Political change has to be more than a slogan

The elections in England ought to be a wake-up call to political parties, particularly about the disillusionment many voters feel about our politics. The warning signs were present in the opinion polls and surveys from ERS; others have highlighted the need to rebuild trust in politics. The More In Common think tank reported that their focus groups were brimming with a level of “anger, despondency or misery about the state of Britain that doesn’t feel sustainable”. It is not an accident that in the local elections, 61% of the most deprived wards were previously held by Labour. Now, roughly 85% are held by Reform.

Some take a more relaxed position, arguing that many voters treat politics like buying a new soap powder. Reform is just the latest shiny brand; after all, we have been here before with UKIP. The ‘red wall’ seats are often viewed as a barometer of opinion, but as academic interviews have shown, the dissatisfaction in these areas goes much deeper. People interviewed generally loathed politics, “They don’t [do] what they say, they don’t keep to what they say they’re going to do. They tell lies.” Roughly one-third of the residents interviewed understood politics largely or predominantly through the frame of corruption. From the expenses scandal, Boris Johnson partying during the pandemic, to the current government ministers accepting donations and Taylor Swift concert tickets. This is one of the reasons that action on political donations is so necessary.

I don’t believe the soap powder analysis works because broader attitudes are in play, and Reform is doing much better than UKIP ever managed. I was in Romania two weeks ago, meeting researchers I had worked with for a European think tank. They were understandably focused on their elections and the growing strength of the far-right Alliance for the Union of Romanians, which subsequently took 40% of the vote in the presidential elections. They pointed to surrounding states, with leaders like Orban and Vučić, taking similar populist positions. These leaders are also starting to make territorial claims. You don’t need to be a historian of the Balkans like me to know where this leads. The hope that Germany would be a stabilising influence is gone, while Chancellor Merz attempts to ape the far-right Alternative für Deutschland (AfD) party.

You might argue that Mark Carney’s Canada win and Anthony Albanese's victory in Australia prove that there is an alternative narrative. However, these were wins based on a nationalistic response to Donald Trump, which won’t be available to all centralist politicians. Having said that, a new poll found that voters regard Donald Trump as a bigger threat to the UK than terrorists, so linking Farage’s blind obedience to Trump might be part of a strategy. Nothing beats the Trump administration when it comes to corruption. 62% of all Brits, including 60% of Labour-Leave voters and 53% of Labour-Reform Switchers, back joining forces with the EU over the US.

For UK Labour, the usual post-election honeymoon was very short. Keir Starmer is now the most unpopular PM in recent history after a series of policy decisions that, if not avoided, could have been mitigated. The many good things the new government has done, including employment rights, minimum wage, trade deals and funding for public services, are being drowned out by some poor and politically inept decisions. Many of us suggested thresholds for the Winter Fuel Payment at the time, along with different approaches to WASPI compensation. However, listening is not something this government does well, and No.10 has rejected changes, and internal debate has been closed down. The benefit cuts may not be as electorally unpopular, but the consequences will play out over years.

Aping Reform won’t work, as one of the ‘Red Wall’ voter interviews said, “Sometimes I just think, these people, they say what they think we want to hear. And I find that quite annoying. That, I find, that as if they think we’re thick.” In any case, Labour is probably more at risk from the left, with the Greens and Liberal Democrats doing well in the elections. If Labour seeks to ape Reform, voters will largely opt for the real deal and vote for Reform, while alienating supporters who despair at the party adopting Reform-like positioning. A study by Persuasion UK found that of potential Labour switchers, only 11% said they would consider voting for Reform. By contrast, 29% would consider the Greens, and 41% the Liberal Democrats. If all of the ‘Reform-curious’ abandoned Labour for Reform (many won't because they don’t support Reform polices), Labour would lose 123 seats, but they would keep a parliamentary majority. On the other hand, if the Liberal Democrats and Green Curious switched, Labour would lose 250 and the election.

So, what about Scotland? Some argue that we are different and Scottish voters won’t buy Farage and his snake oil. However, polling and actual votes tell a different story. Some ultra-nationalists are salivating at the thought of Prime Minister Farage, hoping that this will get independence over the line. In fairness, while rightly calculating that Reform will likely do more damage to the Tories and Labour, John Swinney still understands the broader risks to our politics.

