Thursday, 26 February 2015

Making the opposite mistake to Natalie Bennett

I've just been listening to Natalie Bennett's car crash interview and rather wish I hadn't.  It reminded me uncomfortably of some of the radio interviews I've done myself over the years.  I don't think very well on my feet - one of the reasons I write this blog instead of talking too much.  I write too much instead.

But I've been wondering afterwards what her mistake was, precisely.  As leader of a party with one MP, she doesn't need to use the meaningless language of Westminster discourse.  There was no need to put a figure on the number of homes they would build.

The spurious number of 500,000 new homes was mentioned, and it is worth saying that - even during the Macmillan and Wilson years of jerry-built high rise flats, the UK never managed more than 400,000 a year.

Conventional political wisdom says that you have to express these things in terms of numbers and costs or nobody believes you, but is that really the case?  The figure of 500,000 a year is too round a number to be believable, too imprecise to be serious.  And either the basic policy work had not been done, or Natalie Bennett had forgotten the details.

I was irresistably reminded of the fatal moment when Charles Kennedy revealed a less than complete mastery of the details of the Lib Dem proposals for a local income tax during the 2005 general election.  His wife had just given birth, so perhaps it was understandable - but it was a critical moment too.  I expect this will be a critical one for the Greens.

But before Lib Dems get too holier-than-thou about it, it is worth remembering that they are making precisely the opposite mistake to the Greens.

The Greens have not worked through the practicalities of their proposals in sufficient detail.  They are not focused enough on immediate policy, but they have sharpened their ideology and everyone knows what they are for.

The Lib Dems are hugely exercised with the short-term strategies of getting policy details through Whitehall and the coalition.  Their whole attention is on making things happen, but have forgotten - hopefully temporarily - that they exist for a purpose beyond the moderation of Conservative and Labour excess.

If they forget sometimes what they are actually crusading for - the fundamental purpose of the party and its ideology - the Greens never do.  So don't let's be smug about Natalie Bennett's embarrassment.  She is at least beginning to think about the practicalities of radical policy-making.

I want the Lib Dems to do well this year as much, if not more, than anybody.  Nobody could accuse them of stinting on the policy front.  There will be powerful green policies in the Lib Dem manifesto.  But the more I can persuade the party to provide that crusading edge - to remember what their long-term purpose is - the more I can improve their chances.

Starting perhaps with recommending my own attempt at radical practicalities in my new book (written with Tony Greenham) on the practicalities of ultra-local economic regeneration.

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Wednesday, 25 February 2015

Military weakness is not as dangerous as military delusion

I joined the Liberal Party in 1979, as a student journalist, having interviewed all the local parliamentary candidates. Dermot Roaf, then the Liberal candidate for Oxford City, spent well over an hour with me in the middle of the day, when he must have had more urgent people to deal with – and, by the end, I was convinced. I went off then and there and paid my subscription.

But one of the reasons why I embraced the cause so enthusiastically – rather too enthusiastically for my own good – was my growing sense of irritation at the political discourse.

Why was it that the people who had particular ideologies bred into them seemed to cling to these bundles of ideas, some of which seemed contradictory – apparently because they were psychologically pre-disposed to do so?

Why was it, for example, that Conservatives tended to oppose public spending – but not, apparently, when it came to defence? Why was it that Labour supporters seemed to back all kinds of extra spending – but not, again apparently, when it came to defence?

It was all very odd, and I wondered this morning when I heard the news about sending troops to the Ukraine – can Cameron do that without a vote in the Commons? – whether the same contradictions applied.

I am clearly different these days. I recognise a tyrant when I see one, and Putin is one. There are clearly risks to the Baltic states, and it would be a setback for civilisation if they fell back under Russian control. Perhaps as much as Nazi control was of Poland.

What I do find indefensible is the way that successive governments, but the Blair government in particular, approached these issues with their preference for symbolic gestures to real action. It meant that, briefly at least, they could cut defence spending and still invade Afghanistan. And Iraq.

In the long run, it meant the humiliation of UK forces, and the undermining of our reputation for military competence – because our forces were not equipped or trained or prepared or numerous enough for the role they were supposed to be playing.

Is this what Cameron is doing? Sending 75 troops to Ukraine because it is a cheap gesture? Or is it the same kind of gesture as the one that Spanish government used during the first Gulf War: they would send forces to support the coalition, but on condition that they would leave if there was any fighting?

Because this kind of symbolism is far more dangerous that doing nothing. Sabre rattling might have its place, but if you sabre rattle when you have long since sold off your sabre, then you can get into difficulties – which the rest of us will have to pay for.

Am I advocating strong defence? Not necessarily. But the current mismatch between political rhetoric and military swagger, and the actual military resources we have at our disposal, is so stark that it is downright dishonest.

Something has to give. We are heading next month to the centenary of the Dardanelles expedition (March 18: the first attempt to force the narrows by sea), and it is a good moment to remember the psychology of military incompetence.

The commanders in 1915 deluded themselves about the enemy they faced, putting out reassuring orders to the officers explaining that Turkish troops were afraid of the dark. The result was inevitable.

It isn’t necessarily weakness that precedes military disasters. It is delusion, and this generation of politicians may be even more subject to delusions than any before them.

