Unless we win the economic argument we can’t deliver social justice

The lesson from Labour’s 1992 election defeat is that unless the party wins the economic argument it cannot deliver social justice, writes Meg Hillier MP.

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Meg Hillier MP (Labour and Co-operative, Hackney South and Shoreditch) will be speaking at the Progress Annual Conference this Saturday, which Left Foot Forward is media-partnering; for tickets see here

After my first election in 1994 there was one question my colleagues and I asked, whatever our political view.

John-Major-1992-General-Election-victory-Downing-StreetGiven the attacks on public service and the deterioration of working conditions, how was it that the Tories not only won in 1992 but secured the largest ever Conservative vote in our history?

Labour had run an efficient campaign championing public service, especially the NHS (think Jennifer’s Ear). The polls told us our message was well received, but in the privacy of the ballot booth people who had told us that they would be voting Labour voted for five more years of John Major.

We won the argument about social justice; the Conservatives won the argument about economic performance and the election.

The lesson from this is that unless we win the economic argument we cannot deliver social justice. At this stage of opposition we have space for philosophical debate. But let’s not be too self indulgent.

 


See also:

How can progressives conquer the new centre-ground? 24 Apr 2012


 

Back in the 1990s I tramped around doorsteps with fellow councillors, including Stephen Twigg and James Purnell, speaking to council tenants in properties with windows which were leaky and dangerous. Debates about the best model for a landlords raged, largely among those who did not live in council housing. Tenants just wanted decent homes.

That was delivered by massive investment from a Labour government. Thousands of tenants have warmer, better homes.

For 18 years now, as a councillor, as a member of the London Assembly and as an MP, I have represented constituents on the edge of the City of London. There are huge inequalities between the greatest concentration of wealth creation in the UK and the highest poverty nationally.

These experiences tell me that robust economics is not just electorally necessary, it is necessary to deliver social justice. In a failing economy, it is the poorest who lose out most.

House prices may continue to rocket in Knightsbridge, but unemployment in my constituency is at 12.7 per cent. Child poverty in nearby Tower Hamlets is the worst in the country. And for every stop eastwards on the Jubilee line life expectancy falls by one year.

In retrospect the last government’s economic strategy was a two-trick pony: financial and professional services powered the economy, the proceeds reinvested in better public services. That gave us the most sustained period of economic growth in our post-war history.

We should be proud, and not concede to the Tories the myth that it was excessive spend on public services that caused our downfall. We should have been more vigilant in our supervision of banks, but that alone would not have protected us from the financial tsunami which swept the western world.

Our failure was not having a parallel economic strategy to reduce our reliance on the city. As a government we talked the talk about a green economy but we did not walk the walk. In my time as shadow energy secretary I saw that potential, and how little this government has done to tap that.

Secondly, we know the importance of Silicon Valley to the American economy. Apple alone now has the highest capital valuation of any company in the world. At the southern tip of my constituency we have Silicon Roundabout. There’s potential for local job creation.

Chancellor George Osborne was proud to boast at the launch of Google Campus recently that “everyone’s a start-up”. That’s good for the start-up entrepreneurs but doesn’t create the volume of jobs our economy needs. To be a world beater we need to be a bit bigger than a roundabout.

This government has failed to deliver a coherent and radical investment strategy. We need a government with a plan to help create jobs and sustain growth. A Labour Mayor of London and a Labour government delivered this for the East End of London through the Olympics.

Benefits accrue from our decisions to invest in better rail infrastructure. We could have seen economic benefit nationally if this government had delivered a proper airport hub for London.

Labour now needs to articulate our investment strategy to kick start the economy. We will have to make tough choices. Socialism, as Nye Bevan said, is the language of priorities, so we must make our priorities clear and show why we choose the investments we do and how these will deliver growth.

But we need an investment strategy that delivers for the UK and across the country.

For the last six months I have been on Parliament’s public accounts committee. On a weekly basis we have demonstrated failings in government: targets not met, savings that don’t save – but let’s be clear not all those initiatives arose under the Tories. We have to accept that not every pound spent by the last government was spent wisely, not every initiative delivered value.

We cannot just defend the existing configuration and delivery of public services. As the champions of public service we should be tougher than the Tories in insisting on value for money. Every pound of public money saved can be spent on the vast unmet need in constituencies like mine.

But we must also be honest that we must prioritise investment for growth.

And this is the tough bit – we have to accept that for the immediate future that means a continuing squeeze on spending on many public services. Many of the Tories seem delighted that public services are being squeezed. Some even make the mad claim that public services have squeezed out private sector growth. To defeat this madness we must not create myths of our own.

