There is much to welcome in David Miliband’s call for a ‘comradely and serious debate’ about the future for the Labour Party, as prompted by Roy Hattersley’s recent article in the Political Quarterly on social democracy. He is certainly right about the spirit in which the debate should take place, but this initial foray will have to sharpen its edge drastically if it is not to fade into a merely pious exchange about abstract aspirations.

The starting point has to be what went terribly wrong in the last decade or two leading to financial collapse and cataclysmic defeat in 2010. Those factors include financial deregulation which opened the way to toxic derivatives and the crash, a bonus culture that pumped up recklessness in the City and ballooned inequality, over-reliance on finance to the huge detriment of manufacturing, a naive belief in the self-regulation of markets, and an extension of privatisation into all public services on ideological grounds irrespective of outcomes. David does not mention one of them.

The real problem with his analysis is the assumption that the structure underpinning the British economy is broadly sound – just get the phraseology about the super-structure right. But even in that respect he doesn’t:

• “We should be reformers of the State, not just its defenders” – but the State does produce better outcomes than markets in many areas, notably in provision of key public services.
• “We should be champions of local government” – yes, not diminish it by PFI and endless outsourcing as New Labour did.
• “We should be clear about equality” – indeed, equality of opportunity is a chimera without much much greater fundamental equality, and equality and liberty must be reconciled not just for the rich but for the poor too.
• “We need a politics of economic growth” – yes, not supporting Tory austerity as certain recent moves have suggested.
• “Make our internationalism work for Britain” – whatever that means.
• “Continue to modernise the party” – but it’s already been shrivelled, do we really want more?
• “And defend Labour’s record in government” – but if it was so successful, why does it need defending, why doesn’t it speak for itself?

But the real flaw is the neglect of what is so badly wrong with Britain today, which only a real Labour government can and should put right:

• An unsustainable economic decline (the UK deficit on traded goods was a staggering £100bn last year).
• The loss of control over the money supply to the banks which prioritised allocation to mortgages, offshore speculation and tax evasion over productive investment in industry and exports.
• The need for a massive revival of British manufacturing as the only long-term lifeblood for the economy.
• The fracturing of British society into ever more excessive inequality and the stifling of social mobility.
• The re-democratisation of the outmoded British power structure, the need for which has been irrefutably demonstrated by successive scandals in the City, parliament, media, and police.

All these cry out for reform.

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It’s not just the well-reported antics of Mark Kennedy that call in question the activities of undercover policing against political and protest groups. It’s the almost total lack of accountability about the clandestine operations of police spies over the last 40 years. The HMIC report on this episode draws attention to Kennedy’s failure to “follow codes of practice for undercover officers” or to report his sexual activities with those he was targeting, but fails to call attention to the much more serious charge that his handlers or the CPS, or both, deliberately ignored evidence that Kennedy had provided, in order to secure the false conviction of 100 protestors at a power station in Nottinghamshire.

Despite the revelation that 7 of the known 9 undercover officers had sex with those they were spying on (we don’t yet know how many more there were in this category), HMIC still thinks that spying on protestors should remain under the police’s counter-terrorism supervision. Again the HMIC report doesn’t even raise the much more serious question of whether police action of this kind is justified at all, and should now be stopped, unless there is unmistakeable evidence of violence or violent intention.

Another disturbing aspect of this business is the mysterious role of the previously unknown Office of the Surveillance Commissioners (OSC). Who are these persons? Who chose them? From what occupations are they drawn? Who do they report to? Which parliamentary select committee monitors their performance? What are their terms of reference? What is their response to these serious irregularities that have occurred on their watch over years, if not decades? Who is calling them to account for their abject failures of supervisory responsibilities? What other undercover or spying activities do they look after? We need to know a great deal more about this parastatal organ, and I have put down PQs on all these points.