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Tuesday, 24 February 2015

Business is no longer Conservative - this is why

I've written a blog on the Lib Dem Voice site today explaining the background to the pamphlet which I wrote with the investor Joe Zammit-Lucia, after the series of events he organised to allow businesspeople to talk more informally to politicians.

The idea is that business is an increasingly radical force, no longer tethered umbillically to the Conservative Party.  Hence the title of the pamphlet, A Radical Politics for Business, which we launched at a business reception in London on Monday night.  

You can read the blog here and the pamphlet here.

But it is true that I ought to spell out why this counts as a new idea, or at least the revival of an old one.  The idea of business as a radical force in politics, however careful they might be not to be political themselves, is unexpected for the following reasons:

First, this is not the way that the official organisations supporting business tend to explain it..

Second, this report happens to coincide with the nadir of the reputation of business in the UK, which may have been unfairly blamed for the failures of the banking and regulatory system in 2008, but which has also been tainted by the continuing scandals from Enron to Robert Maxwell’s pensions theft, insider trading, Guinness, and so on, where business has suffered for the sins of relatively few – and politicians have failed so far to shape a regulatory system that can distinguish the few bad apples from the bad barrels.

The point is that businesses are not widely understood to be radicals in any way.

Third, businesses have been known – for a century or so – as bastions of support for political conservatism.

Often, it is true, they have done this mainly for fear of the alternative. But it has usually been more than this. Businesses have been a bastion for conservatism in other ways too: business people have dressed conservatively. They have encouraged conservative living, thrift and hard work. They supported the status quo.

You might feel, after a century or so of business walking hand in hand with conservatism, that it would continue like that forever. But the signs are that a big change is happening, and there is no reason to think this is confined to the UK.

Something in that old relationship between business and conservatism has broken. Business wants openness to ideas. They want open borders. They want long-term thinking, not the insane short-termism of the political world. They increasingly want education that promotes practical vocations, rather than suppressing them. They want schooling that looks beyond basic skills – important as they are – and trains people to be entrepreneurial and creative, not just train them to mind machinery. In short, business is emerging as a different kind of political force altogether, and advocating something altogether more radical.

What is interesting about this shift is that it isn’t unprecedented. For most of the nineteenth century, business instinctively supported the radical force in UK politics. It was Liberal then, just as it is increasingly Liberal now.

But then, Liberals and Conservatives see business differently. Conservatism regards business as supporting the status quo. For Liberals, business has always been about change. It has always involved allowing new ideas to challenge old ones, for new innovations to challenge the entrenched ways of doing things. It has always meant that the small should be allowed to challenge the big. Conventional wisdom has to be challengeable, by ideas or entrepreneurs, which is why – as Karl Popper put it – open societies tend to be more adaptable than closed ones.

Conservatism wants business to achieve some sort of stability. Liberalism wants them to be resilient, aware that change comes from everywhere and is rarely predictable.

Victorian business, proud of and committed to their cities and towns, steeped in the ideals of self-help, was a radical force – politically Liberal, passionately committed to the idea that people should be able to do business where they saw fit, and determined to tackle the vested interests that prevented them (businesses are aware that there are rival vested interests out there now, just as there were in the nineteenth century). The political force behind ‘free trade’ has always been Liberalism. Free trade, that is, as it was originally understood – the right of the weak to challenge the strong.

If you are as fed up as I am by the assumption, particularly by the BBC, that business will always be Conservative - and the endless repetitive non-debate by the same old voices - then give the pamphlet a read.  And talk about it in public.

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Monday, 23 February 2015

Inventing new kinds of money to save the Greeks

It is sad but true that economic innovation is usually born of desperation.  This is at least partly because the elite clings to the economic consensus with fervent, increasingly theological conviction, and all the more so as the consensus gets ragged around the edges.

So perhaps the best we can say about the impasse between Greece and the European finance ministers, grappling with the implications of the disastrous design of the euro, is that it might perhaps - well, perhaps - lead to important money innovation.  Well, it is about time.

Keynes used to call living in an economy without enough money a "perigrination in the catacombs with a guttering candle".  That is the situation in Greece right now, and they are expected to carry on with this wander through the catacombs so that the euro might survive, and we will sleep more soundly in our immediate economic futures.

The question is whether these things can be achieved without the embalming of the Greeks.

The new Greek finance minister Yanis Varoufakis has been suggesting ideas, notably his proposal for a new currency, denominated in euros, but based on the future taxes paid to the Greek government, and designed to use bitcoin style block-chain technology to bypass the banks.

The details are obscure and perhaps too generous.  The new currency pioneers are debating it all online.  Varoufakis is suggesting that Greeks will be able to buy 1,000 euros worth of what he calls FT-coin in return for 1,500 euros worth of taxes paid in two years time.  Maybe too generous, but it is an exciting idea and a sign that - at long last - those flung into the economic mainstream are beginning to think creatively again.  See Paul Mason's take on it in the Guardian today.

It would mean monetising Greece's debts, taking them out of the hands of the banks and providing a machine that can potentially pay them off.

I'm not arguing that this will work, but I see that Shann Turnbull, the Australian financier, is set to speak in Athens.  He is one of the most creative monetary thinkers on the planet, and it is time people gave him the benefit of the doubt and began to listen.

