That Ed Miliband speech in full (4)

Reposted from Liberal Democrat Voice

The following arrived in a brown envelope at Lib Dem Voice Towers, this morning. It is probably an early draft.

[Check against delivery]

[Note to self. I will be speaking without use of the autoclue. Will need to deliver the speech entirely without a clue.]

I want to start by thanking somebody from the bottom of my heart.

Ella Philips, who fell off her bike and called me an action hero who mysteriously appeared out of nowhere. She called me suave and not geeky at all.

I was pretty pleased with this until I realised she was concussed. So I got her to vote in her local constituency candidate selection.

I have emotion that is felt at kitchen tables across the country every night. Six simple words that say “can you pass the ketchup please”.

We have to rebuild anew one nation, and today I’m going to tell you how.

I will start with leadership. Leaderhsip is about risks and decisions. I ran for the leadership of this party to spite my brother.

The other week I faced a bigger decision: whether this country should go to war. All of us were horrified with the chemical attacks. But I saw the opportunity to score political points, and said no.

Let me tell you about normal person. She said to me “How can you understand the lives of normal people who live round here”. My answer – I was brought up in great privilege, infused with socialist theory from books.

The most important qualification for being prime minister is knowing good apple pie. this is what I believe and this is where I stand.

Every week I think about the people of Britain. What are they like?

Hooray for the troops!

Hooray for the police!

Hooray for all the poeple I have met!

Normal person wandered up, he was very angry about immigration. I was a bit scared.

Hooray for the NHS!

For generations in Britain, when the economy grew, people got better off. But somewhere along the way [under Tony Blair] this link was broken. They used to say a rising tide lifts all boats. Now a rising tide just lifts the yachts. Now I say this: don’t take a second look at a political party like ours that made this happen.

Now I have a question for you. Do the Tories get it?

murmur of confusion

Wrong answer! Do the Tories get it?

No!

David Cameron will be claiming to have saved the economy after the mess we left it in. Come on! We left it in a bigger mess than that!

[This is the bit where I channel Ronald Reagan]

Am I better off now than I was 3 years ago? The cost of living crisis is not an accident of economic policy, it is a consequence of our decision to spread the pain of 2008 over the following 10 years. [Sure we should say this?]

Britain can’t win the global race, it can do better than that, it can lose. Britain cannot and should not try to have a competitive economy, it must stagnate.

The Tories call our people inhabitants of desolate areas. We call them people whose votes we can take for granted.

To make Britain better you have to win a race to the top, and it will be tough. So forget everything I have just said, that was just positioning.

Many of the jobs in the future will come from small businesses. So I’m going to put up taxes on big business to cut business rates for small businesses. One nation Labour, extending the class war to cover small versus big business.

And because this government has overseen a massive voluntary expansion in apprenticeships, let’s introduce some compulsion to some businesses, just to give the whole program a bit of a sour taste.

Young people should have access to education and training. Why did nobody think of this before?

Going to primary school is a bit like being leader of the Labour Party. Can I have the paints please miss.

And we’ve also got to deal with low pay. We will strengthen the minimum wage so that people can pay our extra 10% income tax on low earners.

I’m the child of immigrants, but hiring foreigners to do work? It’s a race to the bottom! Not under my government! (Except for me being PM)

In the 1990s we committed to a dynamic market economy. But what happens when competition fails? Train companies, pay day lenders, energy bills – we did nothing about any of these in government but they make for good rhetoric in opposition.

If we win in 2015 the government will freeze gas and electricity prices until the start of 2017. So clearly – if we have any chance of winning – bills will rise sharply in early 2015, and we can blame that on the coalition.

Hooray for the NHS again!

We don’t just need to improve the health service we’ve got to rescue it from the Tories (and Liberals too) who are actually doing the work on integrating health and social care that we only talk about.

Let me tell you about the record of the last Labour government. When we came to office there was a moderately burdensome tick box target culture, but when we left it was immense. [Do we talk about Mid Staffs? No, you fool]

So we will scaremonger over the NHS all over again and for all time.

Now for the best bit. Party reform. Yay.

Change is difficult. But the reason it is impossible in our party is because of our unique link with the unions. My reforms are about hearing the voices of the few million union members much louder than the tens of millions of others.

I want to talk about gay and lesbian young people who are now allowed to marry thanks to the coalition.

But we have to win the battle for the United Kingdom, or I won’t have a chance of winning a general election.

So I have talked to you today about unfunded spending commitments. But the next election won’t just be about unfunded spending commitments and hidden extra cuts and tax rises to pay for them. If you want to know the difference between me and David Cameron, it is simple. He is a more effective class warrior than I am.

We know what we’ll see from our party at the election: divide and rule; north v south, rich v poor. It’s the worst form of politics. Britain is better than us.

The easy path for politics is to divide. I believe in one nation, us versus them. I want to win it for Britain. Britain is better than us.

That Ed Milliband Speech in full (3)

[check against delivery]

Hello and welcome to Manchester.

I'm not very sure what to talk about today. I've been leader for two years, and I'm feeling so old my memory is going.

My son tells me I should be talking about dinosaurs, and that seems as good an idea as any.

Anyway instead of making a speech today I'm going to do what my image advisors keep telling me to do and tell you my story.

I was born in a hospital and went to a school. Just like you normal people.

I wouldn't be standing here today without an education from one of the most exclusive comprehensive schools in the country.

My parents instilled in me a sense of duty to get on with my brother. [shrugs]

I believe we shall overcome, nuns in a convent, over the alps to Switzerland. This is my faith.

Of course my parents didn't tell me what career to go into. And they are both so scarily left-wing, they must be ashamed of me. Or maybe I show them a different face to what I show you.

That is my faith. Those are my two faithes.

When I think of normal person I met I think how full of positive empathic energy she was. And then she told me her story. It was a better story than this one.

When I think of small business person I met I feel so touchy-feely, I'm in danger of touching myself here on stage.

Why is it that the gas and electricity bill just goes up and up? [Should I mention my time as Energy Secretary?  Ed. No, you fool]

Hooray for the olympics and paralympics. We succeeded because of the 70,000 games makers all of whom are here with us today. [We'll need a bigger hall. Ed]

Hooray for the troops. Hooray for the police. Hooray for Seb Coe and Tessa Jowell.

And Hooray for us. [What about all the elite athletes - do we mention them? Ed]

That sense of a country united. I can't remember a time like it since the country rejected Michael Foot.

Bejamin Disraeli - Clement Atlee - One Nation [Tory? Ed] - that is my vision, that is the Britain we must become.

But Labour's failures on youth unemployment, the increasing gap between rich and poor, and a welfare system that fails to make work pay, has stood in the way of these things. [Er, I'm a bit worried people will notice I am praising coalition policy. Ed]

So who can do this? What about the Tories. [murmur of agreement from the crowd] Wrong answer. What about the Tories [boos from the crowd]

Borrowing borrowing borrowing borrowing. We are against the government doing this. We want them to do more of it and/or less of it. But the opposite is true.

