Perfect Financial Idiocy

Wednesday   27 September

So, John McDonnell would like to bring all Private Finance Initiatives (PFIs) “in house”; the crowd went wild. It’s not hard to fathom the reaction because PFIs aren’t very popular, nor are they well understood. ABOLISH THE RICH, AAAH! Mr McDonnell was followed by junior ministers suggesting that he hadn’t meant; it; PFIs would just be reviewed. Let’s spread a little bit of ambiguity shall we!

The problem is that whether reviewed or cancelled McDonnell is stuck in a 1960s Hungarian economics textbook, he isn’t asking the right questions. This man is auditioning for the role of Chancellor; custodian of the purse, analyst of the economy. The question shouldn’t be “what economic things do people not like” but instead “what economics things do and don’t work for our economy?”

He stopped short of announcing a free unicorn in every household, and everlasting happiness and glee. That would’ve been silly. The problem is that saying you’re going to cancel PFI is a bit silly too. If he’d have had said “we will cancel/renegotiate/yell at the bad PFIs because they are a drain on the taxpayer” then fine. There are bad PFIs in the same way that there are bad things of anything else; it is right and proper to draw a line and say “no more”. But to cancel all PFIs is to say two things, (1) nobody in government for the past 30 years has gotten anything right at any level, and (2) I don’t care what works, I want what I want.

In respect of point 1, I don’t mean the political imperative, of whether PFI is a good or a bad thing, I mean the calculations and the terms; PFIs had to be cheaper than the government’s own ability to self perform those services to be approved, and also, most required provisions to ensure for example, the PFIs were subject to UK tax, value for money reviews were obligatory or the risk transfer to industry justified the profits. So again, where bad ones have been signed or mistakes have been made then great, cancel them (or something similar). Otherwise, I’d like to believe that our public servants are capable. If they’re not, why do we believe John McDonnell, charmer that he is, is going to fix that?!

Point 2 is the same criticism I have been making of Jeremy Corbyn since his election as leader; he treats the means as ends and ignores the real life impact of his policies on people and the world. I understand the appeal of the Corbyn project (much as I disagree with it), and I understand that people feel disenchanted and frustrated with the political class but that shouldn’t lead to the reductive politics of the lowest common denominator and ignorance.

But don’t these companies make massive profits?! Yes and no. They make profit in the same way that anybody selling anything does, but perhaps unusually PFIs also make large losses especially during start up, and they also take the risks of delivery. Making profit isn’t a bad thing, it is the reward for taking risks (and losses) but also a measure of the hassle, overhead, and work involved in delivery. Whether PFI exists or not those profits will be made, unless the government is doing it all itself; having experienced government services I’m not so sure that’s a good idea.

The thing with PFI is that revenues and costs are fully transparent so people can see the profits; before PFI nobody had a clue. Forgetting actual value for money for a second, one of the real benefits of PFI is the transparency for both government and the public; the cost of providing the service is transparent, in one place, benchmarked and market tested.

So PFIs are wicked?

Of course not, there are problems, and there are bad ones. That doesn’t invalidate the concept and it doesn’t justify John McDonnell’s hectoring.

Fix or cancel the bad ones, improve those that can be improved but let us not cast aside success stories that deliver excellent service and value for the sake of it.

Speaking as a taxpayer, I don’t like ambiguity in economic policy; and I’m not entirely sure that Mr McDonnell isn’t spreading a bit of ambiguity now and wouldn’t continue to do so if he reaches number 11.

Barnabus Howard

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Why Moderates Should Listen More to Jeremy Corbyn

Monday 25 September

One of the most famous quotes attributed to the American journalist, critic and scourge of populists, H.L. Mencken is beloved of many working in and commenting on public policy:

“There is always a well-known solution to every human problem – neat, plausible, and wrong.”

A century old now, the quote seems to be a useful reminder to the political and policy follies of Donald Trump and his simple solutions to complex problems. Build a wall in order to control immigration, withdraw from free trade agreements in order to protect manufacturing job in the rustbelt, all simple solutions and all flying in the face of evidence and (perceived) common sense, but at the same time all compelling and easy to convey. It is not surprising that people who worry about the declining fortunes of their communities in a globalised world might respond positively to Trump’s rhetoric.

