TfL’s Bailout and London’s regional powers conflict

Coronavirus has up-ended and changed our society in ways that we may not yet be fully coming to terms with. The economy has been required to largely shut down, companies furloughing workers left and right and institutions of government up and down the country have been thrown into severe crisis management mode. In local government, councils up and down in the country have been rallying around protecting their most essential services and completely rethinking how they engage with residents and take decisions in an era of social distancing. In the local authority where I am a councillor, Sutton in South West London, our officers and contractors have responded to the challenges all of this poses extremely well; adapting to work from home requirements incredibly quickly.

But these working from home arrangements have had a major impact on the economy, arguably no more so than for public transport. Mainline rail companies have, according to some, been de facto nationalised; their franchise contracts temporarily suspended. Transport for London (TfL) has also fully complied with national guidelines (such as they were at the time), strongly urging commuters to stay at home and not travel. Furthermore, making all urgently needed travel on buses effectively free by removing the need to ‘touch in’ when boarding to limit the potential for infection. These extreme measures have, however, had an almost unbelievably massive impact on TfL’s finances, explored in extreme detail in an excellent article from London Reconnections, causing TfL to lose upwards of £150 million a week in lost fare income. In recent weeks, this lost income has seen TfL sounding the alarm over it’s long-term viability necessitating urgent action from Government, as the only body able to refinance TfL to this degree, to ensure that services could operate to allow key workers to continue doing their essential work.

While these warnings from TfL have now been heeded, and Government has provided TfL with the much needed cash to continue operating, the move has kicked off a major political bunfight across the capital and beyond. This fighting centres on some of the specific arrangements the Government is requiring TfL make, and indeed the necessity of the deal at all. For instance, Conservative politicians including their Mayoral candidate for the rescheduled 2021 election have launched fierce attacks against the Mayor claiming the deal is the result of wasteful spending by the Labour Mayor of London. While Lib Dem Mayoral candidate, Siobhan Benita has joined local campaigners in attacking the Silvertown Tunnel initiative, in general left-of-centre parties including the Lib Dems and the Greens have joined Labour in defending the necessity of the deal to keep essential services running. Political battle lines are now inevitably being drawn, around these fault-lines amid concern that Government is slowly undermining and encroaching on London’s regional government.

This entire debate- which will no doubt rage on right up to election day in 2021- does however provide an extremely interesting parallel to a major political fight between London’s previous regional government- the Greater London Council (GLC)- found itself in with the boroughs in the 1980s. Throughout the 1980s, Conservative politicians nationally and locally challenged the then-Labour controlled GLC over changes to fares policies. This challenge would eventually boil over into widespread discussion within Conservative circles about the continued feasibility of regional government in London; culminating in the GLC’s abolition in 1986. While the decision to challenge these transport policies did not outright lead to the GLC’s abolition, it certainly did set in train a discursive snowball.

Are we seeing a similar trend now? A conservative administration nationally, with a large majority fiercely attacking a divisive Labour administration in City Hall while Conservative members show increasingly hostile attitudes to the devolution of power, away from Westminster?

While we might not necessarily be seeing history repeat itself- at this stage it would be unwise to make a pronouncement either way- we can say with some certainty that history is rhyming right about now.

Written by Jake Short

A New Leader, A New Time for the Labour Party, but Big Challenges Remain

With recent events you may not have been aware, or perhaps you forgot, that the Labour Party was having its long and drawn out Party Leadership Election. The results are in anyway, Keir Starmer is victorious and will succeed Jeremy Corbyn as Party Leader. Starmer’s task is not an easy one, he takes over at a dire time for the Labour party. Like the Tories during 1997-2005, Labour are in their new “wilderness years”, if they are not careful, they will suffer another defeat in 2024 and Tories will be in power for another 5 years. Starmer must rebuild the Labour Party after the recent general election, where the party won 202 seats having lost 60 from 2017, making it their worst performance in an election since 1935.

Starmer needs to decide how he is going to regain trust and support of traditional Labour voters and regain Labour heartlands, the so called “Red Wall”, where the party collapsed in 2019. He will also have to decide what a post Brexit Britain Labour Party will look like, and what it will say on the big issues facing the country. But also, and probably a more difficult task, he must decide where the ideological fate of his party will lie, whether he remains to the left or moves to centre, similar to where New Labour went or perhaps somewhere in between. Whatever he does decide to do, not everyone will be happy in the Labour Party. And of course, he must tackle the evil of anti-Semitism in the party which will be a true test of his leadership early on.

