Though Cowards Flinch

In November 2011, a BBC Radio 5 Live newsreader stated:

Employers are to be offered subsidies worth a billion pounds over three years to take on more 18 to 24 year olds. Companies will be paid more than 2,000 pounds every time they take on someone new.

This was an entirely false statement, and I lodged a formal complaint with the BBC.  The complaint is here.

I have now received an apology from the BBC. The whole letter is scanned in below (with a courtesy name redaction) but the main part of the apology is:

Please accept our department’s sincere apologies for the long delay in replying, this is most unfortunate and regrettable as we understand correspondents appreciate a quick response.

We discussed your points personally with the senior editorial team responsible in Radio 5 Live, who have listened back to the headline sequences in question after reading your complaint. Having done so, we would like to offer an apology for the incorrect information contained therein.

We suggested the billion pounds was all for the employer subsidy programme, but this is clearly not the case.

The Press Release [from the Department for Work and Pensions] does outline a package of measures which add up to £1bn, but we did not give that impression – we should have made clear there are different elements dealing with different groups of people over a period.

We apologise for getting this wrong.

This is fine as far as it goes, and the BBC is to be commended for offering an unreserved apology after a thorough investigation, even if it did take longer than it might have done. 

Nevertheless, it does leave a couple of questions hanging.

First, my complaint did specifically ask:

that the BBC now publicly retract the statement it put out in the 11.30pm bulletin, and any other bulletin in which it was broadcast, and make a public apology for misleading the public. 

The response makes no mention of a public retraction, so I must assume none is planned.  This means that a significant number of listeners may still be left with the impression that the government is planning to spend £1bn on employer subsidies, when in fact only 39.4% of that is planned.   The fact that the BBC apparently has no duty to correct falsehoods, while the press does (to an extent) seems a strange anomaly.

Second, and perhaps more seriously, no-one at the BBC appears willing or able to challenge the Department for Work and Pensions over why it issued such an unclear, and arguably deliberately misleading, press release, in which a central item (the work experience programme) appears both uncosted and, by deduction, bizarrely expensive (at £1, 624 per 6 week work placement comparied with £2,275 per 6 month employment subsidy).

Hopi Sen wants it both ways. 

First, there’s his defence of the Labour leadership on this past week’s ’accepting the cuts’ bullet in foot:

Trust me, this isn’t a policy coup, Blairite, Black Labour, or otherwise. What the leadership have done is say we’ll start in Government with the situation the current lot leave for us, and that with a tight fiscal inheritance there will not be room to both unpick the choices of the immediate past and focus on increasing employment.

Right so that’s clear.  Ed & Ed are just making it clear that the country will be in shocking state by 2015.

But then Hopi has advice for the unions:

Messrs McCluskey and Kenny have instead decided to invite the Leadership of the Labour party outside, presumably for further detailed discussions.

I think this is a tactical error on their part. There is little appetite in the wider party for internecine warfare, as Luke Akehurst says. Also, you should rarely enter into a fight your opponent feels he must win.  The Eds can’t be seen to lose this tussle.

What? So Ed & Ed are not just clarifying things.  They’re taking on the unions and desperate to win.

As I say, Hopi’s trying to have his cake and eat it too (to be fair, he no longer eats cake).

But this is simply a starter confusion.  What really get my leftie goat is this advice to the union leadership:

[T]he smart move would be to use leverage gained by tacitly accepting Labour’s decision not to unpick 2010-2015 decisions to secure a strong commitment to a more expansionary post-2015 policy. 

Hopi doesn’t expand on what leverage, exactly, will be gained by accepting without demur the two Eds’ acceptance of public sector wage cuts of around 15% in real terms over the four years for which they are due to run. 

That’s presumably because there won’t be any. 

How on earth are union leaders likely to gain bargaining power – this is what I assume he means by leverage – by NOT defending the interests of a substantial number of their members?  Surely, logically, the Eds would take this as a sign that the two biggest unions agree with them that there is some strange, anti-Keynesian trade off between wages and jobs, and that it’s therefore a good idea to enforce a tight incomes policy for the duration of the 2015-20 parliament.

