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item0043D 736, 737
736
16 June 2003
Shelter
For the Labour homeless...
I feel homeless.
John Naughton advocates a
new form of political dating-agency, capable of assembling anti-Bush forces
in the United States, through the Internet- he writes in The Observer.
I feel a similar need, for those who like me
despair of
Tony Blair, yet are quite unable to
stomach the retrogressive Old Labour dirges emanating from Tribune, the
Morning Star, the "new" TU leaders and the old IS Left, now peppered
throughout the Labour Party.
The problem with New Labour is that it has never been radical enough.
"Modernisation" has in truth been a tinkering with our institutions,
tweaking here and tweaking there, more like shaking a child's kaleidoscope
than embarking on any programme of radical reform. My regulars may
even remember my 1997 Tribune article
Blair's too old-fashioned for me!
We
Labour Homeless
are faced with a dismal prospect. We have had no coherent
institutional reform - yet we now confront the Rising Old Left, advocating
only failed ideas. Just consider the New Labour record to date.
- No coherent Lords Reform, botched operation
- No coherent regional devolution, new Constitution crippled by internal
inconsistencies, lack of political principle
- No coherent relationship with USA, collusion with USA in prosecution
of an unwise and illegal war in Iraq
- No blueprint for UK in Europe, mismanagement of the referendum process
- No peace in Northern Ireland
- Growing official illiberality and intolerance of individual diversity,
authoritarian judicial reforms
- No glimmer of new thinking on the "War on Drugs", unquestioning
subservience to the American Right, still cultivating high crime levels
- No acceptable rationale for the mobilisation of "private finance" in
the public sector, PFI
- Increasing reliance of the State upon means-testing, increasing
benefit dependency, lack of any commitment to universal benefits
- No solution to housing shortages - rising house-prices on
owner-occupied sector - and lowest house-construction rates for forty
years
- No acceptable solution to the management of migration, including the
administration of asylum claims
- No coherent company law reform - fat cats stay happy- international
corporations remain free to exploit, plunder and deceive
- No solution to the awful mess of pensions for the elderly
- No improvement in protection against unemployment and its consequences
- No coherent NHS reform, continued professional turmoil, low morale
- No convincing blueprint for education, our schools still floundering
under Charles Clark.
 This is a dismal roll-call of timidity, of the failure of pragmatic
politics, and of a professional political
salariat.
Blairism has proved too timid, lacking the inspiration of any "crusade", any
coherent political philosophy.
Yet - I have no home on the Old Left, with Rix
or Simpson or Skinner or Seddon or Benn. I could not contemplate "more of the
same thing", from the Tories. And the Liberal Democrats are even
more of a failure than New Labour: Charles Kennedy has been a spineless,
unprincipled disaster.
I
have no doubt that the future lies with a new genre of
Liberal Socialism, forged as an individualist
philosophy with a sub-text of public cohesion, democratic, passionately egalitarian,
human-rights-based, espousing and developing the open multicultural society
- that is the way forward, even though Blair has currently lost the plot,
disoriented by his own awful mistakes over Iraq.
Does any of
this resonate with you?
If so - please do drop me a line
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737
20 June 2003
Exaggerating Jobs
Dishonest
machinations
My time as Swansea
Economic Development Officer (1979/85) came back to haunt me
this week. The National Audit Office, took a close and critical look at the claims
made for job creation grants (“Regional Selective Assistance” in the jargon
of the trade). The NAO found that the claims, were fragile and
unsubstantiated, often plainly inaccurate.
I felt a real twinge of
conscience. Because everyone within the system, both on the private and
public side of the equation, has always known the system to be
defective, often dishonest. But as with so many bureaucratic wrongs,
it is quite simply in nobody’s interests to
blow the whistle.
