Tuesday, 24 April 2018

Enoch Powell has nothing to do with the Conservative Party I know today

Helen Grant MP

An invitation to comment on changes in Conservative Party attitudes to race and ethnicity, in the fifty years since Enoch Powell’s Birmingham speech, seems to suggest that Powell was the voice of the Tories at the time. The fact that his speech resulted in a unanimously supported summary dismissal from the shadow cabinet, however, strongly indicates that Powell’s lines on immigration were very much his own and not a mainstream view.

I had no contemporaneous knowledge of the ‘Rivers of Blood’ debacle, being a young girl aged seven, growing up in Carlisle some 200 miles to the north of Powell’s seat in Wolverhampton South West. Paradoxically I was, for a while, perhaps the only person with a darker skin living in that far northern city in the sixties. It was not a place where I recall there being any notion of societal take-over by masses of in-bound ‘people of colour’. That’s not to say I did not suffer racial abuse – I certainly did – but the perpetrators were school kids who picked on anyone who was a bit different.

It was not until 2004 that an urge to investigate party politics first emerged within me. I realised that my politics resonated with the Conservative ethos rather than Labour, albeit to the left of the Conservatives’ broad church. A ‘hand up’ rather than a ‘hand out’, aspiration, opportunity, social mobility, personal freedom, trusting people to take responsibility for themselves and their families.

It was upon David Cameron’s selection as leader in December 2005 that I was drawn to join the party, under the banner of Compassionate Conservatism, early in the following year. That was the first time I had personal experience of the party’s attitude toward people of colour. For the record I was embraced, encouraged and mentored by many. It is true to say that there were a few naysayers outside the party about my chances of progression, but I’ve learned to just ignore it and get on.

The make-up of the Conservative parliamentary party today speaks for itself in terms of progress in diversity and ethnicity. In 1968 there were no black or ethnic minority MPs and only four female members. I take some pride in recording my own part in our progress, forty years later in 2008, by becoming the first black female Conservative to be selected to defend a Conservative seat, then elected in 2010, promoted to Ministerial office in 2012 and appointed as a Vice Chairman of the party in 2018.

The party in government, under David Cameron, was building a head of steam on the diversity agenda and I was filled with hope for lasting change. The following year, however, we witnessed an immensely divisive referendum campaign. UKIP’s then leader Nigel Farage has openly admired Enoch Powell and his immigration policies for years, and just as Powell is credited with whipping up anti-immigration votes in support of the Tories in an election they expected to lose in 1970, so followed Farage in the referendum campaign.

Since the referendum, we have made progress on improving equality in our society. Upon Theresa May’s accession to No.10 in July 2016 she spoke of a plan for fairness for all, and social justice. There then followed a number of significant movements on the BAME landscape: in August 2016 Mrs May ordered an audit into Race Disparity in the Public Sector; in November 2016 the previously mentioned Parker report was published, followed by the McGregor-Smith report in February 2017 and the Lammy review in September 2017.

The wealth of evidence and recommendations we have amassed under a Conservative government, particularly since 2015, shows an immense shift in attitude from the state of things 50 years ago. Race, equality and diversity are now centre-stage policy areas and we have arrived at a critical juncture where we must deliver, to the whole nation, my party’s core messages of self-empowerment, enterprise and social mobility alongside compassion, fairness and social justice.

The Prime Minister has appointed a mixed race Deputy Chairman, a Vice Chairman of Nigerian blood in charge of candidates and two mixed-race Vice Chairmen (one of them being me) with a brief to engage with diverse, disadvantaged and disengaged communities. In government there are now junior Ministers with Pakistani, Mauritian and Iraqi heritage and of the 13 new politicians on the government payroll, eight were women and four were black or minority ethnic.

In my role as Party Vice Chairman for communities, jointly with Rehman Chishti MP, we have been given a free reign to engage. That is what we are now doing; spending time away from Westminster, in communities across the country, being visible, accessible and available; hearing about the complex and individual reasons behind the many torsions and tensions in modern British society.

Compared with 1968 the Conservative Party is in a completely different place. I have witnessed the beginnings of truly transformational change in my twelve years of Conservative activism, where diversity and ethnicity in the Conservative Party now have serious momentum. I will continue to play my part in promoting those agendas and I am proud to have been given the opportunity to do so.

Helen Grant MP is the Member of Parliament for Maidstone and The Weald. 

Monday, 23 April 2018

“Powell had crafted the speech for maximum effect”: How my father unwittingly helped ‘Rivers of Blood’ make media impact

Nicholas Jones

In the 1950s, Enoch Powell, the newly-elected Conservative MP for Wolverhampton South West, and Clement Jones, a journalist on the Wolverhampton Express and Star, were both on a fast track to promotion. Powell became a cabinet minister, and my father became the editor of his local evening newspaper.

The Jones and the Powells were friends, but as the impact of the 1968 ‘Rivers of Blood’ speech was felt throughout the nation, it also triggered a traumatic end of a close family friendship.
While the news cycle was far less frenetic in the 1960s, my father used to say that he in effect became Powell’s first spin doctor. A key strategy in the New Labour playbook of Peter Mandelson, and later Alastair Campbell, was the art of trailing in advance a speech or new policy in order to win the attention of the news media, precisely the kind of techniques that my father had been advising Powell to adopt.

