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The New Depression

The business and political elite are flying blind. This is the mother of all economic crises. It has

We are living through a crisis which, from the collapse of Northern Rock and the first intimations of the credit crunch, nobody has been able to understand, let alone grasp its potential ramifications. Each attempt to deal with the crisis has rapidly been consumed by an irresistible and ever-worsening reality. So it was with Northern Rock. So it was with the attempt to recapitalise the banks. And so it will be with the latest gamut of measures. The British government – like every other government – is perpetually on the back foot, constantly running to catch up. There are two reasons. First, the underlying scale of the crisis is so great and so unfamiliar – and, furthermore, often concealed within the balance sheets of the banks and other financial institutions. Second, the crisis has undermined all the ideological assumptions that have underpinned government policy and political discourse over the past 30 years. As a result, the political and business elite are flying blind. This is the mother of all postwar crises, which has barely started and remains out of control. Its end – the timing and the complexion – is unknown.

Crises that change the course of history and transform political assumptions are rare events. The last came in the second half of the 1970s, triggered by the Opec oil price spike and a dramatic rise in inflation, which marked the end of the long postwar boom. Its political consequences were far-reaching: the closure of the social democratic era, the rise of neoliberalism, the discrediting of the state, the embrace of the market, the undermining of the public ethos and the espousal of rampant individualism. For the next 30 years, neoliberalism - the belief in the market rather then the state, the individual rather than the social - exercised a hegemonic influence over British politics, with the creation of New Labour signalling an abject surrender to the new orthodoxy.

The modalities of this present crisis are entirely different. Extreme as they may have appeared to be at the time, the economic travails of the 1970s were progressive rather than cataclysmic. The old system did not hit the wall, but became increasingly mired and ineffectual. What swept the social democratic era away was not the force de frappe of an irresistible crisis but that it was accompanied by the steady rise of a new ideology and political force in Thatcherism - and Reaganism in the United States - and its victory in the 1979 general election.

In contrast, the financial meltdown of 2007-2008 demolished the neoliberal era and its assumptions with a suddenness and irresistibility that was breathtaking. The political class, from New Labour to the Conservatives, is standing naked. They are still clinging to the wreckage of their old ideas while acknowledging in the next breath that these no longer work. The financial crisis is a matter of force majeure; political ideas and discourse change much more slowly, even when it is obvious that the old ways of thinking have become obsolete. Meanwhile, there is no political alternative waiting in the wings, refining its radical ideas in think tanks ready to storm the citadels of power as there was in the 1970s, notwithstanding the fact that think tanks are now far thicker on the ground. Instead, it has been the mainstream which senses that neoliberalism no longer works, fatally undermined by events and, ultimately, the author of its own downfall. This crisis will have the most profound and far-reaching political consequences and will in due course transform the political landscape, but it remains entirely unclear in what ways and when that might be.

In all these senses the financial meltdown has far more in common with the Great Depression than the Great Inflation. When the financial crisis consumed Wall Street in 1929 and proceeded to undermine the real economy, engulfing Europe in the process, it was not accompanied by a radical shift towards Keynesianism, but rather a reassertion of sound finance orthodoxy, followed in due course by the adoption of protectionism. The political mainstream as represented by Labour's Ramsay MacDonald and Philip Snowden and the Conservative Stanley Baldwin all sang from the same hymn sheet. Only Keynes and a faction of the Liberal Party enunciated a plausible alternative. Eventually a programme of fiscal deficits and public works was pursued by Franklin D Roosevelt in the United States, but in Britain Keynesianism was not properly embraced until rearmament and the approach of war. Indeed, it was not until 1945 that the combined legacy of war and the Depression belatedly resulted in a fundamental political realignment and the birth of the social democratic era.

The Grim Reaper has finally spoken:

a boom pumped up by credit steroids and a bust that takes us back to the 1930s

Since the financial meltdown dramatically intensified in September 2008, Gordon Brown has managed to ride the economic storm rather more successfully than the Conservatives, or, for that matter, than Tony Blair would have done. It is Vincent Cable, the Liberal Democrats' econo­mics spokesman, however, who has indubitably emerged as the political sage, unafraid of confronting neoliberalism's shibboleths, demonstrating a clarity of mind and the political courage to tell things as they are, in a way that has escaped all other prominent politicians. Although Brown was the economic architect of the past decade and was responsible, more than anyone else, for its excesses and was shaping up to be a rather disastrous Prime Minister, he displayed last autumn, at least initially, an agility of mind and nimbleness of foot that defied the expectations of those who believed he was capable of neither. He revelled in the sense of purpose and vision offered by the crisis, seemingly prepared to jettison the thinking that had imbued his previous decade as chancellor.

But Package Part I, widely hailed at the time and imitated elsewhere, proved woefully inadequate, and the financial system remains frozen. Meanwhile the waters are rising up the Good Ship UK, threatening to transform the banking crisis into a fiscal and currency crisis. It seems unlikely that, if that should happen, Brown will survive the next election.