Hopi’s quasi-advice to the unions is at best confused, but he is right to say that we should look forward, not back, so I’ll do a Hopi and offer my own unsolicited advice to Messrs McCluskey and Kenny,

This advice recognises that it’s currently their core job to defend the financial interests of their members, but  also recognises that total disaffiliation would leave the unions with no prospect of credible representation in parliament.  This is not to say that it’s great representation at the moment, but to throw away the long-held institutional ties, and with it any prospect of improved representation, over a couple of opposition speeches, would be foolhardy in the extreme.

So what to do?  How is genuine pressure brought to bear on Ed & Ed to rethink how their Keynesian macro-economics and their oppositional politics need to connect, but without talking up the ‘nuclear option’ into a narrative a way which can ultimately become self-fulfilling, and disastrous for the labour movement.

The answer is to move, very publicly, towards a radical restructuring of the way in which the unions affiliate to and support the Labour party.   As I’ve set out previously, this would involve putting in place plans for:

1.  Disaffiliation by Unite, the GMB and others from national Labour party;

 2.  Re-affiliation by these same trade unions to CLPs (or branches) with a commitment to the same or more financial contribution overall;

3.  A campaign for the re-affiliation to CLPs of trade unions which have already disaffiliated from the national Labour party;

Such a structural change (and I accept it might happen most easily at regional level as a transition step) would have a huge impact upon the way the Labour party both operates.

The key impact, obviously, would be that the reversed flow of financial resources.  Unions and ordinary members would start to get a say both on how affairs are run locally, and how their MP (if there is one) represents them, because they hold the purse strings.  The PLP leadership would lose its de facto power over a signficant chunk of its funding, and would need to deal with representation from a wide range of MPs now much more open to union influence.

If Ed & Ed want to play hardball with the unions – even at the expense of their own economic logic – they are entitled to do so, and of course they are as aware as I am that the union threat to total disaffiliation is probably an empty one, at least at this stage.  But they should also remember that the unions have ways and means of exerting influence on behalf of their members which fall short of the nuclear option both sides want – nobody but the ruling class gains from a labour movement apocalypse – but which are effective nonetheless.

Bye then.

P.s. Tories only like Blair because he stayed in power for so long. In fact he’s not the only person they love for that reason. If I didn’t have principles, I’d probably like someone on that basis alone, too. But, alas, I want to challenge the political class, their lobbyists and the toxic press – not give in to it. You go ahead though, cool handed one, it’ll be good for you. And of course you can come back anytime. Perhaps when your love of politics is based on more than just winning the election, but winning the debate. I mean sure, Blair won all those elections, but do we live in a better country? Got to ask yourself, did I join the Labour party because I’m massively into short term bursts of power for my mates, or do I want to change the world. For all your posturing on enterprise this, and I want this for children that, what it really boils down to is you want to win elections no questions asked. Well, that’s not for me. I want to win elections because I’m doing this country good, and I’m making sure the best is pursued for it, and the most vulnerable don’t suffer in spite of it. Yup, you join the Tories. It’s just a game to you, isn’t it, er, Luke. That bloke what’s off twitter zzzzzz.

Statement to follow.

I’ve been writing to my MEPs (North West England) about the EU-India Free Trade Agreement, seeking their views and requesting specific actions.   

Here’s how I’ve got on:

Brian Simpson (Lab): Email 20/12/11, personalised email reply saying the office closing for Christmas and I’ll get a reply after Brian has discussed with staff when Parliament returns 09/01/2012.

Arlene McCarthy (Lab) Email 20/12/11, personalised email reply same day saying the two Labour MEPs in North West divide the area between them for casework and as I fall into Brian Simpson’s area he will deal with it.  Email copied to Brian Simpson.

