In opposition, Labour must turn its attention to taming the banks

Andrew Simms is nef‘s Policy Director and head of nef’s Climate Change programme.

We need a universal banking obligation. It would mean that everyone, by right, would have access to the full range of banking services – whereas at the moment, one of the great fights with the banks has been the way they’ve chosen customers to maximise profitability and created finance deserts for poor communities. On the ground, it propels people into the hands of vulture lenders with baseball bats.

We also need a green investment bank. The big question is how it should be funded. Some suggest creaming off the proceeds of the European Emissions Trading Scheme, or you could have a windfall tax on the fossil fuel companies, or carbon bonds – there are lots of ideas. And here’s one that could be a poetic test case: the Royal Bank of Scotland used to advertise itself as the Oil and Gas Bank. Given that RBS is now in the hands of the taxpayer, why not turn it into the Royal Bank of Sustainability?

Finally, Labour should aim at launching a competition inquiry into the big banks, and breaking them up. The great paradox of what happened after the crash was that banks that were already too big to fail got even bigger. Major action is needed to stop banks holding the country to ransom.

From today’s Guardian. Original article includes contributions from Sunder Katwala, Pam Giddy, Will Straw and Joss Garman.

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Why the Tories will back PR in the end

David Boyle is a nef fellow, a writer and the editor of nef‘s newspaper, Radical Economics.

“I pondered all these things,” wrote William Morris in A Dream of John Ball, “and how men in fight and lose the battle and the thing that they fought for comes about in spite of their defeat. And when it comes, turns out not to be what they meant and other men have to fight for what they meant under another name.”

Morris was right, and he seems to have hit on a profound truth about politics.  Change is deeply paradoxical, and – although the grammar of progress eludes most politicians – we achieve what we achieve sideways, like crabs.

When we win we are also at the moment of disappointment; when we lose then paradoxically things happen as a result.  It’s confusing, but that is how it works.

This is one of those paradoxical moments, because we are about to see the Conservatives support electoral reform in the Commons, if not outright PR.  The political shift is not yet complete, and it certainly won’t be embraced by all 306, but it has begun.

A quick race through political history shows that this isn’t actually very unusual.  It was Conservatives who extended the franchise in 1867, who reformed factories and extended free education.  It was the Tories who made Ireland independent.

Not because they really had much taste for it, but because of something else.  When Conservatives realise that radical reform is inevitable, then – in the end – they prefer to do it themselves.

In the case of PR, the alternative is that Labour will do it, when they next claw their way to power.  Then we risk Labour-style PR, with list systems that leave the party machines in control.

It is the historic destiny of the Conservative Party to introduce PR a different way, setting Britain on the path towards proportional representation in a way that retains that link between MPs and their constituencies.  The debate is about Alternative Vote now, but that is now so far from the Irish system of single transferable vote – giving the maximum amount of choice to the voters, and keeping van all-important constituency link.

That will mean bigger, multi-member constituencies.  But then, that is what Britain used to have.  It is a potential Conservative compromise.

What we are all learning this month is that strong, decisive and effective government isn’t quite what Conservatives thought it was.  In the end, giving absolute power to a minority isn’t either stable or decisive.

When we face the kind of problems that now face Britain – loss of confidence in the markets, the urgent need to cut the deficit – then minority power doesn’t work.  It isn’t stable and it can’t unite the nation.  The only thing that will work, and give stability, is government that is backed by a majority.  That applies now, but it will apply in the future too.

History suggests that this is the moment when enough Conservatives realise that, and grasp the opportunity to give power back to the voters.  In the heat of the moment, they agreed to back AV, but the logic suggests that many of them will go further.

Watch this space. They will wriggle, but in the end they will back PR.

Political prospects

David Boyle is a nef fellow, a writer and the editor of nef‘s newspaper, Radical Economics.

I’ve spent the last week glued to the television.  I hardly watch any normally, so this is enough to feel pretty exhausting.  There is some opposition already about the coalition government, but – for some aspects at least of the new economics – it seems to me to open up some thrilling possibilities.

Yes, I am also a Liberal Democrat (I think I ought to declare my political leanings at this point) so my heart is bound to leap a little at the thought of Liberals being in government for the first time for 65 years.

But even if I wasn’t, the cancellation of the Heathrow third runway – in the face of all those corporate lobbyists, and all that money – would be enough to make me prick up my ears.

