Monday, 28 November 2011

Labour's business: out today

Today, Alex Smith and Luke Bozier launch Labour's Business, their excellent work on how we need to engage with business (rather than alienate it). I've done Chapter 3, Reaching Out: engaging
with business at every level of the party and there are other chapters by Anthony Painter, Hazel Blears and Kitty Usher among others, and Shadow Business Secretary Chuka Umunna has done the Foreword. So I am quite honoured to be in such hallowed company.

y, take a look and see what you think, feedback (public or private) most welcome.

Thursday, 24 November 2011

How we all look from the other side of the world

We are all taught at school about the five, or even the seven, continents. But in business and elsewhere many still think of the world in three groupings, matching the three broad time-zones, or the three big financial centres, of the developed world: Europe, America and Asia. In each there exists an informal hub for the Anglophone, Anglo-Saxon world: in Europe there is Britain, in the Americas, the US. In Asia, largely old-world but arguably the most dynamic and developing of the three areas, it is economically confident and rapidly-expanding Australia.

Last week
I was in Sydney and it was fascinating to view our troubled continent from there. While Australia still holds a great affection for Britain (the Royal Wedding was huge), the link pretty much ends at the emotional and historical. Labour Prime Minister – and how tantalising those words sound nowadays – Julia Gillard now presides over an economy which has not known recession since 1991 (not even in the Asian crisis of 1998) and has been protected from the worst of the global financial crisis, largely thanks to an Asia-fuelled boom in demand for its mining output. Its population has doubled in the last half-century and, compared with the UK, jobs are relatively easy to come by, with unemployment currently at around 5%.

The learning point from the comparison? All politics, as Speaker of the House Tip O’Neill once famously observed, is local. Information does not flow as freely across borders as you might think.

First, Australia “gets” the rise of Asia, because it is part of it. In fact, it has spent most of the postwar period aligning itself towards it and away from the British Commonwealth. We in Europe, largely, do not. Yes, we know that China is growing and we must engage. We know we can make things there very cheaply. But we do not, perhaps, recognise just how much and how quickly the geopolitical ball-game is changing because of that. Now, this understanding is not the sole reason for Australia’s success. But its Asian alignment has clearly helped.

the reverse lack of understanding is also true: the euro crisis is probably not being jumped up and down about in Asia simply because its full extent hasn’t yet impinged upon people’s consciousness. “My colleague came back from Europe last week and told me that we just don’t get how big a deal the euro crisis is”, a senior Australian fund manager told me. But this is not good news. Because when other world players really do understand the trouble we’re in, the big hedge funds will really start to move in (Warren Buffett, the sage of Omaha, was quoted on Monday as saying the euro had a “major flaw”). What is disturbing is not that such judgements are being made, but the fact they are coming this late in the day implies that, internationally, people are only just waking up to the crisis.

neither is it surprising: our own leaders have taken months to recognise the scale of the crisis, and still seem to be dragging their feet as to the solution. Furthermore, the intricacies of European politics and what the EU actually means are lost on many. From the outside, it is easy to think of the EU as what it is not: a United States of Europe with a universal single currency, a uniform set of laws and free movement of labour.

Third, there is an underlying reason why not those outside Europe might not immediately see the gravity of the situation. Much commentary that you read on the euro crisis, because it is the terrain of specialists, is by economic staff. It is the business editor of this publication or the economics guru of that: after all, their readers, businesspeople and financiers, have a great deal to lose from a possible disaster.

Now, it is sometimes comforting to look at the world as economists do, as a set of reliable mathematical equations. But all models are based on a set of assumptions which have to hold; those same economic commentators may not be quite so well versed in the underlying politics of Europe, with its Byzantine structures at EU level and its long history of irrational, emotionally-tinged politics. If you cannot get your head around the foot-dragging by Europe’s leaders, it is easy to assume that it is because the problem is not all that big. This is a dangerous misreading: it is quite that big, and more. Just because from outside you cannot see the economic logic of failing to prevent an entirely preventable slump in the world’s largest trading bloc, does not mean that Europe’s leaders will behave logically and fix it.

