Category Archives: Debate

John McDonnell’s speech to the Co-operative conference

theshadowchancellor

Thank you very much for the opportunity to say a few words at the conference today.

I wanted to cover three things.

First, where the economy is today, and the problems we face.

Second, the huge challenge facing all those on the left in attempting to address these problems.

Third, how our movement can start to develop a convincing strategy to deal with this.

Co-operatives, shared ownership, and workplace democracy all have a central role to play here. We can’t turn the clock back.

We need a wide-ranging debate on the way forward.

Jeremy laid out some key ideas last weekend, in his speech to the Fabian conference.

At the heart of his argument is the case for fairness.

We currently live in an economy that is visibly failing on this score.

Co-operatives should, I believe, play an essential part in the economy of the future.

But we live in an economy held back by the past.

Wealth is more concentrated now than it has been for a century or more.

Social mobility has dwindled.

Financial legislation is being unwound and serious attempts at scrutiny scrapped, just a few years after the catastrophic crash that was the bankers’ responsibility.

Yet we have lived with a succession of governments who have promised the opposite.

They believed that by unleashing markets, governments would unleash opportunity and creativity.

This approach promised new freedom for individuals, free from the dead hand of the state.

The Tories promised a “shareholding democracy” would arrive through privatisation. A “trickle-down effect” would mean that, even if the rich got very rich indeed, everyone else would be a little better off.

But the promises of freedom and “popular capitalism” turned out to be illusory.

Today, share ownership by individuals is at the close to the lowest level ever recorded. Just 12% of shares are owned by individuals in the UK, down from 28% in 1982, and pension funds own only 3%.

So a “shareholding democracy” never happened.

What we saw instead was an immense concentration of wealth in the hands of the very few.

Today, 62 people own the same wealth as half the world’s population.

But the same process was arguably more sweeping in Britain than many other places.

We moved, on economist Thomas Piketty’s figures, from one of the most equal economies in the Western world, to one of the most unequal.

As a share of GDP, the state wasn’t shrunk. But it was transformed.

On one hand, government became more centralised. Local authorities, for example, were stripped of their powers.

On the other side, the state became more passive, just moving money from one place to another. So the share of public spending on social security has risen as that for investment has fallen.

And when our banks crashed, the state was there, in effect, to arrange an immense transfer of wealth for them, backed up with promises of more.

We bailed out the banking system, and stabilised the economy, at vast expense.

And caught up in the crisis was the Co-op Bank: an institution behaving too little like a co-op and too much like a commercial bank.

We are left with a world in which the fundamental promises of the free market approach have not been delivered.

Instead of a trickle-down effect, we have had a monstrous “trickle-up”. Instead of a more dynamic economy, productivity has slumped.

George Osborne, since becoming Chancellor, has squandered his chance to resolve any of these structural problems.

Our economy remains unbalanced. Whilst services have recovered, manufacturing has actually shrunk since 2008.

Employment in London has risen by 12%. Employment in the rest of the whole country is up just 0.3%.

Our imbalance with the rest of the world, the current account deficit, has reached record levels in the last twelve months.

After years of collectively repaying their debts, households have begun to borrow again.

Unsecured lending, the riskiest kind, on things like credit cards and payday loans, is rising rapidly. TUC research reports that the number of people with “problem debt” has risen by 700,000 in the last two years, to 3.2 million.

The gender pay gap remains stubbornly large, at 9.4%.

This is what austerity economics has left us with and, if it continues, the next Labour government will have to repair the damage.

We can’t turn the clock back

However, we need to be quite clear about this. Whatever the achievements of the past, we cannot simply turn the clock back – whether to 1997, 1964, or 1945.

We must defend, and we are defending, those achievements. The victory on tax credits was one part of that. We now have the fight of a generation in defence of our NHS and so much else.

A priority for the next Labour government will be in sustaining the good that has been achieved in the past.

But that isn’t enough. The changes that have been wrought in our society over that period of time are now so great that they impose the need for a profound shift in how we think about changing the world.

The reasons are well-known. First, what some still think of as the traditional working class has been shrunk. Manufacturing today accounts for just ten percent of all employment.

Only 14% of private sector workers are in a union.

The working class today is still the clear majority of the population. But it is far more fragmented. The ability to win a political majority by appealing to major sectional interests has waned as a result.

The forward march of labour hasn’t “halted”. But it has changed its uniform.