Welsh Labour has long adopted a more detached strategy from UK Labour than the Scottish Labour Party and has achieved better results, although that may be waning. Eluned Morgan has said she will pursue a left-wing “red Welsh way” and draw a clear dividing line between Welsh Labour and the national party.

Scottish Labour is struggling to differentiate its message from the unpopularity of the UK government. With independence further down the voters' priorities, focusing on the SNP’s poor record on public service delivery is a fair attack line. Again, I think the Scottish Government has done many good things, but consistently prioritised process over delivery. However, good attack lines are not enough. If anyone in Scottish Labour thinks trading pledge cards on waiting lists and GP appointments is enough, they are seriously deluded. Scottish Labour also needs a positive message to differentiate itself from the SNP. My suggestion is to devolve real power to communities. This combines how to respond to the far-right while contrasting Scottish Labour’s support for localism with SNP centralism. Even UK Labour is likely to have second thoughts about their centralisation of local government in England, with huge Tory/Reform-leaning populations blocking government policy. Suddenly, directly elected mayors have all the downsides that many of us have highlighted for years.

Scotland has some of the largest councils in the world, with an average population of 170,000, against a European average of just 10,000. It’s time to give real powers to actual communities of place. Giving them the resources to fix their high streets, fill the potholes, reopen the libraries and sports centres, and clean up our public spaces. These are the issues that mattered to voters last week.

For Scottish Labour to shift the dial, three things have to happen. First, the UK government has to change its approach to some key voters' concerns. Second, there has to be outright confrontation against the far right, with no more appeasement. Third, Scottish Labour’s positive vision should be about empowering communities. When politics has become detached and alienated from people’s lives, we must return our politics to them. 

And a few more ideas in this new book.

It's health inequalities stupid!

Benjamin Franklin famously said that ‘nothing is certain except death and taxes’. Well, it used to be pretty certain that this generation would live longer than the last – but no more. Life expectancy was improving until 2011 when it started to decline in Scotland.

This was my opening pitch when moving the Socialist Health Association Scotland motion on health inequalities at the recent Scottish Labour Party conference. The key point is that as health inequalities underpin most of the challenges facing our health and care systems, political parties should put radical action on health inequalities at the heart of their manifestos.

Let's start with why we should be concerned that life expectancy in Scotland is no longer rising. While deaths relating to COVID-19 play a part in explaining recent falls, the deviation from the long-run trend dates back to the early 2010s. More people in Scotland are in relative poverty, more are likely to be inactive due to long-term illnesses, and food insecurity, homelessness, and fuel poverty are all higher than they were. The SHERU report found that key outcomes related to health and inequalities are not significantly improving and are, in some cases, worsening.  The biggest difference in female healthy life expectancy is between the Orkney Islands (77.5 years) and North Ayrshire (54.0 years) – over 23 years difference.  A gap that applies to almost all the leading causes of death.

This isn't an easy debate for political parties. The health debate in Scotland focuses almost entirely on the NHS, partially driven by a less than edifying parliamentary scrap each week, but it reflects how the public thinks about health. Health equals the NHS. It is of course vital that we continue to make the case for the NHS when you have Farage and his Reform private company arguing for privatisation. The US healthcare corporations who have created the most expensive and inefficient healthcare system in the world are rubbing their hands with glee – and they have Trump to press their case through trade deals.

However, the actual pressure on our health and social care system comes from poor health outcomes caused by inequalities. When household income is too low to afford essential goods and services like food and warm homes, participation in everyday social activities leads to greater social isolation. This is not about behavioural factors – it’s about the big issues like income support, wages, employment rights, housing, air pollution, crime and fuel poverty. I remember running a fuel poverty course for health visitors who vented their frustration at returning time and time again to the same families with the same health problems caused by cold, damp housing.

We have many strategies in Scotland, beautifully laid out in glossy documents. What we rarely have is measurable action and outcomes. We have some isolated initiatives, like the excellent Scottish Child Payment, but no comprehensive plan to fully meet the statutory target of 10% of children in relative poverty by 2030/31. As the SHERU report and others have highlighted, there is limited evidence that current policies have effectively reduced inequalities.

