There are many problems with the British economy – this much we know. In fact, the problems are such that sticking-plaster solutions simply will not do. Shop stewards and labour activists need to remember that when they are looking for answers. The quick-fix invariably looks like an attractive proposition but usually precipitates a longer term disaster.
We’re now beginning to see a real debate about the economy for the first time since the early 80’s. This is largely due to the Maastricht Treaty and the controversial convergence criteria within it. Maastricht places great emphasis on the reduction of public sector debt – something that strikes a chord with workers brought up to believe in paying their bills and keeping out of debt.
People in the labour movement are justifiably concerned by the massive cuts facing our local communities. They are worried too, that New Labour will not commit itself to raise taxes to pay for social services. I am not against raising taxes, but to secure lasting improvements we also need to consider more imaginative, forward-looking proposals that would enforce and complement any tax raising measures.
Labour’s early pioneers didn’t place their faith in the power of taxation to resolve the problems of the unequal society in which they lived. Instead, it was the Liberals who thought taxation the best tool for providing the kind of advancements in conditions that society required. The belief in the healing power of taxes was embraced by the Labour Party later, during the 20’s and 30’s, and its failure led to the break up of the Party and the emergence of the National Government.
What saved the Labour Party in the 1930’s was the strong belief that people should reap the benefits of their labour through the common ownership of the society in which they lived.
The mistakes of the ’45 Labour government have been well covered by other commentators. Suffice to say that, in my opinion, one of its principal failures – and that of successive governments – was an over-reliance on taxation to solve problems which required visionary socialist solutions.
Now in 1997, we are faced with huge problems as a result of European economic convergence. Put simply, the Maastricht convergence criteria are an extension of Tory policies that the people of Britain have suffered for the past 18 years. We have also witnessed vicious and repeated attacks on local democracy and our trade unions, all of which have contributed to an air of defeatism. It is a psychological barrier that must be overcome, as, contrary to the myth, trade unions still have tremendous potential power. Used properly, that power could start to challenge the current position.
Of course, our industrial manufacturing base is at an all time low – a glance at the import/export balance sheet is enough to confirm the seriousness of the situation. Such problems lend weight to the arguments of those within the Labour Party who say that raising taxes adds up to handing over our peoples money and resources to multinationals and the financial institutions. Whatever else, we mustn’t lose sight of the fact that there has to be an alternative, another way of running our economy.
As in Britain, workers in Germany, France, Holland, Luxembourg and Belgium all enjoyed Keynesian reflationary programmes following World War II. Unlike Britain though, they had the additional public sector expenditure bonus thrown up by the Cold War and rather quaint and extremely un-British policies encouraging discussions with workers and the wider communities over investment policies. This developed a system of ‘collective’ corporate governance which did much to secure inward investment in domestic industry, education, health, welfare and other social areas. Over the years, the system also made workers in mainland Europe somewhat complacent about the growing problems associated with the EU, the Single Market and Maastricht.
The extreme pressure they are under now, is due to a number of factors. In 1997, they are faced with massive changes imposed by the purely fiscal convergence criteria (introduced into Maastricht by a Tory government representing interests in the City which support Anglo-Saxon law), the rapidly changing global political scene and the relentless pursuit by the City of London to change European law in favour of Anglo-Saxon law.
The recent hostile bid for Thyssen steel made by Krupp is an excellent example of how they are succeeding.
In its Lex column, the FT described it as “…an extremely Anglo-Saxon take-over bid….” that “….breaks Germany’s cosy corporate culture wide open”. It concluded that the bid was good news for investors and that industrial logic was starting to prevail over vested interests. Presumably they don’t mean those workers with a vested interest in the future of the company, whose demonstrations over possible job losses, led to the withdrawal of the bid.
This full-frontal assault by the City to extol the virtues(!) of Anglo-Saxon economic law throughout Europe must be challenged by the left.
