Interview with Amartya Sen

This week, I published my argument for Labour’s approach to creating a country of ‘powerful people’. I mentioned that over the last ten years, I have been much influenced by the way I thought about this, by my practical experience trying to regenerate Hodge Hill, and philosophically, by Amartya Sen. Sen’s book, An Idea of Justice, was published this summer, and a few weeks ago I interviewed Prof Sen about his work. You can access an excerpt of the interview below…

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Guarantees not gambles

Some will have seen news in the Guardian and elsewhere today about rights to new services for people with suspected cancer. For those who want more background about the government’s approach to rights, have a look at Working Together  – our strategy for public service reform; World Class Public Services, where we looked at how rights can preserve equity while devolving power. My speech to the CBI sets out some more of the background argument.

Thanks to Big Lottery Fund

Yesterday, we had simply the most extraordinary turn-out for our Big Lottery Fund Awards for All masterclass at the Beaufort Sports & Social. Building a stronger network of social entreprenuers is at the absolute core of Hodge Hill 2020 – our programme for regenerating the constituency. I’ll be posting some of the information we went through and a video report next week, but in the meantime, if you are part of a group in the constituency which wants some help bidding for money, then drop me a line. Also email me if you are doing great things locally – we want to build a stronger network of community activists where everyone knows what’s going on, and how to get involved. Thanks to all who came along – and thanks to Big Lottery Fund for answering my call to come and tell us more!

Jaguar Land Rover

Lots of workers at Jaguar Land Rover live in Hodge Hill, and they’ll be worried about the plans that Jaguar Land Rover announced today.

I rang the directors to discuss their plans this afternoon. Here’s what they said.

Firstly, and most importantly, JLR said that they are absolutely committed to the West Midlands – and want to build ‘significant’ numbers of new cars in the region. I think the firm will need the same number of workers in the region to build all the new models, which is why JLR has said they don’t want to see compulsory redundancies.

Secondly, when I asked whether government was doing everything they could, JLR said yes – and they were especially grateful for the £10 million of government aid to build new models.

I agreed to lobby hard for the kind of automotive research institute that will help keep our industry at the world’s cutting edge. Long term, that’s the way we boost manufacturing jobs, not see them go abroad.

The company must discuss these changes with the trade unions, and I’ll be in touch with them in due course.

I’ll keep you up to date with news as I hear it.

The New Opportunity Economy

Below is the full text of my John Smith Annual Finance Lecture; The New Opportunity Economy. There’s a bit of a trail in the Guardian today. The argument is simple; is we make the right choices now, we can not only rebalance our economy towards investment and exports, but we can open the new jobs that it is possible to create to people from a wider range of backgrounds, tackling the issue of low pay, and redoubling efforts to get people back to work.

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Mr Osborne’s pattern of behaviour

Here’s the link to my rather long Channel 4 interview about George Osborne’s school-boy economics. A transcript of my Sky interview is below.

Basically George Osborne first said there were ‘secret’ tax plans. So secret they were set out in Table 2.9 (page 40) of the Budget’s ‘Economic and Finances’ document, and Table C7 (page 235) of the Red Book.

Then we heard there ‘must be a black hole’ because we projected money from taxes goes up sharply in future years. Of course it does. Partly because we announced tax rises for top earners in the last budget.

Second, because as an economy returns to growth, tax receipts go up – part of a process called ‘fiscal drag’. In a downturn income tax falls sharply – by some £12 billion we estimate. But in a recovery, they bounce back. National Insurance contribution don’t move around so much because they are a flat rate tax.

Conclusion? Either George Osborne doesn’t understand public finance. Or, he’s determined to twist the truth. Neither is a good sign for his future. Sky transcipt below…. Continue reading

Thanks to NICE

First, a huge thank you to the great race organisers at the National Institute for Conductive Education, who organised the fab 10K in Cannon Hill Park this morning…a personal best for me – 51 minutes 20 seconds…my knees now hurt quite a lot….

Some of the week’s economic news

The OECD says fighting unemployment – not cutting back inthe middle of the recession – has to be everyone’s top priority; ‘Helping the unemployed and getting economies moving again will be among the most pressing issues on the table at the G20 Summit in Pittsburgh on 24-25 September 2009.’  Keynes, I think, would have agreed. Reviews of Robert Skidelsky’s new book on Keynes are out in both Business Week and the Washington Post.

ONS set out latest public spending numbers, recording a £12.8 billion deficit in August, broadly in line with Budget forecasts, as tax receipts fell sharply on the same period last year.

