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Diary Note /0035
Thursday 21 March 2002 2002
for previous DiaryNote

New Socialist Settlement

'Tis done! I have come up with my own core philosophy . It was a week-long voyage of adventure. Three years ago, I produced a pamphlet, reflecting my unsuccessful search for a Welsh Assembly seat and a role in my country's politics The Little Red Book. That was a conventional political pamphlet, covering concerns topical at that time.

This time, last week, it was different. The whole process was more compressed, better focused. And at the very core of the argument I discovered a new principle! It is one which other socialists will recognise, namely public primacy. I had not formulated this principle as clearly before (although it was always lurking in the logic) - I think it may have developed as a response to Thatcherism. And I demonstrate just how it meshes with the traditional socialist values of equality, fraternity, individual freedom, and democracy. It's not a long piece, and I hope you will take time out to read it, whether you're a socialist or not... And don't forget to let me know what you think.

Japan, again

Japan continues to hit the headlines - I drew your attention to the issues last week Japan . We must continue to consider Japanese problems as our own, because Japan's economic weakness constitutes a genuine threat to world economic recovery. My theory is that Japanese citizens are increasingly anxious about the incompetence and corruption of their own governing elites, and that that anxiety is generating a high propensity-to-save and a refusal to spend. There is no welfare state, no element of socialism in Japanese public or political life. Faced with economic adversity, the Japanese are on their own. And the truth is that they are too anxious to get on with life - they have become hoarders of money, with a weakening propensity to consume. And that is fatal for their economy.

Now Makiko Tanaka, Japan's first-ever woman Foreign Secretary, recently sacked by the failing Prime Minister Junchiro Koizumi, has issued a devastating attack upon him, and upon the corrupt right-wing Liberal Democratic Party which dominates Japanese politics. "Japan is a very male-dominated society, and this is particularly true of the LDP," she said. "The Party is finished. This is the end of the road for the LDP, but none of the Party's lawmakers are willing to admit that." The Opposition Democratic Party of Japan (the Japanese socialists are a tiny group, and not in Parliamentary contention) have invited Makiko Tanaka to join them, and she says she would consider taking over as their Leader - for full report, see The Guardian .

This is all very unsettling for the Japanese consumerate. Just look at the way Japanese unemployment has soared, since 1992 (taken from the Financial Times) -

Bad news pours in every few days from the Japanese banking sector, crippled by bad debts from the 1980s and 1990s. This week the Koizumi Cabinet lost one of the PMs leading allies when Koichi Kato resigned - following his arrest for tax evasion, a little matter of £565,000. Last week another top Liberal Democratic politician Muneo Suzuki was forced to resign, following yet another scandal. No wonder the Japanese are worried. Their own state is crumbling, before their very eyes. My view? I say - the Japanese consumer economy will not recover, until these general anxieties are addressed - by political reform. In the modern consumer economy, politics and economics are inextricably mixed.

Regulators unmasked

I have recently fingered the Regulators, as the principal failures of the Thatcherite Settlement - see Danger: Regulators at Work . I could not have forecast that this week a former Railtrack regulator Fiona Bulmer would have delivered the most devastating critique of the four top Regulators - for rail, gas, electricity and telecommunications-
"Their costs are rising much faster than inflation. The budgets for the four Regulators have doubled from £50m in 1997 to £100m now. All their costs are met by the industries they regulate, so they have no incentive to be efficient. We now have a culture of persistent interventionist regulation, where it is heresy to challenge Regulators' rights to demand changes of policy, effectively to manage your company. The result is a bankrupt railway, water companies struggling to fund their capital programmes, and looking at wizard accounting schemes for mutualisation, and a telecoms sector lacking themoney to keep up with technological innovation. Regulators are explicitly saying that a company's social obligations are more important than those it owes to its shareholders. This is undemocratic and uneconomic. Their ever-tightening grip will cost us all dear."
Check out the full report, at the Daily Telegraph . It is my contention that there can never be a legitimate requirement for a Regulator. The very presence of a Regulator betrays an analytical failure, an unsatisfactory fudge. There are, for every function, two legitimate political and institutional options -
(a) its retention in the managed or public sector, if the public interest is dominant (Iplace Post Offices in that category); and

(b) its full transfer to the private sector, with companies operating competitively within a framework of enforceable statutory principles, generating a genuine self-regulating system and allowing companies to make their own decisions within that framework, including whether to enter or leave the sector.
That's where I stand. I am coming to see things in terms of black and white these days, as experience accumulates of the Thatcherite collapse - What do you think? 		 

Public Primacy
and Yellow School Buses

You will have noticed a rising tide of Press references to the American Yellow School Bus. The vehicle is starting to make an appearance on our roads in several parts of the country. Featured in many US films, it is a large 125-seater vehicle, purpose-built for school runs, and equipped with the most modern safety equipment, including three-point seat-belts. It constitutes a very distinctive form of school transport, with an excellent safety record. These vehicles are vastly superior to the raggle-taggle fleet of old coaches that convey most of our children to school, selected assiduously by competitive tender.