Of course populism isn’t the preserve of the political right, the British Labour Party are riding a wave of renewed support and interest based in large part to the appeal of Jeremy Corbyn and his commitment to anti-‘austerity’ policies, social justice and challenging the very wealthy. While the centre right happily decry Corbyn’s pitch as ‘virtue signalling’ and the centre left dismiss it as naïve, there is no doubt that the Labour leader’s pitch is gaining increasing support.

And so it should be. After seven years of government trying to eliminate the budget deficit, many people find their disposable income shrinking and their public services diminishing in both scope and quality. No moderate/centrist- or whatever the more politically pragmatic chose to call themselves- should be content at this state of affairs.

The challenge for them is to explain why providing fair access to education to all means investing heavily in early years and secondary education- the place where disadvantage takes hold- not spending £11bn on young adults who access tertiary education. It involves pointing out that you cannot claim to be in favour of social justice while committing to £9bn worth of benefit cuts to the poorest while preserving current tax rates for middle income earners.

Centrists and social democrats must revive their progressive spirit and be proud of it while at the same time challenging the quick win rhetoric of populists from both ends of the political spectrum. This will involve updating their language and engaging with new ideas that not only challenges easy solutions, but also the dry and academic language of moderate public policy that is so easily associated with the status quo. Despite obvious revulsion from the centre, Michael Gove’s ‘experts’ comment on the eve of the EU referendum resonated with many who felt politics had become too obsessed with technocratic solutions.

Moderates should not be happy to be portrayed as cool, dispassionate and out of touch, when so much many people in the UK are struggling to come to terms with a fast changing world that appears to directly challenge their notions of prosperity and security.

The political centre does have some of the solutions, but it must modernise its delivery and approach in order to be seen as a credible challenge to decline, as well as a positive force for change. Finally, it must also recognise that while Mr Corbyn has few answers, he poses a great many valid questions.

Steven Duckworth

@SP_Duckworth

Sorry to those who will suffer because we have let you down

Angry doesn’t even get close. But I am not angry for me. I am angry for those communities and individuals we have let down.

The election results are awful and there can be no running away from that. No dressing the results up as being ok or blaming the weather, Brexit, lack of seats on trains or the wrong type of voter.

The results must be owned by the leadership and their inner group.

Leadership is a huge issue and although it is impossible in the current political climate to translate this into a definite general election outcome – the warning is there and it couldn’t be clearer that rallies, twitter storms and disowning our record when in government is a huge turn-off for voters.

Labour are at our best when we are radical, forward looking and inclusive – this means a centre left offer that meets the aspirations of the electorate and not small cliques and protest groups.

It doesn’t mean that we simply dress up 1997 New Labour it means refreshing New Labour and making it fit for now and the next ten years.

Perhaps most importantly we need to understand (once again) that to bring about change, to have a Britain based on our values we need to be electable and that winning elections has to be at the heart of everything the Party does.

If we can’t do that we will continue to lose.

Tonight we need to be humble and apologise to those who will suffer as a direct result of the actions of the current leadership and his team.

It also saddens me that so many decent Labour Cllrs and candidates have been let down so badly and more than ever we need to accept that the warnings of the 172 MPs in the PLP were right.

This doesn’t translate as all those in the Labour Party who believed in Jeremy Corbyn are monsters. It doesn’t mean they need to leave – he has let them down.

He promised to take the fight to the SNP in Scotland – he didn’t – he gifted Scottish seats to the Tories.

He said the fight back starts here and pushed our local election campaign in Harlow – result we lost seats to the Tories.

It is time to say enough is enough!

We can rebuild and win back trust but not with the current leader.

He might be well meaning. He may have stood against apartheid (didn’t we all!) I am sure that he has supported many important campaigns.

But none of that matters now – it is now clear that he cannot win the support of the electorate and he has to take responsibility and go and go quickly!

