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What Could a UK Socialist Economy Look Like?

(What’s the Big Idea, get rid of Westminster, Energy policy, the Fashion Industry, Gaming, Housing policy, What Should the Workplace be Like Fruit Please!, a Planned Economy)

Big ideas, such as socialism, require bigger Government than what the Tories espouse.

socialisteconomy

There should be two key tests for a socialist approach to policy making.

Firstly is what is to be pursued transparent, and are the people implementing things fully accountable to democratic bodies which are open to scrutiny?

Secondly the question of efficiency must be addressed. Although there is the austerity myth being pedalled relentlessly by the Tories and the Labour “opposition”, this is not a reason not to ensure that the tax payer is getting top value for their money.

Socialism is about giving everyone the same opportunities to be the best that they can be. This involves the state righting inequalities to free people to succeed. Socialism is not about blanket “equality” or a one size fits all approach. Therefore the best way to deliver progress is not always by mass centralised nationalisation. In tandem there must be an ethos about devolving power and access to local communities. The current Westminster led set up can never deliver on this. Parliament must be replaced first of all be a Democratic Convention to devise a fair and just system where the old political system (and power) is in the hands of a miniscule minority speaking only for vested interests.

Take energy. The current rip off market cannot be reformed. But there are real and viable partnerships to be developed in a publicly owned environment.

Local Government working together democratised accountable Local Enterprise Partnerships (LEP) will see local authorities and business team up to stimulate investment and this has a big part to play in breaking up the energy cartel.

By using their ability to raise money by short term borrowing, Local Government should be looking at how they could provide their own energy needs via imaginative schemes such as converting waste into energy from land fill sites, local tidal power, solar and mixed renewable. In Yorkshire and other coal rich areas, what is there to prevent regional councils getting together to reopen pits. Kellingley Colliery in Yorkshire has, according to Tony Lodge, an economist with the Centre for Policy studies reserves that will last well into the 2030’s.

Local MEP Linda McCavan has campaigned for investment and argues that it is common sense for the UK to take an active role in securing the future of coal, “On an average day, 40% of the UK’s energy comes from burning coal.” A shocking statistic that is proof that the Coalition and New Labour did nothing to really dent the hold of fossil fuels over our energy provision. “At the moment 40% of the coal that we import comes from Russia which might be cheap now, but following the annexation of the Crimea last month, relations with Russia are not good – who knows what it will cost in the months to come.’ (Note: Leeds North West CLP quoting Linda McCavan MEP April 2014 http://leedsnwclp.wordpress.com/2014/04/11/join-linda-mcavan-mep-and-defend-the-last-deep-colliery-in-yorkshire/)

Local Authority investment of just £10 million could keep the pit open. The management could then be operated by democratic control by the workers. This is not the so called “Mutual Option” as outlined by Tory grandee and Cabinet Office Minister Francis Maude in July 2104 when he called for NHS services to be taken out of the public sector and to be owned and run by the staff. (Note: http://www.theguardian.com/society/2014/jul/29/nhs-hospitals-hand-over-mutuals-francis-maude)

Maude’s idea is simply a Trojan Horse for privatisation as outside investment would be needed to deliver services, ergo shareholders and competition driven by profit.

A true mutual sees the workers in control but accountable to each other and overseen by the relevant elected officials. In the case of Kellingley this would mean a Workers Council answering to the investors; the local authorities who are accountable to the voters.

This idea for Kellingley Colliery would pass the transparency test. It would also pass any efficiency test as it protects 700 jobs, keeps money in the local economy and lessens reliance on the volatile energy market.

We need to have a discussion in this country regarding the positive role of small businesses. The economy will not be rebooted in the short term solely by massive state investment. Huge infrastructure and house building programmes take years to plan and deliver. Whilst such projects should be a long term aim, people need jobs now.

Socialists should recognise that multinational business is crushing local enterprise and wealth creation. Local shops are prime example as the relentless expansion of the big supermarket chains sees the independent retailers sink without trace.

Even the resurgence of local convenience stores has been driven by the big names. Sainsbury’s Local and Tesco Express have replaced the traditional UK corner shop.

In the rag trade according to Daily Mail economic reporter Steve Boggan, “ Official figures show that around 90 per cent of everything we wear comes from abroad, Since 2000, 52 per cent of jobs in the textile industry have been lost, and last year, we imported £12.5 billion more clothing than we exported” (Note: Daily Mail March 21st 2012 http://www.dailymail.co.uk/femail/article-2118427/Is-ANYTHING-youre-wearing-Britain.html)

This industry has traditionally been a strength for the UK. London Fashion Week is still a world leader in its field. If the Banks are regulated fairly and efficiently the investment opportunities speak for themselves. We have so much talent in our college textile and design courses to tap in to plus the budding business acumen of our young people is being wasted due to stunted opportunity.

