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The new ruling class

If the polls are to be believed, the Conservative Party is heading for government in 2010, ending 13 years in the political wilderness. So who are the men, and women (yes, there are one or two), jostling for power around Prime Minister Cameron?

David Cameron, 43

Leader of the Conservative Party
Education Eton College. Oxford University
Wealth £3.2m*
Expected to inherit million-pound legacies from both sides of his family, David Cameron comes from a long line of stockbrokers. A direct descendant of King William IV, he is the fifth cousin twice removed of Queen Elizabeth II, and reportedly got his first job in the Conservative Research Department after one of the Queen's equerries intervened on his behalf. A former member of Oxford's notorious Bullingdon Club, Cameron - who said that the large expenses claimed on his constituency home were an "inadvertent mistake" - was described by Norman Lamont as a "brilliant Old Etonian with a taste for the good life".

* This and other wealth figures are estimates

George Osborne, 38
Shadow chancellor
Education St Paul's School, London. Oxford University
Wealth £4.3m
George Gideon Osborne stands to inherit the Osborne baronetcy of Ballentaylor in County Tipperary, Ireland, as well as a substantial share of Osborne & Little, his father's luxury wall­paper company. Not that he needs the money - he already benefits from a company trust fund, and as a backbencher commanded fees of up to £5,000 per article for the Spectator and Associated Newspapers. A former member of the Bullingdon Club, he is very much part of the old boy network, as shown by last year's scandal involving Osborne, his old friend Nat Rothschild, Russian oligarch Oleg Deripaska and a yacht in Corfu.

Oliver Letwin, 53
Chairman of the Conservative Party's Policy Review/Research Department
Education Eton College. Cambridge University
Wealth £1.5m
Despite earning £145 an hour for consultancy work at N M Rothschild & Son, Oliver Letwin claimed £2,000 in parliamentary expenses to replace a leaking pipe in his tennis court. He once said he would rather "go out in the streets and beg" than send his children to a London comprehensive, and during the 2001 election argued that the Conservatives should cut future public spending by £20bn a year relative to Labour proposals. His suggestion was so unpopular that he was forced to stay out of the public eye for the duration of the campaign.

Andrew Lansley, 53
Shadow health secretary
Education Brentwood School, Essex. Exeter University
Wealth £700,000
Andrew Lansley, who earns an extra £29,000 a year for 12 days' work at a marketing agency, spent more than £4,000 of taxpayers' money renovating his country home months before he sold it and flipped his expenses claim to his London flat, where he spent thousands more. Last year, Lansley caused outrage with a blog entry on the Conservative Party website arguing that a recession could be "good for us", as people could "spend time at home with their families". The potential future health secretary also has some insight into obesity, saying that "people who see more fat people around them may themselves be more likely to gain weight".

David Willetts, 53
Shadow universities and skills manager
Education King Edward VI, Birmingham. Oxford University
Wealth £1.9m
David Willetts makes £80,000 a year from 40 days' work as adviser to Punter Southall, and is also paid as chairman of Universal Sensors Ltd, but he still tried to claim £750 for a shed base and £175 for a dog pen on expenses last year.

Francis Maude, 56
Shadow minister for the Cabinet Office/ chancellor of the Duchy of Lancaster
Education Abingdon School, Oxfordshire. Cambridge University
Wealth £3m
Francis Maude, a former director of Morgan Stanley, juggles an array of non-executive financial positions. These bring him £68,600 a year, but luckily don't require too many hours - Barclays pays him £36,700 for six days' work. Maude, who has railed against the irresponsibility of mortgage lenders, banked £100,000-plus as director of a financial services group that profited from sub-prime mortgages. Despite owning four properties, he claimed almost £35,000 in two years for interest payments on a London flat just yards from his house.

Michael Gove, 42
Shadow schools secretary
Education Robert Gordon's College, Aberdeen. Oxford University
Wealth £1m
A self-proclaimed neoconservative and former journalist, Michael Gove still writes a weekly column for the Times, which pays him £5,000 a month. Gove has boasted that it takes him an hour a week to write it. This makes his hourly wage more than £1,100 - 127 times higher than the average salary in his constituency, Surrey Heath. He tops this up through contributions to other titles, including Scotland on Sunday and Building Magazine. Gove is a signatory to the Henry Jackson Society, a "project for democratic geopolitics" that advocates a proactive approach to spreading democracy, by military intervention if necessary. Last year, he described the invasion of Iraq as "a proper British foreign policy success".