In 1989, the European Commission brought forward a proposal for a Directive on company law. It was withdrawn following pressure from the Takeover Panel in the UK and Tory government opposition. The complacent attitude of other member states did not help. The proposal has now been re-introduced, albeit in a much watered-down form, yet none of the parties have changed their attitude towards it.
It was debated in the House of Commons and the House of Lords, with both chambers backing the Government and Takeover Panel’s opposition to a Directive, despite the reservations expressed by some Labour members. Whilst Labour MP Alan Simpson was noted for his research into job losses in Britain as a result of takeovers and mergers, no serious questions were raised about the current situation regarding the Takeover Panel’s operations in this country and the possible exportation of another of our free market enabling mechanisms to mainland Europe.
If we express an interest, we are invariably told that such matters are good for the economy. The question we should really be asking is this : Whose economy is it anyway?
As a member of the Legal Affairs Committee of the European Parliament I argued for a Directive. As a result I was the recipient of a rather hostile letter from the Takeover Panel’s Director General, Alistair Defriez. After dealing with this initial hostility, we have since had a rather interesting exchange of correspondence, and Mr Defriez has provided me with some enlightening information.
According to the House of Lords Report, the Panel is an “…unencorporated, non-statutory body whose membership comprises a chairman, two deputy chairmen and three lay members (all of whom are appointed by the Governor of the Bank of England), and representatives of a number of organisations representing the main investors, practitioners and the corporate sector”. Yet a letter from Mr Defriez confirms it has never had any representation from the trade unions since being established in 1968.
The same report detailed the number of written and oral representations which were made to it during its consideration of the proposals. It reported that the vast majority were hostile to any Directive, yet it didn’t say how many of those organisations giving evidence were also closely associated with the Takeover Panel. In fact, of the 26 organisations involved, 8 were members of the Panel.
Ten members of the Takeover Panel are members of institutions which collectively have direct control of some £67 billion pounds (1994 figures) worth of investments – the majority of which is involved in shareholding activities. Collectively, the members of those institutions which are represented on the panel, exert control over all the funds held by UK building societies, banks, insurance and pensions companies.
That is the culture they are so keen to export. It has led to massive job losses in Britain and increasing inequality. According to the 1995 OECD Income Distribution survey of member countries, Belgium, the Netherlands and Germany show a ‘modest’ rise in inequality – between 1 and 2 percentage points increase in the Gini coefficient (a recognised means of comparing the degree of inequality). Australia, Japan, Sweden, the UK and the USA meanwhile, show a much bigger rise. The UK exhibits by far the largest increase in inequality during the 1980’s and the Gini coefficient shows that inequality in the UK has increased from 27% to 36%.
To quote the FT, there exists a “…cosy corporate culture of vested interests…” which deserves to be blown wide open. Labour activists and shop stewards should now turn their attention to the job in hand.
Comrades are obviously concerned by the widely perceived lack of radicalism in New Labour’s policies, yet we should take heart from recent policy documents issued by Shadow Chancellor Gordon Brown which call for representative reform of the Bank of England. The proposals suggest extending representation to reflect both sides of industry and giving a clear role to representatives from regions such as Scotland and Wales. This kind of statement is welcome, but far more needs to be done.
If there are solid arguments for why we should show restraint in raising taxation, then there is an equally good case for the democratisation of institutions operating in the financial sector. In fact, we really need to look at democratising the operation of each and every fund – ensuring that every contributor has the opportunity to become involved in investment decisions. In terms of takeovers or mergers, this should mean that persons who directly hold shares in either company through investments made by institutional investment managers responsible for their occupational pension fund scheme, are to be consulted before their collective voting power is used in a takeover bid.
We should also reform the Takeover Panel and the Monopolies and Mergers Commission in the same way as is proposed for the Bank of England.
We must encourage campaigns for devolved parliaments in the regions of England, equipped with the same powers as proposed for the new Scottish Parliament. Those powers should be extended to cover vital areas of the financial sector.
