Tag Archives: The Observer

Two tribes go to war and neither the red nor the blue chief is safe

An interesting perspective.

Powered by Guardian.co.ukThis article titled “Two tribes go to war and neither the red nor the blue chief is safe” was written by Andrew Rawnsley, for The Observer on Sunday 27th March 2016 05.04 UTC

Napoleon wanted generals who were lucky. Napoleon would have liked David Cameron. He became Tory leader when Tony Blair’s electoral magic had faded and his days were numbered. Lucky Dave then fought the 2010 election against a Labour party that had been in government for 13 years and was showing its age.

His rival for the premiership had presided over the most severe economic crisis since the 1930s and, on his own account, Gordon Brown was not a politician suited for the television age. When Mr Cameron failed to parlay those advantages into a parliamentary majority, he borrowed one from the Lib Dems, who did sterling service sustaining him for five years while destroying their electoral base in the process.

He gambled the United Kingdom with a referendum on Scottish independence. Labour did the heavy lifting to keep the UK intact and its reward was to be toxified as Tory collaborators in the eyes of many Scots. The devastation this wreaked on Labour support north of the border played to his advantage at the 2015 election by allowing the Tories to scare English voters with the thought that a Miliband government would be a marionette of the Nationalists. Lady Luck also smiled on him when the pollsters, by calling the election wrong, helped smooth his path back to No 10.

I don’t put all this down to blind chance. That would be to underestimate Mr Cameron. He would not be approaching his sixth anniversary at No 10 were he not highly skilled at exploiting the opportunities that time, chance and opponents have presented to him. Like all successful leaders, he has made the most of his good fortune.

The trouble with luck is that she eventually runs out. She seemed to be bidding farewell to this prime minister last weekend. He had been hit with the most dramatic and damaging resignation of his premiership when Iain Duncan Smith quit the cabinet in a fit of vitriolic vapours. By Monday, the budget was unravelling faster than you can say fiasco and George Osborne had gone into hiding. Mr Cameron had to face the Commons that afternoon. This should have been a horrible experience for him.

Yet still he was in luck. Good fortune smiled on him in the bearded guise of his main inquisitor. His prayers for relief had been granted by St Jeremy, the patron saint of prime ministers in peril. Presented with a priceless opportunity to skewer the prime minister and take apart his claims to lead a one-nation government, Mr Corbyn decided the most effective approach was not to mention the self-defenestration of IDS and his excoriating attack on the cabinet which he had just left.

The Labour leader did not, as some have had it, kick the ball over the bar. He didn’t even try to connect his foot with the ball. I am still trying to fathom why not. Had no one told him that a significant element of the job description of leader of the opposition is to, well, to oppose? Was he too preoccupied drawing up lists of suspected traitors among Labour MPs to prepare for this important engagement at the dispatch box? Was he too busy tending to his allotment and nurturing his marrows to have watched any news? Maybe I am over-thinking this. Maybe he is just hopeless.

If that performance had Labour people looking on in stunned disbelief, there was worse to come two days later at prime minister’s questions. By then, Mr Corbyn had managed to find out that a member of the cabinet had resigned. But it was too late. Bringing it up 4 8 hours on only served to remind everyone that he had failed to stick the ball in the net two days earlier. On top of which, someone on his team carelessly lost a list which divided Labour MPs into five categories of loyalty and opposition to the great helmsman of Islington. The list fell ino enemy hands. So we all now know that his chief whip is designated “hostile” and so is Labour’s candidate to be mayor of London. “Core group negative” includes Ed Miliband and Alan Johnson, the leader of the Labour In campaign.

The Tory leader used the exposure of the list to crush the man opposite. “I thought I had problems,” he jeered after saying they could put him down as “core support” for Mr Corbyn remaining as Labour leader. A half hour that ought to have been torture for the prime minister turned into a humiliation for his opponent.

The most devoted of Mr Corbyn’s followers will say that this mockery shows that the Tories are frightened of the Labour leader. Let me try to break this as gently as I can. The Tories really, really are not scared of Mr Corbyn. Most Tories are more likely to lose sleep worrying about whether they put out the cat than they are about the Labour leader. For reasons I will describe in a moment, the Conservatives would be better served, and so would the country, if they were a bit more frightened of Labour. The other thing people will say is that parliamentary knockabout excites only people who live in the “Westminster bubble”. No one “in the real world” cares about this meaningless theatre.