Meanwhile a series of surveys underlined the need for continued government action – not cut-backs – to accelerate the recovery. The Bank of England’s Lending Survey found the weakest flow of total net lending to UK businesses since 1998, as some lenders some lenders said companies used the proceeds of money raised on capital markets to pay back bank debt. In other words, creating ‘headroom to enable them to respond quickly to any future investment opportunities’ But ‘The availability of finance remains more constrained for smaller companies.’

Unemployment figures were published showed a continued rise. ONS, however, confirms retail sales for August were 2.1% higher than August last year and Markit’s survey of labour activity concludes; ‘September data from the Markit/YouGov Household Finance Index (HFI) highlighted a rise in activity at respondents’ workplaces for the first time since the start of the survey in February 2009’.

The FTSE100 posted a second weekly rise, and now stands 47% than 3 March.

Lessons from Sweden; video report now up

Video of Hodge Hill youth group report back from Sweden on how we could – and should – put sport for young people within easy reach now online

The two faces of David Cameron

A simply incredulous attack on the cost of fighting the recession, from Mr Cameron today. He has attacked this month’s deficit figures; and yet admitted in his press conference earlier this week, that his plan for £5 billion cuts in public spending this year wouldn’t reduce the deficit by a penny – the money he said would go to pay for a tax cut for a handful of savers. Naturally, the BBC has carried Mr Cameron’s line straight.

And for those interested, just six Tory policies have been estimated to cost upwards of £35 billion; the costs are calculated by civil servants and were issued under a Freedom of Information request earlier in the week. You can see them here.

Swedish lessons for Hodge Hill

After street surgeries in Bordesley Green yesterday, I had the incredible privilige last night of hearing the report back of a dozen teenagers who visited Sweden to research how we can use sport to transform our community. The group, organised by Comm:Pact, spent some time in Sweden looking at the extraordinary availability – and accessibility of sports facilities, and showed in what was at times an incredibly moving presentation, how better use of sport could transform the self-confidence and self-esteem of our youngsters, equipping them with the forward drive to really make an impact on life. I’ll be posting my video report shortly.

The next step is really feed this work into our ambition to create a sports village trust for the constituency, owned and run by local people. WE took a big step forward last night, in getting a vision for the trust in place. Well done Comm:Pact.

Some of this week’s economic news…

So here’s a bit of a round-up. Bottom-line; encouraging signs that the shot in the arm we gave the economy is beginning to work – hence we’re cautiously optimistic that growth will return by the end of the year.

NIESR, a leading independent forecasting team, said in its rolling 3 month estimate of GDP was now positive – based largely on figures showing that manufacturing output rose sharply, by 0.9% last month.

One of the key indicators of forward confidence, hit an 18 month high. The PMI survey reported; ‘Output rose for the fourth successive month and at the steepest pace since February 2008’. The manufacturing index rose at the fastest rate since December 2007. The ONS also reported that; ‘Total production output increased by 0.5 per cent between June and July’. 

The UK stock-market broke the 5,000 mark – a level last seen last October – before falling back a bit today.

Finally, much depends on the shape of world growth and trade. Economists are revising up estimates of global growth next year. The IMF argued ‘high-frequency data point to a return to modest growth at the global level’, and the OECD say; ‘Recovery from the global recession is likely to arrive earlier than had been expected a few months ago but the pace of activity will remain weak well into next year…Governments will need to continue to stimulate their economies as rising unemployment and weak housing markets continue to dampen private demand’

Our fantastic new school

I’ve reported before on the fantastic £9.5 million new Colebourne and Beaufort School, which I helped open with Schools Secretary Ed Balls on Monday. My video report is now online on LiamTV. The even better news? We have won some £40 million from the Education Secretary to rebuild more schools for our young people across the constituency. Our campaign to make Hodge Hill the best place in Birmingham to be a young person is starting to pay off. So when the leaflets asking your support come through your door – please keep filling them in!

The economic divide

Nick Robinson put it rather well last night. The political divide in Britain has been clear for some time. But with Mr Cameron’s speech last night, the economic divide became crystal clear. Mr Cameron has set himself against the fiscal stimulus we put in place. Here’s what he said; ‘”You need to start the process of bringing spending down now. In practice that means that the substantial increase in spending next year, which is currently planned by Labour, is unaffordable. ” He said the rise in public spending next year was; ‘political calculation, not economic necessity. ”

This is a recipe for putting the recovery at grave risk. But don’t take my word for it. Here’s a selection of thoughts….

Dominique Strauss-Kahn, Head of IMF at Bundesbank conference on 4 Sep: “Unwinding the stimulus too soon runs a real risk of derailing the recovery, with potentially significant implications for growth and unemployment” …”Premature exit from accommodative monetary and fiscal policies is a principal concern.”