I know from listening to him myself that he will start by telling the story of the great American monetary innovation designed to help the poorer parts of the USA escape the Great Depression, thanks to the efforts of Alabama senator John Bankhead, Tallulah's uncle (it is Tallulah pictured above).

Bankhead borrowed the idea from the great economist Irving Fisher, and his bill - vetoed by Roosevelt - would have issued $1 billion of stamp scrip in the poorest areas.  This kind of money encouraged spending by losing value by 1 per cent a month, and was eventually 'retired' - or deleted as we might say now - rather as the FT-coin would be when it was finally spent.

This is from Fisher's 1933 book Stamp Scrip (there isn't even a copy in the British Library):

"At my grandmother's country house, fifty and more years ago, you quenched your thirst at the spout of an old-fashioned wooden pump. To compel this huge creature to pour out its crystal treasure was no easy task for a small boy. It always involved a preliminary period of exercising the lofty handle, and sometimes quite without results, until an older person pointed out a bucket which stood near with a small side-supply of water. It was kept on hand for just such emergencies. Then the small boy would run to the side-supply scoop up a dipperful, climb upon any convenient object and empty the clipper into the open top of the pump. When he returned to his exertions they were no longer in vain. One scoop of side-supply had connected the big subterranean supply with the means of jerking it out of hiding. The strategy was called 'priming the pump'.  This done, there was no further use for the side-supply. Such is the office of Stamp Scrip - to prime the pump, which has thus far been unable to connect the great supply of credit currency with the thirsty world."

Of course, you just can't just use the pump with euros.  It would be inflationary.  It would lower the value of the currency.  The European Bank would not allow it.  But you can experiment with new currencies and new denominations, based on a range of local items, and only starting perhaps with the Greek national debt.

But the Greeks must live, and if they can't live as perpetual captives in the catacombs for the good of the rest of us, then it is time to innovate.  Or bring dishonour and disorder down on all our heads.

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Wednesday, 18 February 2015

The significance of Peter Oborne's grandfather

I've always admired Peter Oborne, and his article yesterday about his resignation from the Daily Telegraph is powerful and heartening.

It is important, and not just for the Telegraph, but it is the allegations that they have suppressed criticism of HSBC in an effort to woo them back as advertisers that are most explosive.  It is also an explosive critique of HSBC - and explains, quite rightly, that there would have been more political pressure to deal with this kind of abuse if the Telegraph had not stayed silent.

But I just wanted to comment on one part of the article that may get less attention:

"My grandfather, Lt Col Tom Oborne DSO, had been a Telegraph reader. He was also a churchwarden and played a role in the Petersfield Conservative Association. He had a special rack on the breakfast table and would read the paper carefully over his bacon and eggs, devoting special attention to the leaders. I often thought about my grandfather when I wrote my Telegraph columns."

I very much appreciated that thought.  My grandfather, also a retired lieutenant-colonel, also read the Telegraph at breakfast.  And it was that beleagured and side-lined small C conservatism which the Telegraph represented, and which has been so often blown aside by a force which is not conservative at all, but which purports to be - a transatlantic, turbo-capitalist, corporate apologia for the richest and most powerful.  

The kind of approach which Oborne describes as abolishing the post of editor at the Telegraph and replacing it with a series of 'Heads of Content'.

I'm not a Conservative.  I'm a Liberal.  But that kind of conservatism, so much part of the fabric of the nation that I'm not sure we would be recognisable without it, is being swept away - first from the House of Commons and then from public life.

That conservatism was never the preserve of the Conservative Party, but they are largely responsible for its demise.  It was a shift that was symbolised when a new Conservative prime minister, Margaret Thatcher, who had very little idea of what to do with the role, was captured by Howe and Lawson and convinced that she had somehow led the revolution herself.  

Mrs Thatcher was not quite what she seemed, but that is by the way and for future historians to revisit.  See more in my book Broke.

The point is that this extreme free market ideology - where everything is for sale, including the content of the Telegraph - is not a conservatism that would have been recognised by either Peter Oborne's grandfather or mine.

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Tuesday, 17 February 2015

The original sin at the heart of the digital age

Back in 2001, I published a book called The Tyranny of Numbers.  It seemed like a new, rather tentative argument at the time, but the Blair government had formulated over 10,000 numerical targets over the previous four years and the growth of counting as an instrument of - well, pretty much everything - had not really been covered much at that stage.

I've been thinking quite deeply about these issues again, and especially after hearing a deeply frustrating discussion on the BBC Today programme involving the education editor of the Economist who had just made a controversial lecture.  The upshot of this was that, by resisting performance related pay, the teaching profession was failing to shape their reward package in a way that would attract the brightest and the best.

Quite the reverse, she claimed it was designed to attract what she called "shirkers".

Now, I have no particular reason for defending teachers, and certainly not bad ones, which blight the lives of children.  UK schools would be considerably better and more effective if it was easier to get rid of them - but there is a huge problem in the 'shirker' idea of performance related pay.

You can't measure success in teaching.  If you try, it becomes narrow and boulderised.  If you turbo-charge this by paying on the basis of those numbers, it becomes obtuse and uncivilised.

Children are then transformed into one-dimensional tickboxes to be manipulated in order to open the box marked pay.  Teachers are transformed into laboratory rats who have to be led to the same box over and over again.

In fact, I wonder if we really have to name the basic problem - which is the original sin at the heart of the digital age.