Sajjad Karim (Con): Email 20/12/11 using email address on his website, ”bounceback’ email indicating non-delivery.   Message resent via website today.

Jacqueline Glover (Con): Email 20/12/11, no reply

Sir Robert Atkins (Con): Email 20/12/11, no reply

Chris Davies (LibDem): Email 20/12/11, automated reply promising response.  Nothing since.

Paul Nuttall (UKIP): Email only sent 15/01/12 because I was well aware of UKIP’s position with regard to its recognition of EU’s authority to negotiate on behalf of members states, but then I decided to email anyway just to complete this little audit.  Reply within 24 hours from assistant confirming unwillingness to engage.

Nick Griffin (BNP) No email sent.  There are limits.

Something very interesting happened in Spain tonight. The personification of the link between fascism and the people’s party (PP) tonight ended - Manuel Fraga Iribarne died, aged 89, of heart failure.

He was around for the creation of the People’s Alliance – as president of it – and present when PP were drawing up their democratic charter, instrumental in tearing up Franco’s commitment to censorship. But Iribarne himself was no angel. He confessed approval of Franco’s regime, but was also very coy about it.

Being questioned on the subject he would reply: “One cannot choose the period of history in which one lives” before steering the conversation elsewhere.

In Franco’s government he was briefly ambassador to the UK, and in spite of political differences was a friend of Fidel Castro, who was a fellow Galician.

The chord that ties PP with the far right has lost a key component, but lives on through a subsection of Franco supporters who still maintain home in Spain’s ruling party. A symbolic death may have occurred, along with the real one, but fascism is alive in Spanish politics to be sure.

Beya adds:

Fraga was indeed no angel. 36 years after the civil war had ended and 2 months before Kiko finally kicked the bucket, 3 members of FRAP (Frente Revolucionario Antifascista y Patriota) and 2 members of ETA were sentenced to death in Spain. Now known as the last people to be executed under Franco, their sentences caused a wave of protest and condemnation both in and out of the country. Even the Vatican waded in, calling for the five young lives to be spared. But alas, on the morning of the 27th September 1975 five young men were executed by firing squad.

 
At this time Fraga was ambassador to the UK, and by the day of the executions a huge crowd of thousands had formed outside the Spanish embassy in London to protest against the killings of these young men and Franco’s regime in general. Fraga, being of the ilk that he was, must’ve thought it a fabulous idea to shamelessly celebrate the deaths of these young men with a party inside the embassy because that is exactly what he did. While people stood outside protesting and mourning, he opened his doors to the fascist elite and their wives. Women in huge fur coats and expensive jewels sashayed their way through the doors, men in their smart tuxes and smug grins made their way in behind them. The laughter and cheer that emanated from the embassy was a slap in the face for all who stood outside calling for justice and democracy. That day, Fraga and his cronies laughed not just at the men who had been executed, but at their families and all who stood in solidarity with them.

1.  Hurd

In 2010 I offered this cautious judgment on the shorter term future of Social Impact Bonds:

[D]angers notwithstanding, the model of financing is an interesting and valuable innovation, thought up and developed by good people interested in the real benefits of preventative work in the Criminal Justice System……

In any event, it’s odds-on that the model will spread within the CJS, and beyond…..The financial attraction for governments is too strong, and too many organisations will be tied in by the post-CSR ‘ground zero’ landscape for the voluntary sector for it to be any different; organisational interests and survival will ensure that any qualms are set to one side.

I was, of course, entirely correct in my prediction.  By August 2011, the Minister for Civil Society, Nick Hurd, had authorised four local authority pilots for Social Impact Bonds aimed at funding work with “problem families”, and third sector policy gurus now seem to talk of little else.

2.  Huhne

Unfortunately for Hurd in the Office for Civil Society, Huhne at the Department for Energy & Climate Change (DECC) may just have killed off Social Impact Bonds before they really got going.