Even if it does not happen, Brown faces a serious problem about his own past role, because Britain’s crisis has been greatly exacerbated by the soft-touch regulation, easy credit, runaway house inflation and overexpansion of financial services over which he presided and for which he is accountable. So far he has refused to admit or accept responsibility for his actions – he initially had the temerity (or foolhardiness) to argue that the UK was better placed than other countries to deal with the credit crunch, even though it has become abundantly clear since that the very opposite was the case. So while Brown remains in denial, the plausibility of his new turn, and his understanding of what is entailed, must be seriously doubted.

Indeed, after its initial boldness, the government now seems trapped by its past actions and its former ways of thinking. Brown's failure to accept the need to nationalise the banks suggests the limits of his new-found political courage, and his inability to embrace the logic and imperatives of the new situation. He is still a prisoner of his old timidity and his conversion to the neoliberal cause. It is his good fortune that the Cameron Conservatives have been hugely wanting in their response to the financial meltdown. Having spent his first years as leader of the opposition seeking to reassure the country of his centrist credentials, David Cameron, at the first whiff of gunfire, has turned on his heels, rejected Keynesianism and, at the very moment when events have shown Thatcherism to be deeply flawed and historically out of time, headed back to the Thatcherite womb of sound finance, arguing that a government must balance its books and that deficit financing, Keynesian-style, is reckless and irresponsible.

But all this, it must be said, is the small change of politics. The crisis threatens in time to sweep away the political world as we know it and those who fail to grasp its magnitude and meaning. Far more is at stake than the fortunes of a few leaders, be their name Brown or Cameron. Who knows where things will be this time next month, let alone next year or, indeed, in 2012? The financial meltdown now rapidly plunging the western world into what increasingly looks like a depression is the first great crisis of globalisation. There was plenty of warning. The Asian financial crisis of 1997-98 proved a salutary lesson about the dangers posed by huge capital movements that were subject to precious little regulatory control. Three economies capsized (South Korea, Thailand and Indonesia) and others stood on the brink.

There were other earlier warning signs, notably Mexico in 1995, when GDP fell by 9 per cent and industrial production by 15 per cent, following a run on the peso. These crises were blamed on the immaturity and fecklessness of national governments - in the case of east Asia on so-called crony capitalism (which, incidentally, prompts the question of how we should describe Anglo-American capitalism) - which the International Monetary Fund obliged to engage in swingeing cuts in public expenditure as a condition of their bailouts.

Yet what if such a crisis were to be no longer confined to the peripheries of global capitalism but instead struck at its heartlands? Now we know the answer. The crisis has enveloped the whole world like an uncontrollable virus, spreading from the US and within a handful of months assuming global proportions, at the same time mutating with frightening speed from a financial crisis into a fully fledged economic crisis. In so doing, it has undermined the foundations on which the present era of globalisation has been built, namely scant regulation, the free movement of capital, a bloated financial sector and immense reward for greed, thereby bringing into question the survival of globalisation as we now know it.

Enormous international flows of unregulated capital have capsized the international financial system - with disastrous consequences for the real economy - in a manner akin to the effect of a roll-on, roll-off ferry shipping too much water. We can now see the cost of free-market capitalism and light-touch regulation. Iceland may provide an extreme example of the consequences of the credit crunch but it also illustrates the dangers facing the more vulnerable economies, the UK included, in a deregulated world where the market rules: a small, open economy; a large, internationally exposed banking sector; an independent currency that is not a serious global reserve currency (of which there are only three); and limited fiscal strength. These propositions have constituted the core economic beliefs - from Thatcher and Lawson to Blair and Brown - that have informed policymaking over the past three decades and without which, it was claimed ad nauseam, an economy could not succeed. Heavy-handed regulation and an overbearing state would serve only to frighten off capital and condemn a country to slow growth, stagnation and global marginality. Now we know the fallaciousness of these claims and the consequences of "letting the market decide".

Like Iceland, albeit not as extremely, Britain has been living in a fool's paradise. A failure to regulate the banks and other financial institutions in any meaningful fashion allowed bankers to behave in a grossly irresponsible and avaricious fashion; a boom that was made possible only by a government-enabled credit binge in which people borrowed recklessly; a bloated financial sector that grew to represent over 8 per cent of the total economy and which was found to have been built on foundations of sand; an overvalued currency that made manufacturing exports uncompetitive and thereby resulted in an unnecessary and counterproductive contraction in the manufacturing sector which must now be reversed; an absurd belief that boom and bust had been banished for ever, allowing the banks to turn a blind eye to the inflating of various asset bubbles and display a profound ignorance of the history of capitalism; a persistently chronic current account deficit that can no longer be compensated for by inward capital flows; monstrous salaries for those at the top of the financial and corporate tree, which were justified in terms of a trickle-down effect that remained a chimera, and as the reward for risk which was, in fact, a reward for greed and failure; growing inequality, which was justified in the name of a more competitive economy accompanied by declining social mobility in the cause of an open and flexible labour market; and, finally, the mushrooming of what can only be described as systemic corruption on a mega-scale as the state ignored the gargantuan abuses of those who ran the banks and other financial institutions, while regulatory authorities willingly colluded in their excesses.