Second, there is the immense cynicism about our major institutions. Big business, banks, the media: none are trusted. But nor are politicians.

So whilst opinion polls report clear majority support for basic, longstanding demands like nationalising the railways, there is a deep cynicism about the capacity of government to deliver.

Put these two factors together, and they mean we’ve depended for too long on a strategy that looked only to the state as a vehicle for change.

The argument that came to dominate the left, from at least the 1930s, was a simple one.

First take the state. Then use the state to change society.

This simple proposition achieved an extraordinary amount. We live today with the legacy of what the labour movement and its party have achieved.

Some of our most enduring and popular institutions – the NHS outstanding amongst them – were the product of this way of thinking.

Capitalism, it was argued during the long boom after the Second World War, had been successfully tamed. It was no longer the brutal struggle depicted by its early critics.

Government intervention and the welfare state had smoothed its rough edges. Private property in production was no longer sacrosanct and giant corporations effectively planned and managed large chunks of the economy.

Government’s main task was to redistribute from a growing economy. Rising equality would follow.

Deeper questions of ownership, control, and democracy were left to one side.

Labour governments, Old and New, thought and worked like this.

So the post-war boom saw rapid economic growth and falling inequality under Old Labour governments.

New Labour, meanwhile, oversaw a decade of rapid growth, and restrained the growth of inequality.

Both approaches involved a compromise with the reality of capitalism in their day.

Their success, however, meant deeper questions about the economy were left unasked by the mainstream of Labour.

And that, in turn, left Labour governments unprepared for system-wide crises.

The first, in the 1970s, brought about the collapse of the global economic order that had sustained rapid growth for the previous thirty years.

The second, at the end of the 2000s, brought about the collapse of the financial system that had sustained rapid growth for a decade.

We are still very much living through the consequences of that second collapse. We may yet find ourselves confronted by what Bank of England Chief Economist Andrew Haldane has called the “third wave” of global crisis.

If New Labour made a mistake that Old Labour did not, it was to cede too much to the existing powers.

This compromise meant a Labour government had to rely on a fundamentally unsustainable model of debt-driven growth.

We need to change the rules of the game.

Left unchanged, we can see the direction of travel.

Rising inequality, as Thomas Piketty and others have suggested.

Increased environmental destruction.

The erosion of our basic civil rights, in our workplaces and outside them.

Our problem, today, is that we must learn to think systemically about the kind of economy we want.

And where our opponents now warn and threaten about the terrors ahead, we must present a positive case for the future we all want.

The charity Nesta published a fascinating piece of research recently, showing how “future-focused” the different party manifestos were in last year’s election.

The Tories talked relentlessly, overwhelmingly about the future. Labour, strikingly, did not.

We cannot allow that to happen again. We cannot be small ‘c’ conservatives.

But the future we want will be built on the best of what we do now. We learn from the past.

As anti-fascist writer Carlo Levi put it, the future has an ancient heart.

The co-operative tradition

If the old economic strategies have run their course, we must look elsewhere.

There is a long labour movement tradition of decentralisation and grass-roots organisation. But it has been somewhat hidden by the success of the alternative.

This radical tradition has deep roots in our collective history. From RH Tawney, GDH Cole and the guild socialists, back to the Rochdale Pioneers, the Society of Weavers in Fenwick, Ayrshire, and even further back to the radicals of the English Civil War.

With the stress on self-organisation and on-the-ground solutions to problems, this tradition stressed the need to organise not just to win the state.

Even in the successes of the state, however, we can see this tradition at work. Take the NHS, the crowning achievement of Labour’s greatest government.

But it was modelled on and inspired by the medical benefit fund in Tredegar – Aneurin Bevan’s home town. This was a fund set up by a local initiative to provide medical treatment to the local community. It was a hugely successful scheme.

Bevan said, when asked about his plans as Health Minister, that what he was doing was “extending to the entire population of Britain the benefits we had in Tredegar for a generation or more. We are going to ‘Tredegarise’ you.”

There is a thread within the labour and radical movement of self-organisation, running right back even before the Chartists to those early organisers for democracy against “Old Corruption”.

We have much to draw on here. A tradition and an argument within the labour movement that stressed not just the need to make demands of the state, and to implement top-down measures, but work from the bottom-up, can provide a natural fit with both the changed society we inhabit, and the changes we can see coming.

Technology is proving disruptive. It can have terrible downsides – deskilling and an accelerated concentration of wealth.

