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Roger Warren Evans
Roger Warren Evans
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You
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Roger Warren Evans |
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item0013 12 September 2002
The State: Insurer of Last Resort?
Have you noticed the parlous state of the insurance industry? Wherever you turn, Governments are having to intervene as insurers of last resort, to prevent the private sector from either collapsing or refusing cover. 
This
phenomenon is not new. The political risks of international trade have
been borne by the UK state since 1919. Terrorist insurance is now
State-backed, in both the UK and the USA, and has been for several years. Airlines can only operate
because of State-backed guarantees. A crisis is looming in the UK
construction industry, where premiums are soaring to levels where
thousands of specialist sub-contractors are likely to be driven out of
business, unable to afford cover for their statutory Employer’s
Liability. Another UK crisis looms when the Government withdraws its
cover for residential flood damage, at the end of the year 2002 - many
properties will become, it is thought, uninsurable. Storm damage cover
is becoming prohibitively expensive, reflecting the cost of major natural
disasters, in spite of massive State relief expenditure. At the same time, new arrangements to reform Lloyds of London
have yet to be put in place, still in the face of extensive internal
opposition. And warnings this week suggest that the mounting bill for
retrospective asbestos liability, throughout Europe and the United States,
will drive many firms into liquidation.
This
is all very unsettling. In my own “scheme of things” (set out in my 1992
Essay Multiple Differential Uncertainty), the institution of insurance
figures prominently. In mankind’s perennial tussle with uncertainty (see
also Advancement of Science), the ability to “buy insurance over” has
always helped to allay anxieties about the future. Conversely, investors
have always made a lot of money from the sale of peace of mind – it’s a
great product. Yet the indications are that, as global uncertainties
escalate, the private insurance sector may be incapable of continuing to
operate. The private corporate sector, it seems, is proving too fragile
and insubstantial to handle escalating major risks.
Is
this the next major sector of governmental involvement? Law
and order, defence, foreign policy, health, education, highways – and now
insurance? If so, then as socialists we should start thinking now.
The big insurance companies will certainly have done their thinking some time ago… Drop me a line < Back to Home Page
12 September 2002 If I were John Edmonds... When I am trying to clear my thoughts, I often put myself in the other guy’s place. If I were Tony Blair (Gordon Brown, David Blunkett…) “what would I actually do?” And with the TUC Blackpool Conference commanding the airwaves this week, I have been putting myself in John Edmonds’ shoes.
John
Edmonds heads the GMB (the “B” still quaintly stands for Boilermakers).
I am a rank-and-file member of the GMB (couldn’t make a mend a boiler,
to save my life - I come under the “G” for General). But I find
myself in increasing disagreement with my General Secretary, and out of
step with the directions which the TU movement is taking.
So if
I were John Edmonds, what would I do?
I would concentrate on strictly TU matters. I would not campaign for or against the Euro, or Iraq – or even on public-private partnerships. I would not have the necessary legitimacy, as a well-paid career professional TU employee, to pronounce on such matters. However galling, I would try leave the politics to elected politicians, and concentrate on TU issues. I would concentrate on workers’ rights – not union rights, but workers’ rights. I accept that English trade unions and their leaders continue to be placed under excessive legal constraints (my views on this are a matter of E-record). But those wrongs are no longer to be resolved by resort to collective reasoning. The future lies with the assertion of workers’ rights against rogue employers. I would argue that every worker should be entitled to appoint a representative of his/her choice, in any dealings with an employer. Present UK law restricts the choice to a TU “rep” or a fellow employee at the same workplace – and that is outrageous. No middle-class employment dispute is complete without a solicitor, or personnel consultant, or Max Clifford. Every worker should enjoy the same right, for the conduct of such disputes. That