 This article will aim to show just how big a task is facing Keir Starmer, and what those problems are. Labour have until 2024 to prepare for the next general election, and as Harold Wilson once said “a week is a long time in politics” so there is plenty that could go wrong for the Conservatives and plenty that could go right for the Labour Party in that time. Only three men have won elections for Labour since 1945, Attlee, Wilson and Blair. Time will tell if Starmer joins them or whether he joins the ranks of Kinnock, Miliband and Corbyn.

The 2019 Election marked another turbulent time in British politics. This was the third general election in four years and the ninth major electoral contest in the decade. The Labour Party and the UK were going into this election against the backdrop of Brexit, a Parliament that was unable to agree a Withdrawal Agreement or anything in fact and a mood of great anger in the country. The Tories had been in power for nine years and the government saw the lowest satisfaction scores for the way in which it was running the country for any administration since John Major’s (Ipsos MORI, 2019). Normally, after the “cost of governance” and satisfaction levels like that, this should have been an easy win for the Labour Party. Far from it.

One reason for their defeat was that Labour faced an electoral dilemma, how to hold onto their collation of voters from the 2017 election? At the time, the party on the one hand had a majority of Labour MPs (61%) represented constituencies that had a majority leave vote in 2016, whilst on the other a clear majority of Labour voters (68%) supported Remain in 2016 (BES, 2019). Labour was doomed from the start, there was no way the party could hold onto both of these very different and distinct groups at the same time. And what we saw at the 2019 election was exactly that, Labour losing in many leave voting areas. The Conservatives captured ‘fifty-seven seats, all but three from Labour. These included traditional Labour heartlands in the so-called ‘red wall’: Great Grimsby (Labour since 1945); Bishop Auckland (1935); Basset-law (1935); Wakefield (1932); Leigh (1922); Don Valley (1922); and Bolsover (a seat Labour had never lost when contesting) (Cutts, et al., 2020). So, the challenge for Starmer and the Labour Party going forward is: how to win these voters and seats back? How to build a more permanent and united coalition of support for the Labour Party? Unfortunately, for the Labour Party the loss of support amongst their traditional working-class base, known as the “falling ladder”, has been a long time coming, as Figure 1 shows:

Figure 1: The difference between Labour and Conservative vote share by class composition of English and Welsh constituencies, 2010–2019

Fig 1

(Cutts, et al., 2020, p. 17)

Figure 1 shows the enormous task facing Starmer, he must pick the ladder back up and prevent this election from becoming a realigning moment. Many in Labour will be hoping that 2019 was a one off, that people lent their votes to the Conservatives because of Brexit and will return to the Labour Party after. Of course, Labour will have to earn their vote back but there is a logic to that idea. Now that Britain has left the EU but is in the transition period as it negotiates a future trade deal with our European neighbours, perhaps this dividing line in our politics will weaken. In a recent poll there was 46-54 split in favour of staying out indicated a small swing in favour of Brexit since January (Woodcock, 2020). So perhaps once, excuse me here, “we get Brexit done” there will be a focus on other issues in a post Brexit Britain. Issues that the Labour Party can be stronger on, and issues that enable them to start winning back the support of the voters it lost in 2019.

So, what drove former Labour voters to other parties? Understanding why these voters left might help the party in winning them back. As you can see in Figure 2, Jeremy Corbyn/leadership was the main reason voters did not support Labour in the 2019 election according to this poll. The Labour Party will now hope that the election of Starmer as leader will settle this issue and his name will not be as toxic for the party on the doorsteps. However, Figure 1 also shows that there was much to Labour’s failings in 2019 than just leadership.

Figure 2: What drove former Labour voters back to other parties?

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(YouGov, 2019)

Brexit, as mentioned above, played a significant role. Perhaps, like leadership, this will now be settled, and voters will not be turned off by Labour. But the other telling issue raised by Figure 2, is that people did not trust Labour on policy and economic competence. There was a feeling this time around that the Labour manifesto and policies were undeliverable and would cost too much. This was consistent with polling before the election, which showed that the majority (63%) thought that Labour’s policies are not realistically deliverable, and that the party would not deliver on its promises. Former Labour voters said in their own words that they: “did not trust the manifesto, you cannot keep borrowing to pay for services”, that “the socialist policies were frightening” and “the sums didn’t add up for all the things they promised if they got in” (YouGov, 2019). This represents a significant challenge for Starmer now coming into the top job in the Labour Party. He and his party need to convince voters that Labour can be trusted on the economy and the public finances if they have any hope of becoming a credible option for the voters.