ECB President Trichet 4 Sep 09 “Now is not the time to exit.”

Martin Wolf (9 September):”The response to the crisis was both essential and successful. But it is still too early to declare victory. Now suppose that, instead of keeping calm, the authorities are frightened into premature monetary and fiscal tightening. Given the extreme fragility of the private sector, that could cause another economic downturn.”

David Blanchflower (formerly of the MPC): “I am worried that in the UK and the rest of Europe people don’t appreciate that unemployment is still rising and that this, alongside rising negative equity, will be extremely damaging for confidence and for the broader economy. Despite these figures, banks are still not lending; these are not green shoots – they are just noise” 9 September

Paul Krugman: “Just a brief reminder. Industrial production is now rising; so, probably, is real GDP. Given the way the official business cycle dating committee dates recessions, this probably means that the recession – again, as officially defined – is over. But unemployment is still very high and rising. As Calculated Risk points out, long-term unemployment – which is the most destructive in human terms – is at its highest level recorded since the Depression. And the purpose of stimulus is, first and foremost, to mitigate unemployment. The fact that the economy may be technically in recovery is irrelevant.”

Bottom-line: Mr Cameron is as wrong on economics as he is on politics…

Osborne detached on Marr

George Osborne today did a good impression on the Marr show, of being completely detached from the economic realities of the moment. On the one hand, he said the recovery wasn’t in the bag. Then he refused to support any of the measures we’ve put in place to make sure the recovery is delivered! (globally, by the way, we’re only half way through the stimulus agreed this year). Here in Britain, Government plus Bank of England action is supporting upto 500,000 jobs and helping hundreds of thousands stay in their homes. Cutting that back is simply a recipe for a recovery that doesn’t happen.

More curious was his inability to give a word of detail about the vast spending cuts he’s proposed (you can tell he’s not in control of the shadow cabinet, because they keep making big spending committments). We heard a bit in the press about ‘boomerang bosses’ – but this is something the Audit Commission is already investigating. Anyone would think he’s making it up as he goes on air. Yet, this is a time for sensible economics, not school-boy politics…

Update on G20 progress yesterday

Here’s a summary of some of the key G20 outomes, agreed yesterday. The meeting of finance ministers was ahead of this month’s Pittsburgh Summit. Yesterday, Alistair Darling brokered agreement to tough global rules on pay, and ordered the Financial Stability Board to thrash out how the rules will be implemented ahead of the Pittsburgh Summit at the end of the month, around four principles;
o Greater disclosure and transparency
o Deferral, clawback of bonuses to ensure no rewards for failure
o Stronger corporate governance – including more independent remuneration committees
o Exploring possible limits on total remuneration in a way that actually works internationally (so one country isn’t played off against another)

These rules are part of wider reform of financial regulation, where G20, led by US and UK, stepped up the pressure on the Basel Committee – the global body responsible for capital rules – to quickly deliver:
o More stringent capital requirements designed to rein in reckless risk taking: more and better capital; countercyclical requirements; leverage ratio added to Basel framework; minimum high quality liquidity standards
o Living wills and cross-border resolution regime

Against the backdrop of signs that the global economy is improving as a result of the concerted international action agreed at the London Summit, Finance Ministers also agreed that the greatest risk to recovery would be to think that the job is done and that sanctions should be taken against tax havens that don’t come into line by March 2010 – delivering on London Summit’s commitment to end tax secrecy for good.

And, as part of the implementation of the agreement reached in London in April 2009, and ahead of the Pittsburgh Summit and IMF Meetings in early October, Ministers also announced that commitments to deliver an additional $850 billion to the IMF and World Bank were almost complete and looked forward to substantial progress at Pittsburgh on an increase in voice and representation for emerging and developing economies in the IMF and World Bank.

PM and Chancellor on public spending…

For those who take an interest in these things…here’s the link to Alistair Darling’s interview in the Times, and below is the part of the Prime Minister’s speech to the G20 today…

“Now, we have also made clear that over the following years we will
invest in the future within a framework of sustainable public finances
that we are all committed to achieve. 

Because of the loss of tax revenue in all countries and necessary measures to support the economy, gross government debt ratios, as reported by the IMF, which were on average 80 per cent before the crisis began, are expected to rise to nearly 120 per cent in advanced countries.  Although in the United Kingdom we start from the position that gross and net UK debts are relatively lower than many G7 and G20 countries, we’ve already made clear that we are committed to halving our fiscal deficit over the next five years, and to achieve this we have already pre-announced specific tax increases including raising the top rate of tax and reducing reliefs for those on highest incomes. 