would open up extensive trading opportunities for trade unions. I would argue that trade unions as organisations should not be too eager to extend their own collective rights (workplace meetings, collecting dues, bargaining collectively) – they should present themselves to all workers as the natural champions of those seeking to enforce their employment rights. Having said that, I am convinced that (subject to the balloting procedures, which most TU leaders now accept) sympathy strikes should be made legal again: it is outrageous that workers are prevented from taking proper collective action in such circumstances – particularly as no such constraint is placed upon employers. I would engage in current political debate, because the operation of “the economy” would necessarily be of concern to my members. But I would try focus on practical political measures to counter the wrongs done to my members. I would not argue, on pensions, contending for Government intervention to force firms to offer pensions to their employees - that would be wholly ineffective. Even at the height of the occupational pensions wave, only half of all employees benefited from such schemes, many to a derisory extent. The employment relationship is too fragile an institutional system to bear such heavyweight functions. The only satisfactory solution is the reinstatement of a decent Old Age Pension, with the State increasing taxation and giving its citizens an effective guarantee against impoverishment in old age. I would not argue, in dealing with closures and redundancies, that firms should be forced to maintain employment levels – that’s a mug’s game. I would contend for a new legally-enforceable system of Adjustment Pay, payable for six months to everyone losing a job, for any reason other than gross misconduct. I would not attack the very principle of public-private partnerships. I would assert a presumption in favour of public service deployment (check out my Public Primacy, also on the E-record). But if the politicians decided that private-sector out-sourcing were nevertheless the right solution, I would argue that by law all public servants faced with out-sourcing should receive a once-for-all lump-sum Public Service Compensation payment, payable by the public agency, not by the contractor. After that, the private contractor would be entitled to operate on ordinary market terms. I would defend my GMB members by contending that no decision to out-source a public function should ever be taken lightly, and that the need for a public-service ethos was a major factor to be taken into account in making that decision. But once the decision had been made, and the PSC settled, I would complain no more, and get on with other business.
I would seek, in short, to
restrict my role to the active defence of my Members’ interests - fighting
their battles, righting their wrongs, seeking legal changes that would
benefit them.
End of fantasy… Drop me a line < Back to Home Page
12 September 2002 David Blunkett: Who's Who This is what David Blunkett says about himself, extract from Who’s Who, A&C Black Sales Department PO Box 19 Huntingdon Cambs PE19 3SF Tel (01480) 212666 e-mail sales@acblackdist.co.uk - Blunkett, Rt Hon David; PC 1997; MP (Lab) Sheffield Brightside, since 1987; Home Secretary since 2001, Secretary of State for Education and Employment, 1997-2001; b 6 June 1947; m (marr.diss.); three s. Educ: night sch and day release. Shrewsbury Coll of Technology, and Richmond Coll of Further Education, Sheffield; Nat Cert in Business Studies, E Midlands Gas Board; Sheffield Univ (BA Hons Pol Theory and Instns); Holly Bank Coll of Education (Tech) (PGCFE) Tutor in Industrial Relns, Barsnley Coll of Technology 1974-87. Elected to Sheffield City Council (at age of 22); Chm, Family and Community Services Committee 1976-80; leader 1980-87; joined Labour Party at age of 16; Chm Labour Party NEC 1993-94 (Dep Chm 1992-93; Mem 1983-98; Chm Labour Party Ctee on Local Govt 1984-92. Frontbench spokesman on the environment, with special responsibility for local govt and poll tax 1988-92, on health 1992-94; on educn 1994-95, on educn and employment 1995-97 (Mem Shadow Cabinet 1992-97). Publications: (jtly) Local Enterprise and Workers’ Plans; (jtly) Building from the Bottom: the Sheffield Experience, 1983; (jtly) Democracy in Crisis: the town halls respond, 1987; On a Clear Day 1995. Address: House of Commons SW1A 0AA. Drop me a line < Back to Home Page
12 September 2002 Americans in the Dark I was gripped by the insights of Mark Hertsgaard, writing this week in The Guardian. His full account is well worth reading, and a telling one.
