Liberals need to challenge inequalities of economic power

To recover from the longest crisis of living standards in memory, we must address fundamental questions around ownership and democracy.

As the citizens of Egypt, Syria and Brazil struggle for control over their lives, it may seem a bit rich to suggest that the UK's economic troubles stem from an unequal distribution of power. Seen from Tahrir Square, Homs or Sao Paulo, the inequalities within British society probably appear moot. Nonetheless, as the Social Liberal Forum will discuss at our third annual conference this week, to recover from the UK's longest depression and crisis of living standards in recent memory, we must address fundamental questions around ownership and democracy, ultimately asking, "Where does power lie?"

So, let us ask: with whom does the power to ensure that finance serves the wider economy more than its own interests - and to prevent the sector from abusing its dominant position in the economy - rest? What about the power to rid politics of the corrupting effects of big money; the power to demand that the press, police and those in positions of influence uphold standards of decency – where does that power lie? To say nothing of the power over the positive capabilities we need to live the lives we have reason to value. How does the ownership of capital, companies, utilities and resources affect the social and economic freedoms we seek? In whose hands is power in each of these domains concentrated, and how can we ensure a more effective, equitable distribution?

Generations of liberal thinkers from Mill and Smith to Beveridge, Keynes and Hutton have acknowledged that the exercise of power by third parties can infringe our freedom. Indeed, liberalism is a political movement dedicated to eradicating the concentration and abuse of power – witness our (almost) unified rejection of state surveillance or of illiberal 'secret justice.' But some aspects of modern liberalism focus almost exclusively on the state as the greatest threat to our rights and liberties when a host of institutions, practices and systems can encroach on our freedom. Our vigilance against the concentration of power must extend to any aspect of society where we find it - with financial capitalism in disarray, electoral politics captured by vested interests and corporations failing to pay their dues while living standards fall for so many, now is the time to unpick the issue of ownership, democracy and power.

Take the question of power over earnings, of particular relevance given the unprecedented decline in the value of wages for millions of low and middle earners. To many, a 'democratic focus on pay' equates to a Living Wage - specifically, to ways in which government can take the lead in paying its own staff enough to live on, and legislate and/or regulate so that companies do the same - thus ending the subsidy for low pay. While these are tools social liberals would welcome, we should go further, democratising the workplace.

Low pay is at least in part a function of the lack of voice, of power, that most employees have over their pay and conditions. As Deborah Hargreaves and Janice Turner will debate at our conference, workplace democracy and a reformed role for unions have a huge part to play in empowering employees to secure a decent salary - democratically, from the bottom-up, in a way that's sensitive to the side-effects that higher wages might bring. In a globalised, competitive, technologically advancing economy, such effects cannot be ignored, and might lead us to ask "how do we unionise [or more broadly, empower] the unemployed?", because empowering those in work at the expense of those without will not do. The answer may lie in radical things like a minimum citizen's income or by expanding mutual friendly societies, perhaps on a sector-by-sector basis, which could provide a range of options to smooth the bumpy journey many face in the labour market - salary insurance, training, apprenticeships and so on.

Applying mutual ownership, widening democratic participation and a redistribution of power to the labour market is simply one example of a social liberal approach to the political economy - the conference will feature discussions on adapting this approach to public services, finance and banking, local and regional government, the welfare state and national economic strategy. The last two are key, and will be addressed in Steve Webb MP's William Beveridge Memorial Lecture, and a keynote speech by Vince Cable, respectively.

Beyond agreeing that we need to reform our political economy, we should ask ourselves whether we can implement said reform and how - answering a question put by Evan Davis in a panel discussion at the Manchester International Festival, "Are we Powerless?" How can we use our collective power as citizens to challenge received wisdom, and to move beyond securing protections against the abuses of power detailed above to fostering the positive power to live fulfilling lives? I suggest two necessary but insufficient conditions must be met.

Firstly, we must take a step back and frame policy, politics and economics differently- as if people mattered, to coin a phrase. The past 30 years - arguably longer - have focussed on growing output, on the assumption that higher living standards would follow. For some, this came true - for the many, the median salary being worth what it was a decade or more ago, not so much. So instead of asking "how do we grow the economy from here?" (which distorts how we address the crisis, hence Osborne's inflation of yet another property price bubble, for instance), we should ask how the government, private enterprise and society as a whole can empower citizens to secure for themselves the capability to live fulfilling lives. We should proceed from there, rather than assuming that growth of output, however achieved, is our goal. Framing the discussion in this way will put deficits, investment, ownership, democracy and power into balanced perspective - and permit the freedom of thought needed to satisfy the second condition, that of formulating detailed policy to meet the challenges we face.

In answer to Davis's question of powelessness, panelists Owen Jones and Judith Shapiro lamented the lack of a coherent alternative to, for want of a better word, neoliberalism. Remember this lesson from history: that even as the post-war economic settlement, with its Bretton Woods institutions and sustained growth in living standards, reached its apogee in the 1950s, 60s and 70s, the likes of Hayek, von Mises and their pals in the Mont Pelerin Society met to tear down brick-by-brick the intellectual edifice of Keynesian social democracy. Where is today's Mont Pelerin group that can build a real alternative not only to austerity but to the concentration of power that hinders progress? Where is the political movement that can integrate grassroots activism with bold leadership to put such an alternative into action? This is not a nostalgic call for a return to some golden past, but an appeal for a coherent vision as to where tomorrow's sustainable, equitable prosperity will come from.