The HMIC report is typical Establishment whitewash – blaming a particular individual (who is certainly guilty of gross misconduct), but brushing over the much deeper and more worrying structural aspects of accountability. How can it be justified that officers no higher than superintendent rank were given the power to authorise undercover police to fabricate false passports, rent new properties and live for years as spies? How can this possibly be justified against peaceful campaigners? And at what level in the police hierarchy was it decided that undercover officers should lie in court about their identity and the nature of their activities? Who authorised this perjury and deliberate contempt of court? They should be named and held to account for what is obviously a gross breach of their public responsibilities.

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Those of us who have suggested David Miliband’s latest political intervention may have – let’s say – ulterior motives have received a bit of flak. Must he stay silent just because any public pronouncement may be misconstrued by the media? Why can’t he contribute to the debate about the party’s future like anyone else?

The problem with this position is that there is the tricky issue of precedent. Back in 2008, David Miliband wrote a similarly ambiguous, cryptic article that was widely interpreted as making a pitch for Gordon Brown’s job. Oh no, it was claimed, he was just adding to the debate about the party’s future. We now know that wasn’t true; from Alistair Darling’s memoirs and other sources we know he was on manoeuvres, but never quite had the bottle to take the final step.

I struggle to see why, therefore, it is so extraordinary to imagine his latest piece should not be seen in a similar light. David Miliband is an exceptionally bright and capable politician with years of front-line experience: he is certainly aware of how this piece would have been received in what was otherwise his brother’s most successful week as Labour leader.

Superficially, the piece is a polemical response to Roy Hattersley. Is David Miliband really re-emerging from the shadows with his biggest political statement since the leadership contest – to take on someone who stepped down as deputy leader of the Labour party two decades ago? Does anyone seriously believe this?

The piece is written in David Miliband’s trademark wonkish style which should give pause to those who believe he would have made a more effective communicator. But in it, he makes a factionalist attack on a constructed grouping he calls ‘Reassurance Labour’. Again, would he really bother aiming fire at this alleged tendency if he didn’t believe it was exerting a powerful influence over the party’s direction?

Essentially, it is a catch-all term embracing those believed to be committed to old-style statist social democracy, or what he calls the “political dead-end of the ‘Big State’”.

Given he’s brought it up again, it’s interesting to note how criticism of supposed statism emerged in Britain. It was barely heard of before the financial crisis, when unions and activists were angrily attacking the creeping privatisation and marketisation of public services under New Labour.

What happened was after Lehman Brothers went under is that the Tories turned a crisis of the market into a crisis of public services. The deficit soared here – as elsewhere – above all because of bank bailouts, tax revenues collapsing in the aftermath of financial meltdown, and soaring spending on welfare because of rising unemployment. The Tories – who had backed Labour’s spending plans pound for pound until the end of 2008 – cynically spun the deficit as the consequence of Labour “overspending”, or big government if you will. Labour failed to effectively challenged this myth and, with the help of allies in the media, the Tories constructed a consensus.

Debates have since raged about how to effectively reduce the state, to move on from a fictional New Labour “statist” approach, and to focus on concepts of community instead; Blue Labour is one prominent example. Would David Miliband and others be making these points about the dangers of statism if it wasn’t for how the Tories had framed the terms of debate? I doubt it.

He argues that, with social democracy, “Growing the pie and distributing it more fairly should be mutually reinforcing.” Agreed – which is why Labour needs a coherent alternative to Tory cuts which, after all, has sucked growth out of the economy. That’s why a strategy for growth – not cuts – should be our priority. Miliband argues the party has been united over “arguing that the Tories’ austerity plan is economically dangerous”, so it would be interesting to know how far he feels a softer austerity should go under Labour.

He argues “we need to continue to modernise the party itself”. He doesn’t mention the unions here (or anywhere in the article – which itself speaks volumes), but this is often New Labour code for breaking the union link. He certainly wants to bring in primaries, opening the door to a US system with expensive contests manipulated by wealthy donors; and undermining a democratic membership party in favour of an amorphous mass of largely passive supporters. In the US, voters in primaries are even more socially unrepresentative than those in normal election contests.