Alistair Darling and I have spoken, too, of hard choices needed in public spending over the coming years, and we won’t flinch from the difficult decisions that are necessary, and we will always act in accordance with our core values of fairness and responsibility, and to take just one example from decisions implemented this week, by finding new efficiency savings in our education budget we have been able to begin and finance a new guarantee to every school-leaver that instead of thousands being unemployed as in the last recession for long times, each of them will have the chance to receive training and work opportunities. 

So our tough approach will be based on an approach that emphasises front line services – front line first – to shift resources from where we can achieve greater efficiency, reducing costs where we can, selling assets where we no longer need them and giving priorities to investment that can secure the jobs of the future and deliver improved front line services to the members of our public.”

Amartya Sen

I interviewed Amartya Sen today for something I’m writing about how important communities are to helping people really get on in life, and turn dreams into reality. I’ll post a few comments shortly – but in the meantime, here’s some of the key links to the Nobel prize winner’s work. He’s had a massive impact on politicians of my generation, and Development as Freedom (1999), was probably one of the most influential books on me, I’ve read.

Many of Prof Sen’s early lines of argument were set out in ‘Equality of What’. His Nobel prize autobiography is here and his Nobel lecture is here. The work developing a definition of exactly what kind of ‘capabilities’ societies should help support was developed together with Martha Nussbaum, whose bio page at Chicago university is here. Finally, some of the thinking about capabilities in high income countries is underway. You can access the links here.

Labour’s local action network

When I scraped home in the 2004 Hodge Hill by-election by 450 votes, I knew I had a fight on my hands to win the next election.

But as we organised endless street surgeries and coffee mornings, we realised that victory was not going to come from politics as usual. There was a “frustrated force” of people who wanted to participate but to reach them meant kicking an attitude problem. Too often, we were just asking for votes or help stuffing envelopes. That ask was – and is – critical. But we failed to ask a second question. What could we the Labour party do, to help people change what was going on outside their front-door?

So we patiently started helping local people bid for money and projects, and things started to happen. E-Caffs started for teenagers. Training for people seeking work. Outreach among disaffected youngsters on our toughest estates. ‘Frustrated voices’ became community activists. And the community activists started joining the Labour party.
These “social entrepreneurs” didn’t want to change Britain simply law by law, they wanted to change it street by street. They needed advice, connections, money and perhaps above all, someone who believed in them. That’s what we helped provide.

Today, many have not only joined the Labour party, but they’re out door-knocking with me on Friday nights. A month ago, one sought selection as a Labour council candidate. He won hands-down.

Our story in Hodge Hill is only one story of political change. But as I’ve talked to activists around the country, I’ve heard strong endorsement. One said “so basically you want the Labour Party to be a community service organisation like the WI or British Legion”. Another said “it sounds just like what the Church of Scotland do where my mum and dad live”.

I think that’s right. The Labour party needs to be the home of realistic radicals who change their local community. And two big changes in Britain mean the opportunity to do this is now. 
First, we can connect community entrepreneurs to the new centres of local power we’ve created in Government: neighbourhood policing, Sure Starts, new schools and youth centres. The places community activists can partner with to improve services – whether its new beat patterns, youth clubs, or advice on getting a job.

Second, twelve years of Labour has helped Britain become a more progressive country with a bigger army of active citizens. We can connect these people to each other – and to the forces of political change. Indeed, unless we connect to this new force, we are missing one of the biggest opportunities handed to our movement this decade.

The online world can help. A few of us are setting up a virtual organisation – – to connect social entrepreneurs and community activists with Labour activists and politicians who want to help. Please log on and help us build it! 

But this is only the start. Because this is not going to be a battle that is won or lost online – as they are discovering in America. In February I met young Democratic leaders in Washington to discuss how the Internet transformed electioneering. The challenge they talked about? How to turn a 13 million strong database – gathered by the Obama campaign – into local change. 

An email list can’t simply be kept ‘on tap’ for a national purpose. It should be let off the leash for local change. The next frontier, we agreed, is not simply how to mobilise communities to ‘serve’ political parties – but how to mobilise parties to change streets and serve communities.

As I’ve discussed this argument with activists up and down the country, I couldn’t but be struck by the echoes with Labour’s past. Before we were born as a political party, we started the movement of mutual help, self-organisation, getting things done for ourselves. I believe this is happening all over again in modern Britain. We need to lead it.

Crime maps and police priorities for Washwood Heath

The police divide Washwood Heath into two, east and west.

The online crime map for Washwood Heath West is here. The police priorities are here.  