All of this was highlighted by the Christie Commission over 13 years ago. I was an expert advisor to that Commission, and we calculated that 40% of all public spending was related to failure demand - putting right the impact of inequality. So, when ministers and others talk about public service reform, the solution isn’t going to be found in efficiency targets and the like. It requires preventative spending that tackles inequality before creating the failure demand, which costs much more. I remember talking to a lecturer running a pilot course for single mothers, helping them to keep their children out of care. The course was successful, but no one could fund the £450 per head to continue it. It can cost over £5,000 per week to place a child in a private care home. How bonkers is that!

Despite our economic challenges, we are a rich country, but the investment in preventative spending has to be paid for. This is spending to save, so we need to look at ways of increasing current spending and how long-term investment can be financed. In the short to medium term, the work of Tax Justice Scotland is essential. In the longer term, we might look at what the EU, with the UK, is considering with bonds to pay for increased defence spending. Now, I am all for financing the defence of Ukraine and the rest of Europe against Putin and his useful idiot Trump. But if we can spend to save for that eventuality, we should be able to do the same for health inequalities. This is an investment in our country’s future.

Public Private Partnerships – surely not again!

I thought I wouldn’t need to write about PPP ever again. However, as the Chancellor is considering private finance for new infrastructure projects, a new generation of politicians and officials must be reminded of this bonkers idea.

 

A Public-Private Partnership (PPP) is a funding model for public infrastructure projects. It is an umbrella term for schemes like the Private Finance Initiative in the UK. It encompasses schemes such as the Hub programme and the Non-Profit Distributing (NPD) model in Scotland. The Tories invented PPP, although the Blair/Brown governments massively expanded it. The SNP came to power in 2007 and committed to ending these schemes but simply rebranded them through the work of the Scottish Futures Trust. Even the Tories abandoned them for new projects in 2018.

The Chancellor is considering such models because of the fiscal pressures the UK is currently under. They are proposing to tweak the model with the introduction of ‘value-for-public-money’ clauses. This test looks similar to those in the old model, which was easily circumvented. PPPs claim to offer a way to avoid tax rises (in the immediate) and break fiscal rules. However, whilst PPPs provide a way to get around short-term budgetary rules, they simply push expenditure forward and pressure revenue budgets. New Labour era ministers promote the model despite admitting it ‘is not without its shortcomings’. The industry is already salivating over the prospects of easy profits while claiming they have learned the lessons of PFI.

 

The evidence against using PPP is extensive. This briefing sets out the major problems and risks the UK has encountered through its extensive experiment with PPPs, including how they have:

·       Cost the government more than if it had funded the public infrastructure by borrowing money itself

·       Led to large windfall gains for the private companies involved at public expense

·       Enabled tax avoidance through offshore ownership

·       Led to declining service standards and staffing levels

·       Hollowed out state capacity to design, build, finance and operate infrastructure

·       Eroded democratic accountability

 

This is not just about historical costs; the price continues to be paid. PPP projects in Scotland typically run for 25-30 years, and you can view the cost for each legacy project here. In the UK, over 700 projects have been built using PFI since the early 1990s, worth around £60 billion. They distributed £300 million in dividends to investors from £1 billion in profits between 2005 and 2022. As NIESR points out, “We are spending far more in PFI repayments than the value of the assets and are locked into these contracts for decades to come. Most households wouldn’t take out loans on terms like this, so why did the public sector?”

A study of parliamentary inquiries into PPP scandals examined a consistent pattern of wrongdoing. Over the past decade and a half, billions of taxpayers’ funds have been unaccounted for. This appears to be mainly because private interests have been prioritised over public needs. Other findings showed that companies regularly reduced the quality of a service to maximise profits. Companies sometimes breach the terms of their public-private contracts because it’s in their economic interest. This even has a name – economists call it ‘efficiency breach’. As many of these contracts come to the end of their life, buildings are being handed back with huge maintenance bills.                               

Successive opinion polls show that the public wants essential public services to be nationalised, not handed over to private companies to make rip-off profits. The hard lessons of the past should not have to be relearned. We already know that taxpayers and consumers will pay the price.

ScotRail: public ownership is not enough

 The Herald has been running a series of articles on ScotRail since it was taken into partial public ownership as the ‘operator of last resort’. As is often the case, the headlines don’t always reflect the content, which is generally good, and the usual suspects have claimed it shows public ownership doesn’t work.