The problem is the British people are paying the price of the last governments failure. [This government surely? Ed. Sorry.]

What do they choose as their priority at this time? A tax cut for milliionaires like me, balanced by caps on reliefs that will raise five times as much from millionaires like me. [better not mention the last bit]

How can we justify the unfairness in 2012 of ignoring the whole balance of the tax package when criticising it? We have to do it or we will have nothing to say in this speech. I mean story.

Remember the people's budget of 1909 that was blocked by the House of Lords? We have sunk Lords reform so that it would be blocked again.

My advisors tell me to attack on the issue of competence because we are rightly seen as weak there.

Ooohh silly Tory toffs look tee hee. You wont find that kind of privilege among Islington and Hampstead millionaires like myself.

So we disagree and agree with the government on welfare reform.

And we agree with many of the government cuts, and we agree that those with the broadest shoulders will bear the greatest burden. I will never support a top rate as low as 45p, that's just wrong. That's why our party had it at 40p. One nation can be two-faced nation.

There is no future for this party as a party of one sectional interest, led by a man bought and paid for by the unions.

In One Nation, no interest from Murdoch to the banks will be too powerful to be held to account. [So why didn't we set up Leveson and Vickers? Ed]

Think about small business person who was ripped of by his bank thanks to our failure to regulate. We will do something about this if it hasn't been done already.

To be a One Nation economy, you see, you have to support coalition policies in all these areas. Let's pretend there aren't a million extra apprenticeships under the coalition and talk as if we've just thought of the idea.

So we'll now focus on the forgotten 50% who don't go to university - by making them pay higher taxes to support the tuition of those who do go.

We will make apprenticeships a condition of public contracts. And I'll talk for a bit about coalition policy on apprenticeships as if it were ours. But focusing on the public sector.

Michael Gove. Tee hee. He wanted to bring back a two tier system, but the Liberal Democrats wouldn't have it.

We can bring about this one nation economy by removing clarity from accounting standards, and by putting up barriers to trade. Because that's never gone wrong, no sir.

I want us to engage with Europe and the rest of the world. Too often in the past we have been tolerant of immigration where it might benefit our economy and society. So this is something I will do differently. The last Labour government did too little to win the "bigot" vote.

Scotland could leave the United Kingdom, but we would be much worse off as a result. Not just in pounds and pence but also in the electoral prospects of the Labour Party.

Hooray for the NHS. I'm so pleased it still exists despite everything we said about the reforms.

What a scoundrel Cameron is. The Labour Party would never do a top-down reorganisation of the NHS.

So I'm going to pretend for a bit that the NHS has been abolished, because that will get you fired up.

The worst thing for me about these reforms is how they were designed around Blairite values. It proves the old adage: You just can't trust New Labour on the NHS.

So let me be unclear. The next Labour government will repeal something.

So that's my speech, I mean story.

I was talking to my mum. Not about dinosaurs this time.

Who in this generation will fight them on the beaches, and on the landing grounds? It's not some impossible dream. One nation under labour can fight these [other] dinosaurs. Thankyou very much.

Ed Milliband's little big idea

While it is easy to lampoon Ed Milliband and the speech he gave to his party conference, he had one big idea that is worth looking at: that of bringing moral values into government's dealings with business, to reward the good and punish the bad.

On the face of it, what could possibly be wrong with that? It is better to have more training, more R&D, better cared for workers, a social conscience, environmental sustainability. Let's reward the companies that go the extra mile to deliver these things, and punish those that merely follow the rules. Companies that merely tick all the boxes and play the rules to their advantage are not giving back to society in the way they should.

Ed was subsequently challenged to give some examples of what he is talking about and failed abysmally. Southern Cross was mentioned as a company that wasn't giving back, but of course that was in the process of it failing as a business. Let's punish failure with higher taxes? The problem is that it isn't obvious who the good guys and the bad guys are. If you can't even say which companies you think ought to be punished for existing, how are you ever going to write laws to fairly judge the predators from the producers?

The challenge here is to turn good intentions into good policy. Ed's project has been tried before with almost no success under the banner of stakeholderism. Stakeholderism held that workers, suppliers, consumers, the wider community and the environment all had a stake in a business, not just the shareholders, so businesses should be run with all these stakes in mind. But put workers, suppliers and consumers on the board and you get big conflicts of interest. So little policy was ever developed to implement this vision beyond saying "you really ought to think about this stuff". I have written about stakeholderism before, and it all still applies to Milliband's new compact.

While it is possible and necessary to regulate for such things as environmental standards and workers rights, it is logically impossible for a regulation to meaningfully say that you must go the extra mile, beyond ticking all the boxes, because every regulation is precisely one of the boxes to tick. So you can't legislate for virtue.

And while tax breaks for R&D, support for apprenticeships and so forth are reasonable attempts to improve incentives, they don't reward virtue, they are attempts to steer self interest towards more public spirited goals. If Ed's vision means another avalanche of schemes and tax loopholes aimed at rewarding virtue, it will be met head on by an avalanche of tax accountants for whom virtue is not the pressing concern. This is no new vision, this is very much Gordon Brown's signature move of trying to micromanage behaviour through the tax system, giving us one of the most complex tax codes in the world and record levels of tax avoidance.

And let's not forget that creating jobs and providing goods and services are a positive contribution to society. We might like more training and R&D, but there are few businesses that could exist without ever doing any of either. Is Labour just too uncomfortable with the fact that business generally makes a big positive contribution to society even without being tinkered with by government?

So Ed, I hope you enjoyed telling your conference that you will stand up for what is right and oppose what is wrong. It is a fine and noble ambition, albeit somewhat unoriginal. But if you can give it any substance at all, that will be an achievement. Failing that, a mountain of regulation motivated by good intentions is the best and worst we can expect.

That Ed Milliband speech in full (2)

In a big scoop for the Extra Bold Blog, I have again obtained an early draft of Ed Milliband's speech.

For copyright reasons, I won't release this until after the actual speech has been delivered.

[check against delivery]

Friends, comrades, it is great to still be here. A generation ago a Labour leader condemned Labour in Liverpool. Today, Liverpool has been put right, by someone.

Ask me the three most important things I've done this year, and I'll tell you. They're all about my family. Which is nice.

But let me talk about my nose for a while. You'd be surprised how many unfunny jokes it can inspire.

Conference, let's get down to business. This is a dangerous time. This is not the time for the same old answers to the challenge of growth. People need to know where I stand. We lost trust on the economy, and I am determined to restore that trust.

We will only spend what we can afford, we will live within our means, but not yet. The next Labour government won't be able to reverse any of the cuts we purport to oppose today.

