Alan Simpson
Introduction
The biggest problem with all the New Labour whinging that surrounds Jeremy Corbyn and John McDonnell is that it distracts attention from the huge crises Britain faces, and the need for a clear Labour alternative.
John and Jeremy’s ‘Downton Abbey‘ critics get no further than calls for the world to be ‘as it used to be’. From Trident to TTIP, forced migration to flood mitigation, climate crises to financial ones, the Tory government doesn’t have a credible plan … but nor (at the moment) does Labour. Getting onto the front foot is the best way to silence internal Labour critics, and to connect with a public that is already ahead of the political circus. We may not have much time to do so.
Warnings of a second financial crash are becoming more strident
“Albert Edwards, strategist at the bank Société Générale, said the West was about to be hit by a wave of deflation from emerging market economies and that central banks were unaware of the disaster about to hit them. His comments came as analysts at Royal Bank of Scotland urged investors to “sell everything” ahead of an imminent stock market crash.” (Guardian 12/1/16)
We should all heed the warning note RBS Bank sent out to its clients, advising them to “Sell everything except high-quality bonds. This is about return of capital, not return on capital. In a crowded hall, exit doors are small.” 
Most of the big issues revolve around oil, climate and casino credit.
The tumbling price of oil is part of the coming crisis, but not the only part. Fossil fuel revenues have underpinned corrupt governance and corporate oligarchies, most of which are now facing internal (as well as international) crises.
First, a whole series of oil-States are overwhelmingly dependant on their oil revenues. Falling oil prices are wreaking havoc in Nigeria, where 90% of government revenues come from oil exports. Some 23 Nigerian States cannot, now, pay their public wages. It isn’t much better in Iraq (96% dependency on oil revenues) or Saudi Arabia (88%). Alaska, with a 90% dependency rate, is currently running a deficit of $400,000 an hour. It isn’t on the point of bankruptcy, but for the first time in over 40 years, Alaska has had to levy an income tax on its citizens. Russia may only be 50% dependant on its oil revenues but, with an already weakened economy, tumbling oil prices merely add to the strain. Most recently, the lifting of sanctions against Iran has sent oil prices down to $28 a barrel and knocked $27bn off Middle East stock values.
Falling energy prices were supposed to boost consumption and growth, but the opposite is happening. In part, this has been exacerbated by a nose-dive in the Chinese economy. 
In recent years, almost half of global construction work has been taking place in China. Global growth has relied heavily on Chinese production, demand (and finance). The fall in both threatens a new deflationary spiral. Every economy whose pension and insurance funds are tied up in this stands at risk.
Climate issues add to the mix of instability. The devastating floods that wreaked havoc in Britain are matched by ferocious droughts elsewhere. In California, a succession of droughts (and a willingness to let farmers pump more and more water from their aquifers) has resulted in roads and land sinking at a rate of up to 1ft/year, with devastating effects on the safety of roads, bridges, buildings and pipelines. It is kicking into the whole basis of the Californian economy, not just its centrepiece of intensive food production. Just repairing the damage will cost billions of dollars… and it won’t make the rains come.
The roller-coaster of deregulated trade obsessions throws these crises together in a way that accelerates the next one; a financial one, likely to arrive within the coming year. From the Opposition benches, there is little Labour can do to avert this crisis. What Labour can do is map out a very different set of survival strategies.
Protect and Survive
Labour needs to become the Party that redefines the problems and which offers different solutions.
1. John and Jeremy should (publicly) launch an initiative with the trade unions to discuss the long term security (and re-direction) of pension funds. The likes of Richard Murphy and Prem Sikha should be included as they have a real grasp of both pensions security and infrastructure investment; putting both into a regulatory framework that moved priorities from the internationally speculative to the domestically secure.
2. A similar initiative should be launched with the Insurance industry. The latest experiences of UK flooding make it clear that the ‘austerity economics’ leaves Britain with no coherent infrastructure programme for flood avoidance and management. Tory proposals for ‘a farmer’s right to flood’ will only make matters much, much worse. The insurance industry knows this, and has far better ideas about an alternative investment infrastructure. An initiative that linked them in with environmental groups could actually deliver some of the “high-quality bonds” RBS is urging investors to look for (and leave the Tories looking marooned).
3. When the next crash comes, Labour must not get trapped into underwriting bank debts. Last time round Labour should have guaranteed ‘savings and deposits’ but not speculative investments. Britain would have done better to have followed the examples of Sweden and Iceland and allow banks to go bankrupt (then nationalising their banking functions to ensure that ‘normal’ economic activities could continue). John should publicly commission Joseph Stiglitz/Paul Krugman to (quickly) produce a plan for surviving the next financial crisis.