Last September, I wrote a briefing for the Reid Foundation, All Change on the Railways, which looked at ScotRail and the UK Government reforms. This was a warm-up for Mick Lynch's lecture at the Jimmy Reid Memorial Lecture in October 2024. It is worth remembering that under the Tories, only 85.5% of trains ran on time, and many more failed to run at all, not least because industrial disputes were deliberately left unresolved, wasting £1.25bn of taxpayers' money. This was also the case with Abellio in Scotland. Fragmentation, waste and bureaucracy beset privatised rail. While welcoming the decision to bring ScotRail into public ownership, I highlighted several challenges. These included driver shortages, ageing rolling stock, retiring engineering staff, passenger safety, and the need for an integrated transport and ticketing system. These all reflect years of mismanagement, which cannot be fixed in under three years of partial public ownership. ScotRail still operates under the failed franchise model, which has additional costs baked in.

The usual suspects have focused on increased costs, pointing to the grant increase from £446m pre-pandemic (2019/20) to £737m. However, we also know that Abellio was running at a loss above £100m, which they, or another operator, would insist on to keep the franchise running. Then, there is the need to settle the pay disputes, record inflation rates, and other costs associated with the mess Abellio’s desperate cost-cutting caused. Some of us can remember the shambles of the 2018 winter timetable, with months of cancellations and service disruption. So, while it is right to question any cost increases, they must be contextualised.

There is a lot of confusing data in the articles about passenger satisfaction based on different surveys over varying timelines, with some highly subjective questions. For example, what is the difference between 'sometimes' and 'rarely' in relation to delays and cancellations? However, overall performance and passenger satisfaction continue to be better than the GB average and trains in Scotland are more likely to arrive on time. As someone who regularly uses the train, I have to agree. Much was made of cancellation costs (still better since public ownership), but these are anyway mainly outwith the control of ScotRail, either due to the weather or Network Rail issues. A public service operator should ensure that passengers get home, which often means expensive taxis because coaches are not always available. I can recall several lengthy disputes with Abellio, who fiercely resisted paying the actual cost of their service failures - no MSP to complain to then!

ScotRail is also running 75% more services, and while that is slightly down on the pre-pandemic figures, other rail companies have not achieved similar pandemic recovery numbers. There has been a significant shift to home working, which has been encouraged in Scotland, with no Jacob Rees-Mogg leaving cards in civil service offices!

It is no surprise that passengers think rail fares are too high – they are. The peak rail fares pilot scheme boosted demand for ScotRail services by around 6.8%, short of the 10% target. However, this criterion ignores the policy's wider benefits, including two million car journeys taken off our roads. 

So, in three years of partial public ownership, services have improved marginally as the Abellio shambles have been patched up. However, that is only part of the story; as Transform Scotland says, a clear, coordinated strategy and long-term investment are needed to ensure railways are a “national success story rather than a symbol of missed opportunity". They criticise the ending of the peak fares scheme and point to the need to adapt services to evolving work and leisure patterns, with greater cohesion between improving rail services and facilitating traffic reduction. The Scottish Government has committed to spending over £6 billion on new road capacity on the corridors from Perth and Aberdeen to Inverness. Yet no similar ambition exists for the parallel rail routes. We have an ageing rail infrastructure and one of the oldest train fleets in Britain. If this sounds familiar to ferry users, it should. Transform argues that the strategy should include simplifying fares, prioritising user experience, improving service reliability, and investing strategically.

As I argued last September, the key to the future of our railways and climate change is to get us out of our cars and onto the train. Rail is in a unique position to accommodate transfer away from the car. To achieve that, we need a radical policy shift and investment. Public ownership is an essential step on that journey but not enough.

Social Murder?: Austerity and Life Expectancy in the UK

Life expectancy has increased in the UK more or less constantly for more than a century. Around 2012, this all stopped, and among poorer populations, it actually went in reverse. In some parts of the UK, the change to premature mortality rates (death under the age of 65 years) has been nothing short of astonishing. This is the starting premise of David Walsh and Gerry McCartney's new book, Social Murder? Austerity and Life Expectancy in the UK. 