The online crime map for Washwood Heath East is here. The police priorities are here.

Crime maps and police priorities for Ward End

The online crime maps for Ward End is here. The police priorities are here.

Crime map and police priorities for Alum Rock

The online crime map for Alum Rock is here. The police priorities are here.

Crime maps and police priorities for Lea Village

The online crime map for Lea Village is here. The police priorities are here.

Crime maps and police priorities for Glebe Farm

The online crime maps for Glebe Farm are here. The police priorities are here.

Crime maps and police priorities for Shard End

Local crime maps are here, and our local police priorities for Shard End are here

Crime maps and police priorities for Hodge Hill

The crime map for Hodge Hill neighbourhood is here. Policing priorities for Hodge Hill neighbourhood are here.

This week’s economic news

This week we’ve seen one of the key forward looking indicators of business confidence – the purchasing managers index for Britain’s services sector move up to a 17-month high of 53.2 for July (surpassing expectations for an increase to 51.6); Office for National Statistics data shows an 0.5% jump in June’s industrial production (the largest rise in 20 months) and Halifax says British house prices saw a 1.1% monthly rise in July.

Commenting today, Paul Krugman writes; ‘Two months ago I wrote that there were hints of a relatively quick economic turnaround in Britain. Now those hints have gotten much stronger. Basically, aggressive monetary policy and the depreciation of the pound are giving Britain a boost relative to other advanced countries’.

Finally, the Bank of England has decided to to continue with its programme of asset purchases financed by the issuance of central bank reserves and to increase its size by £50 billion to £175 billion (the ‘qe’ programme) commenting; ‘”On the one hand, there is a considerable stimulus still working through from the easing in monetary and fiscal policy and the past depreciation of sterling. On the other hand, the need for banks to continue repairing their balance sheets is likely to restrict the availability of credit, and past falls in asset prices and high levels of debt may weigh on spending”

Community-led public service change

John Denham’s department announced the winning areas for the Inspiring Communities programme yesterday. This is a vital project that is exploring new ways of turning around a shortage of aspiration in some of our poorer communities. Its a good example of community driven reform of public services; on the one hand delivering services in a way that strengthens the local community – and on the other, draws on the strength of the community for its effectiveness. I made a speech on the idea to the Fabians a while ago. This is a growing field of work. In the US, President Obama is using similar ideas in the national roll-out of the Harlem Childrens’ Zone and other community based solutions honoured at the White House.

Rob Sampson links

I have a very strong interest in the links between crime, disorder and regeneration of poor places. Today, I’m ploughing through the work of Harvard sociologist, Rob Sampson, including last year’s BJS Lecture, in The British Journal of Sociology (BJS, 2009), Sampson’s debate with Prof Sennett, Sampson’s interview with Laurie Taylor on Thinking Allowed, and Getting to Grips with Disorder. Much develops the research of the Project on Human Development in Chicago Neighbourhoods.

Why its smart to invest in jobs

Yesterday I got confirmation of the Government’s decision to award millions of pounds to Birmingham and its partners to help create 7,500 jobs – especially for young people. Today, there’s fresh evidence highlighted in the New York Times, of just why its so important to keep people in work. Economist, Till von Wachter finds;

“even 15 to 20 years later, most (workers) on average had not returned to their old wage levels. He also concluded that their earnings were about 15 percent to 20 percent less than they would have been had they not been laid off.”

“One of the main reasons for the drop-offs, according to economists, is that workers who endure a layoff are more likely to be laid off again.”

Naturally the Conservative party opposed the Future Jobs Fund…

This week’s economic news

With this week’s news you can see why Alistair Darling has being saying repeatedly that we’re confident but cautious that growth will return at towards the end of the year. News over recent months has been mixed, but today credit rating agency Fitch reaffirmed the Government’s AAA debt rating, adding the outlook is ‘stable’; UK retail sales were up according to the ONS 2.9% on the same month last year; Nationwide reported Thursday that house prices have risen three months in a row, reporting the ‘Three month rate of change at highest level since February 2007’ and the FTSE is back at levels last seen in January. GfK NOP’s also reported on consumer confidence today, noting; ‘Consumer Confidence remains at the same level as last month, fourteen points higher than its all time low of last year, but still very low historically’.

Kitts Green after-work get together

Tonight I did my after-work get together in the Pump in Kitts’ Green; what was reassuring is local residents reporting far fewer problems with gangs and drugs, and many more saying they saw their neighbourhood police team out and about and knew how to get hold of them. This is a big change over the last year an half. We prioritised three sets of problems tonight; pressing for stronger security on local buses; action to get more cameras in place and better street-lighting; and more work to help every resident know not only their local officers, but how to get hold of them, and what was happening about crime – and prosecutions – in the streets where they live. Thanks to all who came.