For the emerging new economics, there are at least four areas where things may now move quite fast:

1. Tackling the banks: Vince Cable will be doing more than just putting in place the banking levy, the coalition agreement has set out a path towards breaking them up – and creating a more diverse, local and mutual banking system.
2. Localism: it wasn’t clear whether there was anything behind the Conservative commitment to localism. Now there is: the coalition has committed itself to large scale decentralisation of power.
3. Low carbon economy: did Cameron know what this was when he used the phrase? That isn’t clear. Why did Clegg repeatedly use the phrase ‘green sustainable growth’?  That isn’t clear either.  It is up to us to define it on their behalf, but it is clear that the political will is there for a major shift.
4. Co-production: the same applies to the so-called ‘Big Society’.  It wasn’t clear if there was any thought-through policy to support it.  Now there is a commitment to devolve power to communities, and – if co-production is not explicitly on the agenda – there is a hole in coalition policy shaped like co-production.

But for some of these, if not all, the political rules have now changed.  Two of the new cabinet in particular now control both elements of a potential Green New Deal, Vince Cable and Chris Huhne.  But if Cable acts on radical reform of the banking system, he will do so in the face of bitter opposition from the City of London and elements among bankbench Conservative MPs.

What he, and those like him, are going to need is explicit political support – as well as research, information and basic cheerleading – if they are going to be able to press forward their ambitions.

Those of us in the voluntary sector, or in campaigning NGOs, who have become used to simply demanding things of politicians, are going to need to develop a more sophisticated strategy.

We are going to encourage and then protect those ministers capable of creating a new economic revolution.  Tackling the banks and building a low-carbon economy is a matter of co-production, and our side of the work starts now.

Climate change needs to be a priority at the General Election

Karen Schucan-Bird is a researcher in nef’s Climate Change and Energy team.

Two months from today, on May 6th, it is likely that we – the British public – will be invited to go to the election polls. Who and how many of us actually turn up is another matter. For those that do, we will be placing our vote with the (naive?) hope that the next government will do many things. Combating climate change sits at the top of my wish list. This must be an overarching theme of the work for the next parliamentary term. The significance and urgency of this task should not be under-estimated. We all know that the clock is ticking. According to analysis carried out by nef, we only have 81 months before we reach a crucial tipping point – the point at which it is no longer likely that we will be able to avert potentially irreversible climate change. With this in mind, how much of a priority is the issue of climate change in the current campaigns of the two main parties?

The answer, in short, is that it isn’t a priority. A quick review of the main new items listed on the Labour and Conservative websites highlights that not one reference has been made to ‘climate change’, ‘environment’ or even ‘green’ in the past week. Not one. The Labour party’s ‘energy and climate change’ page has not been updated since December, when they were canvassing for support for a deal at Copenhagen (so much for that). We see an equal paucity of interest amongst the Conservatives. Despite David Cameron claiming recently that the Conservatives are ‘the new environmental party in Britain’, the party has not released a news story on climate change and energy since early january. The Green Party, it seems, do not need to start to worry.

A low level of interest from the two main parties highlights that we have a vital role to play, as voters and activists, to move the issue up the political agenda. And now is the time to do so. We only have two months left. Write emails, wave a placard, start a campaign to get elected to parliament. Whatever it is, let’s all take action to make climate change a top priority for the election campaign and so the next government.

Climate change needs to be a priority at the General Election

Two months from today, on May 6th, it is likely that we- the British public- will be invited to go to the election polls. Who and how many of us actually turn up is another matter. For those that do, we will be placing our vote with the (naive?) hope that the next government will do many things. Combating climate change sits at the top of my wish list. This must be an overarching theme of the work for the next parliamentary term. The significance and urgency of this task should not be under-estimated. We all know that the clock is ticking. According to analysis carried out by nef, we only have 81 months before we reach our climate’s tipping point- the point at which it is no longer likely that we will be able to avert potentially irreversible climate change. With this in mind, how much of a priority is the issue of climate change in the current campaigns of the two main parties?

The answer, in short, is that it isn’t a priority. A quick review of the main new items listed on the Labour and Conservative websites highlights that not one reference has been made to ‘climate change’, ‘environment’ or even ‘green’ in the past week. Not one. The Labour party’s ‘energy and climate change’ page has not been updated since December, when they were canvassing for support for a deal at Copenhagen (so much for that). We see an equal paucity of interest amongst the Conservatives. Despite David Cameron claiming that the Conservatives are ‘the new environmental party in Britain’, the party has not released a news story on climate change and energy since early january. The Green Party, it seems, do not need to start to worry.