This is the sad story of the New Labour era.

The ultimate cost of this debacle as yet remains unknown. What began as a financial crisis is threatening, as the government seeks to bail out a bankrupt financial sector, to become a currency crisis, with foreign investors concerned about the effects this might have on the value of sterling, and perhaps even worse, ultimately a sovereign debt crisis, with growing doubts about the UK’s financial viability. Until there is some end in sight to the financial crisis, and a line can be drawn under the banks’ indebtedness, we will not know the answer to these questions. One thing is clear, however: whatever the limitations of the social democratic era, it was never responsible for such an all-enveloping and cataclysmic crisis as the one that the neoliberal era – and the Thatcherites and New Labour – have managed to produce. After all the boasting about the virtues of the Anglo-American model of capitalism, the Grim Reaper has finally spoken: a boom pumped up by credit steroids and a bust that takes us back to the 1930s.

There are two key aspects to this crisis: national and global, with the latter promising to be rather solutions are concerned, we are in uncharted territory, with close to zero interest rates, a Keynesian-style fiscal boost that may prove inadequate to the task and could well fail, a hugely indebted financial sector that threatens to leave us with an enormous future tax burden and a greatly expanded national debt. All of this, furthermore, must be addressed in the context of an open-market regime which is very different from those of previous eras, and which could render Keynesian-style national solutions ineffectual. What would greatly assist any national recovery is a co-ordinated global response to the crisis; in other words, global co-operation at the highest level. This cannot be ruled out, but it would be a brave person that would bet on it. It was exactly the lack of international co-operation that bedevilled recovery in the 1930s and eventually led to the Balkanisation of the world into regional currency and trading blocs.

The most important single question in this context is the relationship between the US and China. Will the Obama administration be able to resist the slippery slope of creeping protectionism? Will arguments over the revaluation of the Chinese renminbi be resolved amicably? If the answer is in the negative, then the global outlook will be very bleak indeed and so, also, as a result, will be the prognosis for national recoveries. Indeed, the prospects would look disturbingly like those of the 1930s, with growing international antagonism and friction and a continuingly intractable crisis at a national level, with only the very slowest of recoveries.

Around the world there is growing evidence by the week of a resort to national solutions at the expense of others: measures to subsidise industries that are in severe difficulties; the Buy American clause that was inserted by the House of Representatives into Barack Obama's latest package (though since weakened); the industrial action in Britain against foreign workers; the withdrawal of banks to their national homes; the attack by Timothy Geithner, the US treasury secretary, on China as a currency manipulator. No Rubicon has been crossed but the warning signs are clear. A retreat into protectionism and beggar-thy-neighbour policies will deliver the world into a second Great Depression.

So what will be the political effects of the financial meltdown? Some are already evident. Just as the Great Inflation of the 1970s played to the tunes and concerns of the right, with its invocation of the market, the New Depression suggests the opposite, the inherent limitations of the market and the indispensability of the state. Indeed, the speed with which the neoliberal refrains and invocations have unravelled has been breathtaking. The single most discredited aspect of the social democratic legacy was nationalisation, and yet the government, with the most extreme reluctance, has been obliged to nationalise Northern Rock and partially nationalise the Royal Bank of Scotland and the merged Lloyds TSB and HBOS. Who would have ever imagined, at any point during the past 30 years, that no less than the financial commanding heights of neoliberalism would have ended up in the hands of the state, with precious little opposition from anyone except a few disgruntled shareholders? Even now, however, the Labour government, still trapped in the ideological straitjacket of New Labour and displaying extreme timidity in the face of powerful vested interests, which has always been a New Labour characteristic, is running scared of the inevitable logic of the situation, namely that all the high-street banks should be taken into public hands until the mess is sorted out. Anything else leaves the public responsible for all the debts and risks, while the banks continue to be answerable to the very different interests of their shareholders. But such is the fury and depth of the crisis that this scenario is highly likely.

The state is experiencing an extraordinary revival. The credit crunch is the most catastrophic example of market failure since 1945. It became almost immediately obvious to wide sections of society that there was only one institution that could potentially sort out the mess: the state. Far from being a rational distributor of resources, the market had proved the opposite. Far from bankers and financial traders embodying the public interest, they have been exposed as irresponsible and dangerous risk-takers whose primary motivation was voracious greed. If trade unionists and the nationalised industries were the demons of the 1970s, bankers and the financial sector have assumed the mantle of public enemy number one in the late Noughties. In fact, the irresponsibility of bankers, and the damage they have inflicted on the economy, hugely exceeds anything that the unions could possibly be held responsible for in an earlier era. Meanwhile, the fallen heroes of the pre-Thatcher era, most notably Keynes, are duly being exhumed, restored to their rightful position, and pored over for their ability to throw light on the present impasse and what might be done; if the recession turns into a depression, Marx will once again become required reading.