Interview with Bristol press

Tuesday saw me launch Building Britain’s Future in Bristol with an excellent debate which I chaired with my friend Jim Knight MP. You can read the interview here. You can get the Building Britain’s Future website here

‘Total Place’ in Birmingham

I brought my Treasury team to Birmingham today to meet some of the people I’m proud to work with in the city – and to look at the city’s work on ”Total Place’. This is a set of pilots in 13 authorities where we’re looking at how we can spend taxpayers money on invaluable public services better, by getting rid of the boundaries between council, police, health service and so on.

I have a pretty clear view. There is no lone gun, no single force that can deliver better public services alone for the people of this city.  The key will be strong local leadership and public servants coming together from every part of the city in a new combined force, powerful enough to deliver big change fast.

Only by acting together will we make progress. That means we have to get the barriers to working together out of the way. 

The BeBirmingham partnership recently estimated that in total around £7.5 billion of public money was invested in the city in 2008-09. That’s a huge amount. Over a billion is spent on education.

Our Total Place pilot in the city will now look at how we redesign public services around the needs of the city with a step change in collaboration between local agencies. The pilot will focus on six priority areas for the city – tackling guns and gangs, children leaving care, learning disabilities, alcohol and drug misuse, plus improving mental health services, and focusing on all services within a particular local community.

A century ago Greater Birmingham was born when Aston, Erdington, Handsworth, Kings Norton, Northfield, and Yardley were brought within the city limits. The driving force behind Birmingham’s creation was an ambitious vision for what a modern city should be.

Now Birmingham has the chance to lead again, by pioneering a new way of bringing together our public servants from all corners of the city, to deliver change.

For the past hundred years our city has been a pioneer of civic life in Britain. It was Birmingham, that helped invent the town-planning movement: groundbreakers, like the Cadburys in Bourneville, created model homes, separate gardens, and wide roads.

In our nation’s battle for education, this city once led the charge. It was in Birmingham – in 1869 – that the Education League began. It was in Birmingham, under the 20 year-long leadership of George Dixon, that the Birmingham School Board became a model for educational authorities everywhere.

A century on, Government investment has helped transform life in the City. Between 1999 and 2008, the proportion of students in Birmingham getting 5 A*-C at GCSE level has almost doubled from 38 per cent to 66 per cent. In health, we’ve slashed waiting times – by March 2009 there was just one patient in the region waiting more than 26 weeks for in-patient treatment compared to almost 13,000 in March 1997.

Now we have to square up to the decade ahead. We have to ride out the worst economic downturn for at least 60 years. We face vigorous competition from emergent cities from Manchester to …

In Birmingham, our first step must be to stop this recession cutting our city deep or long. That’s why I fought so hard to save LDV, and why I will go to every length to see production start once again on Drews Lane. The fight against this recession is backed by a government determined not to make the mistakes of the 1980s and 1990s, which left a generation scarred by long-term unemployment.

But beyond the downturn there is a prize to be won. If we make the right investments today, Birmingham can win a large slice of the one billion skilled jobs that will be created around the world in the two decades ahead – skilled jobs with better wages and wider horizons.

So, my challenge is how do we spend our public investment better, to prepare better for the future?

We have a chance to be real civic pioneer once again. If we get it right, we’ll lay the best of foundations for the future.

Cameron on Marr

I’m afraid Mr Cameron’s interview on Marr this morning was the worst possible cocktail of poisonous ideology and poor accounting.

It is now clear the Conservative’s agenda for public finances now begins and ends with ideology and not Britain’s national interest. Today, Mr Cameron says his motives for cuts are purely and simply the pursuit of a ‘big opportunity’ to shrink the state.

He says nothing about how we grow our economy for the future or strengthen schools and hospitals.  Instead all we heard is cold confirmation of public service cuts to pay for a £200,000 average tax cut for 3,000 millionaires.

And his tired old line about identity card savings was the only so-called efficiency he could think of. He seems to have forgotten that he’s committed to keep nearly 80% of the system for new passports, and fingerprint visas, and he’s promised the balance to at least half a dozen other pet projects.

Demos podcast

I’ve only just come across this link to my interview with Demos, about a More United Kingdom.

