Culture and money

No one should doubt that festivals have an economic impact - but are the claims made for them overst

At a recent conference to discuss the story so far for ‘Liverpool Capital of Culture’, Phil Redmond, its lugubriously amusing creative director and all-round TV deity, put it bluntly: "Culture is not just about people holding hands and singing songs. It’s about bringing people together. It’s about footfall. With footfall, people spend cash. With cash you get regeneration. That’s what it’s about."

A trot-through of the relevant statistics suggested that his city can indeed walk tall at the moment. An estimated £35m worth of worldwide media coverage on the back of the opening event featuring Ringo Starr; 800,000 visitors from 189 countries since January; more than 2.75m people have attended a cultural event in that time; plus a 25 per cent to 65 per cent increase in attendances at major attractions.

The list was formidable. If you think about regeneration in terms of a physical action - with more blood pumping into the system, and greater vitality reaching every bodily part - then, on that basis, Liverpool’s regeneration - as a direct consequence of Capital of Culture - has some of the miraculous properties of a reincarnation on Doctor Who.

How long-lasting the process will be, can’t be certain; the city looks set to withstand some of the recession’s worst buffeting as more people look closer to home for their holidays, but even if things tail off in 09, it looks safe to say that Liverpool’s transformation is beyond easy reversal.

The pattern of a surge in economic activity as a result of cultural festivities is discernible across the country. Take three of the festivals that have just been and gone: The Brighton Festival, Norfolk and Norwich Festival and Fierce! in Birmingham.

As at 2006, when an economic impact survey was compiled, Brighton Festival was estimated to contribute £20m to the local economy every year, while Brighton Dome and Festival employs 260 people, and attracts £750,000 in sponsorship per annum.

Jonathan Holloway, artistic director of the Norfolk and Norwich Festival claims that his festival’s cultural offering brings a calculable benefit to a deprived region of Eastern England. "With 20 per cent of the audience coming from outside the region, we estimate that in all about £4m is pumped into the economy." Last year there were some 70,000 visitors - this year he anticipates the number would approach 100,000. One startling indirect social benefit, he suggests, is that crime levels drop during street festivals.

Finally, although Fierce! is a modestly sized, cross-arts programme, the positives for Birmingham were defined starkly in 2004: 32 per cent of questionnaire respondents had travelled over 20 miles to the event, and nearly a quarter of respondents (23 per cent) came from more than 50 miles away.

The Arts Council’s research that year (Festivals and the Challenge of Cultural Tourism) found that festival visitors from more than 20 miles away spent on average £145.71 per day and stayed an average of 3.5 nights per visit. An estimated 100,000 plus people annually engage with the festival’s programme, we’re told. You don’t have to be a maths whiz to realise that Redmond’s equation about footfall applies here too.

So does that mean that any benighted urban - or even rural - location with a name, a car-park and a marketing strategy can set itself up with a festival and watch the regenerative cash flow in? Holloway, former events manager at the National Theatre, sounds a strong note of scepticism: "I do think there’s a tendency to put two or three events on one plate and call it a festival. Creatively, we should have huge expectations of festivals. I expect them to transform people’s lives for the better - I have no truck with the idea of festivals as a marketing tool."

All in all, festivals can bring tangible - and less tangible - benefits; you can’t measure things like civic pride and a greater sense of a collective identity but clearly the uplift that flows from a well-run arts festival isn’t limited to the satisfying ping of cash registers. When the planning and execution go well, you should get a virtuous circle of increased economic, social and artistic vibrancy. The motor of passion behind it, though, has to be the desire by artists to engage people - and, well, ensure they enjoy themselves.

The danger lies when the claims made on behalf of festivals become not only overstated but the very raison d’etre of the festival. And I can think of no better instance of this than LIFT (the London International Festival of Theatre) which starts this week. For the best part of two decades, LIFT played an invaluable role in bringing over the best work from overseas that its co-founders Rose Fenton and Lucy Neal could find. About five years ago, shortly before they handed their baby onto Angharad Wynne-Jones, the organisation became intensively introspective.

The artistic programme this year looks pretty thin. There are ‘four global reports from Australia, the Pacific, China and Canada’ - which translates as four dance and performance pieces by relatively unknown practitioners. It’s hard to work out what you’d rush to spend your money on. There’s little to catch the casual eye besides an insistent need on LIFT’s part to ‘get into conversation’ with people. At the heart of that is something called the Lift Parliament, described by Jude Kelly, artistic director of the South Bank as "one of the most important cultural developments for London in the coming decade". This is "a new concept in performance space where artists from around the world and the people of London can gather together to share stories, exchange knowledge and imagine and rehearse new futures".