What does all this tell us? Well, we could certainly benefit by taking our stare away from our European navels and looking out to the rest of the world, before they truly wake up to the trouble we’re in. Not only could they teach us that the real game is being played out far from Europe and we had better shape up: they would also be unlikely to forgive us easily for dragging them and the rest of the world into recession.

Saturday, 5 November 2011

The Centre Left goes to...Australia!

The Centre Left is, as they say in all the best rock bands, "on hiatus" (usually, apparently, around the time they start "not feeling it") for a couple of weeks.

On the minus side, the last major left-wing government in Europe, Spain, will probably fall while I'm away (although a last-minute rush for Rubalcaba is still possible, given that the alternative is fairly awful). Come to think of it, so might the rest of Europe, which might have me returning to a dystopian, Mad Max landscape, peopled by hordes of marauding Greeks. Ok, maybe not.

On the plus side, I will land in one of the only (perhaps the only) major left-wing democracies left in the West (and no, a cohabiting Obama does not count). And the surfing is apparently rather good, too.

Who knows, I may return to regale you of tales of how Labour Party Prime Minister Julia Gillard explained to me how the left could win again in the UK (it worked for Tony Blair with Paul Keating, after all, as noted here). Well, as I'm going to Sydney and I imagine she works in Canberra, coupled with the fact that, er, she has no idea who I am, probably not. However, I should note that my former Party colleague and fellow Labour Uncut writer, John McTernan, has just disappeared off to be her spin doctor. So you never know how or when those learning points might filter back to the UK to win the day for Labour...

See you all in a couple of weeks.

Friday, 4 November 2011

The world still doesn’t know about the PSC

Well, from my New Statesman article last Friday about anti-semitism, the Palestine Solidarity Campaign (PSC) and their fellow-travellers, I learned a couple of things: that there are an awful lot of crazy people in the world, most of whom, it seemed, wanted to comment on my piece; and that there are also sensible, decent people on the left who simply don’t know this stuff is going on.

Anyway, since PSC chair Hugh Lanning has now posted a response piece at the NS, I should try and correct what he has said.  It is not difficult to take apart his argument, but I shall do it, for completeness and because I am, frankly, a bit bloody-minded.

Thursday, 3 November 2011

Labour vindicated on the economy? Not so fast

Polly Toynbee
On Monday Alastair Campbell ran a positive blog piece which points out that a billion pounds worth of infrastructure projects signals a change in the Tories’ previous policy of “no plan B”:

“It is not exactly plan B. But it is an admission of sorts that plan A isn’t working, that their hope that the private sector would fill the gap left by their huge cuts in the public sector (most of which are yet to be felt incidentally) was exactly that – a hope.
Now that the hope has been shown to be largely hopeless, their magic wand having failed to deliver, and more bad figures due this week, they are having to turn back to good old-fashioned public money kickstarting. And about time too.” 

Tuesday, 1 November 2011

Cameron’s history notes 1: Achilles, revisited

Last week, David Cameron had a bad week. But it’s important to understand what kind of a bad week. He’s had not a defeat, but a sour victory in the Commons against his own rebels; but so did Tony Blair on two memorable occasions – Iraq and tuition fees – when he feared he might have to resign, and didn’t. These things, although nerve-wracking at the time, are to some extent part and parcel of being a prime minister.

The extent of the defeat, though large, was rather to be expected over an issue as touchy as Europe and the relative weakness of his electoral position. However, neither does his government look “in office but not in power”, as Norman Lamont described the Major government. And his rebuke by Sarkozy for trying to interfere in a subject, the euro, which Britain long ago put on the long finger its joining up, was also to be expected. Many have criticized his handling of the Commons vote, saying that he was looking for a fight; but it is hardly his fault that half of his backbenchers defy rationality on this subject. And some believe that, despite the bad headlines, he called it right.

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