A low level of interest from the two main parties highlights that we have a vital role to play, as voters and activists, to move the issue up the political agenda. And now is the time to do so. We only have two months left. Write emails, wave a placard, start a campaign to get elected to parliament. Whatever it is, lets all take action to make climate change a top priority for the election campaign and so the next government.

Solving the prisoner’s dilemma

Aleksi Knuutila is a researcher in the Valuing What Matters programme at nef

Image by Antti Knuutila

With the glimmering colourful lights and the smell of popcorn, the Empire at Leicester square seems an unlikely place for serious discussion on public policy. Yet it may be the starting point for an important movement to change public perceptions and the politics of youth justice.

Yesterday about 400 people were gathered at the Empire for the first screening of the documentary The Fear Factory. The film powerfully described how the fear of crime is maintained by sensationalist media coverage and the cynical tactics of political parties. This has lead to harsher and more punitive responses to youth crime, which in many cases do little more than entrench the criminal behaviour. The documentary, produced by Spirit Level Films, is connected with a campaign for a criminal justice policy that is more humane and long-term in its perspective – and ultimately better at delivering safety for our neighbourhoods. nef’s latest report Punishing Costs was launched in connection with the screening.

With interviews from key experts and practitioners, the documentary shows how the public’s beliefs about the risk of becoming a victim and the general trends in the amount of crime were far from reality and all evidence. Britain has become a safer place in the past two decades – yet the fear of crime remains stubbornly high.

Unfortunately, it is perceptions that drive politics. One of the safest political strategies in the recent past has been to promise to crack down misbehaving youth and to hit them where it hurts. The Fear Factory documents how any deviation from this pattern is quickly struck down, as happened to Cameron when he suggested understanding the social causes of crime. The film also points an accusing finger at the media that gives disproportionate attention to violent cases and misrepresents sentencing as more lenient than it is in truth.

This reaction may actually create the monster that it so much fears. In the climate of alarm about youth crime, the imprisonment of children and young people has remained on very high levels. Prison as an intervention is incapable of dealing with the real causes of crime, and does little more than temporarily isolates an individual from contact with society. About three in four young people released from prison return to crime within a single year.

At the same time custody uses up massive amounts of resources that could have truly improved the safety on our streets. Our report Punishing Costs shows how the full cost of a year-long sentence in prison is £140,000. It is worth pausing to think about what could be achieved if these resources would be put to a positive use.

The screening was followed by an excellent panel that included some prominent criminologists and politicians – and an ex-editor of a tabloid who astonishingly displayed no sense of regret for his past role. Most of the panellist agreed that current policy was too much determined by knee-jerk reactions to high-visibility criminal cases in the media and an arms race between the parties to appear to be the true guardians of law and order.

One of the solutions they proposed by the speakers was to create a cross-party committee for a longer-term vision of developing criminal justice policy that all parties would sign up to. This would curtail the harmful competition between parties, which has led to the current punitive arrangements that hardly anyone believes to be productive or humane. Such a committee, together with a better debate and engagement with the public, is part of the recommendations of Punishing Costs.

Documentaries are powerful tools in transmitting knowledge and awareness of issues. At a time when the media is transmitting a largely false picture and political parties are failing to take the leadership to change perceptions, a film may be exactly the tool that is needed. I hope the Fear Factory, and the coalition forming to campaign around it, receive the attention they deserve.

New ideas to reinvigorate democracy

Perry Walker is head of the Democracy and Participation team at nef

A new dawn for democracy? (Photo by v1ctory_1s_m1ne via Flickr)

One of the most interesting constitutional reform projects to arise in the wake of last year’s expenses scandal is Power 2010. Rather than relying on academics, politicians or journalists to tell us what reform is needed, Power 2010 asked members of the public to submit their own ideas.

Browsing through the ideas sent in, I was struck by two things. Firstly, people care about democracy. The enthusiasm and imagination on display, gives lie to the story of the apathetic and disengaged public often peddled by journalists and politicians. Secondly, there is a great deal of disagreement about what needs to be done. From more direct democracy, to new ways of holding politicians to account, to electoral reform, to ideas to redistribute political power, the range of ideas on display is so broad that it was difficult to know where to begin.

