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Make, sell and buy more Blairism

VINCE MILLS is not convinced by the latest ‘economic vision’ to emerge from the Labour leadership

FOLLOWING the less than spectacular, if welcome, victory in the Batley and Spen by-election, Keir Starmer’s new, new Labour project went on the offensive. 

Rachel Reeves was the appointed messenger and the Observer the trusted platform. 

The announcement, according to the Observer, was “a new post-Brexit economic vision for the UK” involving ambitious plans to “make, sell and buy more in Britain” as it seeks to build “a strongly patriotic policy platform with which to take on the Tories.”

The core of the strategy appears to lie here: “… every public body in the country would be told to award more contracts to British firms, underpinned by a new law that would require public organisations to give details of how much they are buying from UK firms, large and small.”

The loss of 171 jobs in Gateshead when a contract to make new, blue British passports went to a French company is cited. The British-registered company which had held the contract up till then was De La Rue Plc. 

A cursory look at some of De La Rue’s institutional investors raises the question of what exactly we mean by a “British” firm: they include Soros Fund Management, registered in New York, Brandes Global Opportunities Fund incorporated in Canada, Norges Bank Investment Management, which manages the Norwegian Government Pension Fund, and Crystal Amber Asset Management Limited, registered in the Crown Dependency of Guernsey. 

Whether a company is based in Britain counts for little, if the distant international investors, who own it, decide that it is time to leave. 

Currently 500 workers at McVities biscuit factory in Tollcross, Glasgow, are being made redundant. 

Pladis, which now owns McVities, is a subsidiary of the massive Turkish conglomerate Yildiz, which includes the private equity company Gozde.

If Labour is going to explore ways of saving or creating jobs, it needs to consider who owns the enterprises that generate the jobs. 

What is the nature of the enterprise and in whose interest it is being run? Specifically, what say do the employees of that company have in its future?

Here, they could do worse than look at Labour’s 2017 manifesto: “In government, Labour would give more people a stake — and a say — in our economy by doubling the size of the co-operative sector and introducing a ‘right to own,’ making employees the buyer of first refusal when the company they work for is up for sale.”

And in any case why not, where feasible, simply bring services, like printing, in-house. 

That was another commitment made in 2017 manifesto: “We will act to ‘insource’ our public and local council services as preferred providers.”

There are deeper flaws in Labour’s new plans. In 2017, there was no post-Brexit deal in place between the EU and the UK. 

At the time, Starmer, clamouring for a second vote, was desperate to remain in membership of the EU and if not that, as close a relationship as possible.

You could argue that Boris Johnson has done the job for him. In the UK-EU Trade and Co-operation Agreement (TCA) agreed last Christmas Eve, while it is true that the UK escaped the European Court of Justice jurisdiction, the agreement continues to ensure that state aid is heavily policed. 

The TCA states: “And both sides have the right, in certain constrained ways, and subject to arbitration, to take countermeasures if they believe they are being damaged by measures taken by the other party in subsidy policy, labour and social policy, or climate and environment policy.”

It is difficult, then, to see how under that agreement a Labour government could require that “every public body in the country would be told to award more contracts to British firms.” Although some exceptions are granted, the EU understands procurement as a form of state aid.  

In other words, if Labour is serious about using procurement as a means of sustaining British jobs, it will have to start attacking the neoliberal deal the Tories have done with the neoliberal EU and constructing the kind of alternative it wants in its place. 

Of course, procurement is seen as only part of the solution. It is to be “tied in with an emphasis on securing more high-skilled UK jobs for the future in the green, financial technology, digital media and film sectors, and other industries in this country.”

There is no suggestion in the article as to how this is to be achieved, apart from a nod to the tried and failed supply side approaches of our Blairite past: “Labour will get our economy firing on all cylinders by giving people new skills for the jobs of the future here in the UK.”

By contrast Labour’s 2019 manifesto said how jobs could be created: “We will create a national investment bank, backed up by a network of regional development banks, to provide £250 billion of lending for enterprise, infrastructure and innovation over 10 years. 

“They will be mandated to lend in line with our mission to decarbonise our economy while increasing productivity and creating good jobs across the country.”

The 2019 manifesto promised regional development banks that fitted with the vision of a Britain comprising nations and regions. 

It is disconcerting that Reeves did not use the opportunity of this new approach to expose the Tories’ hostility to devolution, a hostility that specifically targets the use of state aid.

This is embodied both in the Tories’ Internal Market Act 2020 which concentrates all powers over state aid and competition policy in the hands of the Westminster Parliament and in the Subsidy Control Bill now going through the houses of Parliament that “introduces a number of prohibitions to prevent public authorities granting subsidies with distortive or harmful economic impacts.” 

In other words, Westminster will have a veto on what devolved authorities or regions can do by way of intervening in their local economies.

Instead of using the opportunity to lambast the Tories on undermining devolution and arguing that Labour will extend economic powers to the devolved authorities and English regions — as both the Red Paper Collective in Scotland and Radical Federalism in Wales argue they should — there was a deafening and damaging silence from the Labour leadership. 

This suggests, at best, a cautious approach to enhanced powers and at worse, a shared agenda with the Tories that it is dangerous to allow Britain’s regions and nations to make their own economic interventions without central state interference, in much the same way that Tony Blair opposed tax-raising powers for the Scottish Parliament — democracy is fine as long as it doesn’t rock the capitalists’ boat.

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