Finally, I would like to talk about another major problem for the Labour Party. Scotland does not get raised enough in terms of Labours problems as much as it should; Scotland is another once traditional heartlands that they have lost. In 2010, even right in the dying days of New Labour, the party manged to have forty-one seats out of fifty-nine in Scotland (BBC News, 2010). At the 2019 election the Labour Party lost six seats and was left with just one seat (BBC News, 2019). The massive decline in Scotland creates a big problem for Labour. For the Labour Party to win a majority, the party must start winning seats back off the SNP and other parties. Otherwise Labour will have to win more seats in England and Wales. This requires an even bigger swing, as the party will need to take seats of the Conservatives, where there are majorities of over 10,000, no easy task. Labour must re-find its political place in Scotland amongst the Nationalist versus Unionist debate or risks remaining in the side-lines of Scottish politics and out of government in the UK.

If the Labour Party is to start winning elections and return to government, then it must address the issues listed in this article. It is currently facing a significant moment in the party’s history, whether it chooses to return to power and credibility, or whether it continues deeper into the political wilderness. It will not be easy, but the path back to having a Labour Prime Minister and a Labour government can start now. We will see if they, and Starmer take it.

Written by Lewis Virgo

Bibliograpy

BBC News (2010) Election 2010 [Online] BBC.
Available from: http://news.bbc.co.uk/1/shared/election2010/results/region/7.stm
[Accessed 4 4 2020].

BBC News, (2019) Election 2019 [Online] BBC.
Available from: https://www.bbc.co.uk/news/election/2019/results/scotland
[Accessed 4 4 2020].

BES, 2019. Labour’s electoral dilemma [Online] BES.
Available from: https://www.britishelectionstudy.com/bes-findings/labours-electoral-dilemma/#.Xoc-UIhKhEY
[Accessed 3 April 2020].

Cutts, D. Goodwin, M. Heath, O. & Surridge, P. (2020) ‘Brexit, the 2019 General Election and the Realignment of British Politics’. The Political Quarterly, 91 (1), pp. 7-23.

Ipsos MORI, (2019) Worst public satisfaction ratings for any government since John Major [Online] Ipsos MORI.
Available from: https://www.ipsos.com/ipsos-mori/en-uk/worst-public-satisfaction-ratings-any-government-john-major
[Accessed 3 April 2020].

Woodcock, A. (2020) UK still divided over Brexit with almost half country wanting to rejoin EU, poll finds [Online] The Independent.
Available from: https://www.independent.co.uk/news/uk/politics/uk-brexit-latest-poll-rejoin-eu-younger-older-divide-a9384661.html
[Accessed 3 April 2020].

YouGov, (2019) YouGov In their Own Words: Why Voters Abandonded Labour [Online] YouGov.
Available from: https://yougov.co.uk/topics/politics/articles-reports/2019/12/23/their-own-words-why-voters-abandoned-labour
[Accessed 4 April 2020 ].

 

 

How the ‘Washington Consensus’ allowed the global core to exploit the global periphery though unfair exchange from a World Systems Theory lens.

What is ‘The Washington Consensus”?

A neoliberal economic plan to introduce the free market to periphery states in the form of Structural Adjustment Policies (SAPs) which made less economically developed states (LEDS) increase funding in their industrial and manufacturing sector. This was done while state recipients of Structural Adjustment Loans (SALs) had to cut their health spending by 25% and education by 50% for some of the poorest citizens on earth. This was masked as a form of ‘development’ but saw the devaluing of developing states currencies and a lower standard of living.

How did “The Washington Consensus” affect trade?

One of the prerequisites of SALs was for periphery states to embrace free trade thus opening their economy to the world, SAPs would mean that their economy was suddenly transformed into one like their western counterparts. This in turn made recipient states reliant on Western trade in order to stay afloat. Periphery states that received SALs had to take on SAPs such as reducing their tariffs to 10-20% which allowed other states to export goods to them at very low rates. This is while developed states such as the United States (US) kept their tariffs high on agricultural products and continued to subsidies their agriculture sector.

Through these means developed states have made periphery states dependent on agricultural imports which are cheaper than produce grown in those less developed states due to western agricultural subsidies. This has lead to the top ten agricultural exporters being core states, the majority of which are Western. This partnered with other SAPs such as the introduction of foreign direct investment (FDI), privatisation and deregulation allows for periphery states domestic economies to be taken over by core states.