Leading commentators and biographers have asserted that the MP had no prior inkling of the outcry, or racial tension, that would be provoked by his ‘Rivers of Blood’ speech. Far from it, according to my father: Powell had crafted the speech for maximum effect, even predicting the furore that would follow.

Powell, like Farage and Trump before him, was an outsider, and in the late 1960s he tended to operate outside the constraints of the Conservative Party’s publicity machine, determined to continue pitching himself as a potential future party leader.

The essence of my father’s advice to Powell was that to create maximum impact he had to prepare the ground in advance, and that required an understanding of the tricks of the journalist’s trade.
On weekend visits home in the early 1960s, I was often intrigued to find my father and Powell talking animatedly for hours. My father was getting an unprecedented insight into Powell’s thinking as a cabinet minister, and later as member of the shadow cabinet; the MP, who lived a few streets away, was clearly eager to learn all he could about the mechanics of news management.

After an unsuccessful bid for the Tory leadership, he was dissatisfied with the way his speeches were being handled by the party machine, and my father was instructing him on the best way to short-circuit Conservative Central Office.

Father’s advice was that a Saturday afternoon was perhaps the most opportune moment to deliver a hard-hitting political speech. Inevitably there had to be a degree of subterfuge and manipulation. The trick was to deliver an embargoed copy of the speech the previous Thursday or Friday to a hand-picked group of political editors and leader writers on Sunday newspapers. They would see the Saturday afternoon embargo and would seize the chance to get a fresh story for their Sunday editions, safe in the knowledge that it had not been trailed or reported in advance by the daily papers.

Needless to say, Powell was meticulous in following my father’s advice. But during visits home in the late 1960s I began to detect signs of a slight uneasiness in the Powell-Jones friendship. Wolverhampton had absorbed a large influx of immigrants, mainly West Indians and Kenyan Asians, and there were increasing fears of racial tension in the town. Powell’s first public reference to these local anxieties was in a speech in Walsall in March 1968 in which he described the concern of a constituent whose daughter was the only white girl in her class at primary school. After both the Express and Star and the Birmingham Evening Mail failed to track down either the child or the class, my father challenged Powell about the story.

Three weeks later, during a subsequent visit to my parents’ home, he told them he was planning another speech at three o’clock that coming Saturday afternoon, to be given to West Midlands Conservatives in Birmingham. He would not go into detail, but made the following tantalising comment:

‘Look Clem, I’m not telling you what is in the speech. But you know how a rocket goes up into the air, explodes into lots of stars and then falls down to the ground. Well, this speech is going to go up like a rocket, and when it gets to the top, the stars are going to stay up.’

According to my father, Powell had followed faithfully his instructions. ‘I never knew, never for one moment dreamed, that was what he was going to say, but, of course, he was very astute. It was impeccably timed.’

Our two families had spent many happy days together on outings and picnics. But my mother was so shocked by the racist tone of the speech that she told my father that she did not want to see Powell ever again. ‘What we both found so offensive was the reference to a little old lady being the only white person in the street, having excrement pushed through her letterbox, being surrounded by grinning piccaninnies shouting abuse at her.’

The following week was a searing experience for my father as editor of the Express and Star. ‘From the Tuesday through to the end of the week, I had ten, fifteen to twenty bags full of readers’ letters; 95 per cent were pro-Enoch.’

Few provincial editors have had to face a stiffer test of their duty to provide balanced coverage. ‘In each edition, we gave over a couple of pages to them but we had to scrape, every day, to try to find a few balancing letters. ‘I had people ringing me at home, all sorts of hours, saying: “Oh, is that the bloody nigger lover?” Just like that. I had a couple of windows broken at home.’

My father’s principled stand came at a price. Powell began libel proceedings against the Sunday Times which had accused him of spouting ‘the fantasies of racial purity’ and a ‘gagging writ’ was extended to include the Express and Star.

Three months later – to my surprise – my father, at the age of 55, announced early retirement. It was only after Powell’s death in February 1998 (long after my mother’s death in 1991) that he finally talked freely, and I understood my parents’ anguish at the time.

I have no doubt that if Powell and my father were alive today, their discussions about the ever-changing interface between politicians and the news media would be as intense as they were fifty years ago.

Tuesday, 17 April 2018

Abortion law should be about women’s rights – not weaponised for Scottish independence

Jennifer Thomson

Abortion law is being politicised in the broader debate about devolution in Scotland, with serious implications for women’s rights.

In recent years, several decisions have been made regarding the devolution of abortion laws from central government at Westminster to the devolved regions of the United Kingdom.

Abortion is rarely a non‐controversial topic for political conversation. It has come to symbolise, in many western societies, “a much broader ideological struggle in which the meanings of the family, the state, motherhood and young women's sexuality are contested”. Debate around abortion has thus often become polarised between conservative and liberal thinking, most especially in North America.
As a result, the central concern in abortion—women, their lives, health and rights—is often obscured in broader political debate. But what is the discussion of abortion and Scotland here actually a discussion of?