It is this.  Digital technology depends on transforming the world into two symbols - a 0 and a 1.  Everything has to be black or white.  The target is achieved or it is not achieved.  Yes, the language can be manipulated, but it would be too complex to take account of this.

And the trouble is that life and humanity are not one thing or another.  The ability to make fine judgements and distinctions is being lost, as we swallow the utilitarian dream that we are machines at work made to be programmed.

We are not one thing or another.  For all the cornucopia of riches which digital developments have given us, they have come along with this great delusion - this great divide that is rendering us stupid, unable to communicate or recognise shades of grey.

We worry about robots taking over and becoming too intelligent.  Actually, the opposite is happening.  We are transforming all our human institutions into bone-headed machines that recognise no variation and go a little haywire if they are confronted with such things - which of course they are, every minute or so.

Then we wonder why public services are getting so expensive.

I'm not the only person saying this.  The journalism of Bryan Appleyard, the system thinking of John Seddon, are part of the same picture.  The question is: how can we wake up from the all-pervading digital sleep and see things as they really are?

Well, as far as I'm concerned, the Campaign for Real Judgement starts now. Perhaps then we might persuade some professionals to revolt against their transformation into Pavlov's dog's.

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Monday, 16 February 2015

The disappointments of participation, so far

Participation in the way we are governed, and the way that public services work, has been the great - largely unrealised - dream of the revival of Liberalism since the 1950s.

Most of it wasn't categorised as Liberal, all that explosion of energy from adventure playgrounds to self-build housing, but it was.  It was also a reaction to the corporate state, over-professionalism, and the sense - as Nye Bevan put it, approvingly - that "the man in Whitehall really does know best".

That anarchic participation and self-help provided the energy for the huge growth of the voluntary sector, now largely controlled by government grants and the lottery.  It has also been undermined by three other things.

First, the delusions of statutory consultation, which brings real consultation - if we ever see it - into disrepute.

Second, the failure of the peculiar phenomenon of official consultees - local people put on boards and paid, who tend to go the opposite of native.  I remember these from the early days of the Elephant & Castle development.  There is no more pompous phenomenon, more obstructive, more on their own dignity, as the official community representative.

Third, the idea that participation is bound to be passive.  People sitting quietly, plodding away online, telling their local authority about potholes using clever software from the privacy of their own back room.

There's no doubt that the online world can support real participation, but - here is the point - there can be no genuine participation without action, without doing things.  They may be very simple things, befriending people, talking to people, having ideas.

Without activity, participation is about spin, and marketing, in a virtual world unbounded by the inconveniences of geography.  It has no equality.  It is all about manipulation.  It is us and them.  Only action wrests equality from officials - working alongside professionals, playing a role of some kind.

So two slightly more uplifting things.  First, there is my co-written book Give and Take about the track record and future of time banking in the NHS.  Time banks are one of those rare things: genuine active participation.

In the 15 years now since Sarah and I launched the Rushey Green Time Bank in Catford, the idea has proved itself many times over.

Second, there is the way that blogs can be a form of political participation which might be able to spread ideas and encourage other kinds of activity.  They may indeed go beyond something that is merely passive.

The Spanish academic Juan Sanchez from Valencia University is doing research about the implications of political blogs and you could help him by filling in his short online survey here.

I will feed back the results when they emerge.

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Thursday, 12 February 2015

OK, whose side was Tolkien on?

Fantasy__038816_I have two children off sick from school at the moment which has involved a very long afternoon watching the films that make up Lord of the Rings.  I suppose I must have seen the end before, with Gollum and the ring cast into the crack of doom, and - ten years on - I can't see Gollum without thinking of Vice President Dick Cheney.  But then, what?

Despite its elongation and long loving camera shots on departing hobbits, Peter Jackson's version has missed out the return to the Shire and its cleansing from the invading industrialism of Wormtongue and Saruman.

It is as if it was a film of Odysseus without the return to Ithaca and the defeat of the suitors.  Or perhaps even the triumphal entry into Jerusalem without the cleansing of the temple.

It also reminded me that there is a peculiar debate going on in semi-academic circles about the USA about the economic doctrines espoused by Tolkein.

The argument has been going on on an American website called The Imaginative Conservative, the home of Roger Scruton-esque intellectuals, between two commentators who I take (I may be mistaken) to be Catholic conservatives.  On the one side, Jay Richards and Jonathan Witt, co-authors of a book about Tolkien's politics called The Hobbit Party.  On the other side the biographer of Hilaire Belloc, Joseph Pearce.

The question at issue is precisely what Tolkien meant when he wrote about 'The Scouring of the Shire'.  According to Pearce, Richards and Witt are so concerned to prove that Tolkien was no socialist that they miss the basic truth - he was a Distributist.

Distributism was a version of English Liberalism which was preached a century ago by Belloc and his sidekick G. K. Chesterton, which suggested that both capitalism and socialism would tend towards tyranny and that the solution was the 'restore' widespread property ownership.  They borrowed and adapted Joseph Chamberlain's old motto (Three acres and a cow); it was an agrarian vision of small farmers, small shops and small townships.