We will set new fiscal rules [like the "Golden Rule"? - Ed]. But I have a disagreement with this government. They believe the government should live within its means, but they are wrong. [Didn't you just say the opposite? - Ed]

Of course the world economy is suffering, but our government is making it worse by following our legacy of debt and austerity, albeit slightly more effectively.

I say to David Cameron, put politics aside and look at the facts. I am going to tell it straight. That's a lesson I have learned over this year. [Insert actual straight talking here later.]

Milly Dowler, Milly Dowler, Milly Dowler. What kind of country have we become where political parties such as this one would suck up to Rupert Murdoch? That's why, once opinion had turned against him, I was willing to change. I'm not Tony Blair (he wouldn't have done this) - a great man, I am my own man, that's what it means to lead. Nobody ever changed things by being nice.

My message to the public is simple... Technical Fault.

... the Labour Party lost trust on the economy. [Haven't we already had this bit.]

... people looting shops, burning cars. But thousands came to help with the clean up. That is what we mean by the big society, I mean Blue Labour, I mean Purple Bookery, I mean refounding next new Labour.

Citizens and public servants alike are truly British, I think. We are great people in a great country, ready for the Olympics. So with such great people, how did we end up here. It is because of the way we have run the country for decades.

There are hard lessons here for our party. Some of what happened in the 80s were right, but too much of it was based on the wrong values. Wrong values that we did not do enough to change.

You believe you deserve more, but bankers are getting more instead.

You believe in the long term, but the fast buck, short termism, borrowing and debt bubbles have been the rule.

You believe in responsibility, but big vested interests like the unions have for too long been able to get away with anything.

Who do we blame for all of this, apart from the last Labour government? Why the fat cats in industry of course. Oh except for the good fat cats, we like them, they create jobs and value. But often the bad fat cats earn more than the good ones. I'm sorry our wages policy didn't crack that one.

Opportunity, opportunity, opportunity. Children, children, children. Sad puppy expression.

Values, values, values. You know what your values are. Celebrity culture, gangs, life on benefits, chavs.

People who have paid into the system all their lives find the safety net full of holes. We need a new bargain. Let's confront head on the new challenge of values, wealth creation, you know what your values are, values, values, China, India and Brazil, the kind of economy we have now, we can't pay our way in the world, confront head on.

Not credit default swaps but creative industries etc.

Now not all business is the same. Who knew? All parties must be pro-business today, but we can distinguish between wealth creators and asset strippers like the Phoenix Consortium; I learned this from a hollywood movie from the 80s.

We must learn the lesson that growth is built on sand if it is built on debt, I mean predators, not producers. This is the pro-business choice because really there is not much asset stripping going on these days, but it makes a good soundbite.

This is why our new industrial policy will stick government fingers deep into the hearts of businesses seeking contracts.

But lets get more competition in energy supply, despite all that.

The wealth of our nation is built by the hands not only of the elite few, but also the proletarian masses.

Just think of our young people going into higher education facing a graduate tax in all but name style repayment. We would cut the amount that a few top earning graduates would have to pay by cutting the headline notional fee to £6000.

Schools, schools, schools, children, children, children.

Have you noticed how uncomfortable David Cameron is when talking about responsibility at the top of our society. When you have had to pay, it is always our fault, our toxic legacy of debt and austerity. Yet at the same time the government is taxing top earners more than Labour did. [Sure you want to say this? - Ed] How dare we say they're all in it together!

If you think putting things right means reforming welfare then you're wrong, but at the same time you're right, work must pay. I'm prepared to make the tough decisions to make the welfare reforms to make work pay a reality, seeing as it will already have been done by 2015. But that won't stop us scoring points along the way.

Decency, fairness, helping those who do the right thing. These are values we are learning from the coalition. And with these values we will make welfare work again.

Millions of public servants deliver a fantastic public service every day and every week. But public services can become unaccountable, and need reform. Patients, victims, standing in the queue, computer says no. We need to sign up to the government's reform agenda, in the hope people think we thought of it. We need to stand up to the vested interests, except the unions, who own me.

Why does Britain care so much for the NHS? Because it's really good. And free, mostly, at the point of use. And when I look at everything the government is doing, I try really hard to find a way in which that will change. That reform agenda I spoke of a moment ago; if the government does it, we will scaremonger as if our lives depended on it.

I'm not finished. Yet. If you want someone who will rip up the old rules, new rules, old rules, new hat, old hat. You know Britain needs to change, kids, mum and dad, a fight for a new bargain, your values, pay our way in the world, values, break open closed circles, a new bargain, a long pause, a new bargain, kids, mum and dad.

I promise to promise the promise of each so we promise the promise of Britain. Thankyou.

Cuts and opportunism

Ed Milliband was again emoting if not explaining his alternative economic strategy on radio 4 this morning. If only we were to borrow and spend more money, that would be good for growth, and therefore good for debt in the long run. It has enough plausibility for people who want to believe it to give Labour cover to proclaim themselves anti cuts, to go on ukuncut demos where by rights they ought to be lynched.

The reality is that Labour's plans are to cut the deficit more slowly: in 8 years rather than 5. That is reaching the midpoint in 4 years rather than 3. (The coalition reaches the midpoint of deficit reduction in 3 years, rather than 2.5 because the first year (this last one) saw only token cuts.)

What this means is that whenever Labour score political points by "opposing" a cut, they have a policy that would demand that same cut is made, on average, only 1 year later. Not "save our libraries" but "keep our libraries open for one more year then close them" would be an honest slogan. Ditto every other cut.

More could be done by raising taxes of course, but when Evan Davies put the question about not capping council tax, Milliband rejected the idea, saying, rightly that an increase in council tax would squeeze many at a difficult time. (An apology for Labour's record on council tax might have been in order, particularly to pensioners, who didn't even have an earnings link as they do now.)

And that story is repeated. Despite having the policy of somewhat higher taxes and therefore fewer cuts, no tax increase is supported or proposed, save the "jobs tax" that would have raised only about 2% of the deficit.

We are told that Labour's plan would be better for growth. Growth is the answer to everyone, even the Greens it seems, confusingly enough. Of course I would hope they do think their plan better for growth, rather than adopted just for the cheap point-scoring value of pretending to have an alternative to cuts. But believing your plan to be better is one thing. Spending the difference is quite another.

Borrowing to spend is right during a recession to blunt the hard edge of the downturn. It will temporarily boost growth, but at the cost of a long term deadweight of debt dragging the economy down. So as Keynes said, such debts should be paid back when times are good. Now the recession ended in 2009, and we are still borrowing. We will still be borrowing 5 years after the recession, hitting balance in the 6th. Labour's plan is to still be borrowing 8 years after the recession. This is not Keynsianism, just borrowism. Borrowing not just during recession, but all the time, hoping some other party will be in government when it has to be sorted out.