The arguments made for this legislative move

In the UK framework, devolution has been uneven and ad hoc in the powers it has distributed amongst the regions. But in abortion law, there has historically been a long period of uniformity in the country as a whole.

For this article, I have considered two debates on the issue of Scotland and abortion at Westminster, alongside several questions on the issue put in the Scottish Parliament.

The issue of devolving abortion law to Scotland was raised in the Smith Commission's report of late 2014. Although the issue of abortion only received one brief paragraph in the report, it was subject to a heated discussion which resulted in eleventh‐hour renegotiating, with Labour insisting that the law remain at Westminster in order for their being able to support the report. As a result, the Commission did not advocate for abortion law to be immediately transferred to Scotland.

The following year, in July 2015, ‘pro‐life’ MPs tabled amendments to devolve jurisdiction over abortion to Scotland as part of the Scotland Bill. Two clauses were proposed regarding abortion, one by Liberal Democrat John Pugh, who has a long history of voting conservatively on abortion, and one by Conservative Sir Edward Leigh, who has a similar voting record of social conservatism on abortion and LGBT issues. SNP Members, now almost the sole political party representing Scotland in national government, distanced themselves from the amendments and the perceived forces behind them. However, Stewart McDonald, MP for Glasgow South, simultaneously argued against the proposers of the amendment, and for the devolution of the issue to Scotland.

In spite of this, the amendments failed, and there appeared no further push from central government to devolve abortion law to Scotland. The issue, it appeared, had been laid to rest.

By September 2015, however, reports came to light that abortion was indeed set to be devolved to the Scottish Parliament. Three competing representations of the issue emerge in the course of the November debate and the question to the First Minister in the Scottish Parliament. For national government and the Conservative party, this is now presented as a natural move, part of the broader parcel of devolution. The Scottish Parliament is able to legislate on this, they argue, there is no specific constitutional reason why it should not be devolved, and, indeed, the Smith Commission recommended that powers should be transferred to Scotland.

For Labour, abortion is an issue of national importance, and one which should not be devolved as it requires uniform standards across the UK. For the SNP, whilst keen to stress that they had no desire to change the law around abortion, it was problematic that Labour think that Scotland was not responsible enough to have this issue devolved. The Scottish Government, the SNP argue, is more than capable of legislating on abortion. Competing representations of the issue thus abound in this debate, emanating from the different political parties' agendas.

Boader issues behind the abortion debate

Looking at the ideas and language helps to get beyond the surface level of the debate and to see the broader issues at play. For the SNP, this is an opportunity to highlight their progressive social attitudes; for Labour, a chance to reiterate the need for strong abortion provision across the UK; and for the Conservatives, a way to reinstate their commitment to devolution.

Abortion becomes a smoke screen that symbolises far more than merely reproductive or women's rights. Beyond a discussion of abortion, these debates become a proxy discussion about the Scottish Parliament, Labour's position on the constitutional question and, by extension, the question of Scottish independence itself.

Impact on women’s rights

These legislative changes have worrying connotations for women's rights. Firstly, creating a framework for potentially different laws within the country as a whole means that there is now a way by which women north and south of the border may see different policy frameworks in which they can access terminations. Secondly, women and their right to bodily autonomy should, from a feminist perspective, maintain precedence in debates on the issue of abortion.

With the devolved levels now carrying responsibility for a potentially controversial policy area, it is doubtful whether such a move is good for abortion laws, or women's rights.

Jennifer Thomson is a Lecturer in Comparative Politics at the University of Bath. 

This article is adapted from a longer piece in the Political Quarterly journal.

Image by mich11e

Monday, 16 April 2018

Can 'Yorkshireness' be politicised?

Arianna Giovannini

Devolution in the UK has long being defined as an unfinished business, not least due to uncertainties concerning England’s role and place within the process. Whilst some progress has been made since the election of a coalition government in 2010, devolution in England remains piecemeal and incomplete.

From 2014, a handful of ‘devolution deals’ have been agreed between the government and local authorities, privileging a back stage, contractual approach.

To date, the devo deals agenda can be described as a ‘ragbag’. Some deals have been successful (Greater Manchester); some fell apart (North East); and others have proved problematic (Sheffield City Region).

It’s turning into a ‘messy business’: devolution draws on a top-down approach but it lacks a clear framework; its roadmap is uncertain and it is developing in fits and starts; it does not cover all areas and each deal involves different powers, funding and responsibilities; it aims to enhance economic development and democracy but it creates new divides between deal haves and have-nots, whilst the public remains largely unaware of what’s happening.

So far, the process has resembled a top-down form of regionalisation around functional economic geographies, within which devolution is conceived as a central-local partnership to foster growth, with little space for any political and popular dimension. However, the story of devolution deals in Yorkshire suggests that, beyond economic growth, devolution could (and perhaps should) be also about people, place, community and belonging.

Squeezing out local agency

In 2015, local authorities across the region followed central government’s script and submitted two devo deal proposal drawing on existing city regions and combined authorities. Sheffield City Region Combined Authority (SCRCA) led the way and signed the first devo deal after Greater Manchester in October.