This political shift is not just a British phenomenon, but a more general western one. The most striking feature of President Obama's inaugural speech was the way in which it embraced and legitimised African Americans for the first time in American history. But it also had another powerful theme, namely its invocation of the public interest and public service. After decades during which American political discourse has been dominated by the language of individualism and the market, it came as a shock to hear a US president articulate a very different kind of philosophy, renouncing private greed in favour of the public good. Obama's election can in part be seen as a response to the failure of the neoliberal era, as well as of Bush's neoconservative agenda; certainly his election represents a remarkable shift to the left in US politics, in contrast not just to Bush, but every recent US president, including Reagan, Bush Sr and Clinton. That Obama is the first African-American president also represents a remarkable redrawing of the political landscape. There is no more powerful - nor difficult - way of redefining society or to embrace a new form of representivity than to include a racial minority that has been excluded.

This brings us finally to what might be the longer-term global consequences of the crisis. Again, we are inevitably stumbling around in the dark because so much depends on whether the recession metamorphoses into a fully fledged depression and in what way and shape the world eventually emerges from the debacle. That said, two key points can be made. First, the credit crunch signals the demise of the Anglo-American, neoliberal model of capitalism, which has exercised a hegemonic influence over western capitalism and been the blueprint for globalisation since 1980. Because of its catastrophic failure there seems very little chance of its resurrection. The process of recovery - whenever that might be - will be accompanied by an overriding concern to ensure that the events of 2007-2009 are not repeated in the future, just as happened in the US in the 1930s with the strict regulatory framework that was introduced for the banks after their comprehensive failure in 1929. This will include the search for a new global regulatory framework that controls and constrains international movements of capital, as well as strict controls over the financial sector at a national level. A new set of political priorities - and with it a new political language - will be born.

Meanwhile, the influence and prestige that the US, and to a far lesser extent Britain, have enjoyed will vaporise in the same manner as their neoliberal model. Their 30-year project has failed and they will be obliged to pay the price in their reputation and the esteem in which they are held. The countries of the former Soviet Union and the casualties of the Asian financial crisis that were forced to swallow the neoliberal medicine will have good reason to feel aggrieved and resentful. The west has been forthright in accusing the non-western world of corruption. The financial meltdown suggests that the west has been guilty of huge hypocrisy. Systemic corruption has lain at the heart of the western financial system. An entirely disproportionate and extortionate level of bonuses has ensured the enormous enrichment of top executives in the financial sector, all in the name of reward for success, when in fact it was the reward for failure. In addition, we have had the collusion of the credit-ratings agencies; a regulatory system characterised by its failure to act as any kind of constraint; and governments that ensured the continuation of this web of relationships and applauded its achievements. The corruption was on a breathtaking scale as evidenced by the size of the bailouts required to rescue the banks. It will be difficult for western governments to make these kinds of accusations of others in the future. That Obama represents such a voice of hope will help to mitigate the inevitable ill-will towards the US, but this should not be exaggerated amid the euphoria surrounding developments in Washington.

The second point is more far-reaching. It is doubtful whether we can still describe ourselves as living in the American era or, indeed, the Age of the West. If not yet quite over, both are certainly drawing to a close, and it seems likely that the effect of the financial meltdown will be to accelerate the rise of China as a global power. The contrast between the situation in China and that in the US could hardly be greater, even though it has been partially obscured by the depressive effect of the western recession on Chinese exports and on China’s growth rate. While the US economy is contracting, China’s grew at roughly 9 per cent in 2008 and is projected to grow at about 6 per cent in 2009. Its banks, far from bankrupt like their US counterparts, are cash-rich. China enjoys a large current account surplus, the government’s finances are in good order and the national debt is small. This is a crisis that emanates from the US and whose impact on China has been essentially indirect, through the contraction of western markets. It is the American model that has failed, not the Chinese.

One of the factors that intensified the Great Depression, and indeed was part cause of it, was Britain's growing inability to continue in its role as the world's leading financial power, which culminated in the collapse of the gold standard in 1931. It was not until after the war, however, that the US became sufficiently dominant to replace Britain and act as the mainstay of a new financial system at the heart of which was the dollar. The same kind of problem is evident now: the US is no longer strong enough to act as the world's financial centre, but its obvious successor, namely China, is not yet ready to assume that mantle. This will undoubtedly make the search for a global solution to the present crisis more difficult and more protracted.

