private sector ownership.’ DAILY MAIL

Farmers hand out free milk in fresh protests over supermarket milk prices

Farmers have been clearing supermarket shelves by buying milk in bulk and giving it away over the past few days. They say they are being paid less than it costs to produce the milk, and some have gone out of business because shops have reduced prices. West Midlands dairy farmer Michael Oakes, from the National Farmers' Union (NFU), said: "I'm getting paid 24p (per litre) and it's costing me 28p to produce. So we thought we'd go along to the retailer, we've bought the milk and we're going to give it away to the consumer and explain why." Dairy farmer Bryce Cunningham, who helped to organise protests in Scotland, said: "At the moment we're being being paid 15p a litre for every litre of milk that we produce. It's costing me 24p to produce this milk." Protests have taken place in Sainsbury's, Tesco, Morrisons and Asda in Kilmarnock and Ayr (Scotland), Coleraine (Northern Ireland), Bideford (Devon), Bude (Cornwall), and Telford (Shropshire). Andrew Opie, director of food and sustainability at the British Retail Consortium, said shops were not to blame: "The global market at the moment is over supplied, we haven't seen the pick up in demand that we might have expected from places like China and India which were growing quite rapidly." BBC NEWS

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