State of the Economy 2018
State of the Economy 19th May Sherfield Building, Imperial College, Prince Consort Rd, Kensington, London SW7 2BB
I hosted the second of our annual State of the Economy Conferences at the Imperial College. The conference heard from experts about the current state of the UK economy and also gave the opportunity for everyone to pitch in with their own ideas. Labour’s Shadow Treasury team and an excellent range of speakers discussed topics such as Labour’s industrial strategy, tax and public spending, public ownership of our utilities and Labour’s policies for productive finance and investment.
Jeremy Corbyn spoke about restructuring our economy to deliver good jobs and prosperity everywhere, putting power back in the hands of people to take control of their working lives and their local communities.
Adair Turner Key note speaker presentation
This session considered issues about energy sustainability and the wider question of environmental economics.
Alan Simpson spoke about the way in which climate will change the framework of economics itself. From food, to flooding, soil to air quality, trees to transport, clean energy to smart grids and urban infrastructures, nothing can remain untouched by the revolution in thinking Labour must lead.
Mika Mino- Paluello spoke about the way in which the climate crisis presents our society with a fundamental threat. The UK with its long industrial and colonial history has a responsibility to lead. But this also gives us the opportunity to shape the post-carbon future, to take a leap towards a more just and democratic society. Where the economy serves people and communities, rather than people serving economics.
She also talked about greater public and democratic ownership of the future – from shiny clean tech to care work. We need to rethink how we move around, how we transport people and goods. And a more flexible and adaptable energy systems – where access to electricity and heat is a human right.
Rebecca Newsom focused on the need to challenge the growing marketisation of the environment and how we must reprioritise the use and management of natural resources for delivering public goods instead. This means upholding fundamental protections for landscapes that can’t simply be traded or replaced; rethinking land-use; harnessing state investment to promote the solutions we need; and rethinking ownership and workers’ rights surrounding green infrastructure and technology.
The future of the finance sector
This session looked at the problems of the finance sector: what needs to change and what should Labour do to make that change happen.
Daniela Gabor spoke about the National Development Bank: long-term financing for the green economy and how to fund it. – green FTT: a progressive agenda for sustainable finance and reform of shadow banking – reversing asset-based welfare to public welfare
Graham Turner’s presentation expanded upon ideas put forward in the Financing Investment: Interim Report, published for The Labour Party in December by GFC Economics and Clearpoint, and briefly introduce some of the themes being developed in the Final Report, to be published in the coming weeks.”
Craig Beaumont set out the latest research from FSB into access to finance issues faced by its c170,000 members, small business owners from every nation, region and community across the UK
Taxation and public spending
This session looked at macroeconomic policy: taxing, borrowing and spending.
Prem Sikka discussed some of the tax issues that the next Labour government will need to tackle. These included designing a system that is fit for the twenty-first century, tackling tax abuses and building robust institutional structures”. Click here for more information
Alfie Stirling Fiscal policy over the decade has been characterised by a phenomenon called ‘surplus bias’ – where a government defies standard assumptions in political economy and displays a ‘bias’ towards fiscal consolidation, despite ill-effects to the economy. Alfie’s presentation set out what this has looked like in the UK, what it is has meant for the economy, and what direction policy reform could take in order to guard against the problem in the future.
Ozlem Onaran’s preserntation addressed the following questions;
– What are the aims of public infrastructure investment? What is physical and social infrastructure?
– What are the macro effects of public spending on productivity, employment and budget?
– How can it be financed?
– How much can/should the government borrow or rely on taxes?
– Is there a role for a National Investment Bank?
– Is there a role for the Bank of England and monetary policy? What is “People’s Quantitative Easing (QE)”?
Co-operatives and community wealth building
This session discussed how we create democratic forms of economic governance at grassroots level, including worker cooperatives and keeping wealth local.
Joe Guinan highlighted the way in which Community wealth building is a pathway to a very different economy based on democracy rather than financial extraction. Approaches like those in Cleveland and Preston point to a new model, organised around ownership, control, democracy, and participation that could displace traditional corporate and financial power in Britain.