The authors, from the University of Glasgow, demonstrate how evidence shows that these extraordinary changes to life expectancy and mortality rates have been mainly caused by UK government policies implemented in 2010 by the Conservative-Liberal Democrat coalition. This is all carefully evidenced, showing what happened, when it changed and who was most affected. While we often bandy around the word austerity, the scale of the cuts to UK government spending is poorly understood. By 2019, annual spending was down by around £91 billion compared to pre-austerity levels. To put that in context, that’s more than the GDP of entire countries like Croatia, Bulgaria and even Oman. Over the period 2010–19, the cuts add up to a total reduction of approximately £540 billion. These are changes on an extraordinary level.

While the authors provide a mass of statistical and other data to make a case that was downplayed by many public health organisations, they also tell the stories of how austerity impacted individuals through case studies. These also show how the coalition government introduced a policy of vilification and demonisation of people in receipt of social security benefits. One case study highlights the impact on so many, "Moira was now terminally ill. But even that was not enough to satisfy the DWP. One of her daughters, Nichole, was told in a ‘cruel and heartless’ phone call that they would not believe Moira was terminally ill unless they were told by a doctor that she only had a few weeks left to live. They had requested evidence from the general practitioner (GP), they said. The GP told Nichole they had received no such request. In August 2015, one month after her cancer diagnosis, Moira died. She was 61 years old."

There are also startling non-public health statistics that illustrate the arguments. For example, in 2010/11, the Trussell Trust, the largest food bank provider in the UK, had only 35 food banks across England; by 2019/20, they had almost 1,300.

They don't deny the impact of other factors on life expectancy, such as COVID-19, obesity, and inflation. However, they point out that the trends pre-dated COVID-19 and the cost-of-living crisis - austerity made them worse. As with the title from an apt Friedrich Engels quote, they don't mince words, "Put more bluntly, poverty kills. And austerity has increased poverty levels in the UK." Austerity kills through physical and mental illness, and children are impacted the most. The book also looks at the international evidence, showing that the greater the austerity implemented by those governments, the worse the life expectancy and mortality trends. They also criticise public health agencies – most notably PHE and the WHO, for not raising the alarm that austerity policies were causing life expectancy to stop improving overall and causing it to fall rapidly in the most deprived communities, which they argue 'is a dereliction of duty', and lessons need to be learned.

If mortality rates are to improve, the new UK Labour government and other governments worldwide must understand the evidence, quickly reverse the erosion of public services and social security systems and protect those at greatest risk. The authors conclude, "If poverty in a wealthy country is a political choice, as Philip Alston so eloquently pointed out, then so too is no poverty. It is not only within the gift of our political leaders to achieve this: it is surely their moral obligation." It is not just governments; we all have a responsibility: "To really change our politics we need to be active citizens: building campaigns and protests; creating and supporting institutions and organisations that can help."

The recent budget was a start, as the impact analysis below is the reverse of the austerity years. However, as I argued in my Budget blog, this direction change must be sustained. If you want the evidence, look no further than this excellent book.

Europe after Trump

I participated in a European foundation workshop last week, which examined the impact of a Trump presidency on Europe. While European leaders politely congratulated Trump and emphasised long-standing links, the policy community is less sanguine.

As you might expect, there was a lot of emphasis on the need for Europe to be less dependent on the USA. However, other strains of thought saw developments within Europe, making it more challenging to develop a coherent European response. When Trump was last in power, he faced a reasonably united Europe led by centrist moderates. Today, Europe has its own populist leaders who have a deep-seated scepticism of the EU and a desire to erode it from within. Many of these leaders also welcome Trump's return, although wary of his policies, particularly trade tariffs and the consequent dumping of China's overproduction on Europe. Add to that the political uncertainty in France and Germany, and Europe looks anything but united.

Despite Brexit, the EU remains Britain’s biggest trading partner, representing about 40% of UK exports. However, the US is the UK’s largest trading partner as an individual country, accounting for about a fifth of all exports and worth more than £190 billion a year. If it's an either/or, re-establishing ties with the EU is in Britain’s financial interest. Neither option is good news for the Chancellor's growth strategy.

My presentation was on the implications for defence. A Trump presidency means Europe and NATO must get serious about their defence. European defence policy has traditionally been heavily reliant on US support, without it NATO will be diminished, While there are some traditional Republican policy voices in his cabinet picks, we also have Pete Hegseth running the Pentagon and Tulsi Gabbard at national intelligence. Having a Putin apologist within the Five Eyes intelligence alliance is a frightening prospect, particularly for Ukraine, which could lose funding and the vital intelligence assets, mainly high-end satellites, that are essential to its defence.