Transcript of Byrne-Etzioni at RSA

The transcript of the talk I gave at the RSA with Prof Etzioni is now online, and the Community Links’ You Tube page has some of my discussion with David Robinson’s team out in East London.  The core of Prof Etzioni’s argument, which has influenced me a great deal is that we need to work on new ways of having what he calls a ‘moral dialogue’ with each other, to establish new norms of behaviour and living. This has to fill the gap – some would say a gulf – that opened with the breaking down of the norms and traditions of the 1950s and 1960s, which in actual fact, few of us would want to go back to. But Prof Etzioni’s message is optimistic; using the example of the debates as wide ranging as Iraq, gay marriage, the environment and the smoking ban, he argues here;

‘I think by now I’ve succeeded in illustrating what I mean, the way whole societies, local communities and increasingly actually trans-national communities, can have more conversation despite as huge as they are, and despite that they’re often heated and emotional. At the end of the day very often they lead to new shared understanding and new voluntary enforcement’

My argument is that this is the kind of conversation that political leaders and parties have to take on help lead if we’re to foster the kind of solidarity which I believe is the key to social progress in the two decades to come.

American economics

A few different angles to the debate about recovery economics from the US. Christina Romer’s argument about ‘bubble free growth’ sets out the basic argument that future US growth must draw heavily on investment and exports – a point echoed by Fed chief Ben Bernanke in testimony to the Senate Banking Committee. Asked; ‘What will the recovery look like?  He answered ‘Slow. The American consumer is not going to be the source of a global boom by any means” 

Meanwhile, Larry Summers’ progress report on the US Recovery Act to the IIE underlines – contrary to a prevailing view amongst some economists – the importance of fiscal stimulus that was ‘speedy, substantial and sustained’ alongside aggressive monetary policy. Summers also highlights the difference of this recession to others, in that productivity is going up not down as output is delivered with fewer workers as companies shed workers at a faster rate than predicted; Robert Reich’s cautionary words on the Dow Jones’ passing through the 9,000 mark, echoes the same sentiment. Ben Bernake sets out his view that the pace of decline has now slowed, but again risks remain to employment, and the US needs a medium term fiscal consolidation plan. Meanwhile, the debate rages about the pros and cons of a further stimulus. Hat-tip to Harvard’s Greg Mankiw.

GDP figures

Today’s GDP figures underline the sheer scale of the international recession that we’re fighting. It’s a force that has taken unemployment in the US to around 10% – and in Spain to nearly 20%. But today’s provisional figures for April-June this year are about three times better than for the first three months of the year. That says the pace of the downturn is easing – which is why the Government is confident – but cautious – that growth will return towards the end of the year.

What today also shows is why such a bold recovery plan was needed from government. Our action – moving £20 billion into the economy plus action from the Bank of England to slash interest rates to 0.5% and introduce ‘quantitative easing’ could be supporting upto 450,000 jobs. We’re taking these steps to make sure we do everything possible to support jobs and people in their homes, and protect people from the worst of the storm. We don’t want to repeat the mistakes of the 1980s. That would be bad ethics and bad economics.


Below is my Guardian Society article about what we can learn from the power shift now underway in the best public services around the world. My argument is simple. If we want better public services in the future, and believe public spending growth is slower, then we need to be more innovative in the way services are delivered. But if we want to ‘free up the system’ and devolve power – and preserve equity – then giving people rights and entitlements to services is crucial. Alongside this, you need better use of information, a shift to personalisation and prevention, and you need to ask the frontline to lead the charge for service improvement – not dictate or demand it from Whitehall. Text of Guardian article below, or link here.

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World class public services

This morning I launched a new report on World Class Public Services at No 10 Downing Street – setting out how governments around the world are proving you can be radical about power and realistic about money. We’re passionate about public services. We think that public services change lives for the better – and give people chances to succeed they’d otherwise be denied. But in the future, we have to change the relationship between state and citizen and between the centre – in Whitehall and Westminster – and the frontline. Today’s report sets out some lessons from 30-40 of the world’s best public services about how you can do exactly that.

It involves using entitlement and rights to put power and control over services in the public’s hands; transforming accountability of services through making available often real time information about spending and performance; incentivising personalised services; delivering on people’s desire for prevention rather than cure, and putting the frontline in charge of improving services. It’s a thought-provoking piece of work, and I’d be grateful for thoughts on it!

Speech to the RSA with Professor Amitai Etzioni

Fantastic event last night at the Royal Society of Arts, where I and renowned American communitarian philosopher Amitai Etzioni, spoke together on the theme of community.
Professor Etzioni is the leading exponent of communitarianism, and was here to help me think through some of the issues around using public service reform to strengthen our sense of community and responsibility. Having admired his work for many years, it was a privilege to meet him yesterday, and to engage with him and an the audience at the RSA. You can read my speech – which addressed the question ‘Do People Need Community Anymore?’ – here. And you can listen to an audio recording of the event here – 

The few and not the many

News reaches me that David Cameron and George Osborne are confirming their inheritance tax plans – in other words, confirming they remain absolutely wedded to their pledge to give £200,000 cash to the wealthiest 3,000 estates, paid for by deep cuts to the schools, neighbourhood p0lice teams and NHS for the rest of us.