But it also opens up new possibilities – the explosion of sharing that the Internet can provide.

There is an entrepreneurial spirit at work here: not the theatrical meanness and one-upmanship of Gordon Gekko, but a desire to create something better for us all.

The expansion of co-operatives in Britain since the crisis, matching developments across the rest of the world, shows the potential. There are now more than 7,000 independent co-operatives throughout the UK, contributing £35bn to the economy.

Co-operative businesses are more stable. Whilst only one in three new businesses makes it through the difficult first five years, four out of five co-ops do.

An effective economic strategy for the left would look now to build on this.

It means thinking beyond using the state to redistributeincomes. It means thinking about how we can ensureassets are distributed more fairly.

Next steps

We can already see where this is happening. Local councils, pushed to their limits by spending cuts, have been forced to respond to deteriorating economic conditions.

Oldham Council has looked to develop its own responses to the crisis, working with Oldham Credit Union to reduce the burden of problem debt locally. Its Fair Employment Charter rewards local employers and looks to use local authority procurement to improve working conditions.

Enfield council in London has developed innovative contracting models with major local employers to support good jobs.

And Preston, inspired by the example of Cleveland, Ohio, has developed an extensive programme of work. Preston was one of the councils facing the very sharpest cuts to its funding out of any in the country. But they are responding creatively.

They have got major local employers and buyers – so-called anchor institutions, like the University of Central Lancashire – to drive through a local programme of economic transformation. By changing their procurement policies, these anchor institutions were able to drive up spending locally.

They’re looking to shift a proportion of the joint council’s £5.5bn pension fund to focus on local businesses, keeping the money circulating in Preston.

And the council is actively seeking opportunities to create local co-operatives as a part of local business succession, working with the local Chamber of Commerce. The aim is to sustain high quality local employment, by giving the chance for workers to keep a business in local hands.

It’s inspiring to see Labour councils responding to profound challenges like this.

It is not enough to oppose austerity. We must also provide a vision of the future. In embryo, and in dire circumstances, some of what Labour local authorities are doing is precisely that.

But it is action at scale that can make the biggest difference.

What the central government does still matters – even if it cannot, and should not, do everything.

A future Labour government will end the current programme of spending cuts. We will protect what has already been won.

But we must look beyond this point. We should be seizing the opportunity to create a fairer, more democratic society.

Osborne wants to make the government smaller, blindly hacking away at essentials like flood defences.

We think government should be smarter. That means recognizing the limits of central government – but recognizing also when it can help.

It’s not about flipping Osborne on his head, and simply increasing government spending. But we know there are some things government can do better.

Vital infrastructure spending has fallen under this government. Labour will invest, and invest across the whole country.

A fairer economy requires a fairer tax system. The great majority of people pay their taxes because they know taxes sustain the services we all need. It’s part of what makes a good, functioning, fair society.

Yet we have large corporations and the super-rich apparently viewing tax payments as an optional extra. That can’t go on. Ultimately, it undermines the public services we all need – and forces the burden of taxation onto people less able to carry it.

We can’t pretend state spending is the answer to everything. There are clear limits on what can be achieved here. But we can make the system work far better, and distribute the burden more fairly.

My colleague Seema Malhotra is currently looking at the current system of so-called “tax expenditures” – the different get-outs and reliefs provided by the tax system.

A thicket of different schemes has grown up, costing the taxpayer £110bn a year. Some of this will be justified. But some of it will not be. We’ll look at whether we need to simplify the system so it is fairer to everyone and encourages the growth a fair and prosperous economy.

We’d create a fairer tax system, taxing assets in an economically efficient way. And we’d help create the conditions for a flourishing of co-operative entrepreneurship.

We’d work with our partners in the Co-operative Party to help bring this about.

The biggest hurdle faced in establishing co-ops is in initial funding.

Small businesses in general, and not just co-operatives, face dreadful difficulties in getting the funding they need from our high-street banks.

No other major developed economy has just five banks providing 80% of loans. We’d look to break up these monopolies, introducing real competition and choice.

Regional and local banks, prudently run and with a public service mandate, have to be part of the solution here.

With consortium co-operatives providing an effective means for new businesses to share and reduce costs, we’d look to support these at a local level, working with local authorities, businesses and trade unions.

Italy’s Marcora Law, providing matched funding for those seeking to establish co-ops, is a model worth considering.

