Welcome to my Blog

It mostly covers my work as UNISON Scotland's Head of Policy and Public Affairs although views are my own. For full coverage of UNISON Scotland's policy and campaigns please visit our web site. You can also follow me on Twitter. I hope you find this blog interesting and I would welcome your comments.

Monday, 12 March 2018

Why ownership matters

Ownership gets too little attention in industrial policy and in public service reform. Richard Leonard, in his first Leader's speech at the Scottish Labour Party conference, put some clear red water on ownership between him and current UK and Scottish government policy. That is the right approach because ownership does matter.

While Richard rightly highlights municipal socialism, this does not mean the adoption of a Morrisonian command and control model. I was highlighting this point at the Scottish Co-operative fringe meeting on Saturday.

This is an exciting time for the development of new thinking on economic policy and role of co-operatives. In a 2016 Red Paper publication, Richard Leonard and others set out a different industrial strategy with a strong role for cooperatives. My chapter in the same publication described how we can take a different approach, extending national policy to local economies - often described as the foundational economy.

The ideas have been built from substantial evidence based studies written by NEF, Centre for Local Economic Strategies, APSE and of course Co-op Party. Some of these ideas are being applied in practice in cities like Cleveland and Preston.

 The foundational economy is built from the activities which provide the essential goods and services for everyday life, regardless of the social status of consumers. These include, for example, infrastructure; utilities; food processing; retailing and distribution; and health, education and welfare. They are generally provided by a mixture of the state (directly or through procurement); small and medium enterprises (SME); and much larger companies such as privatised utilities or branches of mobile companies such as the major supermarkets. These larger firms often originate from outside the local economy, and all too often are the first to flee when the economic cycle shifts.

It's a complex idea, but The New Economics Foundation (NEF) in their handbook for local economies called ‘Plugging the Leaks', describe the concept like this:
"Imagine the local economy as a bucket. If someone has £5 and spends it in the local grocers, the £5 stays in the bucket. But when they pay the electricity bill, it doesn't stay in the bucket. Spending on electricity is like a leak in the bucket: the fiver leaks out as the supplier is a business outside the area. But there are usually ways of stopping all of the five pounds from leaking out. Insulating the house will cut the electricity bill, for example. If there's a local company to do the work, there'll be even more in the bucket"

This is not about local protectionism, it's about strengthening local linkages. It also generates a local multiplier - money spent locally gets spent again locally. This concept is particularly relevant in Scotland where disadvantaged communities often sit next to affluent communities. This can create an umbrella effect when money directed at poor areas too often sprays off the wealthy neighbours.

These ideas have been highlighted very recently by Shadow Chancellor John McDonnell. The Labour Party is setting up a Community Wealth Building Unit to support co-operatives and mutuals as a means of driving local economic growth. It is important to emphasise that this approach is part of economic and industrial policy, a point that has held back cooperative development in public policy for too long.

These are exciting times for those who believe that ownership matters.  As a long-standing cooperator Richard made clear his support for new cooperatives in the private sector as well as a substantial expansion of public ownership, including the railways, postal services, energy, social care, public housing and of course PFI contracts.

These are new ideas on economic policy, being applied in a practical way with a Labour Leadership in the UK and Scotland, which understands that ownership matters.

Thursday, 8 March 2018

Labour and exiting the EU

I often start a conference presentation by saying I am not going to talk about Brexit, but usually do. The subject is unavoidable as it impacts on so many aspects of public policy. As we approach the Scottish Labour Party conference this weekend, here are my thoughts on how Labour should approach the issue.

I voted Remain and my trade union campaigned for a Remain vote. However, that wasn't the outcome and we have to respect that vote. And before some folk get too excited, it was a UK referendum and subsequent polls show that people living in Scotland share similar views on issues like immigration control and they certainly want common trade rules across the UK.

I have written many UNISON submissions to parliamentary committees and elsewhere on the challenges that Brexit brings – most recently on workforce planning in the health and care sector. I have also argued that we should not just defend the rights of EU nationals to stay in Scotland but demonstrate that they continue to be welcome here. I have also made the case for devolving many aspects of immigration policy on the Quebec model and opposed the blatant disregard of the devolution settlement in the EU Withdrawal Bill.

The issue for the Scottish Labour Party this weekend is how Labour should position itself, given the chaotic mess the UK Government is in.

I start from the position that Labour is not the government and is not leading the negotiations. It is the job of opposition to scrutinise government and to indicate a broad alternative approach. Keir Starmer set out his six tests, which I believe form the basis for a Labour response to the Brexit negotiations. As Jeremy Corbyn said in his recent speech, "Our priority is to get the best deal for people’s jobs, living standards and the economy. We reject any race to the bottom in workers’ rights, environmental safeguards, consumer protections or food safety standards."

Most commentators agree that his speech provided some much-needed pragmatism - supporting a new comprehensive UK-EU customs union and strong relationship with the single market. I would argue, as have others, that it was smart politics as well.

It also seems likely, based on the Chancellor’s speech yesterday, that a transition period will be agreed of two years, which “would allow both parties to continue negotiating a free trade agreement”. It could therefore be some time before the Westminster Parliament will hold a final vote on this issue.

In this context, it seems very unwise to adopt a rigid position on the single market at this time. The options available have a variety of nuances as set out in the helpful IPPR paper ‘The Shared Market’. This chart outlines their take on the options.

I understand why those who passionately believe the referendum outcome was the wrong outcome, would want to try and replicate EU membership, if not push for a second referendum. I am more sceptical about the motives of others, who appear more focused on using this issue as a means of continuing their campaign against the leadership.

However, attempts to by-pass the referendum result also give the impression, not just to the majority Leave voters, that Labour is simply bowing to the political establishment. Just another part of the political elite that doesn’t recognise their concerns. The focus and strength of Jeremy’s campaign is that he understands those concerns and will act on them. Too many Remainers fail to grasp the impact our broken economic system has on many people in Labour’s voting base.

We also have to recognise that the Single Market is not a prefect model. The SNP government’s Single Market study is an example of an approach that lacks critical analysis. The gushing support in the paper for the Services Directive, which the Labour movement campaigned against, is one example. Wishful thinking over the Social Agenda, which has largely died since the Lisbon Treaty, is another.

The Single Market not only places actual restrictions on some of the radical policies we would wish to pursue, but it also places a ‘regulatory freeze’ on civil servants and law officers. Recent examples in Scotland include ferry tendering and procurement policy.

I accept that we may have to weigh up the economic benefits of a single market as against the restrictions it imposes, but we don’t have to do that now. We need to see which of the options set out above are practical and make a judgement on all the facts.

Andrew Harrop from the Fabian Society makes this point well when he said:

“The Labour frontbench may ultimately argue for a ‘Norway’ Brexit on EEA terms. But this will only happen if or when it is clear that no less-integrationist alternative is feasible – and when a sizeable portion of Leave voters have changed their minds to the extent that they are prepared to accept the price of soft Brexit.

Neither of those conditions applies today, which is why the Labour centre-of-gravity has not united behind the single market option. In fact it suits the Labour frontbench to be sandwiched between the single-market out-riders on its own backbenchers and the government’s impossible-ist ‘goldilocks’ position.”

For these reasons, I am comfortable with the position Jeremy Corbyn set out in his recent speech. It provides a way forward towards a soft Brexit, with clear red lines between Labour and the ‘Mad Max dystopia’ of the Tory Brexiteers. It also provides a position that has broad support across the Labour movement.