There is a clear case for a revitalised, more representative democracy in Britain. If we distrust multinational corporations who operate here – whether they are perceived as `British’ companies or not – then we should find ways of making them accountable. Companies offering inward investment projects now benefit significantly from the financial largesse of LECs and other government agencies who court them, yet we never impose any significant conditions on them relating to job creation, union recognition, or the environment, let alone secure a place for democratic representatives in their boardrooms.
We also urgently need to ensure that our senior civil servants, who represent our interests within organisations like the World Trade Organisation, are more representative of the society they represent – bringing an end to the Oxbridge axis and the culture of the old school tie.
Finally, we need to look at ways of democratising and reforming all of these organisations that are failing us so badly – and those we elect should not be excluded. That means ensuring that the elected representatives of our local authorities, regional and national parliaments more accurately reflect the background of the people that elect them.
Reading Roger Warren Evans article in Tribune (One Step Beyond 31.1.97), I couldn't help wondering what socialist history he had read, if any. Finally I convinced myself that this rhetorical tract, so dismissive of labour movement history, must surely be a wind-up. Wind up or not, I am a hungry fish unable to resist the bait.
Evans says he cannot `find any relevant new ideas on the Old Left, or Democratic Left, or Traditional Left'. We shouldn't be surprised by this, because there are no new ideas. In truth Evans is arguing for a very old idea that – thanks to the modernisers – is no longer part of our constitution. That idea is common ownership.
Real failure is represented by the dearth of campaigning activity aimed at restoring those ideals and putting common ownership very firmly back on the agenda. To its discredit, the left has failed to adapt its campaign strategies – ignoring changes in communications technology which are now an integral part of the lives of many of our supporters. I doubt whether Evans has read any of the material produced by my office over the past twelve years (all of which has been distributed to CLP secretaries). Some of the campaigning methods proposed may have been of interest to him.
When it comes to corporate power, the 1983 manifesto made proposals – based on common ownership – to introduce some form of democratic accountability to corporate power blocks. It proposed combining workers' control with the development of community-based authority over large sections of industry and the public sector. In numerous pamphlets, my office has argued for the introduction of a system based on the Länder state model that exists in Germany. This model offers a level of political and economic democracy far beyond anything on offer from New Labour. Others may champion other models -Sweden's corporate structure, the French co-operative movement, for example. Our own pamphlet “Global Village Economics” explains that the wealth held in this country – in pension and insurance funds, building societies and banks – is being manipulated and moved around the globe by a few investment fund managers who are wholly unaccountable to those whose money they are investing. Significantly, it called for changes in corporate law to make those responsible for manipulating this vast wealth, more democratically accountable.
The common strand that runs through such economic models is that they have been influenced by the political writings of the likes of Marx, Owen, Paine, Rousseau, and by such enlightened industrial workers as Mann, Thorne, and Tillet in this country. People campaigned for these ideas using whatever materials and tools of communication were available to them at the time – whether mass meetings, pamphlets, community meetings or demonstrations. Unfortunately, campaigners today seem to lack the imagination possessed by those early pioneers of socialism. Consider the effort expended by a young Ernest Bevin, organising cart drivers or a church demonstration of the poor in his parish. Think back to the evidence of the industrial court and the conditions facing Britain's poor at the turn of the century. These pioneers would no doubt look on horrified by the lack of campaigning activity under today's leaders. They would definitely highlight the huge gap between trade union rights in the latter part of the 19th century and early 20th century, and those in place today.
Unlike them, we have the right to campaign in our communities, extolling the virtues of our political and industrial ideas. What we need though is a little imagination about how best to campaign. Surely in 1997, we cannot still believe that leafleting is the best method of communicating our ideas. If not, how would someone like Tom Mann go about campaigning today, given the technology at his disposal.
Computers are not only useful toys for obtaining information through the Internet or for drawing up leaflets, they can be a useful tool for encouraging trade union community organisation. Again, this is not a new idea. Early trade unions organised within their district – some still do so today. The drift towards organising within the factory and work place was an idea which emerged from the non-craft unions, which has gradually been embraced by the craft unions. Now that the workplace does not offer the economic security it once did, surely trade unions must look at other ways of securing economic stability for their members?
