Monday, August 24, 2015

What are taxes for? By Mike Hedges AM

Since being elected in 2011, most of the discussions I have heard in the Senedd have been around reducing taxes in order to grow the Welsh economy, rather than the need for taxation to pay for public services. When you look at the cost of private education and private health care, it puts into perspective the value for money we get from our taxation system.

Taxation exists to pay for public services. Too many people believe that we can have the same quality of public services as Scandinavia but have a taxation system which is more like that of the USA. It is not by random chance that those countries with the highest tax levels have the best public services and those with lowest tax levels the poorest. It is because taxation is necessary to raise the money to pay for the public services we all need.

Quality public services - be they health, education or infrastructure - come at a substantial cost to the public purse and the only way of paying for them is via taxation. Taxation can be on income, profit, consumption/ expenditure or value of land and property - or a combination of all of them. But if people want quality public services, these are the taxes needed to pay for them.

Whilst nobody likes to pay taxes, and some rich individuals and multi-national companies are expert at reducing their tax payments, providing quality public services means that, if some people do not pay then either public services suffer or others have to make up the shortfall. Every time tax cuts are made, they are shown as beneficial and they appear to be to those who are paying less tax and have more money in their pocket. The effect that these reductions in government income have on public expenditure on services such as health, local government and education are completely ignored until the cuts start affecting people.

The more difficult a tax is to avoid, the more unpopular it is with the rich and powerful. By far the most difficult taxes to avoid are the property taxes (non-domestic rates and council tax). There are no tricks, such as using internal company transactions or having non-domiciled status, to avoid paying the tax. The buildings - whether they are residential, manufacturing, commercial or retail - are not movable and the tax becomes liable on the property and has to be paid.

If we desire quality public services then we have to pay for them, via taxation. This is not the start of a campaign for higher taxes but it is linking taxation with expenditure. Remember the old adage: you only get what you pay for.

Wednesday, August 19, 2015

The 2015 Election: Some Facts and Figures - by Peter Rowlands

It is, unfortunately, not a caricature to say that much comment on the recent election has consisted of vigorous assertion by the Labour Party right that the programme was too left wing, countered equally vigorously by the left that it was not left wing enough! Supporting evidence has been scanty, beyond the cry of ‘1983’ from the right, countered by ‘1945’ from the left.

The leadership campaign has, if anything, made this situation worse, with fear of a Corbyn win having elicited some desperate responses from the right, and from the other candidates, and, while Corbyn himself, to his very great credit, has stuck to an elaboration of policy, many of his supporters on the blogosphere have sunk to the level of their opponents.

It is surely only by a rational analysis, rather than blind assertion, that Labour can again successfully promote itself in 2020 or before, and this article looks at some of the more considered evidence and opinion about the recent election than that referred to above. Much of this has not received the attention it should have done, although there will hopefully be a renewed focus on this when the official ‘Learning Lessons’ enquiry  is published next month.

The most important areas of investigation can, I think, be reasonably grouped under these main headings:
  • How the UK voted, by region, age, gender, class and other relevant distinctions.
  • How the new electoral situation has changed Labour’s prospects.
  • How potential and actual Labour voters viewed the party’s appeal.
  • The impact of UKIP and the Greens.
  • Why Scotland moved from Labour to the SNP.
  • Why the pollsters got it wrong again.

I shall cite some of the main findings under these headings and comment briefly on each.

How we voted

The biggest single change was Scotland, where Labour’s loss of 40 seats was a huge blow, which will not be easily reversed, and obviously makes it much more difficult for Labour to gain a majority. It also means that we now have three different electoral systems – Northern Ireland, which was always different, and now Scotland, because of its domination by the SNP. The main system is what remains, in England and Wales. Here there were significant variations between the main regions, with London and the three Northern regions experiencing the biggest swing to Labour, with small to negative swings elsewhere, including, inexplicably, Wales. However, extra Labour votes were largely at their strongest in seats already held by Labour, and much weaker in the small towns and suburban areas that Labour needed to take.