To get my head round the ideas, I went back to first principles. I thought first of John Stuart Mill, who said, ‘a people among whom there is no habit of spontaneous action for a collective interest – who look habitually to their government to command or prompt them in all matters of joint concern – have their faculties only half developed.’ Democracy is a muscle. You don’t build the muscles of your body by watching an athlete on the telly, and you don’t build your democratic muscles by watching election coverage. To get better at democracy, we need to practice politics ourselves, in referendums, town-hall meetings or public debates, not just watch it on the news.

I thought second of Abraham Lincoln and the Gettysburg Address. Lincoln didn’t talk about ‘government by the politicians, for some of the people’. Rather, he referred to “government of the people, by the people, for the people”. For me, democracy has never been so well, or so succinctly, defined. I coupled Lincoln with British academic Peter Reason, who wrote, ‘participation is a political imperative: it affirms the fundamental human right of persons to contribute to decisions which affect them. Participation is thus fundamental to human flourishing.’ For example, evidence shows that people participating in referenda in Switzerland are significantly happier.

I thought third of American educationalist John Dewey, who is said to have remarked on his ninetieth birthday that ‘democracy begins in conversation’. I contrasted that with some lines by G K Chesterton, in The Secret People:

Smile at us, pay us, pass us; but do not quite forget;
For we are the people of England, that never have spoken yet.

From these quotes, I drew three conclusions. First, that while we need more referendums – an idea which croups up over and over again – the danger is that they omit the information and the conversation that helps people form good judgements. Second, that if we are to exercise our muscles, we have to make the effort to find common ground with people with whom we disagree. Third, that in order to build up those muscles, we also have to address the problematic trade-offs that politics has always involved, especially in the next few years as we are forced to make difficult decisions about how to cut public spending.

How do we achieve these things? From the hundreds of great ideas contributed to Power 2010, I’ve picked out two ideas that seem particularly relevant. One idea developed here at the nef is that of ‘preferendums’: sophisticated referenda which let the public control what’s on the ballot paper as well as the outcome. A second idea, which is new to me, is ‘Sarah in London’s’ idea for

regular citizens meetings where communities can come together to seek information, exchange ideas and hold their representatives to account. In very different ways, these two ideas point to a new kind of democracy – one where power resides not only in elected representatives and appointed officials, but also in citizens themselves, working together to build a society around the things that really matter.

You can see all the ideas contributed to Power 2010 and sign up to support their call to change British democracy for the better at www.power2010.org.uk

Letwin: ‘We need a political licence to talk about what really matters’

Juliet Michaelson is a researcher at nef‘s centre for well-being.

Central Lobby, Palace of Westminster (Parliamentary copyright images are reproduced with the permission of Parliament)

Leading members of the three main political parties addressed the second meeting of the All-Party Parliamentary Group on Wellbeing Economics yesterday, with a striking degree of consensus that well-being should urgently rise up the political agenda. Labour peer Professor Lord Richard Layard, Oliver Letwin MP, Chair of the Conservative Research Department and Policy Review and Chris Huhne MP, Liberal Democrat Shadow Home Secretary, all agreed that GDP fails as an adequate measure of welfare and pointed to the need for a new way of measuring the things that are really important. The comments of all three speakers supported the aims of the Group, for which nef acts as the secretariat, to challenge GDP as the sole indicator of wealth and promote new measures of societal progress.

The speakers agreed that policy-making should be much more focused on what well-being research tell us are the drivers of high well-being, with lots of emphasis given to the importance of supporting good relationships. But there was not unanimity on all points of policy. For example, only Chris Huhne mentioned, as a strong argument in favour of progressive taxation, the varying well-being value of an extra pound of income to people with different levels of economic wealth.

However, there was general consent to the proposition that without a strong headline measure to rival GDP, the well-being agenda would not get the attention it requires. Oliver Letwin perhaps went furthest in this direction. He spoke of the ‘terrible danger’ that the Conservatives would find themselves in government and under pressure to focus only on traditional political issues unless a ‘serious, competing measure’ of well-being could be produced. He pointed to the need for all three parties to act in step to create a ‘political licence to talk about what really matters’. As Chair Jo Swinson MP pointed out, this is exactly what the ongoing work of the All-Party Parliamentary Group will aim to bring about.

86 months and counting

Andrew Simms is nef‘s Policy Director and head of nef’s Climate Change programme.

Could the Conservatives be the party to ditch economic growth as a policy and oversee the change our climate needs?

There are only seven more annual political conference seasons to go before the world enters a new, far more dangerous phase of unpredictable global warming, based on the risk categories of climate scientists.