A few hundred pounds can set in place systems that will help organise trade union membership on a community basis – not just involving the workplace membership but also other members of those worker's families. After all, every community has a unique postal code. Every trade union with members names on a database should be able to type in the appropriate postcode, list their collective membership within that area and target letters specifically inviting members and their families to a meeting within their own community. Such meetings could offer the opportunity to discuss trade union policies aimed at resolving the problems experienced by local members. They could also be educational – exploring wider issues including the global economy, the role of the WTO and political power (real rather than imagined). Such activity would compliment workplace and trade council organisation. If trade union leaders insist this kind of activity is beyond them, then their membership should ask why?
We should look at other ways of using new technology. For less than a thousand pounds, political and trade union activists can equip themselves with a video camera, sound and editing equipment. They are then in a position to produce campaigning videos within their local communities – perhaps by asking local residents their opinions of party and trade union policies. Inviting the interviewees and their families along to a viewing of the completed video in a local community centre, would be a step in the right direction and increase the level of political activity within the local community.
Finally, we come to cable TV. This Tory government passed legislation which enables local councils to demand (where there is a community request) that cable operators make a channel available for community use. Local colleges which run media courses could help develop the skills needed to enable communities to take full advantage of this legislation. Whilst some local authorities are already looking into this type of activity, Evans' article suggests that activists are some way behind. The streets the cable companies are tearing up are our streets, we should make demands upon them.
These are just some ideas the movement should consider. Some comrades may have other ideas, but one thing is for sure – they are not new ideas, but good reasons for furthering the socialist cause in a modern setting. This new environment didn't require New Labour to ditch Clause IV (4), so there must have been some other reason.
Poverty is eating up the planet at an alarming rate. However
concerned we claim to be, it seems clear that hoping the problem
will just go away is unlikely to work. The only way we will
destroy the plague of poverty is to adopt a more radical approach
to running the world’s economy.
The collapse of the Berlin Wall and the demise of the Soviet
Union have heralded huge changes, and shifted responsibility for
many of the world’s problems onto people living in the western
In order to act responsibly we first need to understand the
nature of the problems we face.
Every day, whether at work or home, shopping or watching TV – we
make choices. Confronted by packed supermarket shelves, the
goods we buy can be influenced by our concern for the environment
or the constraints of our budget. Our purchasing power allows
us to make these choices – we can skip past shoddy goods or avoid
dodgy manufacturers if we want to. In doing this we operate a
form of trade embargo.
Yet while we take great care in the supermarket over which
products we spend the housekeeping on, as a nation we seem less
bothered about how a far larger portion of our money is being
spent on the money markets of the world.
Here in Britain, a massive 31% of our capital assets are invested
for profit in areas of the world outwith this country and the EU.
The USA, which has the single largest source of capital assets
in the West, only has 5% deployed outwith the USA.
Over the years we seem to have been content with a measure of
political democracy in this country, whilst largely ignoring the
absence of economic democracy. If we are serious about making
the kind of changes needed to wipe out poverty, then we should
start by introducing legislation that will allow us to do so.
This means democratising decision making processes in this
country and making our institutions more accountable to people.
We already have some power to influence decision makers – but
have forgotten how to use it. Massive pay rises for the bosses
of the now privatised utilities caused massive public uproar, yet
75% of the votes helping to push through such unpopular decisions
were controlled by pension fund managers, and managers of
insurance and banking funds.
These funds ultimately belong to the people, yet we allow
faceless and unaccountable investment managers to use our
combined financial clout to prop up unpopular regimes and dish
out bulging bonuses to the fat cats of industry.
In much the same way, our laissez-faire attitude towards
scrutinising the investment policies of these institutions, allow
them to use our pooled resources to invest in areas of the world
which are notorious for their exploitation of human rights.