The way to get Britain growing is not the foolish slash and burn of Osborne, but nor is it the knee jerk defence of everything done in public service.

Our plan must be built on the twin pillars of a radical new public investment strategy to reenergise our economy and an equal commitment to continuous public sector reform. These give us the basis of an argument to take to the British people at the next election.

 


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21 Responses to “Unless we win the economic argument we can’t deliver social justice”

  1. Political Planet

    Unless we win the economic argument we can’t deliver social justice: The lesson from Labour’s 1992 election defe… //t.co/bdRe2azm

  2. leftlinks

    Left Foot Forward – Unless we win the economic argument we can’t deliver social justice //t.co/CUvxlAjR

  3. MegHillierMP

    Unless we win the economic argument we can’t deliver social justice, writes @Meg_HillierMP: //t.co/8NOTrcdV #economy #PAC12

  4. Pulp Ark

    Unless we win the economic argument we can’t deliver… //t.co/ORHtDexH #PublicServicesforAll #economy #MegHillier #muslim #tcot #sioa

  5. Shamik Das

    Unless we win the economic argument we can’t deliver social justice, writes @Meg_HillierMP: //t.co/8NOTrcdV #economy #PAC12

  6. Shifting Grounds

    'The path to growth is not Osborne's slash and burn – nor is it knee jerk defence of everything done in public service' //t.co/gSb9unpl

  7. Anonymous

    Start by owning up to all government debt.

    Pensions on top of gilts on top of guarantees.

    Until you are open and honest about the debts, instead of lying about them, you won’t get anywhere.

    The problem you face is that ‘social justice’ or more spending isn’t going to happen. The converse is. Reason, all those fraudulent off the book debts such as PFI. (Peanuts compared to the big debts that are being hidden)

  8. Reenita

    Unless we win the economic argument we can't deliver social justice //t.co/1YkMQrtA

  9. BevR

    RT @leftfootfwd: Unless we win the economic argument we can’t deliver social justice //t.co/3Et6OSNp

  10. Blarg1987

    Alot of the debts i.e. pension guarentees etc may not need to be paid as the name implies they are guarentees, don;t forget it was started by the right, and right wing policies caused it to carry on not left.

  11. Anonymous

    Correct. Now the question is the to work out what the present value of expected losses is, because its that number that the government should treat as a debt.

    Same applies to the banking bailout guarantees. Should have let them go bust in my opinion, pour encourage les autres.

    Now, for the expected losses. An easy one to start. The local government scheme is ‘fully funded’. The local government scheme is guaranteed.

    //www.birminghammail.net/news/top-stories/2012/04/13/birmingham-facing-1-3billion-public-sector-pension-black-hole-97319-30748683/

    Birmingham, 1.3 billion for one council. Note. Billion not not million. All hidden off the government accounts.

    The total is around 54 billion from the TPA. That’s for a funded scheme.

    What about the unfunded civil servants? Around 1,400 bn, on top of the ‘official debt’.

    ie. The official debt is just the work of a group of fraudsters. Liars reporting numbers to get their turn at the pork barrel, and to leave a mess that can’t be cleared up. Where Newsbot is right, is the disasterous effects of this. Where he is wrong is in assuming that the UK can carry on spending and avoid the effects.

    Hardest hit will be those who relied on the state for their retirement. Forceably or by choice.

  12. Blarg1987

    To chuck a spanner in the works what are the detailed calculations for Local Goverment schemes etc, is it based on everybody retiring tomorrow in which cause one could say insurers are technically bust, or is it based on something else no one has given a detailed break down.

    Untill that happens it is speculation on how the amount was worked out, now with the press mainly right wing, ones speculations are going to question the motives.

  13. Anonymous

    No.

    Do you understand what a present value is?

    A quick example is this. Which is more valuable? A pound now, or a pound in a years time? Answer, a pound now. You could put the pound into a savings account, and get more than a pound in a years time. Now what about 50p now, versus a pound in a years time? The pound in a years time is worth more. You can’t currently get 100% interest. At some level of interest, it doesn’t matter. That rate is what is called the discount rate for converting cash flows that happen in the future into a current value.

    This is used all over the place, from calculating what you can payout on annuities, to whether or not a project is economical. It also makes it easy to make comparisons.

    e.g. Present value the pensions and you can compare them against government borrowing.

    So extending your argument, because the government borrowing isn’t due tomorrow, its irrelevant how much is borrowed so long as its due in the future. Stock up on debt, spend like crazy, not an issue. Is that what you’re claiming?