West Yorkshire Combined Authority (WYCA) proposal, however, never received support from central government. This difference can be explained by the way in which the deals were presented. The former was the result of direct, early negotiations with the Treasury, with little room for local agency – accepting most of the conditions stamped on the deal by the government. The latter included 27 ‘asks’ and sought to challenge to some extent Whitehall’s vision. Party politics played a part too.

As of 2016, SCRCA was the only area preparing to elect a metro mayor in May 2017 and get a devo deal, whilst the rest of the region was left in a limbo. So devolution in Yorkshire was ‘done’ and the message underpinning it was clear. The local authorities that were able to ‘get their act together’ and stick to the script would get a deal. The others would have to wait and see.

Undoing devolution

However, this process was soon ‘undone’. The first stumbling point was Derbyshire County Council call for a judicial review of Chesterfield’s decision to become a statutory member of SCRCA along with Bassetlaw. The High Court found the process was flawed and had to be re-run. Eventually, Chesterfield and Bassetlaw pulled out, remaining in the deal just as non-statutory partners. This meant that the initial membership of the CA changed, with implications for the powers, functions and funding attached to the agreement. It also led to delays in the election of the SCRCA metro-mayor, which are now to be held in May 2018.

This standstill allowed other constituent members to voice their concerns about the SCRCA deal. Doncaster and Barnsley entered discussions with other councils in Yorkshire over a ‘One Yorkshire’ proposal. They also held a ‘community poll’ to ask the local population whether they preferred the government-backed SCRCA deal or a Yorkshire-wide option, underlining their changed devolution allegiances.

Local enthusiasm for One Yorkshire

The undoing of the initial devo deal plans brought in new opportunities for ‘redoing devolution’. 18 out 20 local authorities across Yorkshire have joined forces and developed a Yorkshire-wide devo deal proposal.

This aims to set up a single mayoral combined authority for Yorkshire, “based on the widest possible geography, conditional on Government enabling all 20 Yorkshire Councils to join – if they so choose – by May 2020”. Interestingly, for the first time, the Secretary of State for Local Government Sajid Javid has not rejected the idea, claiming that the government would not stand in the way if there were evidence of support for a Yorkshire deal. Currently, Sheffield and Rotherham are not backing the proposal, as they continue to prioritise SCRCA deal.

However, the imminent metro mayors election could bring about changes in this respect. Barnsley Central MP Dan Jarvis has been selected as Labour’s candidate, and is likely to be the new SCRCA mayor. But Jarvis is on the One Yorkshire camp, and he is standing on a platform which aims to see SCRCA joining a Yorkshire deal by 2020.

The Labour Party has also agreed that Jarvis could continue to stand as an MP even if he was elected as metro-mayor. This would allow him to use his position in parliament to push for a Yorkshire-wide agreement.

From (city-)regionalisation to regionalism?

The path of devolution in Yorkshire is far from settled and remains surrounded by uncertainties. There are, nonetheless, some interesting points to note.

The fact that the government has not rejected a Yorkshire-wide plan but is willing to enter discussions with local authorities suggests that, despite the dominant top-down approach that has prevailed so far, something might be changing. In particular, the lack of a clear framework from the centre and the pressures generated by the current climate of austerity and the uncertainties of Brexit on local leaders have opened new spaces for strategic agency from the bottom up. ‘Cracks’ in the system of devolution have repeatedly emerged in the region, and the new SCRCA metro mayor could act as a ‘wedge’ to extend the purpose and ambitions of devolution in Yorkshire.

If accepted, a Yorkshire-wide deal would usher in a new system of devolved governance, challenging the current agenda. This would be based on a much wider (regional) scale than any of its counterparts and would, in turn, entail more powers, funding and policy capacity, stronger political leadership for the mayor, and much greater leverage both at the centre and across the region.

In essence, to update what I discussed in a Political Quarterly journal article, this could see a shift from the current top-down process of regionalisation around the city-region/combined authority scale, to a more organic form of regionalism with a greater degree of bottom-up agency.

Politicising ‘Yorkshireness’

The SCRCA deal has been undermined by its artificial geography, party political rivalries, the lack of an institutional architecture that maps onto local identities, and the absence of popular engagement.

The Yorkshire-wide deal proposal still sees economic development as a key goal. But it also draws on regional identity and its potential to promote the economy (e.g. exploiting the ‘Yorkshire brand’) and to build popular support across the region (mobilising and politicising ‘Yorkshireness’).

As such, local leaders supporting a Yorkshire-wide deal seem to have borrowed and reframed a narrative of regionalism that had so far been endorsed only by regionalist parties – recognising that people, place, community and democracy can play an important role in strengthening their case for devolution.

Thus, a new form of regionalism could emerge from the hashes of top-down regionalisation in Yorkshire. What remains to be seen is whether the government will be willing to open the way to this model of devolution.

Arianna Giovannini is Senior Lecturer in Local Politics at the Department of Politics and Public Policy, De Montfort University, Leicester.

Image by Tim Green. 