Perhaps it is something we should consider the next time we
carefully check the label of a new brand of detergent.
Haven’t we moved a long way in the Labour Party when Lord Rodgers calls on Liberal voters to tactically support Labour? (That voters are well aware of this fact doesn’t seem to have crossed his ermine covered head). It is fitting that he should call on others to vote labour know, after all Labour is now playing his and the other founding members of the SDP tune. To reinforce this message, I have no doubt that Labour’s last conference before the next election will see further calls for realism to prevail, and more insensitive frontbenchers calling for Labour to ditch its trade union roots, and the word socialist. How on earth did we get here?
Nineteen eighty-three was a turning point in British politics. The Tories were reelected on a wave of post Falklands nationalism, while Labour’s chances were undermined by the media’s massive personal attack on Michael Foot. The Tory victory was strongly aided and abetted by the actions of the Gang of Four and their supporters, many of whom have since rejoined the Party. Significantly, several are now key advisers to the leadership.
While the Tories took 42.4% of the poll (13 million votes) and Labour 27.6% (8.4 million votes), the SDP – led by the 28% of Labour MPs who left the Parliamentary Party in 1982 – took only 11.6% (about 3.5 million votes). It is debatable exactly how Labour would have fared without the SDP breakaway, but there can be no doubt that if there were a Tory majority, it would have been much narrower.
Why were we attacked so vehemently? Why was it so important, to the City and the establishment, for Labour to lose that particular election?
The principles of the Alternative Economic Strategy (AES), which formed the basis of the 1983 manifesto, were in keeping with Clause IV and the objectives of the Levellers, the Chartists and the early Labour pioneers. Namely, control over capital; political intervention in the economy; the extension of democracy through collective bargaining and the empowerment of communities; consumer councils in the main public utilities; and the establishment of regional banks to direct investment, in association with national government, local councils, industry, consumers and trade unionists.
These policies were formulated between 1973 and 1983. They recognised the political vacuum which existed then – the entrenchment of the corporate state and its resulting bad practices; the lack of accountability of the publicly owned industries; the almost feudal rather than democratic practices of certain local authorities; and the growing feeling among the public of alienation from politics. They had to be defeated, because if they had succeeded, then a general reversal of unelected unaccountable power would have started and the massive irreversible shift in power and wealth in favour of working people would have commenced. So a war was created, the right wing split from the Labour Party, and the Press turned their guns on Michael Foot. Anyone who doubts that the escalation of the Falklands War was part of the overall strategy should read Tam Dalyell’s writings on the subject.
Labour’s defeat, and continuing pressure from the media backed SDP, meant that the mid eighties’ political stage was wide open to the advance of the new right. This laid the foundation for the ’87 and ’92 Tory victories, and led to the incorporation of aspects of that philosophy into Labour Party policy.
We all recognise the problems the next Labour Government will face, particularly from the collapse of our manufacturing base which has resulted in over reliance on imports. However, the leadership seem to believe that we can no longer afford a decent pension or a health service free for all at the point of need. In the face of such defeatism, we should remind ourselves that the early pioneers of labour started the long haul to a socialist future when Britain was in a much poorer state than it is today.
I recently took the opportunity when meeting visitors to the European Parliament to remind them that it was not France, Germany or any other European country which was flooding the rest of the world with investment portfolio capital. Indeed, many other countries have legislation which prohibits this practice. Britain and America are capital’s standard bearers in these areas. When the smart suits tell us that we live in a global economy, where capital zooms around under computer control, we should remind them whose money they are using in the casinos of world capitalism. A very large chunk of it is mine and yours, through our pension and insurance funds, and our banks and building societies.
According to the UN’s Human Development Report, the total wealth of 358 billionaires equalled the combined income of the poorest 45 per cent of the world’s population. According to the magazine Forbes, the world has 447 billionaires up from a mere 274 in 1991. Noting this information, a recent Financial Times article decried the fact that there is no visible alternative to the prevailing economic wisdom. “We thought that redistributive taxation was just. For two decades we have chosen another path. Nobody has shown us how to get off, or whether we would be happy if we did”. The writer of the article knows there is another path. It is called socialism.