I agree that it is theatre, but it is far from meaningless. Parliament still matters for holding the prime minister to account. It matters more under this prime minister because he rarely deigns to grant substantial interviews with heavyweight media interrogators and only holds news conferences when he has absolutely no choice. The prospect of being tested by the leader of the opposition should, at the very least, make a prime minister nervous. It should keep him on his toes. Since he started facing Mr Corbyn, Mr Cameron clearly finds PMQs so effortless that the ease with which he cruises through them must embarrass even him. It also matters because how the party leaders perform in the Commons influences how the media rate and report on them and that plays its role in shaping public perceptions. It also has a significant impact on the morale of their parliamentary troops. At the end of that PMQs, you didn’t need any lists to tell you what Labour MPs thought about Jeremy Corbyn. It was written on their funereal faces. An encounter which should have united them in exploiting the government’s divisions and disarray turned into an occasion in which the Tories roared on their man as he ridiculed the Labour leader.

My first column of this year remarked that it is highly unusual for both major parties to be doing the splits at the same time. As this year grows older, things are getting even stranger. We now have a feedback loop in which the divisions in the Labour party feed those among the Tories and vice versa. Whatever their manifold and manifest differences, one thought unites nearly all Conservatives – that the next election is as good as won for them. This is encouraging Tories to think that they can behave however they like without fear of punishment at the ballot box.

The empty space where an effective opposition ought to be is an incitement for the government to be complacent, cocky and slapdash. That arrogance has consequences, as we saw with the budget. At the same time, absent an opposition that they fear, Tory discipline is breaking down. The prime minister’s internal opponents are emboldened to be more aggressive in their rebellions against the Tory leader. The language exchanged about Europe becomes more poisonous. It lessens the chances of putting the Conservative party back together again on the other side of the referendum.

In normal times, we’d expect this to have a positive effect on the opposition. The spectacle of Tories tearing into each other like a feral bunch of ferrets ought to be uniting Labour in a conviction that the next election is winnable for them. In these extraordinary times, Tory division has the opposite effect. It is not bringing Labour together; it is amplifying Labour’s internal turbulence. Labour MPs see a Tory party which is bitterly split and despair that their own leadership seems utterly incapable of profiting from the opportunity that it ought to present to them.

A few Labour MPs have broken cover and openly called for Jeremy Corbyn to resign. Many more talk privately of an attempt to oust him once the EU referendum is over. Whether this will come to anything, we will see, but I would caution Mr Corbyn not to place too much reliance on that list as a guide to the mood in his parliamentary party. It has Labour MPs down as neutral or friendly who are, to my knowledge, hostiles.

While talk of toppling their leader grows on the Labour side, regicide is also on the minds of a significant number of Tory MPs. Among them, there is much chatter that David Cameron will face a leadership challenge after the referendum, whether he wins it or not. It is possible that, before year’s end, there will have been attempts from within both the major parties to oust their leaders. What would once have seemed wildly improbable is now quite easily conceivable. The terra becomes yet more incognita.

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Google and tech’s elite are living in a parallel universe

I think we have always known this to be honest. Ain’t going be no trickle down from this for sure, speaking as an almost exe-tecky type.

Powered by Guardian.co.ukThis article titled “Google and tech’s elite are living in a parallel universe” was written by John Naughton, for The Observer on Sunday 22nd February 2015 00.05 UTC

Someone once observed that the difference between Tony Blair and Margaret Thatcher was that whereas Thatcher believed that she was always right, Blair believed not only that he was right but also that he was good. Visitors to the big technology companies in California come away with the feeling that they have been talking to tech-savvy analogues of Blair. They are fired with a zealous conviction that they are doing great stuff for the world, and proud of the fact that they work insanely hard in the furtherance of that goal. The fact that they are richly rewarded for their dedication is, one is given to believe, incidental.