Thursday, 12 April 2018

Bananas, groupthink, and why the EU could be (partly) to blame for Brexit

Jeremy Richardson

There is an emerging conventional wisdom that the Brexit vote resulted from specific domestic factors in Britain, such as divisions within the ruling Conservative party, the rise of UKIP, strong reaction to increased immigration, all set against the backdrop of globalisation and its adverse effects. The end result was a populist revolt.

British voters have traditionally been amongst the most eurosceptic within the twenty‐eight nations in the EU. Thus, it is easy to blame British voters and/or the British government under David Cameron for the Brexit outcome.

But what if the EU itself played a key role in the creation of the current crisis within the EU?

Why conventional wisdom could be wrong

Although the above factors were certainly very important, it seems unlikely that the immigration issue or, indeed, the effects of globalisation, are the sole causes of this erosion of support for European integration. If there is an EU crisis now, it has been a long time in the making and the main causes of it are probably to be found within the EU's own policy‐making institutions. The EU policy‐making state has run far ahead of what voters at the national level want.
European elites and the EU institutions which they developed (unwittingly) created the seismic conditions for an event such as the Brexit vote.

So, how did the increasing alienation from the EU come about?

The central paradox within the EU

There is a central paradox within the EU, namely that the European elite which runs the EU has introduced some very beneficial public policies, yet that elite has become increasingly out of touch with its peoples.

The case of motor vehicle safety is worth dwelling on as a typical example of this paradox. Motor vehicle safety is a very technical issue, yet is also very important for most citizens. Few would dispute the need for state regulation in this field. Moreover, few would dispute the need for some common international standards for motor vehicle safety, but even very technical legislation (such car regulation) is actually quite coercive in the sense that it is not optional.

After Brexit, most EU law will still be in place but will simply be called UK law. Indeed, it is difficult to envisage British vehicle manufacturers ignoring any future EU safety rules post‐Brexit if they hope to sell cars in the EU.

My argument is not that the EU has passed a lot of bad legislation. My argument is that the EU has constructed a huge superstructure of public policy via a process of Brussels based elite policy‐making which, in the end, has raced well ahead of what European peoples feel comfortable with.

The primary causes of the EU crisis

Task expansion, or the seemingly inexorable expansion of EU public policy by stealth, has lead to the emergence of an increasingly coercive EU.

The EU has acquired for itself the central function of a modern state, namely the power to decide (in considerable detail) a vast range public policies that affect the daily lives of its citizens. The EU has also acquired considerable powers of enforcement. All of the EU's institutions such as European Court of Justice and especially the European Commission have been very adept at task expansion. Similarly, the European Parliament, though of course containing avowed eurosceptics, has essentially been a pro‐integration legislature looking for work.

Finally, there is the role of interest groups in the process of Europeanisation. The close integration of interest groups into Commission deliberations might have had the perverse effect of distancing the Commission from broader public opinion. The Commission has been a very open bureaucracy, ever eager to facilitate interest group access, but interest groups do not equal ‘the public’ as was seen in the UK's referendum.

The so‐called ‘permissive consensus’ which allowed such a productive (and mostly benign) EU policy machine to develop has been greatly eroded.

The totality of the various intra‐EU trends over a very long period has resulted in the creation of a broadly based European elite in favour of a continuous process of integration (‘ever closer union’) – a kind of Brussels ‘groupthink’.

The shift in policy‐making power to Brussels created a vacuum at the national level which new anti‐EU parties have been able to fill.

Time to change?

The EU actually has no option but to do less (probably a lot less) if popular support for the Union is not to decline still further.

To be fair to the EU institutions, particularly the Commission, they some time ago began to recognise that it was time to ease off on the accelerator. But this recognition was much too late.

As one observer put it ‘the EU is good at writing rules: what it needs to do is strengthen the capacity to suspend, ignore, or replace rules that are obviously not working’. I doubt if anyone would seriously object to the EU's legislation on the safety of children in cars, but equally, not many people would support regulating the sale of misshaped bananas.

This issue was seen in the referendum as an example of Boris Johnson's hyperbole, but it was not a figment of his eurosceptic imagination. Regulation EU No1333/2011, issued on 10 December 2011 does, indeed, specify minimum requirements for marketing bananas. For example, bananas must be ‘free from malformation or abnormal curvature of the fingers’.

Thus, there are two good reasons for believing that a different kind of EU might emerge in the coming years. First, it is patently clear to even the most ardent supporter of ‘ever closer union’ that such a policy is going to be an increasingly hard sell to European electorates. Secondly, the fact that voters are becoming mobilised over EU matters might even be a healthy sign.

However, if the EU's institutions were to make this (big) cultural shift, the irony would be that Britain need not have left the EU after all.

Jeremy Richardson is an Emeritus Fellow at Nuffield College, Oxford, and Adjunct Professor at the National Centre for Research on Europe, the University of Canterbury, NZ.

This article is an edited version of a longer piece in the Political Quarterly journal. 

Image by Kevin O'Mara. 