So on the one hand we have lower corporation tax, enterprise zones, apprenticeships, university technical colleges, cutting red tape, part of a comprehensive strategy for growth in the private sector. On the other hand the strategy to borrow and spend in the public sector for 8 years, creating a massive long term dead weight of debt, and neglecting the private sector that could actually bring us the tax revenues we need.

All this for an average 1 year delay to cuts, and the chance to play the good guys.

22 Days in May - my reaction

David Laws account of the coalition negotiations and his few days of ministerial office is a must read. Learn the difference between a traffic light coalition and a car crash coalition. Find out exactly where the hand of history was squeezing. David's account is most politically relevant for its description of how willing the Conservatives were to negotiate in good faith and compromise on policy, and how unwilling elements within the Labour party were to do the same. Shockingly the Labour negotiators didn't seem to agree among themselves, or have the authority to negotiate for the party. I'm shocked enough that they included Ed Balls at all - that really isn't trying to make a deal work is it?

Of course this account is disputed by Labour figures, who want to portray the outcome of the election as Lib Dem decision. (Along with the existence of the deficit.) Naturally I believe David Laws' account and Labour supporters believe the opposite. Of course it is true, as David says, that a deal with Labour would have been much harder to operate because of the parliamentary arithmetic. But you might have thought that sort of difficulty would inspire Labour to greater not lesser efforts than the Conservatives.

The credibility of Labour's version of history falls apart when we get to Appendix 5 of Laws book: Labour's 10th May policy proposals for a Lib Lab coalition. If this had been a serious attempt to reach agreement, if the Lib Dem negotiators had capriciously rejected it, then this document would be waved in the face of every Lib Dem MP, councillor and grassroots member up and down the country with the refrain "this is the radical, centre-left government you could have had". It would be in all the newspapers. Every government policy would be compared to it. You Lib Dems have chosen that when you could have chosen this. And surely enough Plaid and Irish MPs could be found to say the same.

Why has this not happened? Because the document is pathetic. All major disagreements on policy between the parties seem to be met, at best, with a review. Labour know they are right and their review will confirm it. The Lib Dems should be grateful for this sharing of wisdom.

If Ed Milliband has really been won round by the Lib Dem position on student fees, he might have said so on the 10th May when he could have done something about it. But no. There will be a national debate and a full consultation. We know what that means.

Oh you can have the pupil premium, so long as we can dictate what it gets spent on, because government knows best.

Yes, you can have a personal tax allowance of £10,000, wait for it, only for pensioners. Was that an attempt to be funny? Labour doubled income tax for many low earners when they abolished the 10p rate, and this is how they treat the opportunity to put right that injustice.

No. Labour knew the next government would be unpopular because of the state of the public finances. We've all seen Labour's joy at seeing both their opponents suffer the consequences of the £150bn per year fiscal turd they left behind. We've heard senior Labour figures brief against a Lib Lab deal and talk of 'principled opposition' - as if there were any principle that should cause a centre-left politician to reject a centre-left deal in favour of a centre-right one. Although to be fair, this government is better than the last one even by centre-left standards.

Laws talks of Labour's lost opportunities from 97 to 2010 to attempt to forge any kind of closer links with the Liberal Democrats, that might have paved the way for a different outcome, and of Gordon Brown's deathbed conversion to pluralism, at a minute past midnight.

I look at it differently. Labour have been in a coalition with the Conservatives, almost as along as they have existed. But it is the kind of coalition where you take turns enjoying untrammelled power rather than sharing power. They have been quite happy to maintain this closed political system despite the fact that it led to frequent Conservative governments that did more harm to the interests of people who Labour purport to protect, than Labour could ever undo when it was their turn. The party has every reason to be terrified that a different kind of politics might work better. Voters with Labour values on the other hand have every reason to welcome it.

The dawn of a new kind of politics?

So I had a bit of fun the other day with Ed Milliband's speech, but there is much in there to be welcomed. In particular, rather than attacking the Liberal Democrats - Labour's favourite pasttime for the last few months - he almost sounded like one of us at times.

Let’s be honest, politics isn’t working.

People have lost faith in politicians and politics.

And trust is gone.

Politics is broken.

Its practice, its reputation and its institutions.

I’m in it and even I sometimes find it depressing.

This generation has a chance - and a huge responsibility - to change our politics. We must seize it and meet the challenge.

So we need to reform our House of Commons and I support changing our voting system and will vote Yes in the referendum on AV.

Yes we need to finally elect the House of Lords after talking about it for a hundred years.

Yes we need more decisions to be made locally, with local democracy free of some of the constraints we have placed on it in the past and frankly free of an attitude which has looked down its nose at the work local government does.

This could easily be from one of Nick Clegg's speeches.

Let’s be honest, changing our institutions won’t be enough to restore trust on its own.

Look in the end, it’s politicians who have to change.

We've got to reject the old ways of doing politics.

...

Some of the political figures in history who I admire most are Keynes, Lloyd George, Beveridge, who were not members of the Labour Party.

Frankly, the political establishment too often conducts debate in a way that insults the intelligence of the public.

We must change this for the good of the country.

I will be a responsible Leader of the Opposition.

What does that mean?

When I disagree with the government, as on the deficit, I will say so loud

and clear and I will take the argument to them.

But when Ken Clarke says we need to look at short sentences in prison

because of high re-offending rates, I’m not going to say he’s soft on crime.

When Theresa May says we should review stop and search powers, I’m not going to say she is soft on terrorism.

I tell you this conference, this new generation must find a new way of conducting politics.

If the rest of the party listens, this represents the most radical change of direction since the New Labour project. New Labour was defined as much by its posturing - and outdoing the Conservatives - on crime, on terror, on throwing away our hard-won civil liberties, as by anything else. New Labour since the election has done nothing but opposition for its own sake - if only because it was easy and they lacked a leader who might have the authority to do anything more difficult.

Of course there are dangers to our party if Labour were suddenly to agree with us too much, but it is still something to welcome. That we have comprehensively won the arguments on civil liberties, crime, Iraq, political reform and the culture of political debate, is a huge cause for celebration.

I hope Ed can take his party with him. It will be very difficult to engage in constructive opposition, particularly on the deficit. As John Maynard Keynes famously said:

"A public sector deficit of 10% of GDP should be halved in 4 years not in 3."

...or something like that. This means the honest opposition to every cut is either: a) we would do this same cut 6 months or a year later, or b) we would cut somthing else or raise a tax instead, with specifics.

But I am optmistic. I think there is a demand for a better kind of politics. Politicians are so much more beholden to the media these days. We're not even allowed to be old - Ming Campbell was destroyed for that crime - lest the pecking order between journalists and politicians might become less clear. We live or die by their praises or damnation, and they are untouchable. But judging by the way we conduct politics, we deserve no better.