Liam Fox, 48
Shadow defence secretary
Education St Bride's High School, East Kilbride. Glasgow University
Wealth £1m
Fox, a former GP, may lambast the public sector for its inefficiencies and "bloated administration", but he is not so thrifty himself. Despite earning £25,000 a year by lecturing for the medical educational firm Arrest Ltd (14 days' work), he claimed almost £19,000 of taxpayers' money for his mobile phone bill. A staunch Eurosceptic and strong believer in the "special relationship" with America, Fox said recently a Conservative government would be "sympathetic" to a request for thousands more troops in Afghanistan.

Andrew Mitchell, 53
Shadow international development secretary
Education Rugby School. Cambridge University
Wealth £2m
Mitchell, an ex-merchant banker racks up £43,500 every year for financial advisory and consultancy roles that involve a few hours' work each week, as well as owning shares worth up to £180,000. But it's obviously not enough - last year he claimed more than £21,000 for cleaning and redecorating his constituency home. In 2004 he asked the Commons Fees Office to pay him £2,000 a month from his MPs' additional cost allowance "until it is exhausted". Mitchell said last year that the recession was an "incredibly good moment" for the party.

Caroline Spelman, 51
Shadow communities and local government secretary
Education Herts and Essex Grammar School, Bishop's Stortford, Essex. University of London
Wealth £1.5m
Caroline Spelman co-owns Spelman, Cormack & Associates, a food and biotechnology business, with her husband. They also own three properties, including a four-storey Georgian townhouse in London, with an estimated combined value of £5m. In 1997-98, she misused the parliamentary staffing allowance to pay her nanny. The expenses revelations this year showed that she received £40,000 for bills and cleaning for her constituency home, despite her husband claiming it was their main home. In 2005, she attacked proposals on revaluing council tax. Ironically enough, for the 2007-2008 financial year she overclaimed hundreds of pounds on her own council tax.

Lord Strathclyde, 49
Leader of the opposition in the Lords
Education Wellington College. University of East Anglia
Wealth £10m
The majority shareholder in the family estate management company Auchendrane Estates, worth roughly £6m, Lord Strathclyde holds down a plethora of paid directorships for hedge funds and investment companies. One of them is Galena, the investment management arm of Trafigura, a controversial oil trader recently found to be dumping toxic waste in Africa. He said that Trafigura's other activities fell "well outside the terms of my remit".

William Hague, 48
Shadow foreign secretary
Education Wath-on-Dearne Comprehensive School, Rotherham. Oxford University
Wealth £2.2m
Earning up to £10,000 for an appearance, Hague is a stalwart of the Conservative after-dinner speaking circuit. As a non-executive director of JCB, he was paid £50,000 a year and went on to a directorship at AES Engineering, receiving £25,000 a year. He has been paid up to £1,041 an hour for his consultancy work, a wage rate 113 times higher than the average among his constituents in Richmond, Yorkshire. Hague reportedly threatened to walk out when Cameron suggested forcing the shadow cabinet to give up second jobs.

Chris Grayling, 47
Shadow home secretary
Education Royal Grammar School, High Wycombe, Buckinghamshire. Cambridge University
Wealth £500,000
Chris Grayling, worth only half a million, is a real man of the people. The proprietor of four London homes, he still billed a £40,000 second-home refurbishment to the state. So in touch is the former BBC producer with the reality of life in Britain, that he compared the country's streets to those of Baltimore on the US television drama The Wire, and came up with the idea of deterring young criminals by taking away their mobile phones.

Lord Ashcroft, 62
Conservative Party deputy chairman
Education Royal Grammar School, High Wycombe, Buckinghamshire. Mid-Essex Technical College
Wealth £1.1bn
Lord Ashcroft, the Tories' fairy godmother, has donated millions to the Conservative Party since the 1980s, personally guaranteeing its overdraft when it was reportedly £3m in the red. He makes a habit of political donation, and has been accused of wielding undue political influence in Belize, where he has extensive business interests. He does not say whether he pays tax in the UK, and the Electoral Commission is investigating whether his company fits strict rules on overseas donations.