Peter Holbrook looked at how capitalism got us into this mess (trends in inequality, climate change, species extinctions, child poverty, plastic epidemic, homelessness etc) and how the nature of business and the economy must now adapt and evolve to new models of social enterprise. In essence what is wrong with the old system and how we now build and further expand the new economy.
Anna Birley talked about the role of co-operatives in widening ownership and creating democratic local economies where wealth and power are shared. From supporting local credit unions to developing community-led housing and community energy projects, innovative councils are already doing things differently across the UK, changing their communities and local economies from the bottom-up.
Economics, power and equalities
This session considered how economic systems can discriminate against women and other groups in society, and what can be done about it.
Eileen O’Keefe talked about the way Local authorities should be working together to identify a national level legislative and regulatory framework that would enable them to fulfil their public health function to promote the availability in every locality of tasty, affordable, nutritious food for all children.London’s children have higher rates of obesity than those in comparable cities internationally. Inequalities in child obesity in England are steep and vary with local authority deprivation level and by ethnicity and sex. With public health devolved to local authorities, and light touch national policy on legislation and regulation on food production, food safety and trade arrangements, obesity policy continues to highlight community and family, especially women, for intervention. While global food companies’ lawyers discuss how to deal with EU regulatory threats, local authorities receive advice from cognitive behavioural scientists on how stressed parents might be subject to “reduced cognitive bandwidth” which limits their ability to promote their children’s health. “Addressing perception” offers a way in “to implement feasible interventions without the expense of physically re-designing the urban space or requiring the legislative power to do so..” LA’s COULD flag up the highly concentrated food supply chains serving deprived neighbourhoods, the staff reductions in environmental health and trading standards locally and the weakening food safety processes nationally.
Selma James spoke about the implications of women doing most of society’s unwaged caring work for economic and social relations, including women’s wages.
Susan Himmelweit talked about how Gender norms over roles and responsibilities with respect care, unpaid domestic work and paid employment place men and women in different structural positions in the economy. As a result many policies, even those that do not appear to be about gender, have gender implications, increasing or decreasing various gender inequalities. Similarly, many policies, even those that do not appear to be about care, have implications for how people are cared for.
21st century challenges: technology and data
This session looked at technological change and the fourth industrial revolution. What are the potential benefits and challenges associated with automation and big data?
Natasha Thomas talked about how tech innovation is empowering SMEs and then more broadly, the potential to use data to support SME growth and local economies.
Wendy Liu demonstrated that in order to understand the potential benefits and challenges of technological change, we have to critically consider the wider economic and political context in which technological development takes place. To unleash the emancipatory potential of technology requires challenging the dominant narrative around how technology should be owned and deployed.
Francesca Bria discussed emerging alternatives for data ownership and digital infrastructures that are challenging heavily centralised models of data extractivism from the Big Tech. In particular she introduced the DECODE project and talk about the role of cities in democratizing data and artificial intelligence.
Public ownership for the future
This session looked at Labour’s proposals for public ownership: what’s wrong with privatisation, how we end it, and what we replace it with.
Cat Hobbs talked about popular support for public ownership, what our publicly owned future looks like and how we can get there.
Helen Mercer explained the proposal to nationalise SPVs and the ownership and contractual structure after nationalisation.
David Hall focused on public ownership in water and energy as well as his recent publication on the global evidence that public sector is just as efficient as the private sector, and can deliver economic benefits that the private sector can’t.
Inequality and precarity
This session looked at forms of economic inequality, including ‘the precariat’, and consider what policies are needed to address it.
Wanda Wyporska spoke about the human side of inequality and what precarious work looks like, as well as a few stats from our Pay and Wealth Trackers.
Guy Standing traced the nature of rentier capitalism, drawing on his book The Corruption of Capitalism: Why Rentiers thrive and work does not pay, and then trace the character of the precariat, indicating why Labour should focus on appealing to this group. Time allowing he will also mention Basic Income, drawing on my other recent book.
Tom Kibasi focused on some of the numbers on inequality and then some of the policy ideas that are being debated by the Commission on Economic Justice.
Housing and land
This session looked at Britain’s dysfunctional housing sector and how we can ensure the benefits of land are shared by everyone in society.