Martin Jacques's new column will be published fortnightly in the New Statesman. His book "When China Rules the World: the Rise of the Middle Kingdom and the End of the Western World" will be published in June (Allen Lane, £25)

the global downturn in numbers

    0.5%

    IMF prediction for global growth in 2009 - worst since WWII

    Up to 40 million

    Number of people who will lose their jobs this year, according to the International Labour Organisation

    $9.7trn

    Total pledged by the US alone towards solving the crisis

    3.6%

    Proportion of GDP pledged by the G7 and BRICs countries towards fixing the crisis (1.5% this year)

    2.3m

    Number of US properties that received a default notice or were repossessed in 2008. In the UK, 45,000 homes were repossessed - another 75,000 are expected to be taken in 2009

    14

    Number of major global banks which collapsed, were sold or were nationalised during 2008

    200,000

    Number of European companies expected to fail this year; an additional 62,000 are expected to fail in the United States. These figures represent record levels of insolvency

    52%

    Increase in UK company failures between late 2007 and late 2008

    14%

    Drop in level of Chinese exports during January

    1%

    Current UK interest rates (down from 5% in October 2008). In the US, rates have fallen to between 0 and 0.25%

How the crisis unfolded

13 September 2007 Run on Northern Rock begins when it is revealed that the bank has requested emergency support from the Bank of England

21 January 2008 FTSE suffers worst falls since 11 September 2001

February 2008 Northern Rock nationalised

17 March 2008 JP Morgan Chase takes over the US investment bank Bear Stearns

12 July Mortgage lender IndyMac collapses - second biggest US bank in history to fail

9 August 2007 European Central Bank pumps ?95bn into banking market

7 September Financial authorities step in to rescue Fannie Mae and Freddie Mac

9 September Bradford & Bingley becomes second British bank to be nationalised

15 September Lehman Brothers files for bankruptcy

16 September AIG, biggest insurance firm in the US, receives $85bn rescue package

3 October 2008 US government announces $700bn Troubled Assets Relief Programme

8 October UK launches its first bank bailout plan, making £50bn available

October 2008 Iceland's banks collapse. IMF extends £1.4bn ($2.1bn) loan a month later

24 November Alistair Darling announces a temporary cut in VAT from 17.5 to 15 per cent

23 January 2009 UK enters recession

28 January US Congress passes Barack Obama's $819bn stimulus package

5 February UK Monetary Policy Committee votes to cut interest rates to 1 per cent - the lowest in over three centuries

Michael Harvey

Martin Jacques is the former editor of Marxism Today. 

This article first appeared in the 16 February 2009 issue of the New Statesman, The New Depression

Sue Anderson and family
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“I'm to blame”: Blunkett's indefinite prison sentences and the thousands still locked up without hope

Imprisonment for Public Protection (IPP) sentences were ruled a violation of human rights.

It was around the time her parents split up that 14-year-old Charlotte Nokes, known as Charlie, the “fun, wacky, popular, sociable child”, started misbehaving.

Her older sister, Rachel, had noticed her getting into trouble but put it down to Charlie having more spare energy after she’d given up judo and football. By trouble, she means smoking, climbing out of the window when she was asked to stay in, normal antics.

OK, maybe “not that normal”, concedes Rachel, but the kind of stunts and petty crimes to be expected from a frustrated teenager living on Hampshire's Hayling Island railing against her small-town boredom.

Certainly not the type of crimes that would see her die in prison under a 99-year Indefinite Prison Sentence.

Maybe it started with Charlie’s new-found independence working in a local butcher’s, her younger brother Steven soaking up much-needed attention from her now-single mother. Maybe it was her GP’s failed attempts to secure her the necessary treatment for depression, which turned into an alcohol-turned-heroin-turned-crack addiction. Maybe that sent her off the rails?

“It’s the chicken or the egg thing really,” sighs Rachel. “It could’ve been there underlying and the drugs exacerbated it, but you don’t really know do you?”

It was 2007. Charlie was 29 years old and looking for her next hit. Sitting outside a corner shop in Portsmouth, she settled to her regular routine. Skeletal, desperate, she would beg until she scraped enough money together for that glorious hit of white gold crack.

When one woman refused to give her money, Charlie brought out a knife. Not close enough to stab her – but near enough to scare the life out of her. “Quite rightly this woman was fairly traumatised by it”, says Rachel.

On Charlie’s 30th birthday she was given an Imprisonment for Public Protection (IPP) sentence and was due to serve 16 months at HMP Peterborough. Nine years later, in July 2016, she died in prison.

The IPP sentence

Introduced in 2003 by Lord David Blunkett, Imprisonment for Public Protection sentences (IPPs) were designed to detain serious offenders, mostly sex offenders, who were perceived to be a risk to the public. The Home Office initially estimated that they’d incarcerate just 900 dangerous criminals under the sentence.

Like a normal prisoner, criminals would be given a tariff, such as Charlie’s 16 months, but could be kept in prison indefinitely as long as the Parole Board believed they still posed a threat.

