“Now More than Ever” – McDonnell’s ‘Resetting the Political Economy’ Conference

By Adam Peggs

“Radical economic change is needed now more than ever. Both to cope with the impact of the pandemic but also to lay the foundations for a new economy.”

On 31st October 2020, John McDonnell and his new project Claim the Future hosted their Resetting the Political Economy conference to discuss the future of economic policy.

John McDonnell introduced the conference, highlighting how the situation of those hard-hit by austerity has been exacerbated by the pandemic and how working people could end up paying the price for the crisis again this time.

He restated the case for Universal Basic Services, bringing core necessities for a normal life out of private ownership and the market and price system. Rattling through a number of left-wing policy prescriptions, McDonnell praised calls for a debt jubilee, a homes guarantee and a just transition to a sustainable economy. In particular, he emphasised the urgent need to guarantee migrants’ rights against ongoing attacks.

Together he linked these ideas up to the need to ‘Claim the Future’ and lay the foundations for a new society.

To me this opening raised the question of how the left, who have spent the last few years developing a detailed economic programme, are equipped to seize the initiative and set the narrative. If you look at the detail and thought put into Labour’s 2019 manifesto then this makes a lot of sense.

However, if you look at the position of the Labour left this hope looks unfounded. At present, the Labour left is significantly underrepresented in the Shadow Cabinet, in a minority on the NEC, and unable to intervene within policymaking mechanisms like Party conference.

The Labour left is currently unable to mobilise power inside or outside the party in a sufficient way. It is possible for this to change – but that is not going to be easy. I am increasingly wary that this has become the key question for policy – not what the good, necessary policies are but how they can be pushed for successfully. Without this, our policy agenda risks being stuck on the shelf.

Christine Berry, former Principal Director at the New Economics Foundation, opened the first session with a powerful contribution. Berry linked ideas around fairness with both the need to reverse the rise of anti-immigration politics and the prevalence of debt.

Berry was followed by economist Johnna Montgomerie, Reader at King’s College, London. Montgomerie emphasised the growing proportion of incomes going into debt repayments and the growing number of households struggling with debt repayments. She discussed how many of these households are “feeling more and more underwater” and feel ike captives in “a debtor’s prison”.

Montgomerie made a clear ethical and economic case for the need to write off or restructure household debts, stating that “the fairness of debt cancellation is necessary” both for the wider economy and to liberate people from high levels of debt.

Montgomerie was followed by Birkbeck’s Nadine El-Enany. She noted the compensation given to slave-owners which further entrenched the wealth of their families. She argued that Britain remains a racially hierarchical society, where the consequences of empire are still ongoing. She highlighted the number of deaths among people of colour in police custody, the disproportionate impact of Covid-19 on ethnic minorities and the ongoing backlash against refugees.

The final speaker on the panel was Gracie Bradley from Liberty who pointed out the disproportionate impact of lockdown on black people. She highlighted the significant increase in suspicion-less stop and search, the further roll-out of tasers and the recent spate of wrongful arrests of black people. Discussing George Floyd’s murder, she noted that there have been relatively few policy changes from the mainstream parties. As an alternative, she argued for ending suspicion-less stop and search, a ban on facial recognition, ending the stationing of police in schools and rebuilding the social safety net.

Bradley was followed by Bell Ribeiro-Addy from the Socialist Campaign Group. Discussing the criminal justice system she argued it “works harder” to put people in prison than to rehabilitate. Ribeiro-Addy also condemned the rise of privatisation in the justice system, arguing that the profit incentive has exacerbated unfairness in the system.

Work, Education, Ownership

The next panel was opened by Mary Robertson, Labour’s former Head of Economic Policy, who suggested that recent changes in the economy don’t so much represent a new phase of capitalism as the culmination of forty years of privatisation in the delivery of public services. Robertson argued “public ownership is an absolutely crucial demand” to ensure that public services are “resilient,” “equipped” and driven by a “public sector ethos”. She praised We Own It’s campaign to end Serco’s involvement in Test and Trace and the work of the Good Law Project.

The ‘McStrike’ campaign’s Melissa Evans spoke of her experiences of struggling to get by on a zero hour contract and low pay. She highlighted that lack of union recognition deprives McDonald’s workers of any voice. Poignantly she raised the fact that while McDonald’s is donating money to prevent children going hungry, its own workers experience poverty and foodbanks.

