What's the deal with the New Green Deal?

The same old mistakes are made again today by those who pull the levers.

Britain is not heading for a new economic disaster; it has sustained one long-term national and personal debt crisis. One group, the Green New Deal Group, has been consistent with its critique: economic failure caused public debt to rise and this is where the crisis lies.

The same old mistakes are made again today by those who pull the levers. Unemployment figures are down but this is sustained by part-time or zero-hour contracts and underemployment. Tony Dolphin said in 2012 on these pages: "We know there are many reluctant part-time workers because the Office for National Statistics asks those who are working part-time if they would prefer to be working full-time and 1,418,000 are currently saying "yes" – the highest number since comparable records began in 1992 and an increase of 700,000 over the last four years.”

While the number of unemployed is reduced the amount of work being done doesn't rise. Jobs aren't being created quick enough, it's just more jobs have more people working them. That's not what we had in mind when criticising employment rates.

Another mistake is bank bonuses. In the days before the Big Bang (deregulation of the financial markets in 1986), back when bankers were more trusted than the police, the NHS, and the press, UK merchant banks paid bonuses of around 3-4 per cent of a salary, while some firms only gave Christmas hampers as thanks.

In 1997 the city bonus pool hit £1 billion for the first time. Ten years later: £9bn, 4,000 bonuses of which reached above £1m, a few hundred over £5m, and twenty-odd over £10m. Even after RBS was bailed out, post-Libor scandal, bankers were paid bonuses of £7bn.

And here's another kick in the teeth: according to the figures from the Office for National Statistics, banks and insurers delayed about £700m of bonuses so as not to pay the 50p top rate of income tax.

This is where better control of banks is needed. In 2008 the Green New Deal Group argued that, in the face of economic collapse, government should not revert to type, hoping the market would fix things, but actively intervene. In their second report in 2009, The Cuts Won't Work, the group warned of complacency around freezes to inter-bank lending and the rise of high city bonuses.

Cash injections to save the world, bailouts to save the banks – these are all vindicated in theory as in practice. Quantitative easing was not able to save the country from unemployment, low wages, and low investment because in the following years we had a government that were ideologically committed to austerity. But none the less creating more money and spending more to save later should appeal.

The Green New Deal would be funded through tackling tax evasion and avoidance, a programme of Green Quantitative Easing would generate jobs and economic activity, investment would be made through bailed out banks at sustainable rates of interest, and buying out PFI debt using Green QE money would ensure no more money is wasted through it.

But where further? A local Green New Deal could fund regional and community banks which in turn invests in small and medium enterprises and lends to local people at reasonable rates of interest, putting out of business payday lenders, home creditors, and loan sharks who suck money out of the real economy and profit from people's debt.

Giving this kind of boost to high streets and local communities would provide more jobs, more money in people's pockets, and stop high roads becoming a miserable mix of pawnbrokers, betting shops, and empty fronts.

As opposed to the political status quo, the Green New Deal Group called for a Keynesian solution of more spending to meet economic crisis head-on. It feels vindicated in its decision and continues the same for today. Seeing this through at a national and local would do a great deal to improve on what this government has done so much to ruin.

Photograph: Getty Images

Carl Packman is a writer, researcher and blogger. He is the author of the forthcoming book Loan Sharks to be released by Searching Finance. He has previously published in the Guardian, Tribune Magazine, The Philosopher's Magazine and the International Journal for Žižek Studies.
 

Photo: Getty Images
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Why are boundary changes bad for Labour?

New boundaries, a smaller House of Commons and the shift to individual electoral registration all tilt the electoral battlefield further towards the Conservatives. Why?

The government has confirmed it will push ahead with plans to reduce the House of Commons to 600 seats from 650.  Why is that such bad news for the Labour Party? 

The damage is twofold. The switch to individual electoral registration will hurt Labour more than its rivals. . Constituency boundaries in Britain are drawn on registered electors, not by population - the average seat has around 70,000 voters but a population of 90,000, although there are significant variations within that. On the whole, at present, Labour MPs tend to have seats with fewer voters than their Conservative counterparts. These changes were halted by the Liberal Democrats in the coalition years but are now back on course.

The new, 600-member constituencies will all but eliminate those variations on mainland Britain, although the Isle of Wight, and the Scottish island constituencies will remain special cases. The net effect will be to reduce the number of Labour seats - and to make the remaining seats more marginal. (Of the 50 seats that would have been eradicated had the 2013 review taken place, 35 were held by Labour, including deputy leader Tom Watson's seat of West Bromwich East.)

Why will Labour seats become more marginal? For the most part, as seats expand, they will take on increasing numbers of suburban and rural voters, who tend to vote Conservative. The city of Leicester is a good example: currently the city sends three Labour MPs to Westminster, each with large majorities. Under boundary changes, all three could become more marginal as they take on more wards from the surrounding county. Liz Kendall's Leicester West seat is likely to have a particularly large influx of Tory voters, turning the seat - a Labour stronghold since 1945 - into a marginal. 

The pattern is fairly consistent throughout the United Kingdom - Labour safe seats either vanishing or becoming marginal or even Tory seats. On Merseyside, three seats - Frank Field's Birkenhead, a Labour seat since 1950, and two marginal Labour held seats, Wirral South and Wirral West - will become two: a safe Labour seat, and a safe Conservative seat on the Wirral. Lillian Greenwood, the Shadow Transport Secretary, would see her Nottingham seat take more of the Nottinghamshire countryside, becoming a Conservative-held marginal. 

The traffic - at least in the 2013 review - was not entirely one-way. Jane Ellison, the Tory MP for Battersea, would find herself fighting a seat with a notional Labour majority of just under 3,000, as opposed to her current majority of close to 8,000. 

But the net effect of the boundary review and the shrinking of the size of the House of Commons would be to the advantage of the Conservatives. If the 2015 election had been held using the 2013 boundaries, the Tories would have a majority of 22 – and Labour would have just 216 seats against 232 now.

It may be, however, that Labour dodges a bullet – because while the boundary changes would have given the Conservatives a bigger majority, they would have significantly fewer MPs – down to 311 from 330, a loss of 19 members of Parliament. Although the whips are attempting to steady the nerves of backbenchers about the potential loss of their seats, that the number of Conservative MPs who face involuntary retirement due to boundary changes is bigger than the party’s parliamentary majority may force a U-Turn.

That said, Labour’s relatively weak electoral showing may calm jittery Tory MPs. Two months into Ed Miliband’s leadership, Labour averaged 39 per cent in the polls. They got 31 per cent of the vote in 2015. Two months into Tony Blair’s leadership, Labour were on 53 per cent of the vote. They got 43 per cent of the vote. A month and a half into Jeremy Corbyn’s leadership, Labour is on 31 per cent of the vote.  A Blair-style drop of ten points would see the Tories net 388 seats under the new boundaries, with Labour on 131. A smaller Miliband-style drop would give the Conservatives 364, and leave Labour with 153 MPs.  

On Labour’s current trajectory, Tory MPs who lose out due to boundary changes may feel comfortable in their chances of picking up a seat elsewhere. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog. He usually writes about politics.