The same goes for computer gaming. According to a 2010 report by the Scottish Government, “the computer games industry contributes £1bn to UK GDP” (Note: October 1st 2010 http://www.holyrood.com/2010/10/the-next-level/)

Yet one of the first acts of the Coalition was to choke off grants to this industry’s leading company based in Dundee. Having developed hit games such as Grand Theft Auto and Lemmings, Realtime Worlds was denied vital government grants promised by the outgoing Labour Government and went into administration that summer. (ibid)

Michael Rawlinson, influential director of the UK Software Association summed up the problem thus, “I think there may be a chance of some companies moving but I think the greater risk is the high-end, highly-skilled senior managers and creatives within our industry will get taken by companies in other countries”.(Ibid)

Socialism is about creating sustainable, creative and enjoyable employment which encourages creativity and inspiration in a supportive, efficient environment which offers opportunity based on merit. Where a helping hand is needed then the state should play a key role by helping small businesses to attract women, the disabled and other groups who face exclusion such as ex offenders. This act of mutilation by the coalition of Realtime sums up their attitude to small business and the world of work. Profit, low wages and flexible working trumps all else.

The tragedy for the 200 workers who lost their jobs, plus the knock on effect of damaging the UK’s well earned reputation in the gaming industry, was the fact that just £200 million over five years could have averted Realtime’s demise.

What should the balance of our economy be like in a socialist society? We have examples in the UK in 2014 of substantial imbalance. The Centre for Economic and Business Research is an influential think tank. Its comments regarding London make for interesting reading. “Of the 2.7% UK growth expected for 2014, 0.8 percentage points are expected to come from London. This comes despite London comprising only roughly one fifth of economic output and just 13% of employment. (Note: “London Economy Leading Growth. Nov 2013 CEBR http://www.cebr.com/reports/london-economy-leading-uk-growth/)

Unsurprisingly this growth was based largely on house price inflation which results from the chronic shortage of property. Thus growth is fuelled by a negative rather from increased, well paid employment pumping money into the economy. In April 2014 the Nationwide Building Society reported that London house prices had risen by 18% of the past year, and exceeded pre crash levels. Price rises in 2014 were outstripping wage rises in the capital by four times. (Note: 17/4/14. This Is Money http://www.thisismoney.co.uk/money/mortgageshome/article-1671748/House-prices-What-expect-news-predictions.html). London’s economy is totally reliant on the financial sector, services such as tourism, and looks for growth via house price inflation. Thus as soon as things slow down London is massively exposed as we saw with the 2008 crash.

By contrast the economy of Northern Ireland is based on the public sector. The issues in this part of the UK that fuelled 25 years of bitter civil war were partly caused by poor economic performance and a lack of opportunity for young people.
In 1981 The Government persuaded the US car manufacturer De Lorean to relocate to Belfast. Despite huge subsidies the project failed and damaged Ulster’s ability to attract inward investment. Thus the public sector took up the slack and a survey conducted for Parliament in July 2014 concluded that public sector jobs in the Province accounted for 28% of the total employed; nearly double the rate in London and the East of England. (Note: Public sector employment and expenditure by region Standard Note: SN/EP/5625 Last updated: 14 July 2014 Author: Chris Rhodes Section: Economic Policy and Statistics0
According to Secretary of State for Northern Ireland Owen Paterson speaking in 2011, ““77.6% of Northern Ireland’s GDP is dependent on state spending.” (Note: Quoted in the Belfast Telegraph June 2011 http://www.belfasttelegraph.co.uk/business/news/corporation-tax-cut-no-silver-bullet-but-it-may-be-the-only-weapon-in-the-arsenal-28627848.html)
Whilst the idea of making sure people are gainfully employed in Ulster to avoid a return to war is laudable, economic growth in the Province is poor meaning that London has to subsidise this part of the UK to the tune of £11 billion a year. (Note: http://www.belfasttelegraph.co.uk/business/news/top-expert-warns-northern-ireland-economy-is-facing-meltdown-28779242.html)
Well paid employment is the key to a fair and efficient economy for the future of the UK. If we hark back to the control economy of the war, unemployment was largely eliminated causing Tony Benn to comment, “if full employment can be used to fight Hitler why can’t it be used to feed people?” (Note: http://www.theguardian.com/politics/2014/mar/15/10-of-the-best-tony-benn-quotes-as-picked-by-our-readers)
To start things off we need, as mentioned previously to concentrate in the short term on injecting much needed capital into the small business sector to create jobs and encourage the talent that is already out there. In parallel we must radically reform education and skills to ensure that when the time comes for huge investment in housing, the infrastructure, energy projects and hi tech manufacturing our young people are highly efficient and capable of world class performance at work. This sense of pride is just as important as what is in your wage packet. Self confidence and reliance produces high performance in the long term.
We need to get away from the quick fix approach which is more about managing the media than anything else. This saw the coalition gain headlines by announcing major infrastructure projects in 2012. Two years on these projects are barely on the drawing board, let alone near having the first sod cut. (Note: http://www.highways.gov.uk/roads/road-projects/a63-castle-street-improvement/)
The raison d’être when it comes to jobs should be to create realistic, long term employment which offers stability for both the small business owner and the employee. This can be achieved by the Local Authority working in conjunction with small business to secure, short, medium and long term planning. This means the business must be in tune with what is going on in the rest of the local area to ensure efficiency and that cash flow is maintained. The latter is a major issue and bill paying must be pushed up the agenda to protect small businesses the protection they need.
Work is often seen as means to an end in our society. Unless you are really lucky the majority of people are in jobs they are at best, ambivalent about. This is because the profit motive drives the employer.
Research by the University of Warwick published in spring 2014 showed that the slave driver approach which is prevalent in so many of our workplaces, especially for the under 30’s is actually counterproductive. When offered treats such as free chocolate, drinks, fruit and wifi, allied to being asked in a supportive way about their family life, productivity increased by a not insubstantial 12%. (Note: Journal of Labor Economics March 2014 http://www.dailymail.co.uk/sciencetech/article-2586303/Are-happy-work-Researchers-prove-employees-good-mood-15-productive.html)
If we combined a progressive style of working with real democracy in the workplace, the whole ethos of our society could change.

