Saturday, October 04, 2014

What Relevance Milliband's Labour Now

No doubt over the coming weeks the conservatives will be saying again, what relevance Labour politics now?

The conservatives now lay out the expected tax cuts, plus some in the Labour heartland of the low paid, and also a firm but fair freeze on benefits. At the same time of course, the rolling agenda of austerity, privatisation of the health service and strange scando-socialist tweaking of the house market continue with the back drop of continued disontent with low rises in wages for average people as against continual above RPI rises in former public utilities and transport.

The tories have got it right on the one side where labour should have gone as a vote winner in raising the threshold for 40% tax to 50k. Many of the work force earning this are prime labour swing voters or even core supporters , because they are people in their 40s and 50s by in large, and very many doctors and public administrators, who have both benefited enormously from the welfare state and education in particular in their youth, while now seeing the down sides of the Tory march towards britain becoming UK Inc.., a political subsidiary of the USA and international capital.

Where the tories have got it wrong is in giving tax removal in the lower paid section of society. THis is a very Reaganomics policy and is detested by the middle class in the USA, who see that low paid workers do not pay for any federal provision. Also low paid workers are subject to hikes in state taxes, and pay a higher proportion of their income over time to state taxes. This sets a viscious circle of voter demand for less tax and smaller government, while of course just fuelling then "trickle up" in that the poorest third of the work force become slaves to their bosses and to high utility and health costs while even average standards of living are undermined. To break the franchise of paying income tax and getting services in the UK will prove to be a mistake for the Tories as now they create their own little beast, demanding tax cuts at the local authority level while also being more likely to be in receipt of top up benefits and periods of unemployment on benefits, plus of course costing the NHS more from their poorer lifestyles.

Labour should be reversing this, with a direction to even more taxation being central because that is the most cost effective means - income taxes, profit taxes, capital wealth taxes. Indeed on these issues it can be said that the LibDems view of local levvy income tax with a post code tax level is a contender once again to accede the old throne of local rates on domestic and commercial property. Hence deprived areas can recieve boosts to their spending while also reducing the levvy on tax on expecially commercial premises with funding coming centrally. There is a fortune to be saved in not managing rates and community charges at the local level.

On the up side for Labour, the Tories have now showed their hand in the UK becoming effectively the same type of economic model as the USA, but of course we all know that the UK is not a meritocracy with wide access to scholarships for the best students from all backgrounds, nor does the UK have the huge natural resources the USA has per capita. Essentially privatisation of health services will lock some of that area into charges at point of care and blur the boundary between private and public health for both the supply chain with the GP as triage nurse and purchasing manager, while hospital staff increasingly chasing better wages or contracts on which ever side, and probably working concurrently on both sides to maximise their income.

The move to privatise health is of course just going to be the same set of Tory bungled marketism as the utilities and early telecoms privatisation was. The 'market' is mostly false, with many caveats which reduce risk of companies who invest in the utilities such that they can raise capital. That is to say reduced competition, ability to charge higher prices than when public and to keep those prices rising to suit their dividends and ability to raise capital and leverage loans from the stock market share price and allocations.

In health they will of course claim that there are international professionals ready to sweep in and offer a competitive market. Well of course that is nonsense, there will be the same caveats which secure both high prices over time and public subsidy in facilities. There will be in effect hospitals, mostly the newer ones, which will move over first to part private management and then just become private with the state firstly as their paymaster, but later you can expect medicare  and a style of obamacare in the UK too, with checks on these and your credit card when you turn up in trauma by nasty little tory type admin nurses and high earning doctors.

In terms of the real biggy in the UK, the domestic housing market and diconnection for my generation downwards, Labour so far have no answers which are being taken up in the media. The Tories continue to follow the social democratic and outright socialist scandinavian model of making home ownership affordable via state managed mortgage devices. In an ideal world though, Labour should be looking at becoming a popular party by sweeping away restrictions on planning applications for first time buyer homes, and importantly the whole two-up-two-down market. There is a ticking time bomb here in that many of the 1980s cheap built rabit hutch two up two downs are actually reaching the end of their servicable lifecycle and are cheaper to demolish than strip out and repoint, reroof etc. Labour should be looking at freeing up more land where the state continues to own the land and rent it to the developers and then the owners. Also they should be using more housing associations to regenerate run down council house areas and offer a ladder for hard working below average income families to have a stable renting relationship and a route to affordable ownership in their house or within the association.

One area which leads on from this is the very essence of the debate. In the USA the lower fifth of society are completely socially immobile and the lower third are generally crippled for social mobility. Access to education, access to capital, a safe environment for businesses and cultural snobbery are some reasons. There is no solution and there is no solution offered either in the UK either to avoid this becoming the norm in the UK. Capitalism as a system does not care about these people. They may as well move to china and work 60 hour weeks for a pittance for all the system sees of them. THey are irrlevant almost to a modern economy which demands on the one side high skills while on the other reasonable social skills in service industry.

As I said above for Labour in fact this is the last broad generation appeal they can have to turn the middle class away from the model of an American society, in having a middle class which created itself post war on the back of the welfare state and access to college and university education. After that generation wanders into its dotage, there will only be the highly in debt, jealous bickering out for themselves generation, a bit younger than me and so on, who have worked hard all their lives and resent  paying taxes which otherwise could be used to cover their above inflation bills and feed the impossible college fund. In the USA the republican machine managed to swing this large swaith of middle income employee workers over to the mean, I manage my own money best approach to life where smaller government means less taxes for them, and while they are in work and good health they can benefit from small society, small service. So social democracy is avoided in the USA by a massive PR machine which pumps the concept of small government, while feeding off big government spending on defence, policing, space exploration and of course the enormous missues of public employee mediicare contribution which floats the private health system with huge profitability for providers and pharma' companies. The owning classes decided long ago in the USA, probably during WWII that Socialism was far too good for the working classes, and public money should be syphoned off to their own pockets when ever possible.

Sitting writing in Scandinavia it is refreshing to see that democractic belief in society and good public services we trust and rely on is alive and modernising itself, with the best education in the western world being the social democratic model in Finnland, almost a Steinar School approach with the beloved PISA results to show for it, the sensible public planning of the Swedes and Danes and the generous distribution of wealth in oil rich Norway.  Labour in the UK has to redefine its core voter and make them feel responsible for positive change, while also I think it is inevitable that proportional represenation and coalition governance needs to become the norm in the UK if Labour and the centre politics want to avoid a drift to the Cameron mid to far right politics we see rolling out now.

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