The Lib-Dem vote went to Labour more than any other party (24%), but the Tories got, crucially, not much less at 20%, and the Greens 11%. Over 65s were twice as Conservative than Labour, with a much higher turnout, while voters became progressively more Labour as they became younger, but with a progressively lower turnout. Women, except the over 65s, were more Labour than men, particularly the young. There was some reversion to social class alignment, but the middle class Labour vote largely held, but turnout was much higher among the more Conservative inclined social groups. The Conservatives lost heavily to UKIP, as did Labour to a lesser extent, mainly from the older white male working class. Labour remains strong among BAME voters, but the Conservatives have increased their share here. Workers in the private sector are more Conservative, those in the public sector Labour, but less so. Those with more qualifications tended to Labour, those with fewer to the Conservatives.

It is clear that, unless Labour can either increase its turnout among the under 35s and the D/E social groups,  or increase its support among the over 65s, and preferably both, then winning is going to be very difficult. Labour must pay urgent attention to these tasks as well as analysing its failure to capture more than a handful of Conservative seats, and losing some to them.


The new electoral situation

Prior to the election, Labour had an in-built advantage, all of which has not only gone, but the advantage has swung the other way to the Conservatives, and that is before any boundary changes, which they will no doubt push through prior to the next election.

There are three main reasons for this reversal of fortunes. Firstly Scotland, where Labour’s huge loss of 40 seats contrasted with the Conservative’s nil loss; the huge decline in the Lib-Dem vote meaning that the opportunity for tactical voting, either by Labour to keep the Conservatives out or by the Lib-Dems to keep Labour in has largely disappeared; and the swing to the Conservatives in their marginal seats meaning that they are less marginal.

Several commentators have pointed to the huge challenge that Labour faces here, and of the necessity of winning back votes from the Conservatives if Labour is to win in 2020. This is strictly not true, as a combination of votes lost to the SNP, UKIP, the Greens and of new voters and previous non voters could suffice, but it is unlikely that all of that could happen simultaneously, and there is no longer a big Lib-Dem vote to be inherited.


How voters saw Labour

There have been a number of surveys on this, most of which have highlighted similar concerns. The most important were concern over Labour’s past and future handling of the economy, immigration, too generous welfare, control by the SNP and Miliband’s credibility as leader. Anti aspiration and anti business were lesser factors, as was austerity, about which there has been an interesting debate.

It is hardly surprising that Labour is viewed poorly on the economy, as its biggest mistake was not to defend its record in government prior to 2010 and allowing the myth that the deficit was Labour’s fault to become widely believed. Not having put forward a coherent alternative to austerity policies means there is little support for something that is not policy, which is not the same as support for austerity. The problem with the ’immigration problem’ is that it can embrace much, from racist opposition to any non white immigration since the 1940s to justifiable concern with pressure on local services caused by migrant European workers. Here and on   welfare, myths abound, but Labour’s rather desperate pronouncements on these issues prior to the election indicate that  much work is needed here.


UKIP and the Greens

Both, predictably, did very well, despite ending up with only one MP apiece. The Greens, thanks to the Lib-Dem implosion have probably secured lasting extra support, now at 4% although clearly at Labour’s expense. In most of the seats lost to the Conservatives, the Green vote was higher than the margin of loss.

But it is UKIP that is now the most significant extra force. The failure to even win a seat for Farage highlights the injustice of our electoral system and may well serve to boost pressure for the adoption of some form of PR, and UKIP are likely to remain strong at least up to the forthcoming referendum. Thereafter it is, assuming a by no means certain win for remaining in, partly a question of how the Conservatives position themselves, but it is difficult to see UKIP sustaining its momentum,  although its appeal now goes well beyond the EU to cover immigration and nostalgia for the whole gamut of reactionary prejudice. The decline of UKIP would help the Conservatives most, but Labour as well, although it would make it harder for Labour to win overall.



As indicated above, this now effectively constitutes a separate electoral system, about which much has been written, which I do not intend to add to, except to say that without a significant number of Scottish MPs Labour’s task is much harder. With the SNP having firmly established itself as the dominant Scottish party there can be no assumption that, in the short run at least, those seats will be won back.