The question is - "Should they be operated by private contractors, or by a public agency? Should the service be private or public?" In West Yorkshire, they are operated by First Bus, and the company is planning to pioneer another service soon in Surrey. But in Staffordshire,it is the County Council that pioneered the Yellow Bus in 1997, and now has a fleet of fifteen buses, which it operates itself. Who is right?

Ifyou have yet been able to check out my New Socialist Settlement you will know that I assert, as a primary socialist consideration, the presumption that public services should be provided by public agencies - the principle of public primacy. In this case, my NSS theory tells me thatthis service should be public. Let me explain why.

I like the idea of developing a distinct form of purpose-built vehicle for the discharge of this vital social function. And it is unsurprising that America, with its wide open spaces and more dispersed population, should have been the first to develop this idea. But these special vehicles are bound to be (a) expensive (as compared with conventional all-purpose coaches>, (b) limited to term-time deployment, reducing their asset value to any private firm and (c) likely to generate applications for much longer-term private-contractor operating contracts, to justify the capital expenditure involved. The adoption of the Yellow Bus specification would also encourage the emergence of private-sector "local monopolies", because local companies could not all maintain a supply of such buses - at the moment, they simply put onto school runs whichever vehicles can be spared from other duties, and that makes it a money-spinner. Further, there is the consideration that, in the provision of such a sensitive public service, the principle of profit-maximisation is a dubious advantage - if parents are to be persuaded to entrust their children to the School Bus, rather than drive them to school in person, the bus-driver should arguably be a trusted public servant, not "whoever happens to be on duty at the contractor's depot this morning"...

The only argument in favour of privatisation is the Treasury one - the old PFI issue of who makes the capital investment. For if the buses were all provided by the contractor, no capital cost would fall on the public purse - although the month-in month-out cost of the servicewould be very high, given the constrained utility of these specialist vehicles. A possible alternative would be the provision of the buses by the public authority, and for them merely to be operated by a private company, appointed following competitive tender. But in financial terms, that would be the same as whole-service contracting- and would also sacrifice the advantages of direct staff-control (which for me is a very important consideration).

In applying my new-found NSS principles, I therefore find in favour of Staffordshire - and against West Yorkshire - What do you think?

Careless headlines
cost lives

J'accuse... I accuse The Guardian of publishing a mischievous, profoundly misleading headline about the race relations minefield in Burnley. In its front-page coverage,on Monday 18 March 2002, it referred to its own extended interview with the Gurbux Singh, Chairman of the Commission for Racial Equality, published that day. This is what the headline said -
Force the
races to
mix, says
CRE Chief
and it immediately grabbed my attention, because of its outrageous implications.

But if you read the full article, it becomes quite clear that Gurbux Singh was making an entirely different point. The journalist wrote -
"Singh condemns years of "dumping on the worst estates", which resulted in Asian and Afro-Caribbean families being concentrated in "the least attractive estates within the public sector". He claims it was a deliberate policy: "I suspect that many policymakers will now accept that as a fact". Estate agents in the 1970s and 1980s had been "directing black and Asian people seeking private housinginto particular areas, by telling them properties were no longer on the market. Building societies had used "what was called red-lining and blue-zoning areas, again steering and directing people", to protect property values. But just as housing policy led to segregation, "public policy can be adjusted, to change it".
These sensible comments, advocating the cessation of host-society discrimination, were then twisted by the journalist, who went on to describe it (and this was emphatically not a quotation from Gurbux Singh) as a "highly controversial idea, changing housing policy so that white and ethnic communities, already in the throes of racial unrest, are forced to live together". What a distortion! No quotation, no evidence, is adduced to support this outrageous and prejudicial assertion. Yet that is the one thought, from the entire whole-page Interview, which is selected for the headline, and allowed to dominate the front-page. Please take the trouble to read the full article for yourself Gurbux Singh, Interview

J'accuse... The Guardian has been guilty, in an awful, lapse of judgment, by an act of gross editorial negligence, of defaming Gurbux Singh, and inflaming racist attitudes. The apology cannot arrive too soon. If not, the damages should be enormous, and the good name of The Guardian seriously eroded.

Bully for Bridgend! Last Friday I had the opportunity, at the invitation of the Bridgend Fabian Society, to expound my views on the reforms of company law needed to tackle the abuse of power by the corporate sector. I was apprehensive, because company law reform is an arcane and dry subject, which I have always assumed to be inaccessible to sensible laymen. But the occasion went extremely well (must be Enron!) - and the Bridgend Fabians encouraged me to put my thoughts down on paper, which I will do. I did sketch out my views earlier in the year, see summary at Taming the Corporations - full Monty to follow.

What do you think? Drop me a line.

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