His story is one which deepens my understanding of the American political scene. It begins to explain just why I find find the coverage so dull in the New York Times - check out the NYT today! Drop me a line < Back to Home Page
12 September 2002 The Economy: who's in command? On that very first day of the new Portal, it seems that Correspondents may not have been diarised, as they are now. This is the text of that 1 September 1998 letter, published in the Guardian - it sets out an analysis to which I still adhere - Dear Sir While some see the Russian crisis in terms of free market ideology (Leader, 28 August), a greater truth is that all economies, properly understood, are command economies. The only real question is - "Who is in command?". In our own economy, private property rights are ruthlessly enforced by the Courts, new systems of intellectual property deliver ever greater wealth and power to property-owners, and a Victorian system of company law shamelessly enriches business leaders and protects them against legal responsibility for the consequences of their own actions. State intervention has been systematically disparaged. Big companies are cultivated as the partners of government, subtly conferring new command power upon them. In the US, that process has gone further, with public authorities intervening in active support of business interests. The misfortune of the Russians was to abandon one command system before they learnt how to operate the alternative. Their greater misfortune is that we cannot teach them, because too few of us understand how our own command economy works: that should be our most urgent study, the political arena for the next generation. Roger Warren Evans Swansea Drop me a line < Back to Home Page
16 September 2002 Asserting Human Rights Two noteworthy HR victories this week - the Ahmadi family held to have been wrongly expelled by David Blunkett, and Game Boy held to have been wrongly expelled from the Greek High Street - both evidence of the civilising effect of HR thinking. In Greece, the Socialist-led Legislature has recently passed panic measures to impose a blanket prohibition on the public deployment of electronic and video games. Concern had been expressed with a wave of gambling "addiction" related to such machines, and the politicians opted for a complete ban, under which offending retail proprietors or managers could be imprisoned for up to 12 months, and heavily fined. The public use of games consoles, Pac-Man and Tetris, and all games on the Web, became illegal overnight. This week, the Courts stepped in. The new law was held to be unconstitutional, under Greece's own Constitution, assuring the "free development of the personality and movement of ideas". As this human right was clearly wider and more explicit than any provision of the European Convention of Human Rights, it laid the ground for a more effective legal challenge than any argument derived from ECHR itself. The Socialist Government has been sent back to the drawing-board. The Game Boy Case demonstrates the new balance of power that is emerging, triggered by human rights reasoning. Power shifts, by tiny increments, from the politicians to the judiciary - and politicians often resent this change. It is yet another indication of the shift towards dicastocracy, or rule by judges. In the week's second case, UK Home Secretary David Blunkett clearly resented judicial intervention in the case of the Ahmadi family. This Afghan family of four (parents and two young sons) had been deported to Germany pending their UK asylum appeal, by a specific David Blunkett order. The family had arrived in this country, via Germany. Blunkett certified, under the provisions of the Act, that the asylum claim was "manifestly unfounded". Yet the London High Court (Mr Justice Scott Baker) held that there was indeed a case to be argued, under Article 8 of the European Convention of Human Rights, that the deportation would constitute an infringement of the family's "private or family life" and that they should not have been deported without a proper adjudication of that claim. This constitutes a shot-across-the-bows to UK politicians, Left and Right-wing alike. In particular, it acts as a warning to the Government's plans to return all asylum appellants to another country, while their appeals are being heard. That would, in my view, constitute the denial of a fair trial, and would represent a profound error of judgement on the part of Parliament and the Government. If the Government goes ahead, the opposition of the Judges can be expected. Drop me a line < Back to Home Page
16 September 2002 Misleading Fallacy W hen the Liberal Leader Charles Kennedy addressed the TUC Conference in Blackpool, he gave further currency to the idea that there is a straightforward choice to be made between two economic models, the American ("which is looking distinctly shop-soiled and tarnished") and "the more socially oriented European approach.."But that is not the choice. Neither the American model, nor the European social welfare model, is delivering the goods. The weaknesses of the American model are clear to most observers: its economic vitality predicates a massive juggernaut of inherited power, cheap energy, a dislocated political system suborned by big business, a vicious judicial system which incarcerates millions and executes hundreds, a supine Press, and a myriad social injustices. But the continental European model is not working either. Too many national economies on the Continent are sclerotic, failing to generate satisfactory levels of economic and employment change, excessively dependent upon managed sector stimuli, maximising personal security at the expense of overall systemic