Pearce says that The Hobbit Party is right to describe Tolkien as anti-socialist, but miss the clear evidence in the Lord of the Rings - the same bit that Peter Jackson missed out - that Tolkien was also concerrned about the effects of rampant capitalism:

"It was one of the saddest hours in their lives. The great chimney rose up before them; and as they drew near the old village across the Water, through rows of new mean houses along each side of the road, they saw the new mill in all its frowning and dirty ugliness: a great brick building straddling the stream, which it fouled with a streaming and stinking outflow. All along the Bywater Road every tree had been felled. As they crossed the bridge and looked up the Hill they gasped. Even Sam’s vision in the Mirror had not prepared him for what they saw. The Old Grange on the west side had been knocked down, and its place taken by rows of tarred sheds. All the chestnuts were gone. The banks and hedgerows were broken. Great wagons were standing in disorder in a field beaten bare of grass. Bagshot Row was a yawning sand and gravel quarry. Bag End up beyond could not be seen for a clutter of large huts..."

My feeling is that Pearce is right.  Tolkien may have been no conscious follower of the Distributists, though as a Roman Catholic, he was where Distributism eventually went.  He may well have been more of a vague follower of Clough Williams Ellis whose book Britain and the Beast put the case against Saruman's industrial version of England.  But Tolkien's portrait of the Shire was intended as an ideal.

Does this matter?  Well, yes, I think it does.  Because there are hidden political seeds in these books, and this political seed - like Distributism - was intended as an attack on turbo-capitalism, where nobody is allowed to belong anywhere.  it is an economic doctrine so conservative that it becomes radical again, and I have a good deal of sympathy with it.

It also articulates an important division within conservatism that may turn out to be extremely important over here.

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Wednesday, 11 February 2015

The old corruption and the very old debate about business

The editor of the Economist is leaving to take up a position to assist the rise and rise of Bloomberg, and has written a signed, valedictory editorial about the future of liberalism (thank you, Joe, for drawing my attention to it!).

It is worth reading.  It is also one of those rare things these days, a powerful and hopeful critique of the present. But the Economist's interpretation of liberalism is not quite the same as Liberalism, and develops with the speed of a glacier.

Yet, John Micklethawit (for it was he) was surely right that liberalism now has to wrestle with the idea of equality, just as Liberalism did a century ago.  He is right that the huge resources spent by the state on both sides of the Atlantic for the richest fifth of the population dwarfs what they spend on the poorest fifth many times over.

He is also right that this is one of the aristocratic privileges that Gladstone and Mill battled in the Victorian Liberal age. He didn't say that it is also like William Cobbett's idea of The Thing – the great mountain of placemen and pensioners paid for by the struggling farmers and labourers of the nation.

The superstructure of The Thing, as Cobbett saw it, was the burgeoning financial services in London, the stockjobbers and speculators, making money out of money and leaching it out of productive agriculture.

What this amounts to is a re-think by liberals the world over about the meaning of free trade.  Because what began as a Liberal idea to prevent slavery by closed markets has ended up as an apologia for The Thing.

I was thinking about this as I listened with growing frustration as I listened to Digby Jones and Polly Toynbee biting chunks out of each other on the BBC's PM programme yesterday (39.40) about the politics of business, without listening to a word the other was saying.

What was so frustrating was that both were completely right - Jones was right that we need to support those who are making a profit so that we can underpin a civilised nation; Toynbee was right that supporting business does not mean supporting tax evasion or unreasonable tax avoidance.  Or, one might add, it doesn't mean supporting pointless, vacuous, gambling which puts the global economy at risk.  It doesn't mean supporting The Thing.

It was one of those debates that makes you despair for political discussion, and despair for the BBC too.  They seem to want to go through the old motions, for the sake of - what exactly?

Let me say what I believe a Liberal ought to think about supporting business.  Supporting business means backing enterprise and entrepreneurs, but not gamblers - however much money they might make for the economy.  It means shaping a City of London that has the skills and knowledge to support the UK economy, whatever else it might do.  It means backing competition and breaking up monopolies and oligopolies.

Does it mean supporting every whim of every fly-by-night who is speculating in the global market?  Of course it doesn't.  Any more than giving a licence to evade the speed limit to every drunken driver is supporting motoring.

So why are we pretending that is what the argument is all about?  It never was, but it certainly isn't now. 

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Tuesday, 10 February 2015

Targets on speed, targets on LSD

Iain Duncan Smith has become a figure that the left regards with great disapproval.  I don't really share this.  Duncan-Smith is a brave thinker, as his think-tank the Centre for Social Justice demonstrates.  But he has made one gigantic misjudgement which goes to the heart of the mistakes the coalition has made on public services.

He says he is proud of his record on payment by results.  The truth is that it will become an increasing problem as time goes by.

Shortly after the coalition took office in 2010, I was invited - for reasons I never did understand - to an internal seminar at the Department for Communities  A senior civil servant gave us a presentation explaining that it was out with targets and in with payment by results

Nobody questioned this - they may not question things enough in some parts of Whitehall - so I very tentatively put up my hand.  Are they not exactly the same thing, I asked?  Both targets and PBR are narrowing down the deliverables to a tight numerical definition.

The senior civil servant clearly thought  I was being obtuse I was told in no uncertain terms that I had got it completely wrong.  So much so, that I began to wonder myself.

As a belated reply, I wrote an article in Local Economy about it shortly afterwards.