However, they try to spin this, the Tories have blown their golden opportunity to scrap their inheritance tax pledge and admit they were wrong to put the wealthiest few ahead of the help that families on middle and modest incomes need.

We actually know David Cameron wants civil servants to get to work immediately on a gameplan to implement his strategy of help for the few, not the many.

The Tories remain committed to a queue of unaffordable and uncosted tax cuts, including an ambition to cut the new top rate of tax – changes which could only come at the cost of deep, wide and immediate cuts to public services for the over-whelming majority of hard-working British families. Who said they’d changed..?

School place breakthrough – thank you, Mr Balls!

Liam, Schools Secretary Ed Balls and school staff in Bordesley GreenThe Birmingham Mail has news today of a £40 million breakthrough in our campaign for 1,000 extra school places in inner city Birmingham. I lobbied Ed on the need for extra places by bringing him to Bordesley Green to see the pressure on places for himself. Now, Ed has given the green light to £40 million more for local schools. We’re big winners. We’re now destined to have a new primary school in Bordesley Green in 2011/12 plus extra places at Thornton, Greet and Regents Park, with an additional 210 each, George Dixon with 105, and Hodge Hill, 91.

Breakfast in Leeds

Liam and PM Launch Building Britain's Future in YorkshireYesterday I got the chance to help launch Building Britain’s Future with the PM in Yorkshire. At a business breakfast in Leeds I heard first hand, to a man and woman, that people are up for the challenge of the future. They think Britain can do well in the years to come. But if only we keep the recession short and shallow, and invest in infrastructure, skills, science and a low carbon country for the years to come.

Be Birmingham speech

Last week, I made a speech challenging the speed of progress in East Birmingham. Here’s the link to the text posted on the Treasury website.

Today’s GDP figures

These GDP figures are historic figures on the state of the economy 3 to 6 months ago, and once again underline the scale of the global recession, the hit to business confidence and the absolute necessity of urgent government action to deliver real help now to businesses and families.

They don’t change the judgement made by the Chancellor in the Budget that growth will return at the end of the year.

Our plans to halve the deficit within 5 years remain on track because of the cautious assumptions about share prices, unemployment and the loss of output from the shock to the economy built into the Budget and today’s figures don’t change our view on the public finances.

More on public service reform

My interview on Today programme, broadcast this morning, now online.

A new agenda for Birmingham

While we’re on the subject of new agendas, I’ll be posting shortly my speech to the Be Birmingham conference this morning, trailed in the Birmingham Post yesterday. The argument was blunt. In the 19th century we were called ‘the best governed city in the world’. I say that we should set that as our ambition again. We could be leaders in new industries like digital, low carbon and life sciences. And we can open new jobs to citizens from all corners of Birmingham if we use the £1 billion we’re given on education and skills spending better. And with the new wealth its possible to create we can renew our communities, starting with stronger community justice and a renaissance of home-building.

A new agenda for public services

My Guardian interview on our new agenda for public service reform is now up here. You can read a bit of the background in a speech I gave to the CBI a week ago, here. The essence of this argument for progressives is simple; you can be radical about power and realistic about money. There isn’t a trade off between the two.

Bus stop Alum Rock Rd and Burney Lane

Thanks to Ward End

Thanks to all those who came to my residents meeting in Ward End last night – especially colleagues from West Midlands Police. We’ll post a full write up later but the three key local issues raised were;
1. Speeding and dangerous parking – especially folks dropping off children at school. We had a long debate about why parents drive their offspring a few hundred yards down the road
2. Drugdealing – still seen as a problem especially by the shops on St Margarets Road
3. Impact of doubling the school size; this was on the whole seen as a good thing; but there was a real worry that parking was going to get much worse

We then had a long chat about Labours policy review and the things the government was doing wrong. Here’s what was top of residents issue-list;
1. Lack of jobs especially for young people
2. Prices especially petrol prices
3. Immigration
4. Human rights and influence of judges
5. Europe – too much control of decisions lost

Again, we’ll write this up and make sure it’s part of our policy review work. If you couldn’t come and have a comment email me on byrnel@parliament.UK

American squeezed middle

Krugman on the American squeezed middle.