He talks of needing to “establish far more clearly what needs to be defended about Labour’s record in government, not just join the blanket Tory denigration”. Perhaps he shares the bemusement of those who – like myself – were staunch critics of New Labour, and now find ourselves fighting a lonely battle about the myth of Labour’s “overspending” causing the deficit. It is a battle that all too many senior Labour figures are unwilling to fight. But he really appears to be echoing the Blairite mantra that Ed Miliband has rubbished too much of New Labour’s record – “we should also insist that the list of gains far outstripped the mistakes”.

He quite rightly refers to the 2010 defeat as “disastrous, Labour’s second-worst in 70 years”. And it is – I’m sure we all agree – important to properly understand why Labour lost, and which supporters abandoned it. Labour lost 5 million votes between 1997 and 2010, but the Tories only gained a million in the same time. Over 80% of those voters disappeared under Tony Blair’s leadership – that is, by 2005, when Labour formed a government with just 35% of the vote, the lowest share of any successful party in the history of British democracy. The old New Labour triangulation strategy was that the so-called “core vote” had nowhere else to go, but relatively affluent swing voters were key to electoral success. But while Labour lost just 5 points of support from the ABs – the professional middle-classes – between 1997 and 2010, it haemorrhaged 21 points from its C2s (skilled and semi-skilled workers), and 19 points from the DEs at the bottom.

In other words, the old New Labour formula lost the party millions of working-class votes. “The core vote became the swing vote”, as Ed Miliband put it during the Labour leadership contest. It is not a point that David Miliband addresses.

He ends the article by attacking what he calls the “Reassurance Labour tendency”, not just for minimising the chances of electoral success, but because “its vision is too narrow, its mechanisms too one-dimensional, and its effectiveness too limited.”

But who – other than some bloke sitting in the House of Lords who left front-line Labour politics two decades ago – does he mean by this “Reassurance Labour tendency”? Who are its leading figures? Because – again – why would David Miliband break his silence with his most high-profile political intervention yet to aim fire at it if it was not a pretty powerful bunch?

This is – in reality – a proxy attack, not a serious polemical response to Roy Hattersley. It would take impressive powers of self-delusion or naivety to believe otherwise.

David Miliband identifies the division in the party as between modernisers like himself, and the ‘Reassurance Tendency’. But I see the division as a bit different: between those who want a coherent alternative to the Tory cuts agenda, and those who accept the essentials of what the Tories are doing and only quibble with the details. I call the latter the “Surrender Tendency”.

And before I’m accused of factionalism, I’m only talking in the same terms as David Miliband.

This article first appeared at Labour List.

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Leanne Wood’s campaign to become leader of Plaid goes from strength to strength, now gaining the endorsement of Dafydd Iwan, former president of the party, and a renowned Welsh-language musician. Iwan’s support is significant as it bridges the gap between the traditionalist Welsh speaking foundations of Plaid’s support in the West and North of the country with the left-wing republicanism that Leanne avows.

Jon Lansman recently asked the question whether a Plaid led by Leanne Wood could pose the same sort of threat to Labour in Wales as the SNP does in Scotland. Jon makes the interesting point:

Last year, Plaid suffered the consequences of a term of Coalition government with a Welsh Labour party that had, under Rhodri Morgan, put clear red water between itself and New Labour. Poorly differentiated from Labour, and in the context of a Tory-Liberal Coalition in London, Plaid lost 4 seats in the 60-seat assembly. Now governing Wales alone, Labour is being forced to make substantial cuts whilst, in Westminster, Labour is announcing that “the starting point….is we’re going to have to keep all these cuts” when it returns to government and accept real-term cuts in public sector pay in the meantime.

The poor differentiation between Plaid and Labour was not accidental, it is because when Labour speaks for Wales, and embraces the social democratic values that dominate Welsh political life, then Plaid becomes eclipsed.

It is important to understand how labourism creates the space for Plaid to exist. Geoffrey Foote’s indispensable 1986 book The Labour Party’s Political Thought argues that the coalitional nature of the Labour Party, involving as it does both the trade unions and a political movement, provides an envelope that constrains the limits of the party’s politics, not only to left and right, but also over issues that sit uncomfortably with the perspectives of trade unionism. Any deviation that strays so far away from the horizons of the unions risks rupturing the coalitional nature of the party. This explains the phenomenon of essentially social democratic parties arising outwith Labour, expressing a single issue that the Labour Party could not accomodate, such as the Common Wealth Party’s advocacy of a second front during the second world war, or Respect’s opposition to the Iraq war.