We will look into the recommendation in Graeme Nuttall’s report on employee ownership, creating a statutory right to request employee ownership and have proposals considered by their employers.

We should look to extend this approach, offering employees first rights on buying out a company or plant that is being dissolved, sold, or floated on the stock exchange.

The Tories have offered a “Right to Buy”.

Labour would seek to better this. We’d be creating a new “Right to Own”.

We will discuss these co-operative ideas as Labour’s “New Economics” lecture series, which we announced this week, is expanded across the country.

And as our policy development process rolls out over the next few years we will ask ourselves time and time again how the practical, everyday-socialist principles of the co-operative movement can be applied.

In an uncertain world where a laissez faire market approach continues to fail, co-operation is an idea whose time has come again.

This is the start of developing a new, positive economic alternative for Labour.

It’s the new economics.

A Meeting of the Movements

PAAGM

Barnet TUC and the Barnet Alliance for Public Services participated in the annual general meeting of the Peoples Assembly Against Austerity on Saturday, just two of many delegations to the largest anti-cuts conference of the year. 2015 has not been an easy year, but it has been one in which the need for and effectiveness of the Peoples Assembly has been thoroughly proved.

Before the motions and the debates, there were introductory speeches. The first up was Dave Ward, new General Secretary of the CWU postal and communications union. He began by urging delegates to view the massive Tory U-turn on tax credit cuts as a big win for our movement, but also cautioned that there are four and half years left of the Tory government which in his own words had created a situation “the rich have never found an easier race to the top, the rest have never had a harder race to the bottom”. Ward also condemned the decision for Britain to join the Western bombing of Syria, which he likened to a head down charge. He described his ideas for what to do as both redesigning the fundamentals of the trade union movement for the modern economy, and also supporting the revitalised Labour Party under its new leadership. His vision for a new way to do things in the labour movement is to get sectoral, rather than localised, organisation and negotiation, mobilising as much of the trade unions’ six million members as possible.

The next speaker was Yannis Gourtsoyannis, a junior doctor and member of the British Medical Association junior doctors’ committee, with a report on the historically unprecedented industrial struggle they have been engaged in. The government has partially backed off imposing new employment conditions on junior doctors, causing the BMA to call off the planned, and potentially massive, strike on December 1st, but Dr Gourtsoyannis said that the proposals would still expand hours and pay differentiation among them under the guise of providing “cost neutral” expanded 7-day services (it strongly reminded me of the attempt to get London Underground workers to provide Night Tube services without costing any extra money). The young doctor emphasised that what at stake was not just the conditions of the staff and the safety of service users, but that if the doctors win they will have forced a crack in the edifice of austerity ideology. The struggle continues.

The third speaker was Christine Blower, leader of the National Union of Teachers. She focused her speech on the NUT’s firm belief in the power of social movement trades unionism, and said that the spirit of linking labour organisation to a wider political movement was had enabled successes such as the excellent June 20th demonstration this Summer. Blower gave the meeting some examples of the hardships that her teacher members were seeing amongst children in Cameron’s Britain: encountering children who only eat their free school meals because they are not fed at home, and entire cohorts of children at school that disappear as their parents take them away fleeing sky-high urban rents.

Following the opening speakers, a range of policy motions were debated and agreed upon (see the People’s Assembly website for these). BTUC and BAPS jointly moved a motion motion urging all member bodies to actively campaign to make all their local authorities into TTIP-free zones. The AGM unanimously agreed to get its local groups to raise petitions and bring motions to local and regional legislative bodies to get them to defy this secretive and menacing deal. This strategy is a real opportunity to redress the fact that TTIP has been largely ignored in the British media, and to raise awareness of TTIP among the public. This has already been done extensively in France, Germany and Spain, as well as 19 British authorities including Conservative run North Somerset.

The main part of the day closed with a key-note speech by socialist Shadow Chancellor, John McDonnell, who received a rapturous welcome. McDonnell admitted that the mere eight weeks that have passed since Jeremy Corbyn became Labour leader have been a challenge, but that brave stands by the party are being vindicated. He praised the People’s Assembly as essential part of the new politics that Jeremy promised to deliver, and said that these new politics is delivering. Although Parliament did vote for war a majority of Labour MPs and Shadow Cabinet members did vote “No” on a free vote, something McDonnell said he wished the Tories had allowed (only 7 Tory MPs defied the whipped vote on Wednesday).