The Parole Board would assess the prisoners’ continued risk based on psychiatrist and prison guard reports at Parole Board Hearings that take place about once a year for each offender. Some of the hearings are oral, some of them written, and all of them, now, without the help of Legal Aid since it was reformed in late 2015.

By 2010 there were approximately 10,000 prisoners serving IPP sentences, over ten times more than intended when they were first brought in under the Criminal Justice Act in 2003.

In 2012, the sentence was abolished under the Coalition government thanks to a European Court ruling that claimed it violated human rights.

However, its abolition wasn’t retrospective, meaning there are still 3,500 prisoners serving the sentence without a release date, costing those inside their sanity and the taxpayer approximately £131m per year.

Read more: Why we should stop locking up drug addicts and the mentally ill

Andrew Neilson, head of campaigns at the prison charity, The Howard League for Penal Reform, says: “We are largely now talking about people who are post-tariff. You’re in a tunnel with no light at the end of it.”

“It’s terrible,” adds Rachel. “It just seems so inhumane. The punishment is not suited to the crime. I’m not saying they’re angels. They’ve all done something wrong, but Charlotte was on a 16-month sentence and when she died she’d been in there almost nine years. You’ve just taken away the human element of hope haven’t you?”

Fifteen years since the IPP’s implementation, and five years since it was abolished, its creator Lord David Blunkett says he made a mistake. “I’m to blame for IPP,” he says in an exclusive interview, “and we would do it differently now.

“If I had my time again I would have ensured from the beginning that the IPP could only be applied for people with very substantial tariffs,” he says, quickly adding that the Treasury could have allocated more money for prison education programmes and that the Parole Board could have been more efficient with releasing the IPP prisoners once they no longer posed a perceived threat.

But Andrew Neilson says the Labour government “did have the money to throw at the prison system” in 2007-8 when the overcrowding and understaffing crisis hit. In fact, for him the crisis, which continues today, “was directly the cause of the IPP influx”.   

He believes the government “should have been much tighter in the offences that they defined as liable for getting an IPP” to avoid such extreme overcrowding.

But having agreed that the sentence should have only applied for those with substantial tariffs, Blunkett says this wasn’t really his fault, rather the judiciary’s: “The message from the judges at the time was, ‘well you might pass the law but sentencing should be left to us.’”

Lord Blunkett insists he does regret how the sentence was implemented, “if we’re into the blame game,” he says. “But I don’t regret the principle, which was to protect the public from extremely dangerous prisoners who, in several cases, admitted themselves they were likely to reoffend.”

The families left behind

The IPP Families Campaign was set up by Katherine Gleeson in 2003 after a relative was sentenced to the punishment. She remembers: “I set up a 24-hour desk at home and then started working straight away.”

Gleeson now receives hundreds of emails a day from families in need of support and has met with the chair of the Parole Board, Nick Hardwick, on several occasions to speak about IPP. However, he refused to comment on this article.

“You can’t really determine risk. I can’t say that every time I cross over the road that I’m going to get run over,” insists Gleeson, “I mean there’s no proof. None of the IPP prisoners are any more a risk than a normal prisoner and these IPPs actually have minor sentences compared to the rest of the prison population.” 

Katherine Gleeson

Gleeson’s relative Jason was a regular kid. He got in a fight and was given the maximum tariff of five years for ABH with intent, or in other words, common assault. 

“I remember getting a call from Jason and him saying ‘oh my god you’re not going to believe this, they’ve given me a 99-year sentence, a life sentence,’” she says, “I thought I was going to have a nervous breakdown.

“You know, most of us have counselling and it’s just like living with a death that just keeps going. You don’t see any end to it. I had a mother just today who says she’s at her wits’ end and she feels like taking her own life,” she says. 

They were told that if Jason took the relevant educational courses, he might be released sooner and so Katherine and Jason started to work together to get him out. Katherine would scour the internet for the best courses, checking which prisons conducted them, and sharing all the information with him from the outside. 

Meanwhile Jason would apply to the Governor, asking to be moved to a different prison where a course was taking place. She says: “Then he got moved out to another prison to find out that the actual course was full so then we had to apply for another move and sometimes they would say the courses were there and they weren’t.”

“There is no light”

Unfortunately, another IPP prisoner who wishes to remain anonymous doesn’t have a family member like Katherine to help him. James* is currently nine years over his two-and-a-half-year sentence for aggravated burglary and has been refused release four times, after the Parole Board suggested each time he complete a specific course despite him having served his tariff. 

In one instance, James had already been accredited with a course, but it had since been re-named and so he had to take it again. In another instance he was asked to complete a course that he was later told he didn’t fit the criteria for. The most recent course suggestion is not even available at his current prison. 