4. Migration. No government is equipped to deal with the current levels of forced migration from the Middle East and North Africa. None of the international finance mechanisms we currently have are fit for the challenge. A new global framework is needed, along the lines of the post-1945 settlement. Labour cannot deliver this, but Jeremy should lead the calls for it. Former Ambassador, John Ashton would be a good person to lead the thinking. Ironically, calls for a UN/World Bank administered programme of carbon taxation (including shipping and aviation) could provide the funding that paid countries doing the most to support refugees, to be paid the most by the rest of us. In that way, we could ensure that compassion comes with a dowry not a debt. It would also allow for a better political debate between right-wing hatred of foreigners and broader public worries about how much they can afford. Jeremy needs to lead and launch such a call.
5. Food before bombs. This is only a small point, but it is politically important. I sent in suggestions that we get Jeremy photographed with food consignments going to Syrian ‘besieged’ towns. It doesn’t matter who’s army is staging the siege. The point is that If the UK has planes in the region we should use them to drop food rather than bombs. This is quite separate from the questions of who/when/whether we bomb. It. just stakes out a Foreign policy approach that puts saving lives before taking them.
This would wrong-foot many of Jeremy’s critics in the PLP and pull the rug from under the ‘give-war-a-chance’ contingent. It was disappointing that no one picked this up.
6. Energy and Climate. At our last session, we agreed this needed to be led by John or Jeremy. This was Ed Miliband’s mistake: there never was a central driving vision to any plan. The Tories are burning all their ‘energy and climate’ credentials by the day, just as the rest of the world heads in the opposite direction. Mario Cuomo, the Mayor of New York has just pledged that
“...The state will train a clean-energy workforce of 10,000 to help make New York more reliant on renewables...” and
“… has mandated that New York double its reliance on renewable energy to power the electrical grid in just 15 years. The state will get 50 percent of its power from renewables by 2030.”
This is the exciting political space that connects ‘clean’, ‘secure’, ‘accountable’, ‘inclusive’ … and jobs. It is the space voters are looking for.
My hardest message is this: Yes, it is important that Jeremy and John represent a more open and inclusive form of politics, but that isn’t enough. The country/planet is short of big picture vision. In Opposition, this is what Labour has to set out.
The weakness of running with questions sent in by others is that this can easily turn into the notion of not having a plan of its own. “So, what is Labour’s plan?” is the most consistent question I get asked in meetings.
A meaningful (sustainable) democracy
After the Paris Summit, the coming local elections offer the best platform for answering this. The key is to link ‘moving the goalpost’ proposals to one (or more) of tomorrow’s key ‘security’ issues – food, energy, water and employment.
7. An alternative to Osborne’s ‘Micky Mouse’ Mayors. The government’s City/Region Mayors will end in tears and recriminations. They will prove neither popular nor accountable. Only the cash makes them interesting (and this will prove illusory). Labour should promise a much more serious devolution of powers (and duties) to existing (elected) authorities. This could have a local, national and European appeal.
– Already, over 6,500 cities and regions within the EU have pledged to become ‘Smart Cities‘, setting CO2 reduction targets ahead of their national governments.
– The most exciting (international) energy and climate programmes all involve substantial market reforms: tomorrow’s markets are being designed more around localised energy ‘systems’ than specific technologies; with the emphasis being on
– climate duties alongside local freedoms
– energy saving (nega-watts) before energy production;
– public subsidies that are time-limited and carry clear degression rates; and
– an emphasis on both decentralisation and the socialisation of ownership.
Elsewhere, government support programmes underpin the shift from unsustainable energy to sustainable ‘systems’ thinking.
In Puerto Rico, all new renewable energy projects must include a 30% ‘energy storage’ element.
In Japan, there is a 2/3 cost subsidy for all homes/companies installing solar + storage.
Germany offers a 30% public subsidy for the installation of PV+storage.
Italy already achieved 75MW of installed battery storage by the end of 2015, and
In the USA, various States can mandate Grid operators to deliver energy savings as well as clean energy generation.
In Britain, Ofgem estimated that in 2015/16, 4.60TwH of electricity was ‘lost in transmission’. This is roughly the equivalent of 5 power stations. Tomorrows jobs and energy security will be found as much in wasting less (saving more) as in new generation. This is what Labour has to stand for.
The gap between the UK and leaders in the energy transformation process is a direct reflection of government intervention/support policies. 