We strongly believe that the UK people are truly altruistic and given the chance would move heaven and earth to improve the lot of others, as well as themselves.

British values of fair play and looking out for each other came to the fore in 1940. We stood alone against the might of Nazi Germany at a time when Hitler was in total control of Europe.

The USSR and America had decided on compromise with this evil regime. Our sense of what was right didn’t allow us to think about negotiation despite the daily rain of death from the skies during the Blitz and beyond. We showed the world the path of justice was the right one to take and the Nazis were defeated. This sense of solidarity was carried into the post war Labour Government and all that it achieved.

But the capitalist system found new energy in the 1950’s and the gains made had to be fought for by the Wilson Government, only to be further eroded when Callaghan and Healy paved the way for Thatcher by adopting neo liberalism via the right wing orthodoxy of monetarism.

Capitalism has always been sold to the workers via the trickledown theory regarding wealth, its creation and distribution. The Tories subscribed to this idea in the 1980’s which basically argues that if the wealthy are allowed to keep as much of their money as possible via low or none existent tax, they will spend it thereby creating jobs and more wealth which will find its way down to the poorest. Ed Miliband rejected this theory in a 2011 speech on the economy, ““We can’t succeed as a country just by hoping wealth will trickle down from those at the top to everyone else our economy won’t turn around that way.”( htp://www.theguardian.com/politics/blog/2013/feb/14/ed-miliband-john-major-europe-live)

Barak Obama was even more strident in his opposition to trickledown theory, “Here’s the problem: It doesn’t work. It has never worked.” (Note; 6th Dec 2011 speech quoted by Progress Online http://thinkprogress.org/economy/2011/12/06/383348/trickle-down-economics-doesnt-work-obama-asserts-in-economic-speech/)

But the most damning condemnation of the capitalist’s justification for being, “intensely relaxed about people getting filthy rich,” came from Pope Francis. In November 2013 The Washington post quoted the Pontiff as saying “Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naive trust in the goodness of those wielding economic power and in the sacralised workings of the prevailing economic system. Meanwhile the excluded are still waiting.” http://www.washingtonpost.com/business/economy/pope-francis-denounces-trickle-down-economic-theories-in-critique-of-inequality/2013/11/26/e17ffe4e-56b6-11e3-8304-caf30787c0a9_story.html

Socialism should not be just about sitting back and saying the market cannot be reformed, or that a “planned economy” smacks of turning the clock back. Energy policy in the UK shows what happens when you don’t plan. We haven’t had a coherent energy policy for decades. As a result we are running dangerously close to full capacity and the supply of energy is a rigged, privatised market where the consumer is being blatantly ripped off.

We need a planned economy. But not one that is planned from the centre, or where the privateers are simply replaced by inert bureaucrats who become fat cat public sector bosses earning premier league wages whilst delivering performance that would embarrass Sunday morning hung over pub footballers.

Power must be given away from Westminster and devolved to regional assemblies and further handed down to councils and street committees. Opening out our broken democracy where trust in politics and politicians is rock bottom should be a key theme moving forward.

People feel that across their lives things are “done” to them. From the great energy rip off to what their taxes are spent on the UK public feels politics is a party (sic) that they are not invited to. MPs seem remote and unless local councillors actively go out and seek casework many residents don’t realise just what a politician can do for them.

 

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About dermotrathbone

Writer and co author "Through Red Lenses". Activist Unite the Union, Save Our NHS Hull. Fan of Yorkshire County Cricket Club, Hull FC, Munster and Ireland Rugby. Views are mine alone and may not reflect the organisations concerned.

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