In a letter to the Parole Board, James says: “All accredited offending behaviour programmes have submitted positive reports,” but “when I try to ask for help, I receive none. When I ask what I have to do, no one has given the answer. When I try to be assertive, I get ignored…If I become passive, I get told I’m not motivated.

“There is no light. Serving a twenty-year sentence, still with no light, for something I shouldn’t have served more than five years for isn’t justice. It’s just wrong."

Katherine Gleeson claims: “Nick Hardwick said they don’t even have to do the courses. The staff or agencies are undermining each other. They’re still saying you have to do this course with this course, so I don’t understand. They’re told they don’t even have to do the courses because they’ve served their sentence already.”

Andrew Neilson says it’s a “Kafka-esque situation” where “you’ve got people in the system who need to prove that they’re no longer dangerous but they have no means to do that because the availability of courses and interventions are still an issue”.

Katherine Gleeson’s relative Jason soon cottoned on to this subversive parole system. As he became more comfortable in prison, he started to interview the other IPP inmates. He quickly worked out that no one had been released after their first time applying for parole once they’d served their tariff.

Instead, he served his five years and then purposefully waited another year before going to the psychiatrist for his assessment and referral to the Parole Board for release. According to Katherine, his thinking was: “If he applied for parole and never got it, when he went to apply again they would say ‘Oh well why didn’t the other parole let him out? There must be something wrong there.’”

Jason’s plan worked and he was released just one year over his tariff. Katherine claims Jason’s fortune is extremely rare under the IPP sentence, as many others remain stranded behind bars.

Following a recent lecture given by Nick Hardwick, Andrew Neilson believes the Parole Board is taking significant steps to ensure more IPP prisoners are released, shown by the number of rising from 140 in 2010 to 715 in 2015.

Nielson says: “He’s [Hardwick] front-loaded his budget to recruit new Parole Board members and to get more hearings up and running and that is happening.”

However, due to continued prison overcrowding, Neilson says: “There were a number of Parole Board hearings scheduled and then a lot of them didn’t take place because there were staff shortages and they couldn’t get the prisoners out of their cells. The Parole Board can do what it can but it is dependent on the system being able to deliver and at the moment it’s struggling.”

But following a conversation with an IPP inmate whose release date has been set back by six months, Katherine Gleeson worries the prison system is purposefully holding IPP prisoners and blighting their chances of release.

Gleeson has received four letters from inmates claiming their release date has been pushed back thanks to offender managers filling out their pre-Parole Board hearing paperwork wrong. She suggests this is because of the scant availability of adequate aftercare resources, saying: “They haven’t got the hostels for them afterwards so they’re holding them.”

“Guantanamo Bay? That’s possibly a bit far, but in terms of it being a festering injustice that has not been properly dealt with then, yes,” says Andrew Neilson of The Howard League for Penal Reform, the IPP sentence is “comparable”.

A life licence “horror story”

Even upon release, IPP prisoners must live under a ten-year life licence.

This requires a former prisoner to report to the Parole Board at regular intervals for ten years. If a former prisoner does not attend for any reason, including, as Gleeson points out, problems with time-keeping due to learning difficulties, which approximately 80 per cent of the prison population are living with, they can be re-incarcerated.

Kipp Bassett was originally given three years and four months on an IPP sentence for GBH with intent in 2008. He got into an alcohol-induced pub fight and glassed a man caught in the crossfire.

He says: “It’s obviously something I’m definitely not proud of and it’s something I really regret for myself and also for my family, especially my daughter.” He admits the incident came about because “I hadn’t dealt with certain issues around my drinking.” He was released six years over his sentence in 2013.

But it was only in December 2015, after Kipp had been officially released from prison, that he experienced the real IPP “horror story”. He had a shouting match in the street with a neighbour and was immediately recalled to prison, even though he wasn’t guilty of an offence. He remembers: “Even the judge was saying this is absolutely ridiculous.”

Kipp was held in prison for 11 months with no charge until September 2016.

He blames the Parole Board for his unnecessary incarceration. Kipp was meant to have a hearing two weeks after he went to court, but no one notified him or his solicitor that it was happening. So that date passed and he was given another date in April, but a member of the Parole Board couldn’t make the hearing, for one reason or another – he wasn’t really told.

“I was supposed to have another one in July and something else happened. In the end I got one in August,” Kipp says. Even though he was awarded £2,500 compensation from the Parole Board, he says: “That’s irrelevant, you can’t get back 11 months.”

Andrew Neilson says the issues of recall and life licences under the IPP sentence are particularly high on The Howard League of Penal Reform’s agenda, as they see more cases like Kipp’s occurring.

“We’re already aware of people under the licence being recalled to custody for things like missing appointments, not new crimes, but breaching administrative conditions,” says Nielson.

He continues: “They haven’t committed murder or very violent crimes; some of the IPPs, as well documented, are people who were prosecuted for arson because they set fire to a bin. Should someone in that circumstance, never mind get an indeterminate sentence, have a life licence when they get released?” 