Globally, the most progressive governments are leading a transformation from the unsustainable to the sustainable. It is also the shift from energy oligarchies towards energy democracy.
As Labour localities (and the Parties in Wales and Scotland) look for manifestos that might inspire, John and Jeremy have to emerge as the Leaders (not owners) of this vision.
Setting our own agenda
In his election Manifesto (Protecting Our Planet, p7) Jeremy set out the basis of a distinct and different approach to energy and climate politics.
Nothing is going to make the current government less regressive than it is. Labour can, though, turn this to its own advantage.
The most damaging aspects of Osbornomics can be limited in a number of ways, including
a clear statement from the Labour Leadership that it will not be bound by Osborne’s infrastructure spending programme,
a commitment to restore the zero-carbon homes standard
– an intention to use the GIB to deliver low-interest loans for near-zero carbon standards in energy efficiency programmes
– a commitment to reforming the energy market to make it more open, accountable, sustainable and decentralised
– a declared intention to review the role and nature of tomorrow’s energy Grids
– an undertaking to make Labour, the Party of ‘Smart‘: linking technologies to communities; and supporting towns, cities and regions in their development of ‘smart systems’ for producing, sharing, storing and reducing tomorrow’s energy needs,
– a commitment to introduce carbon budgeting into local and national accounting,
– the setting up (as promised) Labour’s ‘Energy Commission’, to work out detailed pathways for such a transformation, and
– and an acknowledgment that this transformation will overlap into the carbon footprint of sustainable transport, food, water and environmental resource policies.
Objectives
1. To establish Labour as the progressive, accountable and sustainable voice in British politics.
2. To make ‘sustainability’ the new ‘security’ agenda.
3. To ‘spike’ Osborne’s obsession with Mayors, with limited extra budgets in artificial ‘super cities’, by offering new powers to elected authorities in order to meet their new energy and carbon obligations.
4. To define Labour as the ‘Smart’ Party (and Osborne’s Tories as the ‘dumb’ one).
5. To show people that this is where tomorrow’s innovation and jobs are to be found.
6. To build a coalition of local authorities, NGOs, communities, co-ops and smart/clean technology sectors to champion this transformation, and
7. To make Labour a key player,(on the international stage) in the delivery of planet-saving, sustainability programmes.
Outcomes
These should include –
– neutralising/reversing the level of support for nationalist parties in the coming local government/devolved Assemblies elections
– building strong trade union support for a sustainable skills/jobs programme
– mobilising (and maintaining) high levels of voter/community/industry support for Labour’s transformation programme
– establishing an international platform for Labour as the One Planet (not just One Nation) Party, and
– establishing the case for a fundamental re-think of Treasury/fiscal approaches to sustainable economics.
Osborne is clearly the driver of the most regressive of Tory policies. He needs to be the target of Labour’s attacks. Labour needs a collegiate approach to financing the transformation process. But, this transformation needs to be SEEN to be driven by the Leader and Shadow Chancellor.
This would make energy and climate the centrepiece of a different approach to sustainable economics.
Alan Simpson
Afterthoughts
1. Naomi Klein is launching the film version of her ‘This Changes Everything’ book at the end of this Jan. On Sat 30th she is doing a live video link to a Friends of the Earth Conference on it. Caroline Lucas is Chairing the session. Why not get Jeremy or John’s Office to contact her and offer a parliamentary screening (and video link-up?) during the preceding week. If it was a runner, John or Jeremy should front it. This is about being leaders of the game rather than followers.
2. In government, Labour introduced the ground-breaking Climate Change Act. In Opposition, Labour would do well to look at adapting the Welsh Government’s ‘Wellbeing of Future Generations Act’. A strengthened version could act as an important rallying point for a Party that wanted to be seen to embrace – and protect – the future rather than the past.
3. Under EU Directive 2010/31 (Article 9), Britain is under the following obligation – “Member States shall ensure that by 31 December 2020 all new buildings are nearly zero-energy buildings; and after 31 December 2018, new buildings occupied and owned by public authorities are nearly zero-energy buildings”.
Member States shall furthermore“draw up national plans for increasing the number of nearly zero-energy buildings”.
These are the commitments Osborne is looking to renege on. It goes to the heart of the ‘fuel poverty’ agenda. My understanding is that the Treasury and the building industry are in earnest discussions about how flexibly they can interpret the word “nearly“.
Labour ought to nail the Tories as the Party ‘in hock’ to profiteering developers who would palm the country off with cheap, shoddy and energy inefficient buildings for generations to come. A really good campaigning platform.
