What is really striking about the UK’s biggest problems today is that they are all insuperable unless there is a strategic change in policy which almost always requires a big shift in the power structure.
The banking crisis will not go away so long as central banks, either in the Eurozone or the UK, believe they can solve it by shovelling vast quantities of money into the banks as a means of stimulating growth – €1 trillion in the case of the ECB funding in particular Spanish and Italian banks, and £325bn in the UK’s case via QE – when the problem will instead be solved by spending a fraction of those sums on public investment in needed economic projects and job creation. But that will require a fundamental change in the monetarist mindset of the likes of Merkel and Osborne.
There will be no long-term economic recovery of the UK while trading deficits in goods are colossal (£100bn in 2010) and constantly require the economy, whenever growth gets going, to be damped down or the currency devalued in order to prevent the balance of payments rocketing out of control. But that requires systematically prioritising manufacturing over the City of London, and the Tories who get half their funding from the banks will never do that.
Inequality, now at obscene levels and a major factor behind the August 2011 riots, will never be reduced to acceptable limits while mutually self-serving remuneration committees pay each other fantasy sums that bear no relation to market realities. It will only be resolved when top pay is made subject to approval, not only of shareholders, but also of employee representatives meeting annually in the company Enterprise Council. The Tories will not touch this in a million years, and Labour needs to be a lot braver than simply suggesting that one or two employee representatives are put on remuneration committees (where of course they would be constantly outvoted).
The mega-corporations – whether 4 supermarkets, 5 banks, 6 energy companies, 4 accountancy firms, 4 oil companies, etc. – will continue to stifle competition and limit access to the market for new entrants while the rules on market share remain so lax. Big business oligopoly power will only be broken when these rules are significantly tightened to remove excessive market dominance in each sector. That requires a reversal of the nonsense neoliberal dogma that the market is always self-regulating, but neither the Tories nor the Blairites will ever accept that.
The media will remain severely distorted by the money and power and prejudices of a small number of private tycoons, and real diversity and balance in the press will only be brought about by radical changes to enforce openness and transparency. That must include:
- no cross-ownership between broadcast and print media,
- no ownership by any individual or organisation of more than one daily and one Sunday paper,
- a right of reply,
- a strong press complaints body (excluding editors or senior newspaper executives) with the statutory power where necessary to enforce their rulings against gross or repeated violations,
- a much more robust media supervisory body with the power to investigate and deal with serious abuses (e.g. the illegal and corrupt nexus between media-police-No.10 revealed by the hacking scandal).
Leveson may help, but the Tories will never give up their in-built advantage from having a strongly right-wing press behind them, though Labour should certainly have the courage to take up these much-needed reforms.