Austin Mitchell argues that there’s no point trying to save the world if you can’t save your own nation or yourself
GORDON BROWN has done a good job in pushing the world to common reflation and regulation. The achievement may be small: the usual mixture of big spin and minimal measures. But someone had to do it. Barack Obama, focussed on his national problems, wasn’t going to do it. The European Union is divided, so only the Prime Minister had the stature and experience to take on the job and he deserves whatever praise results.
Now, though, the spin-doctors and statesmen and women have departed and Brown needs to stay at home. He must apply himself totally to Britain’s problems and Labour’s survival. Our reflation is inadequate. Necessary measures are failing. Policies contradict one another. Messy problems aren’t being dealt with. The world needs leadership, but this country and our Government need it more. There’s just a year to go until the next general election and only strong leadership can save Labour and boost Britain.
Combating the recession requires a big building programme. The Learning and Skills Council’s plans for rebuilding 144 colleges of further and higher education offered one. Now it has been put on hold because the LSC has bungled. Under the inspired leadership of one of these businessmen Labour keeps promoting on the grounds that they’ll bring business-style efficiency, it has authorised developments far beyond its resources. All over the country, with money arranged, planning permission secured and builders ready to go, building for many colleges is stalled, while building for many others is held in the pipeline. Restarting will take months. Most won’t go ahead until after the election. We now have a full report on how the mess was created, but no idea when building will start. That’s because only the Prime Minister can provide the extra money and drive through the programme.
On house-building, Labour announced in 2007 a target of three million new houses by 2020. That means building 240,000 new homes a year. The actual figure will be closer to 70,000 houses this year and less in 2010. Private builders are going bust, housing associations are in financial difficulties, houses for sale are not selling, right to buy sales are drying up and money is difficult to raise on the market.
Only local councils can put the builders back to work by building the public housing for rent we desperately need. Yet having told councils they can build, the Government has failed to provide the money on a scale adequate to bring local authorities back into building. So house building is stalled – just when it’s the easiest way to boost employment and the economy.
There are also problems with the Government’s Schools for the Future programme. Ministers want to use the Private Finance Initiative to build new schools. Yet all over the country PFI bids can’t raise the money. Contractors want to slow down or pull out. Unless the Government finances the contracts, thus building more quickly and cheaply, the new schools won’t be forthcoming any time soon. Sadly, there are no decisions, no money and no rescue without Gordon Brown to drive it.
Labour promised a big investment programme in green energy to produce millions of new jobs. That’s stalled, too. BP and Shell have pulled out. Planned energy farms at sea aren’t going ahead. The building of wind generators on land is slowing because the finance simply isn’t available and subsidies are inadequate.
It’s a similar situation with solar energy, where hopes to have panels in every home have evaporated because Government subsidies have failed. Siemens is choosing between three bases to build its wind generators – two in Europe, one on Humberside. Nothing is being done to encourage the company to come to this country. So, very few green jobs are actually being created here. The technology is still being imported because the market in Britain in uncertain.
The nation’s ports will shortly be in turmoil with investment postponed but insolvencies and job cuts going ahead. Having done nothing about the individual rating of port businesses scheduled to start in 2005, the Government opted to rush this through in 2008 and give port businesses massive bills backdated to 2005. Most are unable to pay. So, at a time when we need to expand and boost our ports for the export drive which devaluation has made possible, we will be destroying firms and jobs and diverting investment and car imports to Europe.
It could all be blamed on the Valuation Agency, which has caused the problem by putting revaluation back to 2010. But the Government says it can do nothing – except allow port operators to pay these massive arrears over eight years instead of immediately. With business down and users able to direct trade to other ports or to Europe, many port operators still can’t afford to pay. Then, if they go bust, they and any other property owners will be hard hit by the new rating charge on empty premises. It’s just what we don’t need in a recession.
Britain’s spending boost did start earlier than those of countries, but it is less than Germany’s or America’s spending and far less than our economy needs. What spending there is is bogged down by Treasury meanness. The Treasury turned a necessary tax cut into a futile reduction in VAT on the grounds that what comes off easily can easily be put back. Promised aid for the car industry still isn’t being delivered.
And it gets worse. Nothing has been done to support credit insurance, which is essential to firms supplying bigger businesses. The attempt to stop repossessions has been pathetic: 6,000 people may have been helped, but repossessions are running at 70,000 a year.
There has been no decision on taking old cars off the road or supporting skill centres and export industries with subsidies to keep firms going. The money isn’t being spent, even though the economy needs a big boost. If we’re losing 5 per cent of growth of gross domestic product, the boost needs to be similar in scale. It’s just 1.5 per cent.
In all these areas, heads must be banged together and policy driven forward. And follies such as Royal Mail privatisation are like an own goal in a penalty shootout. It’s deeply damaging to Labour Party morale. It will divide us for months. Why isn’t it kicked into the long grass where it belongs? It can’t be to give Peter Mandelson something useful to do. Perhaps it’s to prepare the way for the Tories.
In one crucial area, it’s not so much a question of knocking heads but cutting them off. The Governor of the Bank of England’s attack on further borrowing for further reflation should get him fired. Borrowing is an investment in the future of a viable economy. It does give the lead to a chorus of complaint from finance and the City as they regain confidence that borrowing encourages a funding strike and destabilises the economy. But they are wrong. In the 1960s, Harold Wilson blamed the “Gnomes of Zurich” for the country’s travails. We can’t allow their modern equivalents to move into Threadneedle Street.
In normal times, all this might provide employment for spin-doctors and in the media, as well as entertainment for students of government and economics. But these are desperate times. We’re in the middle of a recession which is still gathering pace with unemployment still rising. The economy needs a big building programme to put people back to work and stimulate the whole economy. Labour will need an answer to the calls of “Time for a change” that it is sure to face at the next election. The recession will hit us hard, but can be countered by a strong leader leading the nation to recovery.
When Britain faced a crisis in 1972, the country had a strong Cabinet of major figures, all battle-hardened and led by a strong Prime Minister who brought them together with seven long meetings in 13 days. In contrast, we now have a junior league Cabinet working in a presidential system where the leader spends his time trying to save the world, but not the country.
In this situation only the Prime Minister can stop the dithering, remove the obstacles, get the recovery show on the road and drive it forward. We don’t need a new leader, just one who stays at home and leads. Gordon Brown has shown the world the way and told other countries what to do. Now let them get on with it. The biggest problem is here and now – and we’ve got less than a year to deal with it. Brown’s country needs him – at home.
Austin Mitchell is Labour MP for Great Grimsby