The pollsters

They got it wrong again, more badly than at any time since 1992. To be fair, it was only Labour and Conservative that they got  badly out, by three points too many for Labour and the same too few for the Conservatives, thus enabling a majority government to narrowly emerge, and experts on a hung parliament to go back to their ivory towers. Investigation into the reasons for this error are ongoing, with not much evidence of a late swing over Scotland, nor of ‘Shy’ Conservatives (i.e. those deliberately lying), but some evidence of turnout by Labour being down for those indicating their intention to vote. 

This brief summary of what happened on May7th has not touched on the wider and more important issues that will determine Labour’s future. Can Labour win on the basis of a populist social democracy now being promoted by Jeremy Corbyn here and elsewhere in Europe? Or is a reheated Blairism the only way back to power? Is our unjust electoral system a barrier to change, and is PR the only way forward? Did Labour lose because of a number of factors which can be changed, or is its plight part of the crisis of social democracy afflicting similar parties in Europe.

Such questions and others will be debated in the coming period, but in order to move forward we must have a clear idea of what actually happened.

For those interested in further reading, I list some of the main sources below:
Touchstone.  TUC Polling.
Ipsos Mori   How Britain voted in 2015
P. Kellner  You Gov  How Britain really voted.
J. Curtice   IPPR   A defeat to reckon with.
A. Harrop  Fabians   The mountain to climb.
Smith Institute  Red Alert. Why Labour lost.
UK Polling report.

This article was written for Chartist magazine.

Friday, August 14, 2015

Why I am supporting Jeremy Corbyn - by Mike Hedges AM

Jeremy gives hope to both the party and the country.

I have always wondered how the First World War generals could have been so stupid trying the same tactic time after time. Yet more of what failed in 2010 and 2015 a form of austerity light is considered by some the solution next time. If it fails in 2020 we can always try it again in 2025.

You win elections when you give the electorate hope. When they think you are on their side. Labour lost in 1959 and in 2015 because we were not prepared to differentiate ourselves from the Tories. We are the party that stands up for the poor, the down trodden and exploited. We are the party of the ordinary workers and their families not of the casino capitalists of the city of London.

I want to debunk two myths. Firstly is that you keep the last election vote and add to it.

Remember the last election, the experts, the leadership, the planners had it all worked out. All we need to do to win is add the disillusioned Liberal Democrat to our 2010 voters and we would win. According to electoral calculus 7 % of the electorate who voted Lib Dem in 2010 voted Labour in 2015 so we should have won or at least come a close second.

But 2% of 2010 Labour voters voted SNP, 1% voted UKIP, 2% voted Tory and 1% voted Green. If we had held on to that vote we would have polled 36.4% of the vote to the Conservatives 36.9%.
We cannot take our voters for granted and try and gain some conservative ones by moving to the right. Some people have said we lost due to lazy Labour voters not voting. It is my view we lost because too many ex Labour voters could not see how we would make their lives better. Why voting Labour would make a difference.

The second myth is that you win elections from the centre ground. If that was true the Lib Dems would win every election Although the Liberal Democrats most successful elections have been when they moved to the left.

Was the Attlee government in 1945 in the centre ground?
Were the Wilson Governments in the centre ground?
Was Thatcher in the centre ground?
Is Cameron in the centre ground?

We in Wales, when led by Rhodri Morgan, set clear red water between us and the Labour Party in London and we won.

What are my constituents telling me
Statements on my Facebook feed from my constituents include:

“If he (Jeremy)  gets elected as leader of the Labour Party I will come back from the Greens the only other party that leans to the left and in support of the people.”

“I believe it needs to change people’s minds and lead rather than take the populist view. That's what it was good at back when it started. Make fairness, caring and looking after the worker and the disadvantaged an electable ticket rather than trying to be a less conservative Tory party”

“I feel the Labour Party has forgotten its roots and those who started it. It was from trade unionists we came!! For a Labour Party to abstain from voting on welfare rights is completely diabolical.”

Finally, we win when we offer the electorate hope, when we appear economically competent, when we appear a party of principle - and that is why I am supporting Jeremy Corbyn for leader.