There is, of course, one major difference.  By attaching money to the targets, which is what PBR does, it turbo-charges their effects.  That is what bonus payments do too.  And bonuses, as we all know, have the power to drag the entire economy down, as they did in 2008.

Targets with bonuses are the curse of the age.  They narrow outputs, they blind professionals and make organisations stupid.  They waste staggering amounts of money by spreading the costs of all those other things that organisations no longer try and do elsewhere in the system.

For payment by results to actually work, they would have to take actual savings created by the intervention and recycle them.  Otherwise, they are like targets on speed.  Worse, targets on LSD.

Let me tell you, for example, what I heard about my children's old primary school.  Teachers in tempers. Teachers throwing furniture.  Staggeringly dull lessons.  Why this abomination?  Because they now get cash bonuses based on the SATS results of the children in their care.

This is doubly unfair because the children do not benefit individually from the SATS results at all.  They are just being used as the tools to deliver target figures, and therefore bonus payments, to individual teachers.  It is the precise opposite of professional care, and it is all down to payment by results.

It fits into a wider mistake, and this has nothing to do with Iain Duncan Smith.  It is the fantasy that everything can be reduced to numbers.  It is the McKinsey Fallacy again, that everything can be measured and what can be measured can be managed.  It can't.  If you try it will eventually cost you everything.

See more in my book The Human Element.

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Monday, 9 February 2015

Labour's share of the blame for NHS problems

The NHS.  It appears to be the heart of political debate and there is no doubt that it is in difficulties.  Roy Lilley caricatured the problems last week, but he's essentially right - the NHS institutions are pulling in different directions, and the multi-headed responsibility makes it very hard to shift direction, divided between the CQC, Monitor, NHS England and the Department of Health.

Then you come to the question of whose fault it is.  Because, listening to the Labour Party, you might almost believe they were the thin red line which separates the NHS from privatisation, vivisection and disaster.

If you settle down for a moment and list the major forces - at least those which governments can change - which have caused difficulty, things are not quite as clear cut as they seem.  Here are my four:

1.  The Health and Social Care Act.  Andrew Lansley's complex legislation looks like taking the rap, and there is no doubt that the original draft legislation added complications to the structure of the NHS, and that - as originally set out - it would have led to considerably more outsourcing.  But people seem to have such short memories, forgetting that the Lib Dems excised most of the privatisation from the bill.  Still, there is no doubt that it has added to recent costs, if only because it was another re-organisation that has had to bed down.

2.  The legacy of PFI.  Why has the Labour Party forgotten this one? Labour didn't invent PFI - that was the John Major government - but they turbo-charged the idea.  We now have what Lansley called a "£60bn postdated PFI cheque" to deal with, because the deals locked costs in for three decades in their efforts to take the costs of new hospitals off the balance sheet.

3.  Outsourcing culture.  The trouble with outsourcing in practice is that, because it is linked to narrow targets which have to be delivered, there is a tendency to contract the big operators who are most adept at producing the numbers - achieved largely by narrowing what they deliver and, by doing so, spreading costs elsewhere in the system.

4.  The current quadrilateral management structure of the NHS in England.  This is partly the legacy of the Health and Social Care Act, but it is also based on a New Labour fantasy - that somehow it would be possible to create an administrative system that would just run itself, without the need for value judgements.  It was their utilitarian dream of a public service system like a big humming machine, tended by men in white coats.

Let's just emphasise the PFI problem.  North Cumbria University Hospital, ex-Cumberland Infirmary, was the first hospital to be built using the PFI.  It cost £67m to build and was opened by Tony Blair in 2000.  The investment came from Interserve, a multinational support services and construction company based in London.

To manage the facilities, Interserve set up a joint venture with engineering giant AMEC, called Health Management Carlisle (HMC), based in Berkshire. Early in 2014, the hospital board announced that it had ‘lost confidence’ in HMC, when it was told the company would be increasing its annual charges by £1m (from £8m) a year.  This followed a report on the facilities management contract that uncovered ‘major issues’ with the maintenance of operating theatres, water systems and gas pipelines at the hospital.

The contract for facilities management was agreed as part of the original PFI deal and both last for 30 years. Even without confidence in the provider, the hospital is contractually obliged to keep paying.

The Trust is also paying £18 million a year for the original investment by Interserve, up from £11 million at the start of the contract. The total paid back on the PFI contract is estimated to be £587 million by the final instalment in 2030.

And for some reason, Labour claims to be preventing the privatisation of the NHS.  How did they do that, and how do they get away with it now?

Add those four points up and you find that the coalition is certainly at fault, but mainly because they failed to diagnose the mistakes which the Blair and Brown governments had made in public services, primarily the way that targets wasted money, blunted what services could achieve and locked in inefficiencies.

The tragedy of the coalition's achievements in public services is that they half understood that there was a problem, but never grasped the whole picture - then they went ahead and locked the problems in with a more extreme version of the same idea, which we know as "payment by results".

Now I ask you: why are political and journalistic memories so short?  Why is Labour allowed to portray itself as the saviour of the NHS?

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Thursday, 5 February 2015

Is Scotland going the way of Ireland?

English votes for English laws. I can’t help feeling that it is somehow an excuse for Westminster not to debate devolution of powers to cities. It panders to Westminster's obsession with itself.  It expands to fill the BBC’s political brain, and therefore ours. But will it change anything very much – apart from making English laws subject to even fewer MPs than consider them now?