The rationale of
“Regional Financial Assistance” has always been the assurance of “jobs” to
those regions whose employment performance is poor. As a grant-system, it
has its political origins in the Depressed Area payments made in the dark
days of the early-1930s. In the period post-WW2, it came to form part of
Labour’s general drive to redistribute wealth from the richer to the poorer
regions.
Yet it is, as an administrative system, deeply flawed. In my view, it should simply be
abolished, and redistribution managed in other ways. Just consider its
defects.
-
The concept of “job” – in filling
in the forms, the firm is always required simply to claim the number of
“jobs” involved – merely positions, titles. Not the overall quantum
of paid employment, but the number of people to be “employed” disregarding
part-time/full-time distinctions, and without asserting in any enforceable
way the predicted survival-time of “the job”. This represents a wholly
inadequate approximation to the level of economic activity.
-
Only “manufacturing” jobs are to be
assisted – and that is itself a tenuous concept. I remember two attempts to
secure my support (when I was EDO for Swansea) for RSA applications in
respect of “manufacturing” jobs.
(a)
The first was in a garage which was
generally used for chassis repairs (not manufacturing) but was also
on occasion used to build chassis structures for specialist vehicles,
including trailers, sometimes also the bodywork. Was that “manufacturing”?
I decided not, and withheld my support.
(b) Again, a glass-supplier sought to
argue that, although the process of replacing broken shop-windows was not
manufacturing, the process of fitting glass panes into new double-glazing
units was manufacturing, and contended that he should therefore enjoy grant
support. Again, I demurred. But in an era in which so much “manufacturing”
consists merely of the “flat-pack” assembly of ready-made parts, the
borderline can be very fine indeed.
3. Over the years, the system has come
to be used for “safeguarding” jobs, as well as creating them. Firms seek
grant-funding merely because they have threatened to leave the area, and
should be paid subsidies to persuade them to stay. While
there are bound to be circumstances in which these claims are valid, the
doctrine is also a rogue’s charter. Distortion and dishonesty are
rife, in this sector of the system. Firms get used to structuring their
applications in such a way that – if they get no grant and then do leave –
the public agency will get the blame for “losing” that investment.
4. Firms become expert at dressing up
their projects so that a financial shortfall is demonstrated, which requires
the introduction of RSA Grant “to enable the project to proceed”. Again,
this is commonly a deceit, to meet the doctrinal requirement that state aid
is not to be introduced if adequate private capital is sufficient.
5.
Finally, every Tom, Dick and public sector Harry tries to get in on the act, and claim the credit for the “job
creation”. Both politicians and professional officers view for the
credit. The Welsh Development Agency claims the credit for receiving the
first phone-call from Taiwan, and arranging the trip to Wales. The local
Council claims the credit for having provided the factory or the site. The
DTI/Welsh Assembly claims the credit for making the RSA grant.
Double-counting is rife.
The whole thing is a
mess – a discreditable, dishonest mess. And now the EU is intervening to
try and restrain competitive grant-offers from various countries within the
EU, all seeking to attract inward investment. Ireland, hitherto the past
masters of this technique, is being forced to reduce the scale of its
operation.
State-grants should
be abolished for all except “new firm foundations”, within their first three
years of operation – whether the firm originates within the region or from
elsewhere. This is the old principle of "infant industry (or infant
firm) protection", which originated in the 1930s, and which I still consider
sound. Grants should all be incubation grants. Once a firm had passed
the three-year deadline, it would have to sink-or-swim by itself. At a
stroke, most of the dishonesty would be wiped off the public account. And
the public would be supporting the only factors that really matter in the
long run – the ability to innovate, to organise new firms, to promote new
products and services, to enter new markets, to confront competition in new
ways, in a constantly changing market environment.
We should give up counting “jobs”. That is the language of the 1930s Depression. If we have a
lively economy, employment levels will be high, as night follows day. We
should concentrate on the great ebbs and flows of trading activity –
locally, regionally, nationally, internationally. That approach
should appeal to Gordon Brown…
What do you think? Drop me a line
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