Jan Toporowski

TO PURCHASE THIS BOOK click here and use AGENDA25 to obtain a 25% discount

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Robert Skidelsky

Will Hutton

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Edited by PEF Chair Patrick Allen and council members Suzanne Konzelmann and Jan Toporowski

Publication Date 29th April 2021. Agenda Publishing

40 years of neoliberalism has failed to provide prosperity or stability to the UK economy. Instead it has led to low growth, turbulence, grotesque inequality , poverty and ill health for millions . This is the outcome of damaging economic polices driven by free market dogma, rentier capitalism and ideology. It’s time for a change.

This book contains 18 essays by PEF council members and academics who outline the essential features of a progressive economy dealing with the five massive challenges of our times to the economy – Covid-19, austerity, Brexit , inequality and climate change.

PEF calls for bold public intervention. Shrinking the state and weakening our public institutions has undermined social and community resilience and promoted an out-of-control, value-sapping and high-inequality model of capitalism. 

The authors say the resources of the state must build a fairer and more dynamic post-Covid society, using a mix of regional and industrial policy and investment to revolutionise our public health, housing and social services. A progressive new society should construct a new income floor and new measures to spread wealth and give everyone an equal stake in the economy. 

The financial crash of 2008 proved that only the state can rescue the economy when all else fails including the biggest banks. Covid has shown how only the state can rescue us from death and the collapse of the economy during a devastating pandemic. Only the state can steer the economy and deliver the investment needed to cope with climate change

The 2008 crash showed the breathtaking incompetence of the private financial sector. Now Covid has once again laid bare the myth than private is best – outsourcing to companies the job of track and trace at a cost of £37bn has so far failed to show any discernible benefit say the Public Accounts Committee.

By contrast, the selfless work of millions of NHS workers and volunteers has delivered one of the most outstanding vaccination programmes which has been the envy of the world. This has been done at modest cost and was only possible with a national health service drawing on the vocational drive of its workers for the common good.

The Biden adminstration is today showing the mighty power of the US State with Biden’s Covid and infrastructure bills. The results are expected to cut child poverty in half. The UK government should follow this lead and bring in new models of public intervention to deliver a pandemic-resistant, green economy which works for all citizens.

For an outline , list of chapters and authors and to order a copy go to this webpage

You can obtain a 25% discount on the cover price by entering code AGENDA25 on the Agenda page here

Launch event on Zoom – Wednesday 19th May 2021 at 11am . Joining details to follow.

The launch will be chaired Miatta Fahnbulleh , CEO of NEF and attended by Ed Miliband, Shadow Secretary of State for Business, Energy and Industrial Strategy . Martin Sandbu of the FT will attend as commentator.

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This time round, we’ve been offered a recovery plan which Boris Johnson is keen to compare with Franklin Roosevelt’s “New Deal”. That plan lifted America out of the Great Depression, expanded the economy and created employment. According to the Guardian’s estimate, though, Johnson’s plan to invest £5bn amounts to just 0.2% of UK GDP, whilst FDR’s contribution was a rather more convincing sounding 40% of US National Income in 1929.[1]

Johnson and Roosevelt were, however, as one when it came to the role of alcohol in an economy under pressure; Boris concluded that off licences were an “essential service” whilst FDR ended prohibition … Not too much to shout about then.

But the problem with Boris’ proposal is about more than scale. By focusing almost exclusively on the usual sectors – property, construction and finance – it’s also likely to make an already unbalanced economy even more lopsided. Where’s the plan for boosting manufacturing industry and creating more, better paid jobs? And how come we remain one of the few developed countries without a business bank?

The answer to those questions owes rather more to Margaret Thatcher, than it does to Roosevelt. Indeed, had Thatcher not shut down most of industry in the north of England – crucially, without any sort of plan to develop new sectors to replace it – we might not need to “level up”. It was there that the process of undermining the balance of the UK economy began.

During the 1980s, Thatcher’s programme of privatisation and deregulation (including financial services) accelerated the process. One of the less obvious ways by which this was done, was by simultaneously putting large numbers of council houses onto the market – and making large amounts of credit available to pay for them. The result was to not only rapidly expand the financial services sector, but also to make home ownership increasingly unaffordable. By going down this route again, Johnson is offering the same “old” deal, not a “new” one – and running a significant risk of simply amplifying the existing problems.

However, with the UK’s exit from the EU looking unlikely to be delayed, and the pandemic doing little to move trade negotiations along elsewhere, Johnson’s government is going to have to find some immediate growth and a bit of the “feel good” factor from somewhere. So all the emphasis on short term, easy to do projects does make a degree of political and economic sense. But not if the longer term is ignored entirely – and especially if Johnson is also hoping to emulate Roosevelt’s four terms in office.

By opting for a stimulus package at all, the current government has, like its 2008 predecessor, opted to become an economic actor. So why not do it properly this time? The need to support the NHS during the Covid-19 pandemic revealed not only that its privatised supply chain was, to quote  a senior army officer, “knackered”[2] but also  that universities, medical companies and manufacturers could work together to supply much needed medical supplies – at the government’s behest.[3]

Ignoring that success, and simply carrying on with the failed, privatised supply chain on the basis of 1980s-era dogma, would suggest a comparison less with America’s longest serving president and more like a tribute act of an entirely different nature. As Rod Stewart once put it “Oh Maggie, I couldn’t have tried any more …”

[1] https://www.theguardian.com/business/2020/jun/30/how-does-boris-johnsons-new-deal-compare-with-franklin-d-roosevelts

[2] https://londonlovesbusiness.com/military-slams-nhs-over-appalling-handling-of-ppe/

[3] https://theconversation.com/coronavirus-inside-story-of-how-mercedes-f1-and-academics-fast-tracked-life-saving-breathing-aid-136028

Photo credit: Flikr/NPGpics

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Rethinking Britain is not only for the many – it’s also written by the many. As a result, it doesn’t set out the vision of one or two people, but instead offers the assessment of a wide range of experts, who are working in or studying the areas we cover. We not only set out the problems and suggest policy solutions to address them. Our aim is to help improve life for people living in today’s Britain. Between each set of policy ideas, you’ll also find interludes.  These draw upon real-life stories of people in Britain who are experiencing unresolved difficulties that should be considered unacceptable in any developed economy or civilised society – and we suggest how these problems could be solved, too.