Forgive the reliance of press-release quotes at this point but the Lift parliament, along with many parliaments one could mention, seems to have an instinctive love of hard-to-apprehend hot-air. Maybe I’ll be proved wrong when I step inside this strange vertical portable venue, when it pitches up at the South Bank - and get stuck into meaningful discourse with another dropper-by. But to pretend that dialogue around art can be as transformative as art itself and as empowering as political enfranchisement strikes me as a kind of evasive piety. To change the world you need to engage with the political system not hang out in a surrogate hive. To make a change, you’ve got to make the leap - not just catch a LIFT.

Lift Festival 2008 Stratford Park, Newham E15. 12–21 June. Tickets: 0844 412 4317 Lift

Jeremy Corbyn. Photo: Getty
Show Hide image

Lexit: the EU is a neoliberal project, so let's do something different when we leave it

Brexit affords the British left a historic opportunity for a decisive break with EU market liberalism.

The Brexit vote to leave the European Union has many parents, but "Lexit" – the argument for exiting the EU from the left – remains an orphan. A third of Labour voters backed Leave, but they did so without any significant leadership from the Labour Party. Left-of-centre votes proved decisive in determining the outcome of a referendum that was otherwise framed, shaped, and presented almost exclusively by the right. A proper left discussion of the issues has been, if not entirely absent, then decidedly marginal – part of a more general malaise when it comes to developing left alternatives that has begun to be corrected only recently, under Jeremy Corbyn and John McDonnell.

Ceding Brexit to the right was very nearly the most serious strategic mistake by the British left since the ‘70s. Under successive leaders Labour became so incorporated into the ideology of Europeanism as to preclude any clear-eyed critical analysis of the actually existing EU as a regulatory and trade regime pursuing deep economic integration. The same political journey that carried Labour into its technocratic embrace of the EU also resulted in the abandonment of any form of distinctive economics separate from the orthodoxies of market liberalism.

It’s been astounding to witness so many left-wingers, in meltdown over Brexit, resort to parroting liberal economics. Thus we hear that factor mobility isn’t about labour arbitrage, that public services aren’t under pressure, that we must prioritise foreign direct investment and trade. It’s little wonder Labour became so detached from its base. Such claims do not match the lived experience of ordinary people in regions of the country devastated by deindustrialisation and disinvestment.

Nor should concerns about wage stagnation and bargaining power be met with finger-wagging accusations of racism, as if the manner in which capitalism pits workers against each other hasn’t long been understood. Instead, we should be offering real solutions – including a willingness to rethink capital mobility and trade. This places us in direct conflict with the constitutionalised neoliberalism of the EU.

Only the political savvy of the leadership has enabled Labour to recover from its disastrous positioning post-referendum. Incredibly, what seemed an unbeatable electoral bloc around Theresa May has been deftly prized apart in the course of an extraordinary General Election campaign. To consolidate the political project they have initiated, Corbyn and McDonnell must now follow through with a truly radical economic programme. The place to look for inspiration is precisely the range of instruments and policy options discouraged or outright forbidden by the EU.

A neoliberal project

The fact that right-wing arguments for Leave predominated during the referendum says far more about today’s left than it does about the European Union. There has been a great deal of myth-making concerning the latter –much of it funded, directly or indirectly, by the EU itself.

From its inception, the EU has been a top-down project driven by political and administrative elites, "a protected sphere", in the judgment of the late Peter Mair, "in which policy-making can evade the constraints imposed by representative democracy". To complain about the EU’s "democratic deficit" is to have misunderstood its purpose. The main thrust of European economic policy has been to extend and deepen the market through liberalisation, privatisation, and flexiblisation, subordinating employment and social protection to goals of low inflation, debt reduction, and increased competitiveness.

Prospects for Keynesian reflationary policies, or even for pan-European economic planning – never great – soon gave way to more Hayekian conceptions. Hayek’s original insight, in The Economic Conditions of Interstate Federalism, was that free movement of capital, goods, and labour – a "single market" – among a federation of nations would severely and necessarily restrict the economic policy space available to individual members. Pro-European socialists, whose aim had been to acquire new supranational options for the regulation of capital, found themselves surrendering the tools they already possessed at home. The national road to socialism, or even to social democracy, was closed.

The direction of travel has been singular and unrelenting. To take one example, workers’ rights – a supposed EU strength – are steadily being eroded, as can be seen in landmark judgments by the European Court of Justice (ECJ) in the Viking and Laval cases, among others. In both instances, workers attempting to strike in protest at plans to replace workers from one EU country with lower-wage workers from another, were told their right to strike could not infringe upon the "four freedoms" – free movement of capital, labour, goods, and services – established by the treaties.

More broadly, on trade, financial regulation, state aid, government purchasing, public service delivery, and more, any attempt to create a different kind of economy from inside the EU has largely been forestalled by competition policy or single market regulation.

A new political economy

Given that the UK will soon be escaping the EU, what opportunities might this afford? Three policy directions immediately stand out: public ownership, industrial strategy, and procurement. In each case, EU regulation previously stood in the way of promising left strategies. In each case, the political and economic returns from bold departures from neoliberal orthodoxy after Brexit could be substantial.