Of course the media's desire for a good scrap has often shut down serious debate of the issues, and this is not going away. I am talking about how politics now responds to the situation we have. Playing the infantile games - spin, smear, and opposition for its own sake - has given some quick wins and will continue to do so. But being more grown up will better serve us, will be truer to the passions that brought us into politics - to make the world a better place - freedom and fairness.

It is not easy to leap first into a more grown-up kind of politics, but with the Liberal Democrats and Conservatives already co-operating, Labour need only leap last. Good luck.

That Ed Milliband speech in full

In a big scoop for the Extra Bold Blog, I have obtained an early draft of Ed Milliband's speech.

For copyright reasons, I won't release this until after the actual speech has been delivered.

[check against delivery]

Friends, comrades, it is 72 hours since I became leader of this party. I want to say how incredibly honoured I am that you have chosen me over my brother to lead our party. David that'll teach you to nationalise my train set.

And let me pay tribute to two colleagues who are standing down. Alasdair Darling: you kept cool while Mandelson and Brown were overriding you. And Jack Straw you were always good as the butt of my unfunny jokes. Like this one.

The gift my parents gave to me and David is what I want for every child in this country: an indoctrination into the revolutionary road to socialism.

We have a responsibility to leave this world in a better state than we found it, except when it comes to public debt.

Freedom and opportunity are precious gifts. This is something I learned not to be true from my dad's books.

But lets face facts we had a bad result. Every day out of power is one where we can blame the coalition for the consequences of our deficit. So lets resolve to be back in power when the deficit has been removed, er, hopefully just 5 years.

Remember the spirit of 1997. But by the end of our time in office we had lost our way. Tony and Gordon took on conventional wisdom and lost. Let's do that again.

The old way of thinking said that public services would always be second class. And they still are. I'm proud of, er, something. But we saved the National Health Service, apparently.

The old thinking was that the world was too big and this country too small to make a difference. But look at our wars!

So Tony and Gordon took on established institutions until they became them.

But we also have to understand where we went wrong. How did we lose 5 million votes? A party taking on old thinking became trapped by its own dogmas. We became friends of the city, insufficiently racist on immigration, corrupted in the expenses scandal, and piling the debt on students.

But this week we embark on the journey back to thinking. We don't know all the answers yet. Dis generation wants to rule the nation with version. This generation wants to change our foreign policy so that we don't always start wars when we have the chance.

As we emerge from the global economic crisis we need to reduce the deficit. We are in no position to oppose what the coalition does because we would have had to do much the same. The fiscal credibility we earned in 1997 was hard won, and Ed Balls has being doing his best to throw away the last shreds of it.

But I'm now going to pretend I didn't say any of that, and have a go at all the cuts we would have had to have done anyway.

This government has no 5 year plan for growth, and no 5 year economic plan is no way to a planned economy of any kind.

I have a much bigger vision - to emerge from the financial crisis learning to listen to Vince Cable next time.

I want our businesses to benefit from the globalised economy. But not if it means hiring foreigners. Except people like my dad. We didn't listen on the doorstep to complaints about immigration. [camera cuts to some black people in the audience]

We want to win an argument about the danger the coalition government poses to our party. So let's have no truck with overblown rhetoric about waves of strike action. Labour would have had to do the same. In case that sounds evil, I'll talk a bit about caring for children.

This is one of the hardest issues for our party - but those who can work should do so. Reforming our benefits system must not be about stereotyping everyone out of work, like it was under Labour, but a genuine plan to make sure those in need are protected, and those who can work do so, like under the coalition.

We are a generation that yearns for things business cannot provide - green spaces and family. We were right to introduce markets, but naive about them. We shouldn't have closed all the post offices. We shouldn't have put all those pubs out of business with the smoking ban.

We stand for these things not because we are social conservatives, but because we are just conservatives.

Family, family, family, family, family, family, family, family, family, family, family, family, family, family, family, family, family, family, family, family, family, family, family, family, family.

So as we rebuild our economy, family, family, family, family, family, family, family, family.

But government can itself become a vested interest. I know the value of a good school, and I know that many parents are frustrated that they don't have them. But we wouldn't let them set up their own schools.

I believe individual freedom and liberty matter and should never be given away lightly. [Do I need to duck for cover at this point? Ed] Locking up innocent people undermined the good things we did like the database state.

We, me and my brother are the new generation. And we need new thinking in foreign policy.

Troops, troops, troops, troops, troops, troops, troops, troops, troops, troops, troops.

I've got to be honest with you about Iraq. Iraq divided our country. I'll say it divided our party, although we didn't show it at the time. But we were wrong.

Politics is basically broken. We have a huge responsibility to reform it. I support changing the voting system and will vote yes on AV. And we need to elect the house of lords. And we need more decisions to be made locally. I am so happy we have a government that understands all this unlike the last lot.

Hooray for Red Ken being our candidate for London Mayor. We can be the Red brothers. Sorry David.

Wisdom is not the preserve of any one party. Keynes, Lloyd-George and Beveridge are among my heroes. When Ken Clarke wants to review short sentences, I won't call him soft on crime, sorry Jack. Let's have a more grown up kind of politics. [Do make sure this early draft of the speech isn't leaked.]

We are the optimists, the new generation, the optimists and the new generation. Hooray for us.

What's wrong with the electoral college?

So Ed Milliband has been elected Labour leader, winning the unions big, and losing the members and MPs. Are the system and result wrong in some way? Does it matter that not all votes are equal? I don't think so.

There's nothing inherently unreasonable about having a ballot just of MPs or just of members, or just of some wider constituency, like an open primary. So what can be wrong with a heterogenous compromise between these homogenous ballots?

And yes, there is something wrong with representing the interests of unionised workers over and above everybody else - lower paid non-unionised workers, the unemployed, the self-employed, etc - but it is a wrong that is at the core of the Labour party identity. If the Conservatives had an electoral college with such a wider constituency, it would include all the already privileged and powerful people. Well perhaps not all of them - they might make a point of leaving out Trades Union bosses.

And if the Liberal Democrats had an electoral college including non-members, it would include everybody, or at least all self-identified supporters, reflecting our belief in not dividing people up arbitrarily by class or some other aspect of identity.

And we're not so far off an electoral college. Nick Clegg had the support of many more MPs than Chris Huhne, and this fact alone doubtless influenced some members to support him. And a leader should enjoy the support of MPs, so perhaps this could be recognised in the ballot rather than relying on the power of endorsement. On the other hand MPs are perhaps more likely to back the winner, so a ban on endorsements would be a good complement to an MPs section in an electoral college. And for deputy leader MPs vote and we don't. And it's not an outrage.

The Conservatives also have something like an electoral college, but cleverly have the MPs reducing the contenders to 2, and then the members making the final choice. I say cleverly, because this process is designed to enjoy all the benefits of AV while looking as little as possible like it.