But is also explains how the Labour Party, with its orientation towards the British national state and therefore towards British national identity has struggled with expressions of Welsh and Scottish identity. As the architect of devolution, Ron Davies, explained to me in an interview in 2005:

There were many people in the Labour party, and there still are, who find it very hard to reconcile their patriotism, their love for Wales, with their commitment to socialism, or to the Labour party I should say.

Because they believed and argued very strongly in 1979, and still do, that the solutions to the problems of Wales are to be found in exactly the same mechanism as the problems of the North of England or wherever. The answer is a strong labour government in Westminster who will legislate all these problems away.

It doesn’t understand that there are issues about patriotism, of identity, of wanting to do things differently in Wales, of nation building if you like. To free up the initiatives we have in Wales, because our scale is different, because we do have different values, there is a greater sense of community, we do have distinctive policy issues of our own we do have issues about language and so on. And there is a large part of the Labour Party that is entirely uncomfortable with that agenda, and didn’t want to go down that track.

Labour’s support in Wales and Scotland is therefore jeapordised by the very arts of triangulation towards swing voters in the South East of England, which many on the Blairite wing of the party still believe is the magic feather for winning elections.

The paradox is that David Miliband’s recent article in the New Statesman advocates moving away from the idea he atributes to Roy Hattersley, that the “mechanism … for furthering social democratic goals is the central state”. Yet Miliband fails to acknowledge that Labour does not only exercise power in his own words in “Newcastle, Lambeth, Liverpool – and South Tyneside”, there is also a Labour government in Wales. Miliband confuses two issues: the practical devolution of power to the nations and regions is an entirely different question from whether the state itself should directly intervene in the economy and be the provider of services. Therefore David Miliband demonstrates no recognition that there could be a different political culture in Wales, or indeed in the English regions away from the South East.

What is more, the economic policies of the Blair/Brown government benefitted the South East of England more than the regions and nations. As Dr Éoin Clarke argued last year:

[Since 1995] incomes of the south east and London grew significantly more that Labour heartlands. Now that’s the thing. Labour already succeeded in boosting the pockets of southerners more disproportionately than the north [of England] but what thanks or indeed recognition did they get? The lesson is clear, don’t build you political strategy around courting those who have no intention of voting for you anyway. Cosying up to big business, vested interests and the filthy rich did Labour no favours at election time. It is the reason why our working class voters stayed away in such vast numbers.

David Miliband’s article in the Statesman does make sone sensible points. There is a potential danger of Labour succumbing to a self-referential agenda of reassurance, instead of developing a vision of a better society, and a strategy of acheiving it. It is true that some sections of the left, for example, do have an overly optimistic belief that Labour could win elections by simply being more left wing. However, David Miliband should look in the mirror: the greatest danger for Labour being sucked into an electorally damaging  and self-indulgent nostalgia comes from the Blairite right.

Firstly, the economic and social policies of the Tory led coalition are so damaging that they cannot simply be triangulated around, they needed to be oppsoed by a credible alternative vision; but secondly, the process of devolution has created increasingly differentiated political contexts in the other nations of the UK outside London. The world is bigger than Portculis House, and a preoccupation with the incestuous London chatterati does not lead to politics that works on the streets of Middlesborough, Swindon or Bolton; let alone in Dundee or Caerffili.

This is why the prospect of Leanne Wood winning the leadership of Plaid is such a potential challenge. As Dafyyd Iwan says:

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I must admit that I did not immediately grasp the obvious parallels between the decision to strip a banker of his knighthood and the brutal murder of hundreds of American blacks at the hands of a mass white supremacist paramilitary organisation.