It would mean returning and improving upon certain policies contained in the 1983 manifesto. It would mean, now that the factory gate is no longer the protective force it once was, the development of trade union involvement with the communities where members and their families live.
This is not new. Early trade unions sprang from the community in the shape of district branches. It would mean not just a demand for workers’ rights but for the development of the rights of nonworkers to participate in the decisions which affect them and their families.
I recently requested information on the European Union’s representation at the World Trade Organisation in Geneva. I am still trying to obtain fuller CVs for our representatives, but the skimpy information provided reveals no trace of trade union representation. If the WTO is to remain then it is important that we challenge this.
Lastly it will mean that the pension, insurance, building society and banking funds investment are made more accountable to the people whose money they are investing. Every time I raise the question of Pension and Insurance fund investment accountability at a meeting of local church and community groups I receive a favourable response. People are still endowed with a healthy sense of democracy. It is time the Labour Party stood up for them.
However, that will mean a return to the principles of Clause IV and its reinstatement in our Party’s constitution. The Labour leadership knows it will not go away. Socialists will refuse to be humanely phased out. Perhaps Donald Dewar is developing another method in the leadership’s revision of the Parliamentary Whip’s discipline procedure.
After twelve years as an MEP, checking in at Brussels airport is
second nature. So when something abnormal happens, it sticks in
your mind. My first trip in January was one of those occasions.
Before the Christmas break I had noticed a stand of postcards.
This time I took a closer look. On each card were pictures of two
missing children. I took one, and brought it back to my office
in Inverkeithing, where we displayed it in the window.
Our window is large (the office used to be a Co-op shop), and the
postcard was in competition with several large posters and other
notices for local events and campaigns. It was, however, the
postcard which drew the attention of most passersby.
The children on the card have now been found dead, and this case
has rightly provoked an enormous public outcry. Its macabre
circumstances are on a par with the West outrage, and its horror
has prompted media comparisons to the tragedy of Dunblane.
I first heard the news through the international TV networks,
while on holiday in Italy. I scanned the European press for more
information. The murders were front page news everywhere.
Yet, now that the initial horror has ebbed, I find myself
thinking: “Why do we react as if this form of abuse is something
new? And why don’t we do more do stop it?”
In many countries – including both developed and developing
nations – abuse is commonplace. Recent reports have concentrated
on the Philippines, but there have been similar tales from every
continent of the world. Hollywood has made several films which
have highlighted the problem as it exists in America.
Child abuse within the family is now well documented, and while
historical comparisons are difficult because of the scale of
unreported cases, there is evidence that abuse had dropped
between the early part of this century and the late sixties. The
trend has, however, reversed in recent years. In Europe, we have
reports such as that of the “Eyes Campaign” of Amsterdam, and
cases such as Black and West in Britain. In the United States,
reports of child abuse rose by 223% between 1976 and 1989, when
2.4 million reports were received. 15% were sex abuse cases, and
160,000 involved serious injuries.
Child abuse is too easily dismissed as a “sign of the times.”
“The times” are surely our responsibility, and we should look to
policies which will reverse and hopefully prevent abuse.
While there are some cases where children have been abducted or
run away from home, the main source of abuse is in the home.
Fewer than 20% of children are abused by strangers.
Abusers and abused are found in all sections of society. We do
however, have some indications of contributory factors.
Disadvantaged families, and families suffering from chronic
unemployment and oppressive living conditions, have abusive
situations more often than economically stable families.
Likewise, families with high levels of emotional and
psychological instability and stress are more susceptible.
Such home conditions must also be common in those cases where
children run away from home.
It is therefore clear that we must tackle the economic and social
circumstances which foster abuse. We must fight for full
employment and oppose the widening poverty gap between rich and
poor. We must provide support for families, not put pressure on
As a European MP, I give such policies my highest priority.