    The motivation is simple. If those debts including pensions are large compared to taxation, then those debts won’t be paid. If those debts are large, then future taxation won’t go on services it will go on debts. At that point future taxpayers will decide that they want services for their taxes. NHS etc. If they aren’t getting them they will vote not to pay them.

    The consequences of both scenarios is disastrous for those people forced to, or choose to rely on the state.

    Now you approach is the ostrich approach. If we don’t ask, we won’t be scared. If we don’t ask, then we can carry on spending. Get the cash now.
    For politicians, its if we don’t reveal how bad it is, we won’t be lynched by the mob.

  14. Anonymous

    ONLY because you’re determined to shut off the income streams which make them possible. Your approach is to tax the 99%, while denying them services.

    You are the one who is taunting the mob.

  15. Anonymous

    That’s right, they should of gone bust and wiped millions upon millions of the 99% out, the rich would have been okay. The government couldn’t even have afforded to keep their guarantees on deposits, so the 99%’s savings would have gone *poof*.

    Just like the third world countries you want to emulate in terms of wages, people wouldn’t use banks after that, they’d keep dollars or euros under the bed at home.

    You’re quite wrong it’s a disaster, you’re working to CAUSE the disaster by shutting down the influx, making sure people won’t get the cash promised as it’s “unaffordable” – you’re MAKING it unaffordable, making SURE the 99% get nothing.

    You’re absolutely insistent that the 99% MUST NOT receive pensions. Rather than paying your share. You insist there’s a conspiracy for ideological reasons, of course.

  16. Anonymous

    The debt is, of course, acknowledged. There is no conspiracy, you’re inventing one for ideological reasons . What you refuse to do is admit a penny more will be paid in, in future. This is because you want to close the funds. Thatcher’s move – “oh, those fully funded schemes? No, you don’t need to pay into them, they can close”.

    Nope, gotta get scams into their place, and those scams are indeed unsustainable since they helped inflate the stock market bubble you loved so much. You are absolutely insistent that the 99% see their cash be channelled into corporate welfare, rather than a penny going on services.

  17. Anonymous

    The debt is, of course, acknowledged.

    ==============

    So quantify it. How big are the debts compared to Gilts?

    What you refuse to do is admit a penny more will be paid in, in future

    Not at all. Remember I’ve stated that past accruals should be paid in full. That means if you have accrued 15 years of a state pension, you get 15/30 or 50% of the state pension going forward. For the rest, its back to savings with the extra money that you get from compound interest. If that isn’t sufficient, I’ve also said that you get a guarantee from all for a full state pension. So you can’t lose, only win.

    I’ll repeat. I don’t want to close any funds. I don’t want to raid any funds like Brown. I want more funds, with capped charges to deal with the Spivs, because funds mean compound interest.

    The scam is 5K from the state pension versus 19K from the FTSE {more if there are more funds}

    The scam is taking people’s money and spending it, like Maxwell.

  18. Anonymous

    No ideological reasons.

    If you want to see why, quantify the pensions promises so they can be compared against Gilts. Then you will see that it is a government scam.

  19. Anonymous

    Ah yes, let’s see the risk of losing of everything, as people routinely do playing the stock market is compatible with a pension…

    …No, it is not.

    You’re looking to fund your banker buddies and save companies money, nothing else.

  20. Anonymous

    Yes at all. That’s the step 1 – No more funding. It doesn’t matter what you’ve accrued, without future inputs that money won’t be paid, it’s not affordable. THIS IS YOUR GOAL!

    “Compound” interest, when it’s far lower than inflation, is useless. You can only lose, not win, and are better getting paid in cash for your future.

    You’re not closing funds, you’re destroying them, you’re not raiding them, you’re destroying them. You’re setting up new funds which will force even the poorest to pay large chunks of their income to casino bankers.

    You’re trying to cut the return down by a factor of five. And yes, you’re a scammer! Thanks for realising this.

  21. Blarg1987

    No

    You are forgetting that people are contributing to pensions year on year as assett prices go up so will the value of pension funds, (alot of pensions went into the red in the private sector following the dot com bubble).

    I am aksing the simple logical question of the DETAILED CALCULATIONS which NO ONE has provided as all we get is pensions are unaffordable or they are not unaffordable.

    As by your argument we could say most private companies are broke as they borrow to invest in new services, any person who has a mortgage is broke as the mortage is more then their earnings, and all insurers are broke as their liabiilites are more then their assetts.

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