Tim C

@forwardnotback

An Election Without Leadership

Politics is a funny old game, but it is a game nonetheless. If I cast my mind back to GSCE Sport we talked endlessly about “knowledge of performance” as compared to “knowledge of result”. In politics, as in sport, numbers and outcomes are of course fundamental. However, the utterly intangible concepts of “tone”, “leadership” and “principle” in politics (or the defeat despite magnificent performance in sport) receive almost equal coverage and column inches.

Another way to put it is that whilst people can theoretically measure the impact of election pledges on themselves and those around them; they are often more likely choose to vote based on a candidate or party’s intent. Put another way still; people expect political parties and governments to show leadership, but are willing to let government’s work out the details later on.

That said, whilst politicians can show leadership and that in itself can catalyse change; ultimately they must understand and interact with what people want, to use an unattributed quote, “a leader without followers is just somebody talking a walk”. The vast numbers of people who are not members of political parties, along with the vast numbers of floating voters are testament to the idea that people (and their views) are movable. The same must apply political parties.

I’ll be honest, I didn’t enjoy Ed Miliband being leader of the Labour Party; too many of his ideas seemed to involve legislating societal change, or legislating an outcome. He may not have won, but he didn’t collapse the Labour Party and I still voted for him. Why was that? Well he seemed to be a man of integrity, who was intent on addressing the needs in people’s lives such as energy prices, housing, and zero hour contracts. He may have got the detail wrong in his ideas and policies, but they were just that, ideas. Looking back, I feel I was too critical of him. He showed leadership through his ideas and his understanding of people’s dreams and their concerns.

Most people; the man on the Clapham omnibus, the electorate behind their front doors, the old lady being interviewed at the community centre want that approach- ideas, not ideologies. I can and will remain critical for a great many reasons of Cameron and Osborne in their leadership of the country. They did, however, grasp that they had to understand the things that were important to people; retaining the NHS, taking people out of tax, regeneration of the North of England and immigration to name a few examples. Their deeds may not have lived up to their election promises, but their promises at least showed an understanding.

The next general election however, has all the hallmarks of a car crash waiting to happen. Why? Well all of the parties seem to have shrunk into themselves; I have never seen so many people at odds with the party they usually vote for (but then again, I’m not that old, so I probably can’t make too much of a big deal of it). I have seen Tory voters furious about the headlong and undefined dive into hard Brexit, Lib Dems wishing their party would shut up about Brexit, and Labour voters simply deflated by at the whole situation. I saw somebody I know put an “X” in the Conservative box of their postal ballot for the local elections whilst simultaneously complaining that they simply couldn’t vote for them in a general election. And another first-past-the-post loving friend somewhat oddly profess that “what we need is a bloody hung parliament”.

I retain my belief that there is more than one way to Brexit (although I am not wild about Brexit being a verb!) and there should be some heavy and involved cross-party collaboration on how to get the best deal for Britain. I think Theresa May should use Parliament as a stick to beat EU with; but instead her election announcement had an authoritarian tone that showed no leadership “give me more power, because some people are threatening to be difficult”. The Lib Dems are leading the charge the other way, perhaps as a way of expunging in the minds of the public their own coalition collaboration with the Tories.

Jeremy Corbyn meanwhile, said the right words in his launch speech, “It is only Labour that will focus on what kind of country we want to have after Brexit”. Brilliant stuff, except that the Britain he wants after Brexit is no different to one he wanted before Brexit. A Britain based on his ideological commitments to disarmament, nationalisation, and maximum wage caps. Ideology, ideology, ideology.

The Tories have in recent years made the case that receiving state benefits (or being poor for that matter) is exploiting normal hard working people. Meanwhile the current Labour leadership claims that high earners are doing the same. I don’t think either statement is true. So whilst I accept that there are benefit frauds, and I accept that there are high earners that avoid tax for example… (and we shouldn’t ever stop trying to sort these issues by the way), we should be trying to find innovative ways to help those in need without dragging everybody else down and get people away from benefits without demonising them.

I am a centrist, because I think government should be for everybody and that means policies normally need two sides; rights and responsibilities. We should be trying to help people with the things that are of concern, but we cannot and should not being pitting one part of the electorate against another. I could be wrong, but it feels a lot like people want the politicians to focus on the issues that affect their lives, rather than on their own priorities.

By Barnaby Howard