While not banned outright by EU law, public ownership is severely discouraged and disadvantaged by it. ECJ interpretation of Article 106 of the Treaty on the Functioning of the European Union (TFEU) has steadily eroded public ownership options. "The ECJ", argues law professor Danny Nicol, "appears to have constructed a one-way street in favour of private-sector provision: nationalised services are prima facie suspect and must be analysed for their necessity". Sure enough, the EU has been a significant driver of privatisation, functioning like a ratchet. It’s much easier for a member state to pursue the liberalisation of sectors than to secure their (re)nationalisation. Article 59 (TFEU) specifically allows the European Council and Parliament to liberalise services. Since the ‘80s, there have been single market programmes in energy, transport, postal services, telecommunications, education, and health.

Britain has long been an extreme outlier on privatisation, responsible for 40 per cent of the total assets privatised across the OECD between 1980 and 1996. Today, however, increasing inequality, poverty, environmental degradation and the general sense of an impoverished public sphere are leading to growing calls for renewed public ownership (albeit in new, more democratic forms). Soon to be free of EU constraints, it’s time to explore an expanded and fundamentally reimagined UK public sector.

Next, Britain’s industrial production has been virtually flat since the late 1990s, with a yawning trade deficit in industrial goods. Any serious industrial strategy to address the structural weaknesses of UK manufacturing will rely on "state aid" – the nurturing of a next generation of companies through grants, interest and tax relief, guarantees, government holdings, and the provision of goods and services on a preferential basis.

Article 107 TFEU allows for state aid only if it is compatible with the internal market and does not distort competition, laying out the specific circumstances in which it could be lawful. Whether or not state aid meets these criteria is at the sole discretion of the Commission – and courts in member states are obligated to enforce the commission’s decisions. The Commission has adopted an approach that considers, among other things, the existence of market failure, the effectiveness of other options, and the impact on the market and competition, thereby allowing state aid only in exceptional circumstances.

For many parts of the UK, the challenges of industrial decline remain starkly present – entire communities are thrown on the scrap heap, with all the associated capital and carbon costs and wasted lives. It’s high time the left returned to the possibilities inherent in a proactive industrial strategy. A true community-sustaining industrial strategy would consist of the deliberate direction of capital to sectors, localities, and regions, so as to balance out market trends and prevent communities from falling into decay, while also ensuring the investment in research and development necessary to maintain a highly productive economy. Policy, in this vision, would function to re-deploy infrastructure, production facilities, and workers left unemployed because of a shutdown or increased automation.

In some cases, this might mean assistance to workers or localities to buy up facilities and keep them running under worker or community ownership. In other cases it might involve re-training workers for new skills and re-fitting facilities. A regional approach might help launch new enterprises that would eventually be spun off as worker or local community-owned firms, supporting the development of strong and vibrant network economies, perhaps on the basis of a Green New Deal. All of this will be possible post-Brexit, under a Corbyn government.

Lastly, there is procurement. Under EU law, explicitly linking public procurement to local entities or social needs is difficult. The ECJ has ruled that, even if there is no specific legislation, procurement activity must "comply with the fundamental rules of the Treaty, in particular the principle of non-discrimination on grounds of nationality". This means that all procurement contracts must be open to all bidders across the EU, and public authorities must advertise contracts widely in other EU countries. In 2004, the European Parliament and Council issued two directives establishing the criteria governing such contracts: "lowest price only" and "most economically advantageous tender".

Unleashed from EU constraints, there are major opportunities for targeting large-scale public procurement to rebuild and transform communities, cities, and regions. The vision behind the celebrated Preston Model of community wealth building – inspired by the work of our own organisation, The Democracy Collaborative, in Cleveland, Ohio – leverages public procurement and the stabilising power of place-based anchor institutions (governments, hospitals, universities) to support rooted, participatory, democratic local economies built around multipliers. In this way, public funds can be made to do "double duty"; anchoring jobs and building community wealth, reversing long-term economic decline. This suggests the viability of a very different economic approach and potential for a winning political coalition, building support for a new socialist economics from the ground up.

With the prospect of a Corbyn government now tantalisingly close, it’s imperative that Labour reconciles its policy objectives in the Brexit negotiations with its plans for a radical economic transformation and redistribution of power and wealth. Only by pursuing strategies capable of re-establishing broad control over the national economy can Labour hope to manage the coming period of pain and dislocation following Brexit. Based on new institutions and approaches and the centrality of ownership and control, democracy, and participation, we should be busy assembling the tools and strategies that will allow departure from the EU to open up new political-economic horizons in Britain and bring about the profound transformation the country so desperately wants and needs.

Joe Guinan is executive director of the Next System Project at The Democracy Collaborative. Thomas M. Hanna is research director at The Democracy Collaborative.

This is an extract from a longer essay which appears in the inaugural edition of the IPPR Progressive Review.