Kipp must follow strict conditions to avoid being sent back to prison. He can’t leave the country for ten years and he must register each new romantic relationship with probation, despite the fact he has never been charged with a sexual or domestic offence. 

Sure, “it can be awkward with a girl”, he says, but the travel ban is Kipp’s main sadness. He says: “I want to take my daughter around the world. We want to go to Australia, but I can’t for another ten years”.

Kipp’s daughter has cystic fibrosis, a chronic lung disease that requires hours of physical therapy each day to move sticky mucus away from her lungs and digestive tract.  

 “You need to give someone some kind of hope,” says Kipp. “People pick up the Inside Time [prison] magazine and just read horror stories, horror stories, horror stories and then after a bit of time… that’s you.” 

 Kipp and Jason both got out of prison, but Charlie Nokes never did.

Good night, Charlie

Her sister Rachel remembers: “When she passed away everyone in the prison described the same Charlotte from our childhood.”

The “entertainer”, the kid who started bands and taught herself guitar, who cracked jokes and wore too many colours. “Sometimes I’d go and visit her in prison and be like ‘Oh my god what are you wearing?’ and she’d say ‘What? I look awesome’,” remembers Rachel, laughing. 

In fact, Charlie’s “amazing” creativity thrived behind bars. She would design and paint murals on the cell walls and all over the back of her door with art materials she’d been given by the Koestler Trust, a charity which encourages art as a form of rehabilitation.

Charlie’s artistic talent caused quite a stir in the "outside" art world as well. She would enter the Koestler Trust Awards each year, changing her style so no one could guess it was her. Her work was thought of so highly that one of London’s most prestigious art schools, Central Saint Martins, offered her an unconditional place to study there upon her release. Charlie was, of course, never able to take this up.

“After she died, we kept thinking ‘Oh I wish I could talk to her about that’, you know? I wish she’d spoken to us about it more when she was alive. Quite often her art was quite abstract and you’d see stuff and you’d want to go and ask her about it. But I can’t,” says Rachel. 

But Charlie’s “wacky dressing” and abstract paintings increasingly served to hide a darker, more tortured person, despite her efforts to stay positive in the earlier months of her sentence. By the end of her time in prison, Charlie had been diagnosed with multiple different personality and mental health disorders. 

Rachel remembers: “Every time she saw a different psychiatrist they gave her a different diagnosis and then stopped her medication all together. Then she would go off the rails because she just felt awful and then they would sort of punish her for that. I think that’s quite often why her IPP got extended and then they put her on another cocktail of medication and so on.”

She continues: “Last time we visited her, she was so medicated that she would just lose her thread while she was talking to us and just stare off into space. She was so heavily medicated by the end that she would fall over without realising she’d fallen over.”

At just 37 years old, Charlie’s mental health was deemed so poor that it was suggested she have her womb surgically removed to control her mood swings, with the operation to be performed by an NHS doctor.

Charlie officially consented to the hysterectomy. “But I’m not sure she was in the right place to be able to consent,” Rachel admits. “It’s something that bothers me and all of us really.” 

In this way, she believes that “most women on IPPs should not be in prison, most of them should be in mental health institutions or psychiatric wards”, and that the relevant facilities just aren’t available.

“We met a couple of others in prison, most of them are on wards because they were self-harming so badly and to be quite honest most of the women that were in the long-term wing that Charlotte was in shouldn’t have been in prison. A lot of women end up being put into prison and not treated properly due to the lack of spaces,” she says. 

A short time after her surgery, Charlie’s father came to visit her and she was feeling hopeful for the first time in years. The Home Office told her she could be transferred to a secure psychiatric facility, and she could finally get the proper treatment she’d needed since adolescence. 

At the end of July 2016, Charlotte lay back in her bed and rolled a cigarette, looking over the cell she had made her own over the nine years she’d been in prison. She closed her eyes and fell into life’s last sleep.

“I don’t think she tried to kill herself. There were just prescribed drugs in her system, that’s all,” says Rachel, who is now waiting on further toxicology and mental health reports to see if her sister was on the correct types and doses of medication.

“I got a letter a week before she died,” remembers Rachel, “and I hadn’t got a chance to reply to her. Since we were children really we were like chalk and cheese but she was saying that it would be nice to build a relationship and get to know my children. But now, she never will.”

“Charlotte wasn’t a horrible person. She was still my sister, Mum and Dad’s daughter. You get defined by your crime and your addiction, which is sad in itself. Then get put in a box and stop being a person in society.”

There remain around 3,500 IPP prisoners incarcerated across the country, with little hope of release and the prospect of future suffering if they are let out thanks to overzealous recall conditions.

The problem is, admits Lord Blunkett, “there are no votes in investing in prisons or prisoners”.

* Name has been changed

This article first appeared in the 16 February 2009 issue of the New Statesman, The New Depression