Ah yes, AV. Did I mention that Ed Milliband only won on transfers, and that David was leading not only on first preferences but in every round but the last one. But of course supporters of Diane Abbot and Andy Burnham deserve to have some say in the final outcome. It's not a gerrymander to let them transfer their votes to one of the Millibands. Ed had more support than David in the electoral college as specified, and the FPTP result would have been a travesty.

So it is good to see the importance of transfers in proving the winner is better supported than the runner-up, is not just supported, but taken for granted by the Labour Party. Amen to that.

Mediocrity in the shadow of a tyrant

Mike Smithson has called it for Mr Ed (Milliblair). Charlotte Gore is relieved because he is a clear loser.Much like the other 4.

But why haven't Labour got somebody with a bit more about them? It reminded me of the post-Thatcher years in the Conservative party. John Major rose without trace. William Hague was known only for being a pompous schoolboy. IDS - well I can't think of anything to say about him. And each time they rejected better-known party heavyweights.

Strong leaders like Thatcher and Blair it seems instinctively create the wrong environment for the nurturing of their successors. The same goes for their contemperaneous rivals, the Browns and Heseltines.

So, again, hooray for coalition. With genuine debate happening for once behind the mask of collective responsibility, more than one politician is at last thinking more about how best to govern, rather than just about how best to get to the top. Cameron's position is much weaker, and the Conservatives will be better off for it. Ditto Clegg and the Lib Dems.

As for Labour, I will reserve judgement a little longer. Will their new leader have a vision beyond "more borrowing"- which is all the party seems to stand for at the moment. I doubt it.

Buses v Dogma

We know that state provision of services is generally inefficient and unresponsive to customers' needs compared to the private sector. So if a service can reasonably be provided by the private sector, then it should be. This is why buses were deregulated in the 1980s and it was a disaster. Unlike, say, water or rail, there was no regulation of fares and these went through the roof, and are still rising year on year above inflation. Instead of profitable routes cross-subsidising unprofitable routes, extra public money had to be found to subsidise these routes. A very few routes enjoy competition, high frequencies and occasional discount fares. But the majority of profitable routes are not worth fighting over, and the customer is treated as a captive cash cow.

So why this discrepancy between theory and practise? Free markets are competitive, but attempts to introduce them so often seem to bring uncompetitive rip-off practises instead. We (rightly) aren't willing to stand the withdrawal of the only mobility option from millions of vulnerable people, so we try markets plus subsidies, which inevitably corrupts the markets. And for this, the publicly owned asset - the right to run buses on profitable routes - was given away for nothing.

Today government wants more people to take the bus instead of driving, and PTEs up and down the country will spend money on better bus stops and better bus lanes, and more subsidies. And up and down the country bus companies say "thanks very much, and by the way we're putting up the fares again, and cutting services", and there isn't a sausage that can be done about this but to offer even more subsidies.

Yes, my local service, the 86 is facing the axe. The government closed our post office earlier this year, many pensioners expected to walk miles uphill to another, or to catch the, er, bus. An angry local has postered the bus stop calling this cut barbaric, quite rightly. So we have a campaign of leaflets, petitions, complaints to the council, the PTE, the MP. The PTE write back offering an hourly daytime-only service, which is pretty miserable. When you can never entirely trust a bus to turn up at all, an hourly service is hardly worth using - with a 15 minute service such unreliability is not such a big deal.

The government has flirted a little with largely unusable powers for PTEs to take on regulation of fares and timetables, so there is some recognition of the problem, but clearly no determination to bring it to a resolution. It's another Labour failure and we know the Tories - the original culprits - will do nothing. And both will probably blame the Lib Dem council. This is a vital issue for millions of people, and for the environment, that we should be taking a strong lead on.

And all parties should learn the lesson that involving the private sector, and giving away public assets to the private sector, is not the same thing as introducting competition and markets; it doesn't bring any of the benefits, and if we're not careful we end up paying way over the odds for inferior services.

Labour: where can it go from here?

Labourology seems to be the rule at the moment. This excellent piece by Alex Wilcock is particularly pointed. "They won’t listen to your complaints. They won’t listen to your concerns. Now they’re telling you to clear off if you don’t agree with everything they ever do." Their sense of frustration is palpable. 12 years of Labour! Surely everything should be all right by now?

Speaking to Labour activists on occasion, what is most remarkable is this disconnect between what they percieve the Labour Party as being about, and what the government does. However much some of them disagree with the government, the Labour Party still has some hidden magical essence that is different. Total cobblers of course. The best way to judge the party is by what it does in government. That is what defines it. The rest is comfort food.

The 50p rate signals the end of the Blair project, which was to get the party to shut up about what it believed in, because that was largely wrong, and adopt a centrist position, or conservative or neo-con as necessary, to be elected and achieve the core agenda of pushing through big public spending, much of which has done some good, albeit inefficiently.

The problem with this was not where the party was moving away from, but where it was moving to. Labour instincts of opposing the bosses and capitalists at every turn had to be suppressed, but there was no real debate of these new centrist/neo-con values. Loyalty matters more than debate anyway. So now the project is ending the unresolved conflict re-emerges: between the moral superiority of socialism and the practical necessity of rejecting socialism. This is a dead debate, but I don't think the Labour Party knows how to have any other. It knows no other values by which it might criticise the rights and wrongs of a policy, but socialist values, and it knows it cannot trust itself to speak these values.

So when a party/government has a culture of a) no debate, or b) if there must be debate, a futile left-right one, it should be no surprise that it cannot listen, that it must become out of touch. Just as the Tories ignored all the sane advice on the mess they were making of railway privatisation, Labour cannot understand the mess of the tax credits system. Political good intentions trump any constructive criticism. And if a policy is wrong because it is illiberal, the same applies. They have put their values away because they are left wing and so can't be trusted.

And this value-free, debate-free politics leads naturally to the cult of managerialism. We know how to run public services, they said. But they didn't. Chris Dillow's book The End of Politics is good on this, where I have dipped into it.

So we have an autocratic value-free government/party incapable of listening, and that is enough - any such party would have to go badly wrong sooner or later. But that's only half the problem. They've also run out of money. In 1999 Gordon Brown was crowing about how he'd fixed the structural budget deficit that the Tories had left. But even before the financial crisis, the golden rule had gone and prudence was dead. Having no money means that New Labour deal - switch off your values and we will give you big public spending - can no longer work. So the party will descend into infighting as both sides renege. 

12 years. Where did it all go wrong? The New Labour deal - you can't have socialism, but you can have a bigger state - could only last so long. The working class may have been abandoned, but I don't think the class struggle mentality, or the Hegelian dialectic was. So centrist/neo-con Labour needed enemies and scapegoats as much as Old Labour did. But I suggest most of the problems our society faces are organic, spontaneous, not the result of a clash of interests, and so top-down confrontational answers do not work.