Returning to first principles, it falls to social liberals across the political spectrum to consider aspects of ownership, democracy and power in ensuring our political economy provides shelter from poverty, ignorance and conformity, takes on Beveridge's five evils, and secures the freedom and capability for all to live fulfilling lives - nothing short of tireless endeavour to this end will suffice.

Vince Cable will be the keynote speaker at tomorrow's Social Liberal Forum conference. Photograph: Getty Images.

Prateek Buch is director of the Social Liberal Forum and serves on the Liberal Democrat Federal Policy Committee.

Getty
Show Hide image

Is defeat in Stoke the beginning of the end for Paul Nuttall?

The Ukip leader was his party's unity candidate. But after his defeat in Stoke, the old divisions are beginning to show again

In a speech to Ukip’s spring conference in Bolton on February 17, the party’s once and probably future leader Nigel Farage laid down the gauntlet for his successor, Paul Nuttall. Stoke’s by-election was “fundamental” to the future of the party – and Nuttall had to win.
 
One week on, Nuttall has failed that test miserably and thrown the fundamental questions hanging over Ukip’s future into harsh relief. 

For all his bullish talk of supplanting Labour in its industrial heartlands, the Ukip leader only managed to increase the party’s vote share by 2.2 percentage points on 2015. This paltry increase came despite Stoke’s 70 per cent Brexit majority, and a media narrative that was, until the revelations around Nuttall and Hillsborough, talking the party’s chances up.
 
So what now for Nuttall? There is, for the time being, little chance of him resigning – and, in truth, few inside Ukip expected him to win. Nuttall was relying on two well-rehearsed lines as get-out-of-jail free cards very early on in the campaign. 

The first was that the seat was a lowly 72 on Ukip’s target list. The second was that he had been leader of party whose image had been tarnished by infighting both figurative and literal for all of 12 weeks – the real work of his project had yet to begin. 

The chances of that project ever succeeding were modest at the very best. After yesterday’s defeat, it looks even more unlikely. Nuttall had originally stated his intention to run in the likely by-election in Leigh, Greater Manchester, when Andy Burnham wins the Greater Manchester metro mayoralty as is expected in May (Wigan, the borough of which Leigh is part, voted 64 per cent for Brexit).

If he goes ahead and stands – which he may well do – he will have to overturn a Labour majority of over 14,000. That, even before the unedifying row over the veracity of his Hillsborough recollections, was always going to be a big challenge. If he goes for it and loses, his leadership – predicated as it is on his supposed ability to win votes in the north - will be dead in the water. 

Nuttall is not entirely to blame, but he is a big part of Ukip’s problem. I visited Stoke the day before The Guardian published its initial report on Nuttall’s Hillsborough claims, and even then Nuttall’s campaign manager admitted that he was unlikely to convince the “hard core” of Conservative voters to back him. 

There are manifold reasons for this, but chief among them is that Nuttall, despite his newfound love of tweed, is no Nigel Farage. Not only does he lack his name recognition and box office appeal, but the sad truth is that the Tory voters Ukip need to attract are much less likely to vote for a party led by a Scouser whose platform consists of reassuring working-class voters their NHS and benefits are safe.
 
It is Farage and his allies – most notably the party’s main donor Arron Banks – who hold the most power over Nuttall’s future. Banks, who Nuttall publicly disowned as a non-member after he said he was “sick to death” of people “milking” the Hillsborough disaster, said on the eve of the Stoke poll that Ukip had to “remain radical” if it wanted to keep receiving his money. Farage himself has said the party’s campaign ought to have been “clearer” on immigration. 

Senior party figures are already briefing against Nuttall and his team in the Telegraph, whose proprietors are chummy with the beer-swilling Farage-Banks axis. They deride him for his efforts to turn Ukip into “NiceKip” or “Nukip” in order to appeal to more women voters, and for the heavy-handedness of his pitch to Labour voters (“There were times when I wondered whether I’ve got a purple rosette or a red one on”, one told the paper). 

It is Nuttall’s policy advisers - the anti-Farage awkward squad of Suzanne Evans, MEP Patrick O’Flynn (who famously branded Farage "snarling, thin-skinned and aggressive") and former leadership candidate Lisa Duffy – come in for the harshest criticism. Herein lies the leader's almost impossible task. Despite having pitched to members as a unity candidate, the two sides’ visions for Ukip are irreconcilable – one urges him to emulate Trump (who Nuttall says he would not have voted for), and the other urges a more moderate tack. 

Endorsing his leader on Question Time last night, Ukip’s sole MP Douglas Carswell blamed the legacy of the party’s Tea Party-inspired 2015 general election campaign, which saw Farage complain about foreigners with HIV using the NHS in ITV’s leaders debate, for the party’s poor performance in Stoke. Others, such as MEP Bill Etheridge, say precisely the opposite – that Nuttall must be more like Farage. 

Neither side has yet called for Nuttall’s head. He insists he is “not going anywhere”. With his febrile party no stranger to abortive coup and counter-coup, he is unlikely to be the one who has the final say.