What affects of “The Washington Consensus” can we see today?

Since SAPs brought their recipient periphery states into the free market dependency has only grown, both in terms of food and aid. Since the implementation of SALs the states that inhabit the core, semi-periphery and periphery have changed, as they do depending on power and economic influence. One of these changes has been China’s move to the core. Since then China has gained a massive amount of influence in Africa and now holds a monopoly on most of the African Union’s (AU) economy. This level of economic control has given China, now a core state, a huge amount of fiscal power over the AU. The AU now have no choice but to back China on the international stage in exchange for their continued ‘support’.

In exchange for this ‘support’ China not only has a fiscal monopoly but exploits AU states open economies. Through FDI China has opened mines in a variety of African states, for example Zambia. FDI from China has been shown to have a negative effect on the standard of living on Zambians as well as the erosion of trading regulations and working conditions. This is further highlighted in the Democratic Republic of the Congo (DRC), where China have purchased both the rights to copper and cobalt mining. Cobalt being a highly sought after material, as it is used in virtually all rechargeable lithium-ion batteries, China takes it from the DRC at a very low price, this shows the amount of unequal exchange that can be brought about by a lack of FDI regulation, via The Washington Consensus, as the cobalt market “will hold an aggregate global market value of $12.93 billion between 2019 and 2025”. Despite being the top global producer of cobalt the DRC only sees roughly 15 per cent of the revenue as their revenue from cobalt is $1.9 billion, the rest goes to technological manufacturers after being distributed by China, a clear example of unfair exchange.

A similar situation can be seen in Haiti, but not so blatantly. Haiti has a very high rate of food dependency with a huge 36.12 per cent of their imports being food, agriculture or animal products, and the US being their single biggest importer. Conversely, a huge 83 per cent of Haiti’s exports go to the US, 89 per cent of which are textiles.

Before SAPs Haiti was virtually self sufficient when it came to rice, this was until they were encouraged to liberalize their economy by The Washington Consensus. By 2010 Haiti was importing 80 per cent of their rice, which has had an overwhelmingly negative impact on rural Haitians. Because of this effect Haitians have been forced to produce textiles, in order to survive in their own states now free market economy, which are in demand in core states like the US.

Both the examples of the AU, and Haiti, on a smaller level show how states that have received SALs in accordance with The Washington Consensus have been pushed to the periphery due to mounting economic pressure form core states.

Despite Bill Clinton, former US President and later the United Nations’ (UN) Envoy to Haiti, saying that the US supply of rice to Haiti was “a mistake”  the US has continued its export of the product. In 2015 Haiti is receiving its largest imports of rice from the US, supplying 90 per cent of their rice. This costs Haiti almost two thirds of the aid sent to them by the US, and once all other imports from the US are taken into account the US has made a profit out of this periphery state, this exploitation has stemmed entirely from the SAPs imposed by The Washington Consensus causing an unfair exchange.

What does it all mean?

Without major international trade reform such as debt forgiveness regarding the $15 billion structural adjustment lending in sub-Saharan Africa alone, and help from core states, self sufficiently for the periphery states will not be achievable.

What little action has been taken since the Doha 2001 round table we have seen as well as international inaction towards the US and China’s FDI in Haiti the AU, respectively can be expected to continue as the demand for fast fashion and minerals such as cobalt grows.

Written by Josh Trood

The decision on HS2, and the future implications for British infrastructure projects

On Tuesday 11th February 2020, 5 months after Boris Johnson announced the Oakervee review into High Speed 2 and 11 years after the project was even proposed, the government finally declared that the project would indeed go ahead. Despite growing reservations in recent years over the mounting delays and the increase in the estimated cost from a budget of £56bn to a gargantuan £106bn, preparatory works will continue with the aim to complete the first phase and have trains running by 2028. The first phase will consist of a direct line from London Euston to Birmingham Curzon Street, with additional stops at Old Oak Common and Birmingham Interchange. The second phase, broken into two sections with the first extending from Birmingham to Crewe, and the latter branching off to service the East Midlands, Leeds and York, has yet to receive Parliamentary approval. It will be sure to draw further fire from both opponents to the scheme in Parliament, and from public pressure groups and lobbyists.