Listening to William Hague putting forward his proposals has been a particularly miserable business, irritatingly English for all the wrong reasons. It is like so much else of what passes for a UK constitution, the sum total of a couple of centuries of short-term fudges.

Because, in the end, these fudges will unravel. The news today, thanks to the Ashcroft polls, that the Scottish Nationalists are likely to win most of the seats in Scotland, reminds me suddenly of the 1880s and afterwards, when Irish Nationalists came to dominate in southern Ireland and to play a critical part in the politics of Westminster.

I happen to live now in the small Sussex town where Charles Stewart Parnell, sometime leader if the Irish Nationalists at Westminster, married his mistress, Kitty O’Shea.

Parnell was known as the ‘Uncrowned King of Ireland’. It may be that we are entering a similar period now, this time with the SNP and Salmond as Scotland’s claimant to the position of Uncrowned King. In which case, we need to learn from history.

The trouble with nationalism of all kinds, and it is always intolerant, is that it arises as a result of basic injustice.

The rise of the Irish Nationalists was related partly at least to the disaster of the Irish Potato Famine in the 1840s, and the sense that Westminster did not in fact have the interests of Ireland close their hearts.

I  have a feeling that a similar sense began to pervade Scotland during the Thatcher years, when bizarre social experiments were tested first on Scotland. Both the ways the Victorians treated Ireland and the way the Thatcher government treated Scotland smacked of empire. These mistakes take decades to filter though and the current rise of nationalism seems to be to follow on from there.

There are differences, of course. The Fenian terrorists were already active in Ireland in the 1880s, and there is no similar force in Scotland. Scotland does have home rule, which the Irish were never offered until it was too late. And you can hardly compare the disdain of successive London governments with the appalling neglect of the famine.

And then there is the offer to Scotland. No comparison here with the pathetic settlement offered to Manchester and Sheffield, another raft of glorified grants and special systems of centralised control.

If Manchester had shown signs of seceding from the UK in a referendum, perhaps they might have been offered that measure of economic independence they really need.

Also, the disdain of Westminster for Scotland no longer really stands up to scrutiny. The Scots have their own parliament and their own destiny, which may now be inevitable. The disdain of Whitehall for the UK cities is also now being broken down, but ever so slowly.

The cities will eventually grasp the power to innovate they need – and to regenerate their own economies (see my book People Powered Prosperity, and ebook now available). They may not manage it, even in the next parliament, but they will eventually.

As for Scotland. historic inevitability, given the parallels with the 1880s, suggest they will eventually go the same way as Ireland. Whether they do or not comes down to whether anyone can make a sufficiently inspiring case for the development of Scotland inside the union as they can outside.

Can they have a parallel currency inside? Can they develop their cities on a more European model? So far, this task has not even begun.

Wednesday, 4 February 2015

Clinging On for dear life: what to do about it

I must say, I feel like a Liberal today.  I spent yesterday being criticised by a Conservative councillor for my book People Powered Prosperity, and last night being criticised by a Labour councillor for pandering to middle class educational angst in my Radio 4 programme Clinging On (now online).

This pattern of argument isn't logical.  Being criticised by right and left simultaneously doesn't make me correct, but it might constitute evidence in that direction.  Personally I'd settle for Gillian Reynolds' verdict on the programme in the Telegraph this morning: "Rivettingly pertinent".

In fact, she was talking not just about my programme, but also Robert Peston's programme on gross inequality that went out the same day, and asking similar questions.  And the question you can't help asking in this context is - what can be done?

I've set out an approach to rescuing the middle classes in my book Broke.  It involves an economic strategy - building a new entrepreneurial niche to replace the middle management niche which supported the middle classes in the last few generations.  It also involves a political strategy to support the radical anti-trust and entrepreneurial support that will be needed.

But what about the underlying problem: we have built an economic system based on corrosive and controlling debt - just as the Romans did in Palestine, the Spanish did in the New World and the British did in India: saddling people with debt is a way of making them work more frenetically.  The system also funnels wealth upwards to the masters of the universe.

What can be done?

Thomas Piketty has suggested an international asset tax, which will not be simple to negotiate.  Tackling tax havens will help, but not while the next generation of ubermenchen - the internet platforms - are knitting bags for our heads like Madame Lafarge.

Other international tax systems, like the Tobin Levy or Robin Hood Tax may also have to wait for an international consensus that may never emerge.

The pathetic failure of the developed world to shape an effective banking system, especially in the UK, after the 2008 debacle, is a symptom of this same problem: there is no alternative that is being discussed effectively in the mainstream.  They remain locked in the world shaped in 1980.

That alternative will emerge over the next five years, but there is a Liberal solution I will be talking about during that period.  It isn't sufficient.  It does not quite encompass the promise of the phrase 'pre-distribution' coined by Ed Miliband Mark I (sadly forgotten, like so much else, by Ed Balls).  But it is a start.

We need that radical anti-trust movement.  No company should have more than 20 per cent of a national, regional or international market.  The new emerging internet tyrants - I can't think of a better word - need breaking up, and we will need to remain in the European Union to have the clout to do that.

But for some reason, these issues - the demise of the middle classes, the mega-rich, the emerging monopolies that will rule us - hardly get a look in to the mainstream political debate.