DECC, you will remember, are in trouble with the courts over their decision to slash solar power Feed-in Tariffs two weeks before a consultation on whether or how they should be cut had finished.  Whatever the final legal outcome, there is no doubt that Huhne, and his junior minister Barker, acted both arrogantly and stupidly by overriding normal consultation processes in this way.

In London over the last couple of days, talking to those in the know, I learned how this government stupidity has been taken to heart by the very people  Hurd wants to get behind Social Impact Bonds – Trusts, Foundations and the more enlightened parts of the fund management industry - and how this may well have a huge impact on the very survival of Social Impact Bonds.

3.  How Huhne hurt Hurd

To understand what’s going on here, it’s important to remember what a Social Impact Bond is i.e. that it’s not actually a bond.  Whereas a real bond is purchased by an investor on the basis of a guaranteed return – and is therefore seen as a relatively safe investment – the return on a social impact bond depends on whether or not the service outcomes delivered are sufficient to meet the contract between the service provider and the eventual funder of that service. 

In most cases this eventual funder of the service is the government, who is content to spend money on the (preventative) service outcomes on the basis that it will not then be spending even more money on non-preventative services.  Spending some money on keeping people out of prison is better than spending lots of money keeping them in prison, and so on.

But if investors are going to invest in Social Impact Bonds, which they know only bring a return if the service outcomes are delivered as per contract, they need to be sure that the contract will be honoured.

The decision by DECC not to honour the Feed-in Tariff  has sent shockwaves through the world of those who might have been interested in investing in Social Impact Bonds for social and philanthropic reasons (or instructing their Fund Managers to do so), but who are also keen (and indeed have a fiduciary duty) to maintain their capital.  

Indeed, the need for stability and security in the developing finance model is widely recognised by those who know anything about it.

The shock is not least because renewable energies is, or was, seen as a key area of possible investment opportunity.  Finance South East, for example, is right now looking for investors for a 15m scheme:

Discussions are currently underway with interested investors into the Fund, which is likely to include charitable foundations as well as private sector corporate groups which are dedicated to supporting  reduction in UK carbon emissions and to engaging with local communities.

I wish them well, but it’s difficult to see how these discussions have got any easier since DECC stepped in to wreck the solar power industry.   Certainly, the pensions and insurance industry – a vital part of the picture if Social Impact Bonds are ever to be rolled out on a wide scale –  is far from impressed:

“There’s been lots of pension fund investment in solar PVs,” Aviva Investors real estate investment director Chris Laxton warned last week. “But the sector won’t make sense under the new regime.”

4.  How Hurd should bring Huhne to heel (but won’t)

If Hurd had any sense – or indeed any real passion for social impact bonds, he’d be banging on Huhne’s door, telling him that for the greater good DECC should call off its legal action, apologise for the mistake it made, and set about discussing a sensible tail-off plan for Feed-in Tariffs which allows the solar power industry time to adapt to lower, and ultimately, no subsidies.* 

Huhne, in turn, should be sending out a clear message to investors that, this cock-up aside, his government honours its obligations.   In so doing Huhne and the Treasury need to realise that trust in the government to honour its obligatiobs lies  at the heart not just of Social Impact Bonds – which will have a fairly short life anyway, because they are too complex an instrument – but in Osborne/Norman/Cable’s whole medium term plan to deliver growth while keeping the necessary debt off the balance sheet.

Frankly, though, I can’t see this happening;  this government’s operational code means that it simply doesn’t “get” stuff like that.  It will, I suspect, take a more policy-astute, dare I say ”joined up”, Labour government to understand and manage that process.

*There is, after all, a big problem with the FIT scheme, in that it tends to redistribute, through energy bills, from the poor to those who can afford to install solar; community-owned installations of the type envisaged by Finance South East, are not going to be on a big enough scale in the shorter term to counteract that. 

So while the subsidies introduced by Labour were broadly justified as a move to get the solar panel industry going, they do need to be phased out over time, and subsidies for other renewable technologies need to be skewed towards those organisations, including local authorities and housing associations, who demonstrably invest proceeds back into redistributive measures.