12 March 2013

Compass: Plan B+1

Work has kept me away from Compass events for almost two years so it was good to get back in to the groove again. My current office is something like ten minutes walk away from the Houses of Parliament where Compass meetings are often held.

The subject this time was Plan B+1, Compass' analysis and response to the current economic climate. The panel consisted of Howard Reed (Author of Plan B+1), Claire Annesley (Women's Budget Group) and Chuka Umunna MP (Shadow Secretary of State for Business, Innovation & Skills) with Deborah Hargreaves (High PayCentre) chairing.

As is typical when MPs are involved, Chuka could only be there for part of the evening hence his absence from the photo. He had a good excuse though as the Division Bell could be heard clearly.

The three panellists each spoke for about ten minutes and then the discussion was opened to the floor. What follows is my usual mix of notes taken at the time so some of the points came from the panellists, some from the audience and some from me.

Plan B+1 was written because the predictions in Plan B proved to be too optimistic.

The Government's plans, like funding for lending, have had minimal impact, and some of those impacts have been bad.

Plan B is still to increase Infrastructure investment, tax reform to make it more progressive, e.g. wealth taxes, a bargain for labour through enhanced employee rights, and fiscal reform and reform of capital markets.

Is that still too little? Big capital will still win unless we take it through wealth taxes, Cyprus has the right idea.

Austerity is bad for people, especially women. There have been cuts on benefits paid to women and eligibility rules changed. Lone parents are particularly hard hit. Softening measures, e.g. raising tax allowances, do not benefit those at the very bottom. Job cuts in public sector hitting women more. Their employment is not rising.Go for Plan F; increase taxes more and reduce benefits less. Bring in the Tobin tax and a mansion tax. Invest in social infrastructure, e.g. child care, schools. Gender voting gap increasing as the political awareness of the impact rises.

This is a key moment. Budget in March and spending review on 26 June last chances to make a difference before the General Election. We have a demand problem but the government is just trying to increase supply. Demand is suppressed by a lack of cash in hand now but some is fear for the future, e.g. pensions, student loans etc.

We need a different model. The crash is just one symptom but so is inequality etc.New Labour's plan worked for the time and made significant social change, but not secured by significant reform. We need to pay a decent wage for a decent job, e.g. Living Wage. We need an industrial strategy, with strategic investment and a reform of corporate governance.

There were calls for a Big Bang - but is that a big enough bang?

We need to define what a good society is first so we know what the economic policy is trying to achieve. Need to look at redistribution of work, but should we also reclassify it, i.e. to include anything that delivers value to society including raising your own children.
The social recession is harder to fix than the economic one. The cultural issue to fix we need some sort of Cultural Revolution (!). The Tories have simple messages that we have not been able counter. So why is debt a problem? Just don't pay it back!

Time is the new currency, that's why we retire as soon as we can, but we are still measuring success in financial terms.Go for land value taxation. Stop corporate tax avoidance. Need to be careful about asset realignment, e.g. sell house and buy yacht.Need to be clever over tax havens. Should try and close the havens altogether, e.g. refuse to trade with companies established there.

Trident?? Nobody has mentioned it yet ...

Taxation is not free money. If Starbucks pay more tax they put up prices and customers have to pay so we have a transfer from corporate to personal taxation.

And that was it. An interesting and useful debate even if it went around the houses a bit and failed to nail any specific points down, not that it would have been fair to expect that. Most of my political debates these days are on Twitter so it was good to raise the bar and talk to real people with brains. Looking forward to the next one.

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