The following two months could be critical for Ukraine as Russia intensifies its offensives to strengthen its bargaining position. Biden's missile decision helps Ukraine, but it's not a silver bullet. Trump's buffer zone plan is doomed to failure, as the UN peacekeepers in Lebanon would tell you. Putin will simply use the time to regroup before his next aggression. Front-line European countries identified this more than others at the workshop.

The silver lining is that it could galvanise the UK and the EU enough to take action on UK-EU security and defence cooperation. Germany, in particular, needs to develop a new defence policy with funding to match, ending reliance on the USA for protection and supporting Ukraine. To date, the average German military support for Ukraine represents approximately 0.1% of Germany's GDP annually. According to projections by the Kiel Institute, ceasing support for Ukraine could lead to costs ranging from 1% to 2% of annual GDP over the next five years.

Britain also needs a new defence strategy to end the myth that we can do everything. The British Army cannot deploy a whole division for combat. The Royal Air Force struggles to defend its airfields, especially against missile attacks, and the Royal Navy lacks enough crew for its remaining ships. In a sustained Ukraine-style conflict, our ammunition supplies would quickly run out. We should not forget that the so-called independent nuclear deterrent almost entirely relies on US technology. These were highlighted in a House of Commons Defence Committee report, and the new UK Government is developing a new strategic defence review. 

Since the Second World War, Britain has acted as a supporting player to the US, pursuing global goals without the means to sustain them. The last government's 'tilt to the Pacific' and 'Global Britain' rhetoric was just the latest iteration of this delusion. As Frank Ledwig put it recently, "The UK must decide: is it a global power or a regional force in the Euro-Atlantic area? It cannot be both."

Autumn Budget 2024

 I am sadly old enough to remember when budget purdah was a thing. Clearly, no more, with relatively few surprises in today's budget, which hadn't either been formally announced or at least briefed in advance. That doesn't mean it wasn't a massive shift in direction, arguably transformational. I would highlight three in particular.

The first is the distributional analysis. After 14 years of the Tories rewarding the rich, this looks like a proper socialist budget. This point is reinforced by specific measures such as changes in Capital Gains Tax, Inheritance Tax, and, the one I particularly enjoyed, private jet passenger duty.

Second, there will be a big increase in spending for devolved administrations. An extra £1.5bn for the Scottish Parliament this year and an increase of £3.4bn next year. As Stephen Boyd points out, this doesn't end all the Scottish Government's long-term challenges, but if I were Shona Robison, I would sleep better tonight. 

Third are the fiscal rule changes, which many of us have been shouting about for weeks. This means more significant public investment in rebuilding our public services. As the OBR highlights, this alone won't boost GDP in the medium term, but it does start to fix the foundations of the economy after many years of neglect. Some of us would argue it could have been more significant and, as the OBR also highlights, must be sustained. The historical record shows (below) that it is not the 1960s and 70s, but greater than the manifesto implied and a move in the right direction. The OBR assessment of the impact on inflation, debt, and the bank rate is marginal. 

Other excellent announcements include the above-inflation increase in the minimum wage and reserved spending on defence, although this is still below where we need to be as a proportion of GDP. Hopefully, the Defence Review will address the huge threats to our national security. Confirming the ending of VAT exemptions for private schools thankfully showed the absurd lobbying failed. I was also pleased to see action on the mineworkers' pension scheme. 

If there is one big disappointment, it is the failure to increase fuel duty. I filled up my car on the way home yesterday, and when I left the petrol station, I thought it would not likely be that low for some time. However, Fuel Duty was frozen, and the 'temporary' 5p cut was kept. For a government that cares about climate change, this is bonkers, particularly when increasing the cap on bus fares. Some economic downsides around household incomes and employment have to be acknowledged. Increasing Employer NICs is not a free lunch.

Overall, I was very impressed with this budget. Of course, there are actions I would have liked to see that are missing, and she could have gone further with others. Serious tax reform is still needed, particularly on wealth. However, this was a step change in direction, and you can't do everything at once. There is still some headroom against fiscal rules, so there is scope for further structural changes.