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Tuesday, 3 February 2015

Lefties, protectionism and people-powered prosperity

"The problem with David Boyle and his sort is that they're too buried in their bien pensant leftiness to realise that the best and strongest argument for localism is actually a conservative argument..."

Bien pensant lefty?  Moi?

It is a step towards the kind of debate we wanted to create with my new book People Powered Prosperity, that Conservative councillor Simon Cooke, a thinking blogger, has produced a thoughtful response.  But I can see - never having met each other - that he doesn't understand where I'm coming from.

Let me step back a moment.  People Powered Prosperity began as a project, funded by the Friends Provident Foundation, to translate economic localism and resilience into terms that the Treasury might understand - and vice versa.  We had found, after a dialogue begun with the Chief Secretary to the Treasury that, once we talked to Treasury officials, there was a definite translation job to be done.

We set out, not to propose policy solutions, but to try and explain why the various sides found it so difficult to understand each other.

I have always felt, and feel now, that the arguments for localism are largely liberal, but there are good conservative ones too, for the reasons Chris sets out.  A more robust local economy, with independent businesses, is more resilient, more human, and it stays the same - all good conservative arguments.

I'm not sure if Chris was advocating the kind of big scale combination that he was caricaturing.  I think he was saying it was the logical extension of green thinking.  I don't think he is right about this.  I think most bigger scale factories, units or organsiations are big because of muddled thinking about economies of scale.  It is about hiding the externalities more effectively, rather than including them.

Most big organsiations, companies and units I know are more wasteful, less efficient, less human and less effective than smaller ones - but of course there are exceptions to this.

But where Simon Cooke gets it wrong, it seems to me, is that there are no other economic arguments for networks of small businesses than a warm conservative feeling inside.  These are mine:

1.  They keep money circulating locally for longer, so - with the same amount of money coming into the local economy - they produce more wealth.

2.  They often pay better and provide more flexible employment.

3.  Twenty small businesses is more resilient, more likely to get through a global downturn, than one factory on the outskirts.

4.  They provide economic independence, imagination and innovation in a way that big companies can't.

That is not bien pensant leftiness.  As Simon says, it looks a good deal more like conservatism, with a dose of old-fashioned free market Liberalism.  Because big business without small business challenging from below is just monopoly by another name.  It is the very opposite of the free market.

So I don't accept that economic localism is about protectionism.  It can be, of course.  But not the kind we are advocating.  It is about making sure the economy is more interdependent, more competitive, more diverse, more challenging, more downright exciting then when you have a few unchallenged, unchallengable monoliths to deal with.

Still, how about you make up your own minds?  People Powered Prosperity, by David Boyle and Tony Greenham, is published by the New Weather Institute.

Monday, 2 February 2015

When are the middle classes allowed to speak up?

I am pleased, not to say excited, to announce that I'm taking to the airwaves tomorrow (Tues) in the Radio 4 documentary Clinging On: The Decline of the Middle Classes.

As I explained in the Guardian on Friday, I don't quite understand why it is that admitting you are middle class in public should be such a difficult thing to do - but it is difficult, as you may have heard me saying on the various trailers for the programme.

It is even more difficult to admit it and then to complain the the middle classes are getting a raw deal.  We generally speaking prefer to suffer in silence, behind drawn blinds, assuming it was somehow our fault and our shame - not seeing that there's any kind of pattern.

And the reason is that, it doesn't matter how many times you assure people that you are not saying that the middle classes have it worse than anyone else - quite the reverse - and that this isn't about starvation exactly, you will still have people accusing you of whingeing, or re-opening the class war, and of a range of rather less flattering things.  These have been popping into my email in-box since my Sunday Times article about the programme yesterday.

Even so, Nick Curtis is a splendid writer and it almost feels a privilege to be beaten up in print by him in the Evening Standard.

Under a large picture of John Prescott, looking seriously constipated, this is how he caricatures what I say on the programme:

"Only a tiny few working in the financial sector can now afford the appurtenances many took for granted, like a home of their own or a chance to save little Sophia and Oliver from the horrors of (cringe) state education. Because the cost of living is accelerating like a Bugatti Veyron with a hedge-fund manager stamping on the accelerator as he snorts ketamine off a Ukrainian glamazon’s bum-cleft..."

Quite so.  But look.  What do Curtis and the other critics want the middle classes to do?  Shut up entirely about the economic mega-trends that are seeing them squeezed by the ultra-rich?  Wait until their children can afford nowhere to live in south east England - rented or bought - unless they embrace financial service careers?  Or is it somehow impolite to point out that the interests of the working classes and the middle classes - in fact nearly everybody - are now largely aligned?

Or do we just shut up, keep quiet, and continue with the idea derived from the twentieth century - that the interests of the two classes are fundamentally opposed?

Because this isn't just to do with rising prices.  It is about a future society that consists just of a hugely wealthy, tiny class of ubermenschen - in finance or the beneficial owners of the internet platforms - and a vast sprawling proletariat, timed when they go to the loo at work, in indentured servitude to Big Landlord plc.

Or do Curtis and friends feel rather like Hyacinth Bucket, that it isn't quite the done thing to point it out?

Find out more by reading my book Broke - or tuning in at 8pm on Tuesday night on Radio 4.

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