John proceeded with laying out his vision for Labour should be offering: democracy in the economy and a say for ordinary people at the top of public and private companies. This vision relies on a healthy trade union movement, and on this point McDonnell reaffirmed total opposition to anti-union laws and supported the words of the leader of Britain’s biggest union, Len McCluskey of Unite, when he said that if stepping outside the law was necessary to protect the movement, it will have to be done. He praised the words of the comedian, and big Assembly supporter, Francesca Martinez, when she said that really was something fundamentally wrong with society being obsessed with GDP as a measure of success. He said that it was all part of a distorted narrative that exists in the country, the same one that has lied and rubbished Labour endlessly (and rather stupidly in the wake of an excellent by-election result in Oldham this week). He strongly encouraged the audience to make more use of new and social media, as a response to the problems our movement faces getting a fair hearing in the mass media. In his concluding words, he said that the vote for war had been a terrible step backwards in foreign policy, taking us further away from Britain working for peace and back toward Britain acting as an aggressor. He said of Hilary Benn’s pro-war speech: “It was great oratory, but some of the greatest oratory of the past has lead to some of the greatest mistakes.”. He said that he was still determined to fight for a political solution and, even more than this, to get justice for the refugees fleeing war in their millions. “Hope” he said “is back in our political system.”

This lead us well into the final session, which had been added to the agenda in response to the bombing of Syria. The People’s Assembly affirmed opposition to war, and to help to build the Stop the War Coalition march on the following Saturday (12th of December) and the Campaign for Nuclear Disarmament demonstration on February 27th 2016.

The meaning of Corbyn’s ​election

​Corbyn’s election as Labour leader is a victory for the movement against austerity and privatisation, of which BAPS is part of. This coming Tuesday 22 September, Barnet Left Unity is hosting a meeting to discuss what Corbyn’s victory means for us and the fight for public services. Hope you can make it. There will be food to share after the discussion.

The meaning of Corbyn’s ​election

TUESDAY 22 SEPTEMBER, 6:30-8:30pm
Greek Cypriot Centre
Britannia Road, N12 9RU, North Finchley

Speakers:

‘Jeremy for Labour’ speaker invited
Kate Hudson, National Secretary Left Unity
John Burgess, Barnet Unison Secretary (in a personal capacity)

 

GREATER LONDON ASSOCIATION OF TRADE UNION COUNCILS CONFERENCE

GREATER LONDON ASSOCIATION OF TRADE UNION COUNCILS

CONFERENCE

LONDON AGAINST AUSTERITY

Trade Unionists, Councillors and Communities together

SATURDAY 4 JULY 2015 10.00-15.30 ISLINGTON TOWN HALL

UPPER STREET LONDON N1 2UD

 

This free event is organised by GLATUC (Greater London Association of Trade Union Councils)

http://glatuc.org.uk/home.html

We aim to bring together councillors, trades unionists and community activists to share and develop practical strategies to resist austerity. We are looking for those who can share information on successes no matter how small – councillors, trade unions and campaigners – and those who want to learn and work together. Hear about

  • successful action by trade unions working with councils
  • trade unions working across different councils
  • campaigns working with unions and councils
  • London councils’ actions against austerity and privatisation

Share successes

Gain more influence through Councils joining together

Organise ways to protect your community

Develop networks for support and information

 

Register

https://www.eventbrite.com/e/london-against-austerity-councillors-communities-and-trade-unionists-together-tickets-16865794044

Radical Labour – A Message From John McDonnell MP

Let’s transform this leadership election into a real debate about the future of socialism, our party and our country

So far neither the political range of candidates for the Labour leadership nor the ideas they have voiced have set the world of progressive politics alight.

So if we want to use the selection of a new leader to excite people about the potential of socialist politics, then it’s up to us to get this debate going.

I am launching this website to host a debate on the issues the Labour leadership candidates have to address and to promote some of the ideas and policies people think any new leader should adopt.

We start with a hard hitting analysis of Labour’s electoral geography in last week’ selection by Andrew Fisher, the Director of the Left Economic Advisory Panel.

If you would like to submit a paper on your ideas about what the Labour leadership candidates need to address, send us your ideas by emailing me on radical-labour@hotmail.com.

At the moment the choice of a new Labour leader is looking like a glamour contest between a group of candidates with little ideologically to choose between them.

Let’s transform this leadership election into a real debate about the future of socialism, our party and our country.

Solidarity

John

McDonnell MP