Tuesday, 10 April 2018

The takeover of GKN shows that the UK can’t build a sustainable industrial policy without reducing shareholder power

Prem Sikka

Does the UK have an industrial policy? Such a question is likely to become more acute as the UK seeks to forge new priorities to compete in the post-Brexit world. An answer can be teased out of the recent £8bn hostile takeover bid for GKN, UK’s third largest engineering conglomerate specialising in automotive and aerospace components, by Melrose, a UK-based private equity-like investment company.

Pressurised for quick returns

A key aspect of an effective industrial policy is to require companies to focus on the long-term development of skills, innovation, products and services. Government policies need to be geared towards nurturing such aspects. However, such assumptions are at odds with the UK’s shareholder-centric model of corporate governance which exerts pressures for quick returns.

The average duration shareholding in major companies has declined from around five years in the mid-1960s to around seven and a half months in 2007. At banks, it was around three months in 2008. Others suspect that the shareholding duration in large companies may well now have declined to around a month.

Whichever way you look at it, shareholders who pursue short-term gains function more like speculators than owners with long-term interest in companies. Institutional investors are part of the malaise. A parliamentary inquiry into the 2007-8 banking crash noted that institutional investors “were scarcely alert to the risks to their investments prior to the crash, but were mesmerised by the short-term returns ... ”.

The manufacturing industry requires long lead times and resources for research, development and skilling labour. It is hit hard by shareholder pressures for quick returns. A 2013 government-backed report on the future of manufacturing said:

“The existing corporate governance framework operating in the UK, which generally favours shareholders, acts negatively on innovation, with particularly unfavourable impact on manufacturing… the current legal framework in the UK is a deterrent to (manufacturing) firms’ undertaking complementary investments in knowledge-based technologies and firm-specific human capital, given that both generate returns over an extended period… there seems to be strong endorsement of the need to move towards less shareholder protection/liquid capital markets and more employee protection”.

No UK government has shown willingness to reform the shareholder-centric model of corporate governance. Such an environment emboldens speculators and makes it difficult for management to develop long-term strategies, even if they want to.

Melrose’s hostile takeover

The above provides the context for understanding the GKN takeover. In January 2018, its directors rejected a hostile bid by Melrose. But shareholders scenting large gains had to be appeased. In February 2018, GKN promised to sell parts of the business and cut costs/jobs to boost shareholder returns by £2.5bn over the next three years. The GKN pension trustees were not happy as the pension schemes had deficits of £1.5bn and Melrose had not promised to eliminate it. Melrose has a reputation for asset-stripping and cutting costs (read jobs) to boost shareholder returns. In the light of that, Airbus, a major GKN customer warned that it would be "practically impossible" to give new business to GKN if it was bought by Melrose.

Melrose’s persistence encouraged speculators to build a stake in the company and force the issue, with the full knowledge that the eventual takeover price will have to exceed the market price of shares and therefore they will make a killing. On 29 March 2018, contrary to the advice from GKN directors, shareholders exercising 52.43 per cent of the voting rights, which included institutional investors such as Aviva and Legal & General Investment Management, accepted the bid.

GKN has total assets of £8.9bn and its shareholders have provided about £2.6bn (or 29 per cent) to finance that. But they exercised 100 per cent of the controlling rights. Suppliers, customers and employees have a long-term interest in the success of GKN, but had no say in the takeover decision.

Tackling short-termism in industrial policy

The £8bn paid by Melrose to acquire control of GKN will go straight to the pockets of shareholders. None of it facilitates additional investment in the company. Shareholders secured a 40 per cent premium on what the shares were worth in January 2018. Melrose directors are expected to share £285m in bonuses from the deal. Accountants, lawyers and banks advising the warring camps are expected to collect over £240m in fees. Melrose will not eliminate the £1.5bn pension scheme deficit, but has promised to provide an additional £1bn over the next five years.

In principle, the government can counterbalance short-termism and veto the takeover, but has shown little sign of doing that. So what awaits GKN? If Melrose’s past practices are any guide, GKN will be loaded with debt to enable its new shareholders to extract higher returns. The need to service debt will reduce the resources for investment. Some parts of the GKN will be sold off and jobs will be lost to further reduce the UK’s pool of skilled labour. Melrose has indicated that it might hang on to GKN for five years, but that is insufficient for long-term planning, research and product innovation in the engineering sector.

The GKN story is another episode in short-termism that dominates the UK. Government can provide foundations for long-term industrial policy by ensuring that speculators cannot hijack companies. They can require investors to hold shares for a period of twelve months before they can vote. Stakeholders with a long-term interest in companies (such as employees, customers, etc.) should be empowered to vote on governance of corporations. Rather than a simple majority, company law should require the approval of 75 per cent of eligible stakeholders for major decisions, such as mergers and takeovers.

The above is not a panacea for the deep-seated problems of the UK industry, but nevertheless is a necessary step for focusing attention on the long term.

Prem Sikka is Professor of Accounting and Finance, University of Sheffield.

Image by Captain Roger Fenton. 

Thursday, 5 April 2018

Council tax is a poor tax. It needs urgent reform

Charlotte Snelling

Council tax certainly has a reputation, and not a good one. There are well rehearsed arguments as to why: it is regressive and hits the incomes of our poorest households the most; it is out of date, with a banding system based on 1991 house prices and a baffling (to many) system of ‘ninths’ to calculate its rates; it is a local tax and yet constrained by central government rules; and it is increasingly insufficient in raising the money our cash strapped councils need to deliver vital services, in the wake of government cuts.