That means we should already be able to see genuine solutions emerging in the debates and speeches echoing around the nation’s conference capitals of Brighton, Bournemouth and Manchester. It also means that whoever is successfully elected to form the next government in 2010, they will almost certainly be in power during the period when the fate of the atmosphere is settled.

Except, perhaps, during wartime, history rarely offers up such a definitive performance indicator for a government. But here, for better or worse, the words, “it happened on your watch” will be carved, probably in coal, on their headstone.

New research from the Hadley Centre, part of the government’s own Met Office, set the scene for the political challenge. It warns that we should now plan for the possibility of a 4C temperature rise by 2060. This is far beyond the maximum 2C rise considered a maximum safe threshold before the environmental dominoes start to fall.

On 25 September, the Friday before the Labour party conference began, the world went into ecological debt for the year, beginning to consume more resources and produce more waste than the planet could handle.

The challenge couldn’t be clearer. Bad accounting, poor risk assessment and profligate behaviour nearly destroyed the global financial system. It threatens to do the same to a climate conducive to civilisation. It’s not reform that the next government must oversee, but paradigm shift.

Yet in the last few weeks, the siren voices for a return to business as usual have been getting louder. We need bonuses back, says the City, although they never really went away, to get and keep the best talent. But that was hardly a good strategy last time, when the “best talent” on bonuses wrought chaos. The Confederation of British Industry says recovery depends on cutting back regulation. But an absence of appropriate regulation is the slippery slope down which the economy and environment slide. Others call for another wave of no-strings bailouts for the fossil fuel-intensive car industry. These voices, effectively, are telling the survivors of a sinking ship to leave their lifeboats and climb back on board.

As the Conservative party takes energy from Labour’s disarray and disheartenment is there any sign that they might do the seemingly unthinkable, and consider radical economic redesign to prevent what happened to the banking system from happening to the climate system?

On one hand, there is a disturbing and furtive creep of old vested interests. Big money, big business, old school connections looking to return to their comfort zone after more than a decade of feeling culturally uncomfortable with a Labour government. Regressive tax, more binge consumerism and dirty and weakly regulated industry are all poised for a potentially easy ride. Yet the Conservatives are also on a journey to distance themselves from their own past. What started as an unavoidable rebranding exercise can take on a life of its own.

David Cameron is on record as saying that well-being is as, if not more, important than growth in an economy. An increasing number of voices from Nobel economists down are pointing out the ultimate incompatibility of endless rich country economic growth with the preservation of a habitable planet. What’s interesting for the Conservatives is that ditching growth as the single, overarching economic policy obsession could well revive ways of living that they find politically appealing.

A world in which there is much less passive consumption of goods and services is a world in which we do many more things for ourselves and each other. It’s a world not of absolute but much greater self-sufficiency, at the national, local and even individual level. In other words, it’s a world in which we have much more control over our own fate. A revival of real local democracy beckons in which we are more responsible locally for our own food, energy and the reciprocal delivery of services. With 86 months to go, that doesn’t sound too bad to a public very jaded about UK politics – it may even sound infinitely preferable.

86 months and counting …

No Turning Back – Compass event 13 June

Andy Wimbush is nef‘s Communications Assistant and blogmaster.

Here at nef, we like to talk about the triple crunch: the interlinked crises of climate change, economic meltdown and diminuishing supplies of fossil fuels. But that’s not the whole story. The breakdown in economic consensus in the wake of the credit crunch points towards other crunches: evapourating trust in established politics and a coming ‘social’ crunch, as the gap between rich and poor gets wider.

Our friends at Compass will be exploring these latter aspects of our current predicament at their major conference No Turning Back happening later this month. The aim is to forge a new political and economic settlement for the 21st century with democracy, equality and sustainability at its heart.

nef will be joining the fray. Our policy director Andrew Simms will proudly commit what he calls ‘the final heresy’ by questioning the justifications behind economic growth. Juliet Michaelson, a researcher at nef‘s centre for well-being and one of the brains behind our National Accounts of Well-being, will be talking about work, happiness and democracy. And finally Dr Stephen Spratt, nef‘s chief economist, probably won’t be grieving too much as he joins a panel on The Death of the Free Market.

Non-nef highlights include Jon Cruddas MP, Chukku Umana, Billy Hayes of the CWU, Prof Richard Wilkinson and Dr Kate Pickett (authors of The Spirit Level), Polly Toynbee and John Harris of the Guardian, Nick Hildyard from The Corner House, and plenty more besides.

Tickets for the conference are going quickly, so make sure you book as soon as possible if you want to be there.