vitality, protectionist, and slow to respond to external change. There is too little understanding of the centrality of a trading society, of the need for social and legal conventions calculated to encourage innovation, in both the private and the public sectors. Europe is no paragon of economic success, no model to follow. I have no time for Professor Anthony Giddens, and his attempt to dignify Tony Blair's "Third Way". But I am convinced that there is a new course to be charted, by way of socialist market theory. The need is first to recognise that all economies are managed economies (see my 1998 Guardian letter). Then, one sets about re-designing our welfare state to give people the kind of reassurance they need to handle the new uncertainties of a rapidly changing economic environment. They need far better financial cushioning against the immediate impact of unemployment. They need the assurance that there lives will not be routinely disrupted by crime or civil disorder. They need the absolute assurance that, if they fall ill or are injured, they will be cared for and healed, without incurring crippling costs. They need the absolute assurance that they will not face impoverishment in old age. And they need a comprehensive quiverful of individual rights to protect them, as individuals, against the abuse of power and threatened abuse, and they need the wherewithal to enforce those rights. The role of the State, in a socialist market system, is to deliver those assurances to its citizens. And that must be done by governmental techniques which do not unduly inhibit the spirit of individual initiative and innovation - upon which all societies ultimately rely for their survival. This is not merely a matter of "the economy" - indeed, I reject the very idea that there is such a thing as an "economy" - I prefer to think in terms of a trading society, whose members display differing degrees of trading skill and experience. The success of the society turns on the effective development of those skills, enabling markets to operate within the interstices of socialist legislation. This new system is not yet in place. Our people are still assailed with uncertainty, anxiety and fear. It is the role of Labour Party to build that new society, giving its citizens the best possible opportunity of living full and rewarding lives. Aneurin Bevan argued that socialism meant building a society that was not founded on fear - see In Place of FearThat remains my goal. Drop me a line < Back to Home Page
16 September 2002 Misleading Rural Model With another Countryside Alliance March due next Saturday 22/9, the economists are sharpening their pencils again to analyse the state of the UK rural economy. I do not think that the "rural economy" exists at all. Will Hutton has got it all wrong, in his Observer article There are no "rural economic" issues which do not equally impact upon the wider economy in precisely the same way. Will Hutton highlights the risk of deflation, which threatens the Japanese economy, even the US economy, and may become a factor in Europe. And it true that food-prices have been falling for several years, because "supply exceeds effective demand" - societies are unable to get food to those who need it, and so there is no effective demand, in callous terms. It is vital that we understand the real triggers for this general weakness of demand.My view is that it springs from a deep-seated concern among people about the inadequacies of their own social and political systems. In the USA, in spite of George Dubya's current popularity, I believe there is real popular unease about the way American society is managed, and in whose interests. That is certainly a major factor in the continuing Japanese recession. In Continental Europe there are other concerns, some of which are shared by the UK public - trade union protectionism, sclerotic public administration, "uncontrolled" immigration. These worries all feed into a reluctance to consume - because "rainier days may be ahead", - and therefore a pattern of weakening domestic demand. These popular worries are the cause of national economic weaknesses, not the effect. It is my view that the antidote is to move towards more socialist forms of society, to the reduction of personal inequalities, to the dignified equality of all citizens, and to the maximisation of personal citizen involvement in the governance of all societies. The great paradox is that only such systems will in future be able to maintain the necessary confidence, among the consumerate, in the fairness of the overall system of society to which they belong. "Socialism is good for you", and for the global economy. Will Hutton goes on to argue the case for more effective cooperation between farmers, in the marketing, supply and processing of food. But the truth is that these lessons are vital for all small firms in the modern economy. There are no sectors to which their lessons are not relevant - more supportive financing, improved marketing skills, a gentler bankruptcy regime, better managerial training, easier employment-contract laws, simpler taxation.
And that means that the issues are of great concern to all of us. Drop me a line < Back to Home Page
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New
I would sell the services of the GMB as a universal
counsellor and advocate for each individual Member. I would fight to
prevent the TU movement becoming simply a mutual protection society for
public servants. By far the greater need for TU action lies in the
private sector, where membership is disastrously low – so I would put
these charts up on my wall (with the kind permission of The Guardian) to remind
myself of the parlous condition of the TU movement, in September 2002.