Even a party starting from a good place, which made a virtue of loyalty over debate, would inevitably go wrong over time. Add to that a belief in top-down micromanagement from a position of ignorance; an internal compromise that demands ever-ballooning state spending; adherence to some of the philosophical errors underpinning socialism, if not socialism itself; preference for a value-free attitude to business, rather than admitting your values were wrong; having no regard for liberalism; willingess to go to war on a lie;... etc, etc.

Frankly, it is amazing that things are not already much much worse than they are. Where should Labour go? What should it change? Or is the question: what on earth should it keep the same?

Emote with me!!!

I've been meaning to say this for a while - since attending the Social Liberal Forum meeting at the last Lib Dem conference. But it ties in nicely with Charlotte's revelation about the nature of the "progressive" and conservative debate, and how each side thinks they are doing what is right.

Speaker after speaker at the social liberal forum said how deeply they cared about the plight of underprivileged people, so much that the mood of the event could be described as a collective subvocal chant of emote with us! Having been a churchgoer (charismatic) in the past, and therefore having done that sort of thing in another context, I am deeply suspicious of it. It doesn't work for me. Yet these are important emotions to have. Empathy for the poor is better than contempt. It is still only a pale caricature of what the left - the Labour movement - was meant to be about, which was working people asserting themselves, not, as it is now, working people being patronised by the middle classes. I would attribute much of the BNP success to the way that where Labour seem to say "We care about you", the BNP say "We care about us."

But back to the Forum. A speaker goes "We care. We care. We care. 50p tax rate!" to a cheer. I can see how that policy absolutely feels right to people, but I am still left wanting the analysis that it would do any good. "It's a symbol" we are told, as if that were a good thing.

But of course it is not just the left that emotes like this. Only when Conservatives do it, it is something way nastier. Europe: boo. Foreigners: boo. Single parents: boo. I remember the Conservative election broadcasts in the 80s pushing the fear button over nuclear disarmament. Fear leads to hate and hate leads to the dark side. Conservative emoting is all dark side of the force stuff.

Charlotte points out that Conservatives believe they are doing the right thing, and I would agree for the most part. But lets not slip into relativism here - just because people disagree over what the right thing is, it doesn't mean there is nothing to be said about it. Charlotte is right that politics would be better if it were more rational, but rationality alone doesn't give us values. Libertarians of the Ayn Rand school like to portray themselves as driven purely by reason, but this is based on sophistry, and Rand had no answer to David Hume's is-ought gap.

I've written before about the 2 or 5 foundations of morality in evolutionary psychology. These 5 instinctive traits do exist in us, and we can apply reason to ask the question: what are the consequences if we reinforce this instinct or suppress that one in the language that we use - the metaphors we choose - the buttons that we push - to explore and advance our political ideas.

So liberalism as I see it involves a recognition that promoting the wrong foundations - the deference to authority for example, or the ingroup (class/race/etc) - has bad consequences, and promoting the right foundations - reciprocity, no harm, etc, has good consequences. This relies on an assessment of the consequences of freedom or tyranny, class war or class peace, etc. Is this or that a consequence that I want? How do I feel about it? It is an emotional question.

Tax: Labour to copy the Lib Dems; Tories to lose the plot

We hear that Gordon Brown (not Alasdair Darling - what is his job, again?) is thinking about tax cuts as part of a fiscal stimulus package. This is something that the Lib Dems have been advocating for some time, particularly that taxes on people on lower and middle incomes are particularly good candidates for lowering to stimulate the economy. Such people are most likely to spend the extra money, and, if they are homeowners, to keep their homes as a result. This sort of stimulus also has the advantage over extra public spending in that it benefits the private sector directly, not just indirectly. More from Nick Clegg and myself on this here.

Some will doubtless feel offended at Labour stealing our policies, but I rather like it. They are admitting to the world that we were right all along, again, and that if you want the right policies on the economy without months or years of dithering first, then vote Lib Dem.

The Tories on the other hand, well, what can I say. 

The Tories unveil their own plans, aimed at dealing specifically with unemployment, on Tuesday.

They say they would fund tax cuts through existing spending and not - as they suspect the government would do - through borrowing. 

The Today programme was suggesting this means tax cuts targetted at people "likely to lose their jobs." Huh? What? How can you measure who is likely to lose their jobs, in a systematic enough way to include this concept in tax law? Or perhaps they just mean tax cuts for bankers. That could be it. But incorporating this kind of nebulous concept in tax law is even worse, and will lead to far more pointless complication of the tax system, than even Gordon Brown's insufferable tinkering. Whatever happened to a simpler tax system?

Bizarre as this is however, it is not the worst of it. They would fund these cuts "through existing spending" [cuts], not through borrowing. So this is not going to be a fiscal stimulus at all. The Tory response to the economic climate is to do nothing. Whoopee.

The moral difference between liberals, conservatives, socialists, etc.

There's a good talk by Jonathan Haidt examining the differences in moral thinking between liberals and conservatives. This is American usage of course, but particularly focussing on social rather than economic issues, so it is not too inaccurate.

Haidt identifies what he calls the 5 foundations of morality by which he means 5 traits in evolutionary psychology (touched on here), connected with questions of moral behaviour. These are:

1. Harm/Care. We are disposed to bond with others and care for them, and have strong feelings about those who cause harm.

2. Fairness/reciprocity. This is associated with the golden rule ("Do unto others as you would be done by.") Also, I dare say, there is a fairness/reciprocity basis to both support for a social safety net, and for free trade. Both are reciprocal, but are often associated with opposing ideologies.

3. Ingroup/loyalty. We have a powerful instinct for forming tribes, mostly to oppose other tribes. More on this shortly.

4. Authority/respect. The anarchists' lament. Stop taking orders, they might say. Just listen to me and stop taking orders!

5. Purity/sanctity. Not just sex, but also attitudes to food for example.

So while we have the brain wiring to be guided by all of these consideration, there are differences of opinion as to which are moral. According to the video, conservatives tend to recognise all 5 as moral, and liberals just the first 2. In contrast to ingroup/loyalty we celebrate diversity; in contrast to deference to authority, we question it; in contrast to purity, we celebrate the freedom to be impure. 

Haidt makes some sweet bipartisan point about the conservatives having a point, using all the tools in the toolbox to maintain order (yuk! stability, perhaps, please?) and that libs and cons therefore exist in some wonderful symbiotic dynamic harmony like yin and yang. But I will move swiftly on from there by looking more closely at the 5 foundations and British politics.

Harm/Care

Disagreements here a generally over what constitutes harm, and the extent of our duty to care for our neighbour. Mill, in On Liberty, argues, for example, that there are duties of care - to throw a line to somebody drowning for example. I see little disagreement on this except from libertarians. Am I right?

But while I disagree with libertarians who say that the state should not seek to do good, I agree that it should not try to (and can't) make us good. Socialists on the other hand don't seem to see a problem with that. (Do other liberals agree with me?) Conservatives can be found in both camps, I guess.