Although some depressing situations are described, our overall approach is extremely positive. Instead of denying that there are problems – or ignoring them, as many politicians have done – we take a much more “can do” approach to building the society that most of us would want to live in. That leads to another significant point: Whilst Attlee’s 1945 government put people and society at the centre of its policy ideas, less than forty years later, Thatcher’s administration reversed this, focusing on the individual, privatization and the wealthy. This raises the question: “In whose interests should the economy be run”?

The shift to individualism, private profit maximization and an obsession with “free” markets resulted in serious wealth for the few – and runaway inequality and poverty for the many. It’s therefore not hard to guess where those contributing to Rethinking Britain are coming from!  We strongly believe that a society that produces healthy, well educated, strongly motivated people – who have, or can realistically hope for, a good standard of living – will also help to generate a powerful and dynamic economy.

The post-1979 dogma – that the British government should play as small a part in the economy as possible – is also misguided. Far too much capital is being used for short-term, speculative purposes, whilst not enough is finding its way into the development of sustainable businesses that provide long term employment and pay decent wages – not the hand to mouth existence of a zero hours contract. In other words, the economy should work for the many, not just the few.

Another theme that runs through Rethinking Britain is the concept of citizenship – where sets of rights and obligations mean that you are indeed part of something bigger than yourself. This is the polar opposite of Thatcher’s point of view, that there is “no such thing as society”. Many of her policy ideas were developed in the context of the Cold War – which came to an end thirty years ago; and it’s time for her policy ideas to do the same.

By investing in Britain’s people, we can build a stronger, more cohesive society – which will underpin a more vibrant economy. Rethinking Britain shows how.

Photo credit: Flickr/Christian Reimer.

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Public sector bodies have been under pressure from central government to sell off land. Such pressure is not entirely new. It has existed to one degree or another since the beginning of the 1980s.

What’s new is the intensity of this pressure and the emphasis on a hitherto marginal rationale. Land is being sold off to raise income specifically to reduce the budget deficit. This is the perverse logic of austerity.

Pressure has been especially intense on local authorities, who have sold more than 12,000 sites just since 2014-15. And, as they have disposed of their landholdings, councils have struggled to satisfactorily provide a number of services that have historically been at the core of their operations. This includes youth centres, leisure facilities, allotments, farm tenancies and, last but not least, social housing – all of which need land.

Manchester City Council sold off 673 public properties between April 2014 and July 2018. This included a large amount of social housing, as well as community centres, care homes and schools. While this is the most extreme example of sell-offs, it’s a similar story for many councils around the country.

The madness of austerity

Meanwhile, local authorities have increasingly been buying other types of land. Not the same kinds of property they can use to provide important services for the community. But rather commercial investment property – most notably, shopping centres. This is all about austerity, too – and in two key respects.

First, austerity explains why councils have been doing this: to raise (rental) income in order to continue to be able to fund the provision of local services that have been imperilled by savage cuts in grants from central government as the latter has devolved austerity to the local level.

Second, austerity explains how councils have been doing this. As is now widely recognised, austerity in Britain has ushered in a lost decade of stunted growth. The Bank of England has accordingly maintained interest rates at historically low levels and local authorities have benefited from the availability of unprecedentedly cheap debt. They have borrowed prodigiously to finance their commercial property investment spree, with annual borrowing rocketing to £10 billion in 2017-18 from £4.4 billion four years earlier.

You don’t have to be particularly radical to believe that this state of affairs – councils selling land crucial to what they should be doing (such as providing social housing) while pursuing a land acquisition strategy well beyond their central remit (speculative investment in commercial property) – is absurd.

In 2016 alone, local councils spent more than £1 billion on business parks and shopping centres. Spelthorne Borough Council in Surrey, for example, spent £360m buying an office complex from BP, while Canterbury City Council in Kent made the first of two payments towards the £155m acquisition of a shopping centre.

This may be the new normal but these are bizarre decisions for local authorities. As FT journalist John Plender writes, it makes Spelthorne council more of “a property company with a sideline in providing local government services”. To paraphrase academic and author David Harvey, who has written of the madness that underpins a lot of mainstream economic reasoning, we might say that this is the madness of austerity reason writ large.

Reintroducing sanity

As a first step to reintroducing some sanity, the government should halt the austerity-augmented privatisation of public land. Not only is the income generated by disposal a one-off, non-recurring source of income. But it often removes a source of recurring public-sector income, as was the case with the privatisation of Network Rail’s commercial property portfolio.

Furthermore, there is growing evidence that public land acquired by the private sector is frequently hoarded rather than being used in a productive way – such as for the construction of truly affordable housing. And even where such land is put to use, there is zero evidence that this use leads to economic growth.

If Britain is to chart a navigable and fair route out of austerity, plotting a better path for the ownership and allocation of the ground beneath the nation’s feet is quite simply a political and strategic necessity.

This article has also been published on The Conversation. Photo credit from previous page: SomeDriftwood / Flickr

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