The guys (and they are mostly guys) who manage these good folk are properly respectful of their high-IQ charges. Chief among them is Eric Schmidt, the executive chairman of Google, and a man who takes his responsibilities seriously. So seriously, in fact, that he co-authored a book with his colleague Jonathan Rosenberg on the care and maintenance of these precious beings. Dr Schmidt objects to the demeaning term – “knowledge workers” – that economists have devised for them. Google employees, he tells us, are much, much more impressive than mere knowledge workers: they are “smart creatives”.

In the opinion of their chairman, these wunderkinder are very special indeed. They are “not averse to taking risks”, for example. Nor are they “punished or held back when those risky initiatives fail”. They are “not hemmed in by role definitions or organisational structures”. And “they don’t keep quiet when they disagree with something”. And so on. Altogether, they are an admirable body of men and women – mostly men (70%), admittedly, but, hey, what’s a little gender imbalance in a brave new world.

Dr Schmidt’s smart creatives work all the hours that God sends, and then some. They are, to use his term, “overworked in a good way”. The concept of work-life balance can, he thinks, “be insulting to smart, dedicated employees”, for whom work is an important part of life, not something to be separated. The best corporate cultures, he thinks, “invite and enable people to be overworked in a good way, with too many interesting things to do both at work and at home”.

All of which no doubt makes perfect sense if you’re running an outfit like Google. But it also highlights the extent to which our world is bifurcating into parallel universes. In one – that populated by technology companies, investment banks, hedge funds and other elite institutions – people are over-stimulated, appreciated, overworked (but in a “good way”, of course) and richly rewarded. Meanwhile, in the other universe, people are under-stimulated, overworked and poorly rewarded. And the gap between the two universes appears to be widening, not narrowing every time Moore’s Law ratchets up another notch in computing power.

Which is why we need to make a connection between what those smart creatives in California and elsewhere are creating and what is happening in the real world. In that domain, the level of economic inequality has attained staggering proportions for reasons that Thomas Piketty set out in his celebrated book Capital in the 21st Century.

Although there have been lots of detailed arguments about Piketty’s work, his central proposition – that in the absence of special circumstances such as war or redistributive taxation, the rate of return to capital exceeds the rate of return to labour – is both simple and obvious. What it means is that if your wealth involves ownership of capital assets (like company shares), then you will inexorably get richer at compound rates.

One of the oddest things about the furore surrounding Piketty’s book was that almost nobody talked about the role of technology in all this. Specifically, there was little discussion of the strange coincidence that the recent catastrophic rise in levels of inequality has coincided neatly with the digital revolution.

When you think about it, it’s clear that this isn’t just a random correlation. The digital revolution is driving inequality, not reducing it. That’s because the technology has certain characteristics (zero marginal returns, network effects and technological lock-in, to name just three) which confer colossal power on corporations that have mastered the technology. In the process it confers vast wealth on those who own them.

But that wealth isn’t shared with the users of the platforms operated by those corporations: most of the work that generates revenues for Facebook or Google is done by unpaid workers – you and me. And folks who work in paid occupations powered by those platforms – Uber drivers, Amazon warehouse workers, to name just two – are not sharing in the wealth it generates for their owners either. Like Google’s smart creatives, these people are also overworked. But not in that “good way” advocated by Dr Schmidt.

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Osborne wants to take us back to 1948. Time to look forward instead


Powered by Guardian.co.ukThis article titled “Osborne wants to take us back to 1948. Time to look forward instead” was written by Will Hutton, for The Observer on Sunday 8th December 2013 06.20 UTC

It is an incidental sentence, but it brought me up short. By 2018, general government consumption will be proportionally no larger than it was in 1948. So declared the Office for Budget Responsibility in its report accompanying the autumn statement. The work of three generations in building the sinews of a state that support systems of health, transport, education, environment, policing, science and the rest is to be summarily withdrawn over the next five years. It is a landmark moment in our national life.

Next year the coalition – deputy prime minister Nick Clegg supporting Cameron and Osborne – is aiming to legislate that the reduction of the deficit on this scale and speed should be a statutory obligation. Stunningly – apart from some allegedly effective new measures against tax avoidance, and asking non-residents to pay capital-gains tax on the sale of their homes – all of the work is to be done by cutting spending, by a cumulative £75bn in ways yet to be specified.

The IMF, after assessing the experience of 107 countries between 1980 and 2012, recommends that, after a credit-crunch deficit, there should be a balance between tax increases and spending reductions. In Osborne-land over the next five years more than 95% is to come from spending cuts – a global first in self-harm.