However, it is probably most famous for (a mantra which has become common among politicians and policy makers alike) sitting firmly in the ‘too difficult to touch box’.

Memories of the poll tax, which is widely credited with bringing down Margaret Thatcher, has meant that reforms to council tax have been reduced to nothing more than tinkering. Just look at the introduction of the health and social care precept, for example. Other moves have been counterproductive (given the cuts to central government grant) such as the centrally imposed limits on council tax increases without referenda.

A regressive tax

The problem, as new analysis of London boroughs from IPPR shows, is that the regressive nature of the system with regard to property value (which was embedded in the system’s very design) has significantly worsened over time. This is due to the failure to update property values and the rapid (but also uneven) increases in house prices.

Moreover, our analysis has found that the system takes far too little account of the ability to pay. The most significant reform to the system – the devolution of council tax benefit – has seen council tax become regressive for the very poorest far beyond anything which we consider acceptable.

In April 2013, the responsibility for council tax benefit was devolved to local authorities, coupled with a 10 per cent cut in central government funding, and a series of other powers over savings limits and eligibility thresholds. While councils have a legal duty to offer the same support to pensioner claimants as had been given previously (under the renamed ‘council tax reduction’ system), they can make changes to how claimants of working age are supported.

In London, this has involved as many as 26 (of 33) councils introducing minimum payments. Whereas before, qualifying households could have received a full council tax exemption, they must now pay at least a portion of their council tax liability, necessarily increasing the impact on their household finances.

Why the poorest pay disproportionately more

The figures are shocking. While as a property tax, a perfectly progressive system linked to income cannot be achieved, it should be everyone’s concern that in London the burden of council tax is significantly greater for the poorest households. As a percentage of their annual income, under a minimum payment system council tax for those in the bottom income decile is 8.1 per cent, more than six times greater than for the very richest and top income decile (1.3 per cent). Worse still, these figures take account of those who are eligible for council tax support and have taken it up.

Our research has shown that take-up of council tax support is a big contributor to the problem. The number of London households claiming council tax reduction has fallen from 824,000 claimants in March 2013 to 657,000 in March 2017.

This is partly due to stricter rules on eligibility but also a longstanding pattern of low take-up. Receipt of council tax benefit under the old pre-2013 system was only around 50 per cent of entitlement for the lowest income decile and 57 per cent and 67 per cent respectively for deciles two and three. Suggestions are that this is because of complicated application processes, levels of awareness, and a stigma linked to claiming.

The result is that many poor, low income households, are facing high council tax rates and ones which have far outpaced earnings growth in London. The average Band D rate in London has doubled since 1997/98 while earnings have increased at a much slower rate (1.7 times) over the same period.

However, IPPR’s analysis suggests that even if all those eligible claimed council tax reduction, the burden of those in the lowest income decile would still be much higher than any other group, at 4.5 per cent - a notable reduction but 22 times what it would have been (0.2 per cent) under the system in the 1990s.

Reform is urgently needed

As governments and councils grapple with questions over budgets and funding, the impact of any reforms on the poorest households must be central to their discussions. As one of our focus group recipients reflected, "The system should protect people who cannot pay, I’m not sure it does that at the moment”. The system as it stands is unfair and ineffective in ensuring the very poorest households do not face a disproportionate burden.

Issues around how the system itself is shaped – who does it support and to what extent – and how it operates, whether this is through an automatic qualification or self-application process, cannot be ignored. IPPR will be setting out its recommendations for reform in a report later in the year.

Charlotte Snelling is a Research Fellow at IPPR. 

Image by Bill Dickinson. 

Tuesday, 3 April 2018

No such thing as anti-Muslim racism?

Tariq Modood

Historically, Muslims have often been told that there is no such thing as anti-Muslim racism, because Muslims are a religious group and not a race. Hence Muslims could legitimately ask for toleration and religious pluralism, but not for inclusion in anti-racist egalitarian analyses and initiatives.

The background to this mistaken view, of course, is the fact that Anglophone scholars of racism originally understood it in terms of biology, and specifically in terms of the black-white binary. At the same time, other scholars, especially in continental Europe, understood racism in terms of antisemitism, which again in modern times has had a biological underpinning.

However, it has become clear that these two paradigms failed to capture some contemporary experiences, such as anti-Asian cultural racism in Britain or anti-Arab cultural racism in France. Muslims, triggered by controversies such as The Satanic Verses affair and other incidents, responded to such hostilities and articulated their misrecognition.

The battle to define Islamophobia as a form of racism

While a number of Anglophone authors, including myself, started using the concept of Islamophobia in the late 1980s and early 1990s, it was the Runnymede Trust, with its report, ‘Islamophobia: a challenge to us all’ in 1997, which launched the career of the term as a concept of public discourse in Britain and much beyond it. It presented Islamophobia as “a useful shorthand way of referring to dread or fear of Islam – and therefore to fear or dislike of all or most Muslims”.

