Monthly Archives: September 2016

Thoughts on the Labour Party

I’ve been thinking a lot about party politics, and in particular about the UK Labour party, which is currently embroiled in conflict.

My take on the history: The years of Blair/Brown Labour government (1997-2010) were far more successful politically at the time than in hindsight, particularly due to the financial crisis and the Iraq war.  Since losing power, Labour has struggled to clarify its message (whether to work within the neoliberal consensus or to reject it) or its target audience (the enthused left or the centre-ground), with the result that it came across as unfocussed and insincere in the 2015 general election.  Enter Jeremy Corbyn, a veteran challenger of the neoliberal consensus, who is authentic and speaks inspiringly (at least if it is a topic that you and he are already convinced of).  In 2015, in an attempt to engage the membership, Corbyn was nominated to the leadership and won a landslide.  Since then, he has struggled with a media biased against him, the EU referendum (which he was never going to be able to sell with conviction/passion, given his Euroscepticism), questions about his ability to work with his cabinet, and many who are unconvinced that he could ever lead the party to a general election victory.  Against that, he still has the support of huge numbers of members, particularly in the light of far less inspiring/authentic alternatives (eg Owen Smith).

My opinion is that the conflict appears worse than it is.  There’s a huge amount of ground that the vast majority of Labour MPs, members, voters and potential voters (enough to easily win a general election) agree on – most notably, that the neo-liberal consensus won’t work going forward, and that the solution isn’t state socialism or anarchy.  There are a few emotive historical disagreements (Trident, the war in Iraq, the EU referendum), but I feel that the majority of members are prepared to put those disagreements aside in order to focus on the bigger picture.   There are definitely questions about how the party is run (as there are in any party), and definitely moments where some individuals have acted badly (a few unacceptably so).  But, most of the heat of battle seems overdone – most people who are voting against Corbyn support the bulk of his message, and most people who are voting for Corbyn genuinely want to positively impact this country and agree that winning seats is the best way to do that.

I expect Corbyn will win, and things will cool down again.  MPs will be able to return to focussing on competently arguing for a better way of doing things, a message that will resonate with core members and increasingly with a wider audience.  A new leader may emerge in future who can enthuse the core members, or Corbyn and his MPs may find a way to work more productively together, particularly with the challenge of the Brexit campaign behind them.  I don’t expect a general election until 2020, and a lot will have changed by then in the public mind and in the media landscape – we will have had 10 years of Conservative rule, and the economy won’t be in good shape, and Labour will have had time to clarify its message.  So I certainly think there is plenty of reason to be optimistic.

 

Book Review: Back to the Future of Socialism, Peter Hain

While thinking about the Labour party, I have been reading “Back to the Future of Socialism”, by former MP Peter Hain, which I’d recommend for anyone interested in the challenges of politics, particularly in the UK.  Written in 2015, it takes a good look at the challenges facing the world today, and the need for a strong Labour party with a commitment to addressing those challenges.

The title is a reference to Crosland’s 1956 book “The Future of Socialism”, which had a very similar remit.  Unfortunately I suspect a lot of people will be put off by this title.  While Hain is promoting socialism, he makes very clear that his kind of socialism involves as much decentralisation and individual liberty as possible, just with laws and institutions architected with a much greater emphasis on the common good.  I expect most people (even those who would never voted Labour) would support this vision, though reject socialism thinking of it as State Control and anti-liberty.

But the substance of the book was extremely good, considering a wide range of topics (eg housing, education, jobs, health, aging, the environment, internationalism, devolution), discussing them in light of changes in the past 60 years, and the challenges and potential solutions for the future.   As with any political argument, it was sometimes easier to agree with his diagnosis than his cure, but I’d certainly support much of his thinking.  And I particularly appreciated the history that he used to illustrate his points (especially his assessment of the Blair / Brown years).

Some of the practical advice around how Labour should practically do things differently was particularly interesting – the crucial need to win councils, earn respect for competence, and to engage both core members and the wider public.  It was written before Corbyn’s election as leader, and doesn’t mention him – I’d be interested to hear how he might update his advice in light of that.

If I had a criticism, it was that the book took too partisan a view.  I have no problem with condemning the worst stereotypes of Conservative ideology (eg blind trust in the market, rampant individualism, blindness to society and inequality), but Hain seemed to be accusing all Conservative governments and voters of these things (and Liberal Democrats too, for joining the Coalition in 2010).  He made some excellent arguments which I’m sure many Conservative voters and MPs would be open to, and even accept, but put them in a book they’d be unlikely to want to read.

But if you can get past that (or don’t have any problem with Tory bashing), it will certainly get you thinking about the problems we face, with a useful blend of pragmatism and big picture.  

Questions around Apple’s tax bill

On Tuesday this week, the European Commission announced that Apple’s tax arrangements in Ireland were illegal, and that it consequently owed EUR13billion in back-taxes from the past 15 years (https://www.theguardian.com/business/2016/aug/30/apple-pay-back-taxes-eu-ruling-ireland-state-aid)

Not surprisingly, it has provoked outrage from some corners, and lots of bold statements about things are meant to work.

While I don’t pretend to know the specifics, and both Apple and Ireland have said they will be appealing the judgement (I suspect successfully), I did have some thoughts on several of the wider issues raised in the claims.

Can rules be changed retrospectively?:  Many (particularly in the business community) are uncomfortable with the idea of changing rules retrospectively.  In fact, our justice system has always had the notion that not all contracts are enforceable, for example those made under duress, or those involving an illegal action, and I would be happy to include rules and contracts that are grossly against the common good.  It would take some work to get the balance right, and ensure these powers weren’t used unfairly, but I hope that recognition of these powers would lead to companies doing a better job to ensure that their arrangements are not just ‘legal’ but also not against the common good.  

Sovereignty of a country’s tax affairs:  The case has raised the question of whether a country has total control of its tax affairs.  Firstly, we need to appreciate that countries competing with each other to win companies and wealthy individuals by lowering taxes and offering ‘sweetheart’ deals can end up hurting everyone.   Under these circumstances, it seems reasonable for countries to disincentivize other countries/companies from doing that, and it does happen (eg US taxation on its citizens’ overseas income, or sanctions against tax havens).  However, when you look at what steps they can take, their options aren’t unlimited, and in the case of Apple, the EU may have overstepped the mark in thinking they can force Ireland to retrospectively change their tax rules.

Providing an unfair advantage to one company (or industry): There are lots of instances where governments provide favorable treatment to one industry, or even one company.  I can see that there is a cost of this, in terms of fairness (both perception and reality) to other companies/industries and to the public, and I would want to make sure was only done where the benefits clearly outweighed those costs.  

What is a fair rate of tax?:  There was a time when the this question didn’t make any sense – of course any individual or company would pay as little tax as they could.  I am pleased that society is starting to assert its desire for a fairer system, and companies are being criticised where they can’t justify their tax contributions (within each country they operate).  Yes, tax affairs are complicated, and occasionally the public outrage is misinformed, but I believe the scrutiny is a positive force.  Interestingly, Apple subsequently announced that it will begin repatriating funds next year (and paying tax on it – this has also been a point of contention) – I guess they know how important it is becoming to be perceived as paying a fair rate of tax.