I worried in my column last week that the principal risk of the recovery – induced by Osborne actually introducing measures contrary to those he is supposed to believe in – was that his apparent economic success would seduce him into actively damaging prescriptions. So it has come to pass. The OBR shares my view that all we are witnessing is a cyclical snapback of the economy driven by a recovery of demand. This should not be the excuse to shrug off the calamity of irrational total austerity, and hack away at the state with abandon. But sure enough that is what is now promised. It is a deliberate challenge to the Labour party, but importantly also to the Liberal Democrats. I am not sure that, once the enormity of what is proposed is grasped by his party, Clegg will be able to persuade it to sign up to such a dark vision. He had to take the coalition agreement to a special conference of party members before he could formally agree to it. Already key figures aware of what is proposed, I’m led to believe, feel the whole party, as in May 2010, must be involved in another decision of parallel importance. I don’t think he can win any such vote. And what future would there be for the coalition – or indeed him – if it did come to that? Osborne’s calculation is that he and his party are on the right side of the argument. A jihad against government, backed by a rampant centre-right press, is capturing the popular mood. For alongside the proposal to create a 1948-scale state is another highly toxic proposal, at least for any Lib Dem worth their salt: to introduce a cap of just over £100bn on welfare spending, excluding pensions and the jobseeker’s allowance. Any last element of Beveridgean underpinning to the British approach of supporting the least well-off is to be removed. All there will be is a limited pot into which the needs of Britain’s disadvantaged will be shoe-horned. No Lib Dem can support this, surely.

The story is that this is all in support of “hard-working” people, as the Treasury declares on its webpage – bizarrely reducing a great state institution into a mouthpiece of Tory central office. The assumption is that the public and social institutions built up over the last 70 years are unnecessary and held in the same contempt by “hard-working” people as a highly ideological Tory party. It is a bet that only politicians insulated from the reality across Britain could make.

Some of the intense pressures on government departments are already surfacing. Leaked papers from the Department for Business show its cumulative spending cuts are at least £1.6bn, with more unspecified for 2018/19. Two proposals are privately under active consideration: one is to turn £350m of grants to students from less well-off households into loans, which I doubt will be cheered by their “hard-working” parents. The other is to cut the science budget. Indeed any ambition to lift research and development spending from its current 1.8% of GDP to the 3% benchmark spent by the world’s best can be abandoned. We are to stay in the second or even third division.

It will be the same across the board. From flood defences to class sizes, from the capabilities of our regulators to the effectiveness of our police, from assistance to the elderly or the scale of our performing arts – everything is under threat. And this is unrelieved by any attempt to look for tax revenue to mitigate the impact, as every other country does and is advised to do. Instead, more asset disposals are proposed. The east coast mainline, generating £209m of surplus on £700m turnover, will be sold despite its fabulous returns to the taxpayer. The same will take place with EuroStar. To give up such great financial returns along with the benefits of ownership is daft. The new owners will demand even higher returns on their investment, with only enfeebled regulators left to protect “hard-working” people from being skinned. Ownership matters.

As the IMF argues, the knock-on depressive effects of spending cuts on such a scale is much higher than a more balanced approach involving tax increases, especially when the banking system is still palpably weak. The next 18 months will see a clawback of some of the ground lost over the last six years. There could be a substantive follow-through for the rest of the decade. Instead growth will be much more subdued as the next wave of the jihad kicks in, all to create a 1948-scale state and a giant leap backwards to a 19th-century system of poverty relief. Is this the civilisation, and wider economy, in which “hard working” people want to live and work – and where so much risk is transferred from social institutions to the individual.

The autumn statement is a seminal event. The obligation is on the Labour party, and the Lib Dems, to make the counter case. Great politicians must have vision, and back it with argument and evidence. Miliband and his shadow cabinet must be brave enough to set out what kind of state and social settlement they want, and how best to lift the stagnating productivity of British workers, which is at the root of the “cost-of-living crisis”. Lib Dems need to ask themselves if they really want to be allies in creating the regressive, punitive civilisation Cameron and Osborne have in mind. Back to 1948? Or onward to something smarter, fairer and more generous? It’s decision time.

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