Although the report was ground-breaking and played a crucial role in getting people to think about anti-Muslim prejudice, I felt it did not sufficiently locate Islamophobia as a racism, like say, antisemitism.

I continued to write about Islamophobia as a form of cultural racism, which may be built on racism based on physical appearance (eg., colour-racism) but is a form of racism in its own right – again, like antisemitism. This also became the approach of UNESCO and I am pleased to see that it has been explicitly embraced by the new Runnymede Trust report, ‘Islamophobia: still a challenge for us all’, published in November, 2017.

In spite of these developments, the view that anti-Muslim racism does not exist continues to be expressed even today, with some denying that there is a racism that could be labelled ‘Islamophobia’. However, thankfully it no longer has the hegemony it once did.

The danger of reducing Muslims to the ‘Other’

Understanding some contemporary treatment of Muslims and aspects of their societal status in terms of ‘racialisation’ clearly is an advance. That being said, we should beware that the conceptualisation of Muslims in the West is not reduced to racialisation or any other ‘Othering’ theoretical frame such as Orientalism.

By definition, ‘Othering’ sees a minority in terms of how a dominant group negatively and stereotypically imagines that minority as something ‘other’, as inferior or threatening, and to be excluded. Indeed, the dominant group typically projects its own fears and anxieties on to the minority.

The danger of reducing Muslims to racialised identities is particularly high at the moment because the Islamophobic ‘othering’ of Muslims is acute, and if anything, rising.

This can be seen in how aggressive negative portrayals of Muslims is standard in so much rightwing nationalism, whether in President Trump’s Muslim bans, Marine Le Pen’s Front National, Alternative fur Deutschland in Germany or in various parties in central and eastern Europe, including the Freedom Party in Austria, which has now entered government.

Discourses about Muslims are central to the internal debates in UKIP about whether to become a working-class party of welfarism or one defending ‘our way of life’ against the alleged threats of Islamisation. Western media routinely present Muslims as unBritish, unFrench, unGerman and so on and with a degree of hostility that no other group suffers (except perhaps the Roma in parts of central Europe).

It is therefore right that scholarly and public attention should be focussed on this racialisation of Muslim that is creating a deep, long term division in our societies which may be very difficult to reverse.

Towards an anti-essentialist view of Muslims

Yet, like all ethnic or religious groups Muslims are not merely created by their oppressors but have their own sense of identity too. They seek to not be defined by others but to supplant negative and exclusionary stereotypes with positive and prideful identities. Oppressive misrecognitions, thus, sociologically imply and politically demand recognition. Our analyses therefore should be framed in terms of a struggle for recognition. Multicultural inclusivity means recognising and respecting these identities.

Recognition of Muslims’ own identities of course does not mean thinking of Muslims as a group with uniform attributes or a single mindset, all having the same view on religion, personal morality, politics, the international world order and so on.

In this respect, Muslims are just like any other group – they cannot be understood in terms of a single essence. Groups do not have discrete, nor indeed, fixed boundaries as these boundaries may vary across time and place, across social contexts and will be the subject of social construction and social change – and Muslims are no different in this respect.

This ‘anti-essentialism’ is rightly deployed in the study of Islamophobia and Muslims. It is a powerful way of handling ascriptive discourses, of showing that various popular or dominant ideas about Muslims, just as in the case of, say, women, LGBT people and so on, are not true as such but are aspects of socially constructed images that have been made to stick on to those groups of people because the ascribers are more powerful than the ascribed.

Anti-essentialism is an intellectually compelling idea, and a persuasive resource in the cause of equality, but it does not imply that Muslim identities are merely constructed by Orientalists and racists.

Drawing the line between reasonable criticism and Islamophobia

Most people will agree that Islamophobia must be distinguished from reasonable criticism of Muslims and aspects of Islam, but this is a difficult distinction to make. It also begs the question: what are reasonable criticisms that Muslims and non-Muslims may make in relation to some Muslim views about, say, gender or education or secularism?

The study of Islamophobia must not squeeze out the possibility of such discussion, but must endeavour to show us where it becomes Islamophobic. It must point out common examples of caricaturing, or assumptions that all Muslims think in a particular way, in order to create a climate where reasonable dialogue is possible.

Yet merely identifying the unreasonable and the populist is not enough. Our analysis should lead us to what is reasonable: to what criticisms may be made of Muslims and/or Islam, and what criticisms that Muslims make of contemporary Western societies that are also worthy of hearing.

Non-Muslims must be able to publicly state that some Muslim views or practices (eg., in relation to divorce) are oppressive of women – after all plenty of Muslim women say so – but they must do so in a civil and respectful manner and without offensive language or imagery. Yet we should beware of those who latch on to such views simply to express and promote Islamophobia, in the way that a lot of right-wingers who have spent decades arguing against feminists and against gay rights have today become champions of women’s and LGBT rights.

Every minority must be able to negotiate, modify, accept criticism and change in its own way; a dialogue must be distinguished from a one-sided imposition. That is the challenge for us all.

Tariq Modood is Professor of Sociology, Politics and Public Policy at the University of Bristol.

Image by MTSOfan.