Dominic Grieve, 53
Shadow justice secretary and shadow attorney general
Education Westminster School, London. Oxford University
Wealth £3.1m
A barrister and QC, Dominic Grieve supplements his income with shareholdings in 13 firms, most notably with £240,000 worth of shares in companies operating in Zimbabwe. Apparently £3.1m doesn't go very far towards keeping a second home - Grieve was forced to bill the government £18,668 in maintenance costs last year. A traditionalist who has voted against bills promoting gay rights, he has praised the Victorian era for its "sense of moral values".

Philip Hammond, 53
Shadow chief secretary to the Treasury
Education Shenfield School, Brentwood, Essex. Oxford University
Wealth £9m
Hammond enjoys a lucrative directorship at Castlemead Property, in which he has shares worth £4.9m, but that didn't stop him claiming £23,075 - £8 short of the maximum - for his second home in London. He now promises to oversee swingeing cuts in public spending in an emergency post-election budget. He has said it is "absolutely not the case" that public-sector workers are dreading cuts, feeling instead a "sense of liberation".

Owen Paterson, 54
Shadow Northern Ireland secretary
Education Radley College. Cambridge University
Wealth £1.5m
Paterson, married to the 4th Viscount Ridley's daughter, owns a large country estate in his North Shropshire constituency (he voted strongly against the hunting ban). He is a member of the Cornerstone Group, which published a report describing the NHS as "Stalinist" and calling for it to be replaced.

Jeremy Hunt, 42
Shadow culture, media and sport secretary
Education Charterhouse School. Oxford University
Wealth £4.1m
Hunt is paid £1,000 a month for two hours of business advice to Hotcourses Ltd, an educational guide publisher, and enjoyed a £245,181 dividend payment from the company in 2006. He still felt hard-pressed enough to submit an invoice for 1p for a 12- second mobile phone call.

Gregory Barker, 43
Shadow minister for energy and
climate change
Education Steyning Grammar School, West Sussex. Royal Holloway, University of London
Wealth £3.9m
Gregory Barker, a former adviser to the Russian billionaire and Chelsea FC owner Roman Abramovich, reportedly made millions when he sold his stake in a recruitment advertising firm, and continues to rake in cash as director of Flare View, a property investment company, and as an adviser for Pegasus Capital Advisors. He made a £320,000 profit in just over two years by using the second-home allowance
to buy and sell a house in the exclusive borough of Chelsea, in central London.

Philip Dunne, 51
Conservative whip/deputy chairman
Education Eton College. Oxford University
Wealth £5m
Dunne, a super-rich backbencher has had a 20-year career spanning investment banks in London, New York and Hong Kong, as well as Ottakar's bookshop, which he co-founded. The son of Sir Thomas Dunne, the Lord Lieutenant of Hertfordshire, he has done all this while looking after the family farming estate.

Brooks Newmark, 51
Conservative whip
Education Bedford School, Bedfordshire. Harvard University. Oxford University
Wealth £3.2m
Yet another Conservative MP with a high-flying background in the world of finance, Brooks Newmark held a senior role at Lehman Brothers, and spent eight years at a British merchant bank. He now owns the investment firm Telesis Management and has shares in two other investment firms, from which he gets undisclosed payments.

Zac Goldsmith, 34
Conservative parliamentary candidate
Education Eton College (expelled). Cambridge Centre for Sixth-Form Studies
Wealth £300m
Son of Sir James Goldsmith and his third wife, Lady Annabel Vane-Tempest-Stewart, Frank Zacharias Robin Goldsmith is an environmentalist and socialite. An odd combination, perhaps, but both grandfathers were Conservative MPs, so he is walking a well-trodden path.

Michael Spencer, 53
Conservative Party treasurer
Education Worth Abbey, West Sussex. Oxford University
Wealth £250m
A close friend of Cameron's, Spencer owns a 21 per cent stake worth £474m in the money broker Icap, which he set up in 1986. He was caught up in controversy last year when it emerged he had pledged his stake in the investment bank Numis as security for a loan, a legal grey area. When he did sell his shares, he made only £16m - a third of what he would have gained in 2006 when shares were at their peak. It's a hard life.

Research by Samira Shackle, Stephanie Hegarty and George Eaton

This article first appeared in the 05 October 2009 issue of the New Statesman, The tories/the people

Jeremy Corbyn. Photo: Getty
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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.

 

 

This article first appeared in the 05 October 2009 issue of the New Statesman, The tories/the people

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