Greens generally apply harm/care thinking to the natural world, which, it can be argued, means a failure to apply it properly to human beings.

Fairness/reciprocity

Socialists believe that the poor deserve more, conservatives that the rich deserve more. Greens believe that everybody deserves less. I, frankly, don't know who deserves what, but I bet it isn't a function of class identity. Fairness in the sense of equal rights is still opposed by many Conservatives, but otherwise is largely agreed.

Both free trade/freedom of contract, and the social safety net and public services can be seen in terms of reciprocity. Socialists and greens are against half, and conservatives and libertarians against the other half; liberals support both halves.

Ingroup/loyalty

I agree that liberals are not greatly moved by this (except obviously as political partisans, like everybody else). Socialists and conservatives represent ingroups based on social class.

Socialists have struggled politically from the numerical decline of the unionised working class. Labour, therefore has had to expand its ingroup suffering much pain in the process. 

This has left the working class feeling justifiably aggrieved that nobody represents them, creating opportunities for the BNP. The BNP being of course the epitome of the evil of ingroup/outgroup thinking.

Having your ingroup taken away, or being betrayed by it, can be an utterly crushing experience. Politics would perhaps be much healthier if there were an old-fashioned working-class socialist party. As long as it never won any power. We may have the best policies for millions of poor people, but we don't represent their interests against those of the middle classes.

Authority/respect

Clearly this issue separates liberals and libertarians from conservatives and fascists. Socialists appear in both camps and in the middle ground. 

I think Greens have a complex relationship with this one. I know many would post them firmly in the authoritarian camp, but they also have a strong anarchist influence. In any case this is not so much about whether strong authority is necessary, or even helpful, in saving the planet - a question we will all have to face; but whether an attitude of deference to authority is a good thing, on which point I think they are largely with liberals.

Purity/sanctity

This is not so clear as in the US with its big religious right, although the same trend is apparent.

However I think the biggest on purity/sanctity are the Greens. Organics, GM, alt meds, being close to nature. Support for such "natural" things, often out of proportion to the benefits (if any), seems to be a purity thing. 

In Haidt's surveys everybody recognised Harm/Care and Fairness/Reciprocity as moral instincts, but conservatives did tend to rate them lower than liberals. Understandable: these different factors must be weighed against each other. And yet libertarians also seek to diminish the scope of considerations of harm/care and fairness, reducing them to "no initiation of force" and free trade. I think this explains why they are seen as right wing, with some justice, even though they don't agree with conservatives on foundations 3 to 5.

So this just illustrates yet again the error of lumping any of these ideologies with any other. A five dimensional compass would not sort these babies out. It is no good lumping greens with fascists or communists, or lumping libertarians with conservatives, as if this could end the debate. Both must be opposed for what they actually say, unless, of course, on occasion, they are right.

Still alive

...and back from the beaches of north Wales. I will resume putting the world to rights as soon as I get round to it, etc.

Actually I did pop in to the David Lloyd George museum in Llanystumdwy. I learned that Lloyd George was the greatest statesman of the 20th century; the man from whom Churchill learned everything he knew (except, presumably, disastrous naval tactics); a man without flaws, at least none worth mentioning.

It impressed me how much he did for ordinary working people - pensions and national insurance and more, and yet he and the party were brought down effectively by the rise of the Labour Party. How does that event look today? What is the Labour Party for? A class war movement winning power has to either represent this new elite, and invent new class enemies, or become a cipher, or a bit of both, as it happened. We have been out of power for 100 years for this? What a stinker.

Reinventing the State Chapter 13: The Limits of the Market

And at last we have the manifesto of the left of the party: not the manifesto of social liberals - we are all social liberals here. You could probably skip straight to this chapter. Paul Holmes apologises for straying beyond his remit, but it would have been interesting if more of the authors had done this. Many incomplete manifestos don't necessarily make a complete one.

My problem here is that Paul doesn't seem to distinguish between the effects of free markets on the one hand, and the worst excesses of right-wing governments and corporate greed on the other. He talks about water privatisation in the third world. But when people who cannot afford mains water are prohibited from collecting rainwater under laws sweetening the privatisation, this is not a free market situation in any sense. Involving the private sector does not necessarily involve markets. The title of the chapter "the limits of the market" should perhaps read "the limits of private-public rent-seeking deal-making to prevent free markets and screw ordinary people".

Failing to make this distinction leaves Paul making the same soggy compromise that defines Labour: "markets" are a necessary evil that we can't do without but must fight against most of the time. Or as Labour morphs into the Conservatives, this becomes "markets" (still meaning corrupt rip-off rent-seeking) usefully make money for those whose interests we represent and oil the wheels of politics.

Well this isn't what markets are. This evil is not a necessary one, it should be opposed with clarity and vigour. PFI is not a market mechanism, quite the opposite, it is a relationship almost completely devoid of competitive pressures. Markets on the other hand are a necessary good, always rough at the edges and reliant on peace, law, sound regulations, quality information and so on, but the greatest force there is for enabling opportunity and prosperity.

Paul defends the role of democratic politics as the only way to put health, the environment, public goods, monopoly prevention etc, above the profit motive. He is right. The rules of the game have to be set according to the common good, and not bought - as Adam Smith warned against - by special interests. If the rules of the game allow profiteering which destroys more value than it creates, then value will be destroyed, and the few will prosper from the suffering of the many. A simple example of this would be that if theft were permitted: a few bandit barons would be fairly rich, and the rest of us would be in grinding poverty. If you make money destroying the environment - stealing it from the rest of us - this is much like being such a bandit baron. A market system, in contrast, is one in which we only give up things of value voluntarily in exchange for things we value even more.

Democratic politics and markets are brothers. They are both expressions of the principle of power to the people. It does not upset me that one typically works better than the other for a given kind of decision - it is not enough to make me want to pit these allies one against the other.

So when Paul says, of desirable social outcomes that

The hidden hand of the profit motive in the free market, left to itself, will deliver the opposite of all these outcomes.

or

The key driver of Adam Smith's 'invisible hand' is the profit motive based on success or failure in cutthroat competition - not motives of fairness, humanity or the common good.

I must refer to Adam Smith too:

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love...

Smith is of course not saying that people should not be humane, fair or pursue the common good - just that it would be unwise for us rely for our dinner on these sentiments in others, when self-interest can be turned to the good.

The left's objection to Adam Smith - which is a valid objection to right-wing interpretations of him - is that he is saying that we ought to pursue profit and ignore the good. Both left and right are guilty of very selective reading.

And so for most of the chapter Paul rails against "unfettered markets" or "markets on their own" largely in reference to policies which involve the private sector but not markets. If you read "the profit motive" for "markets", the arguments are quite good.

I am confirmed in my view that the left of the party, the social liberals who question economic liberalism, have misunderstood the rest of us, and not understood Adam Smith. Far from retorting to the Orange Book, this chapter confirms its importance.