Despite announcing the review barely a month after taking office as PM, it never appeared likely that Johnson would ultimately take the proposal behind the metaphorical barn and shoot it – instead the review has given Johnson a way of dodging some of the criticism that was sure to come from giving the proposal the green light. Despite endorsing the project, the review made clear that the endorsement came due to the lack of “shovel ready alternative investments” that would expand UK rail capacity between the north and south, in addition to the £9bn already sunk into the project. Partially insulated from criticism Johnson has been free to approve the project, albeit with changes designed to reign in costs and delays. These include a new ministerial position, which will be responsible for the project and its management on a full-time basis, non-executive directors have been overhauled and the development of the London Euston terminal has been spun out to a new management team.

There has also been a recent fresh twist with the revelation that China Railway Construction Corporation, a part-state-owned Chinese contracting giant, has been in talks with HS2 Ltd regarding a deal for the company to potentially step in and build the line. Such a deal would, according to CRCC, see the UK save billions in construction costs, with the firm aiming to complete the work within 5 years. Despite these claims however, the government has so far had no part in the talks. It also seems unlikely that CRCC will be able to take over all work on the line, given the advanced stage of preparatory work – instead a “joint venture” seems a more likely option.

In addition to this, there would be the added political difficulties of the UK government allowing a Chinese firm to build a major piece of UK infrastructure, particularly given the recent decision by the government to allow Huawei, a Chinese telecom firm, to “continue to be used”  in the UK’s 5G networks. The decision was said to provoke dismay from the US intelligence services, which have lobbied extensively for European countries to ban Huawei from working on their networks, and ““apoplectic” fury” from Trump himself in a call to Johnson.

Written by Andrew Harris

Sudan: A Revolution in the Making?

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By Rob Johnston

The 2011 Arab Springs shaped much of the contemporary Middle East and North African (MENA) region, but the large, mainly desert country of Sudan appeared to be unaffected. That is until now. In the past four weeks we have seen increasing tensions within the country as protestors take to the streets, speaking out against current President Omar al-Bashir.

Continue reading “Sudan: A Revolution in the Making?”

How monolingualism is costing the UK £48 billion a year.

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By Kit Henderson

I’m sure by now that we’ve all heard about the diminishing take ups in Modern Foreign languages at GCSE, A-Level and degree level, while the number of languages on offer has increased dramatically take up is down, and there seems to be little to suggest that it’s going to improve, which is a problem. Beyond the obvious issue of Britons assuming everyone else will speak English, only to be perceived as arrogant, there is also a huge economic cost to our monolingualism, one that seems likely to increase.

Continue reading “How monolingualism is costing the UK £48 billion a year.”

Bitcoin: The Politics of a Stateless Currency

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By Suhail Mayor

Throughout time, literature has been replete with a wide variety of differing accounts on the concept of money. Through these theoretical versions of discourse most of them follow a common thread; they are intensely political in nature. Money has always been and will be a talking point in relation to its control and the role of government. While one side suggests that government and laws are crucial to the nature of money, others have come to believe that currency and economic activity can arise spontaneously without a centralized authority. Emblematic of a basic law in economics inferring that government intervention always leads to inequalities in the market. Continue reading “Bitcoin: The Politics of a Stateless Currency”

The Paradise Papers: Central to Society

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By Sarah Jasem

The Paradise Papers are 13.4 million leaked documents spanning the period between 1950 to 2016, which reveal the extent to which the assets of corporations like Facebook, and wealthy public figures from the Queen to Harvey Weinstein, are held offshore where they can be unregulated and untaxed. Almost 7 million of these documents are related to a law firm called ‘Appleby’, filled with lawyers who specialise in registering trusts and companies in overseas jurisdictions with little to no tax rates such as the Cayman Islands, the British Virgin Islands, Bermuda and Mauritius. The leaks were passed on from German Newspaper Süddeutsche Zeitung to the International Consortium of Investigative Journalists, ICIJ. Similarly, in 2016, the same newspaper leaked 11 million documents to the ICIJ where the tax avoidance was orchestrated not be Appleby but by Mossack Fonseca, a law firm in Panama, hence the 2016 leak being marked, ‘The Panama Papers’. Continue reading “The Paradise Papers: Central to Society”

The New Right: Fictitious Yesterdays and Fabricated Tomorrows

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By Ovais Malik

In contemporary political discourse, doctrine and reality tend to be radically divorced from each other. We often hear from the New Right about the alleged glories of private enterprise; the wonders of the “free market”; and the incompetence of government intervention. When it comes to reality, however, sinister hypocrisies pervade this rhetoric. Continue reading “The New Right: Fictitious Yesterdays and Fabricated Tomorrows”