This contribution was followed by IWGB’s Henry Chango Lopez who began by highlighting the rising pressures on workers during the pandemic. He argued that issues around low pay have received increasingly public attention, highlighting how right-wing newspapers have recently given attention to the inadequate levels of statutory sick pay. Chango Lopez concluded that, for many, an effective trade union was the only thing standing between them and destitution.

Jo Grady, the General Secretary of UCU, gave an engaging and impressive speech about the work of higher education workers, the politics of the current government and the marketisation of higher education. Looking at the current situation, she criticised the return of students to campuses as a consequence of the government’s “ideologically corrupt”’ vision of higher education.

Beth Winter MP spoke next. Winter stated that the Welsh Labour government “continues to be a hope and inspiration”, highlighting the Welsh government’s support for a Green Industrial Revolution, the recent step toward rail renationalisation and the role of Welsh Water as a private non-profit company.

A sense of security

The next panel was opened by Nadia Whittome MP, who argued that those in social care have been “marginalised by government policy”. Whittome said, “We don’t just want nationalisation run from Whitehall”, arguing for a social care model rooted in people’s lives. She praised the work of care workers who have built social care cooperatives.

John Lister from Keep Our NHS Public made a contribution describing the underfunding of the NHS and the government’s obsession with private sector solutions in healthcare. Arguing “we need to change course”, Lister detailed a rescue plan for the NHS, reversing privatisation, scrapping charges for migrants and properly paying NHS staff.

Dr Sonia Adesara followed, arguing privatisation of the NHS is “behind our government’s failure” and that this process has been ongoing for 30 years. Adesara argued that we need to be active in our communities to deliver real change.

Next, London Renter’s Union’s Sana Yusuf spoke on housing. Yusuf argued the housing crisis was “untenable before the pandemic” and is even more unbearable now. She highlighted the end of the eviction ban and the rise of illegal evictions due to the pandemic. She argued for a blanket ban on evictions, the end of no recourse to public funds and the suspension of rents.

Finally, Andrew Fisher, Labour’s former Head of Policy, gave a contribution calling for economic support for workers as part of the new lockdown, saying that nobody on minimum wage should receive less than 100% of their pay. Noting the £20 per week increase in Universal Credit, he argued for the uplift to be extended to the legacy benefits – which would particularly help those on disability benefits. Notably, Fisher called for the left to campaign for a new benefits system – a Minimum Income Guarantee, which would see substantially greater levels of security.

Tax, Finance and the Environment

Daniela Gabor, Economics Professor at UWE, opened the final session. Gabor argued for major reform of private finance, noting finance’s role in the climate crisis. British banks, she argued, have had a “good crisis”. Emphasising the climate emergency, Gabor discussed the report she co-authored last year on greening the financial system – and suggested she was hopeful that the report’s recommendations would be retained by the current Labour leadership.

Shreya Nanda from IPPR, spoke on taxation. Focusing on the big-picture ethical questions around tax reform she detailed the role of tax in a social democratic economy. Here, tax is described as part of a social contract in which tax is used to redistribute “gains” to those who’ve lost out. Arguing that the money can be found, she suggested that “political will” is needed to raise taxes to provide for those in need. 

Rebecca Long Bailey MP spoke next. Discussing the impending national lockdown, she called for proper resourcing of Test and Trace, refunding the Health and Safety Executive, giving workers a right to work from home where possible and for public equity stakes in companies that need bailouts. Moving on, Long Bailey highlighted the urgent need for a green solution for the economy – advocating the implementation of her Green Industrial Revolution plans, including plans for new windfarms to be majority publicly owned.

The final speaker Mika Minio-Paluello, energy economist and former advisor to Long Bailey, argued that green investment has greater potential for job creation than other forms of public investment. Minio-Paluello argued that rising support for bold green economic policy was already manifesting in politics, with Biden making commitments on green investment and our government employing green rhetoric. She called for movements to pressure the government to take action and Labour to maintain the level of ambition of the Green Industrial Revolution. 

Politics and Policy

The conference raised some key policy questions. Should private finance be re-regulated and reformed or socialised? Can Labour’s Green Industrial Revolution and Green Finance Strategy be retained under the new leadership? Can a Minimum Income Guarantee work as a new direction for the social security system?

A lot of these questions are overshadowed by the left’s current lack of power and influence. It’s often been said in recent years that when a crisis occurs “the actions that are taken depend on the ideas that are lying around”, a phrase taken from Milton Friedman. This isn’t necessarily true for the left. Until the left is able to successfully rebuild its power and influence we will find it difficult to further our policy agenda. And until we can do that, we will struggle to confront and overcome our current social structures – and the monstrous inequalities that come with them.