Heather Wetzel spoke about the way in which homes can never be affordable for all to rent or buy until our distorted land market is corrected by returning land wealth to the public purse and not to speculators or big land owners. The value of a home has two parts – the building value and the land (location) value; land value is generated by all of us as taxpayers, workers, consumers and worthwhile investors. Until there is a fundamental shift in what is taxed, land owners will continue to suck land wealth out of the economy as they have done for generations.
Joe Beswick spoke about the cost of land, kept high by a debt-fuelled, speculative housing system, is one of the main barriers to solving the housing crisis. Surplus public land provides a key opportunity to get round this, and can provide affordable land for public and third sector social housebuilding. However, austerity policies and regulation mean that instead public land is being sold off to the highest bidder, producing few new genuinely affordable homes, and keeping the cost of land high. Joe will explore the role of land in the housing crisis, the public land sale, and how public land can provide the beginnings of a route out of the housing crisis.
Anna Minton talked about the way in which British cities, from London to Manchester, are home to spiralling property and land prices, creating a crisis of housing unaffordability. We are witnessing the wholesale reconfiguration of areas, where towers of luxury apartments aimed at foreign investors displace communities. Why has this happened and what can we do about it?
Brexit and the post-Brexit economy
This session considered some of the issues around Brexit and Labour’s proposals to rebuild and rebalance the economy after we leave the EU.
Lee Hopley looked at the economic opportunities for UK manufacturing. He considered short term challenges posed by Brexit and the long term policy framework needed to successful capture benefits of fourth industrial revolution.
Tony Burke’s presentation focused on Brexit and Industrial Strategy. Unite the union represents over 1 million people across all sectors of our economy, from all areas of manufacturing, transport, energy, local authorities, health services, education, community and not for profit organisations to services and hospitality. Unite have long campaigned for an active industrial strategy from Government’s of all stripes to deliver good jobs across our regions and nations, as part of an economic policy to build a more equal society.
Laurie Macfarlane focused on the challenges and opportunities of implementing a transformative industrial strategy to rebuild and rebalance the economy after we leave the EU.
Closing Plenary (3.50-4.40)
What would a transformative economic agenda look like?
Kate Raworth spoke about the 21st century global goal of meeting the needs of all within the means of the planet (aka the doughnut) – creating an economy that is regenerative by design (working with and within the cycles of the living world), and distributive by design and how regen and distrib design can and need to work together.
Paul Mason: spoke about his “maximum programme” which is about promoting collaborative economy, automation and ending information asymmetry. But short term I would – unless others want to talk about it – also focus on what a new companies act and an “office of the non-market economy” could do
Selina Todd talked about promoting economic democracy and re-valuing work
Ann Pettifor focused on citizen power in relation to the finance sector.
There were also 3 lunchtime briefings
Labour Business Briefing chaired by Hamish Sandison
This briefing session was an opportunity to talk about how to organise a programme of business engagement in the regions, the role of a Business Liaison Officer in the CLP, and some of the business issues that participants thought were important.
Should Wellbeing be the goal of policy? Chaired by Thelma Walker MP
Richard Layard spoke about;
- GOALS – The goal of public policy should be the happiness of the people. Social justice requires a special focus on the prevention of misery.
- SCIENCE – We know a lot about the causes of happiness and misery. Especially important are mental health, physical health and human relationships (in families, in the community and having work).
- POLICY – We should evaluate policy options by their impact on happiness and misery per pound spent. This is now a subject of worldwide interest among policy makers and academics.
Rosa Connor focused on community orientated and the results that have been achieved through the Corporate training and teacher training programmes she has undertaken with various organisations.
Progressive Economy Forum Chaired by Chair Patrick Allen
Where to start on building the new economic narrative?,
The Progressive Economy Forum was formally launched at a meeting at the House of Commons on Wednesday 16th May 2018
The Forum brings together 12 eminent economists and academics whose mission is to create a new macroeconomic programme, founded on the progressive values of equality, dynamism and sustainability. PEF will inform the public, policy makers, politicians, activists and the media of the principles of progressive macroeconomics, and of the possibilities offered by this new programme.
Key to this is correcting the current false narrative which tries to justify austerity