So I am thankful to Lord Digby Jones, a man who served as trade minister under Labour, for bringing the comparison to my attention. The erstwhile head of the Confederation of British Industry believes that the treatment dealt out to Fred Goodwin earlier this week carries ‘the faint whiff of the lynch mob on the village green’ about it.

Who knows? Maybe Alan Parker can be prevailed upon to remake his powerful 1988 film ‘Mississippi Burning’, maybe relocated to somewhere like Esher, as bands of roaming vigilantes track down and string up stray City Boys.

Lord Jones might care to ponder on the fact that victims of lynch mobs in the last century were typically hung to death. Not only is Mr Goodwin still very much alive, but he is in receipt of a pension of hundreds of thousands of pounds a year while still a sprightly fifty-something. That doesn’t sound too bad to me.

According to the Wikipedia, the home of all reliable information on the internet, Goodwin is the son of an electrician from Paisley, a place where not many kids on the local council estates will have had feudal titles when he was growing up there in 1960s. And the few that did would probably have been bullied on account of it.

Whether or not Fred the Shred is particularly bothered about no longer being able to use the designation ‘Sir’ we do not know. But if he has got any sense, he will not give a monkey’s. If there is any whiff of lynch mobs here at all, it is decidedly faint.

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I’m almost feeling sorry for Fred the Shred. ‘Humbling of Mister Godwin’, mocked the Daily Mail; ‘Goodwin is shredded’ (geddit?) bellowed the Daily Telegraph; ‘Once A Knight Fred’, echoed the Sun, a newspaper always keen to win the most imaginative pun stakes.

It’s more than tempting for the left to jump on this populist bandwagon. After seething with anger as those who had nothing to do with the crisis have been expected to pay for it, finally, one of the those responsible for the current catastrophe has been held to account in some small way.

But this is where the left should have a different approach to the right. The crisis was not caused by a few “bad eggs”; the odd greedy banker who can be treated as a fall guy, and then we can all move on. It was a system – not a few individuals – which plunged the world into economic catastrophe. This is a crisis of unfettered capitalism, red in tooth and claw, not the unfortunate consequences of some cock-ups by the likes of Fred Goodwin. We forget this at our peril.

I’ll give you an example: James Dyson, a businessman who gave his name to the pioneering vacuum cleaner. He was once hailed as leading a renaissance in British manufacturing, until he shut his British factory down and upped sticks to Malaysia in 2003. It’s not because he’s a bad person, or morally questionable: it’s because capitalism is about making profit, rather than putting the good of society first.

In short, a good slogan could be: “Socialism, it’s nothing personal.” The left stands in opposition to the way society is currently structured, not to the fact there are greedy or selfish individuals running the show.

Apologies for quoting myself, but in the introduction of my book Chavs I wrote:

We are all prisoners of our class, but that does not mean we have to be prisoners of our class prejudices.”

I could be accused of hypocrisy here: after all, like others, I’ve railed against the fact that we currently have a government of multi-millionaires, and the fact that Parliament is full of middle-class professionals. That’s not to say the well-heeled have no place in politics whatsoever: but unless working-class people are properly represented, their interests will not be properly championed (as indeed they’re not).

When I asked Hazel Blears why New Labour had let 5 million people languish on social housing waiting lists, for example, one reason she gave was that there simply hadn’t been anyone sufficiently interested in housing. Yet if there were people in Parliament who’d actually experienced the housing crisis, the odds of something being done about it would dramatically increase.

It should be how we understand politics, too. Some on the left offer a lazy critique of New Labour, effectively arguing that the Labour leadership swung to the right in the mid-1990s because a coterie of right-wingers (led by Tony Blair) made it that way. But New Labour was really the product of a whole range of factors: the rise of the New Right, the battering of the labour movement in the 80s, repeated electoral defeats producing massive disorientation and desperation, and the capitalist triumphalism that followed the end of the Cold War.

It’s easy, too, to castigate Ed Miliband personally for the concessions the Labour leadership has made to the Tory cuts agenda. But, again, it is in large part a product of the weakness of the left (which barely exists as a coherent political force).

That doesn’t mean individuals should not be beyond criticism: after all, we’re not all robots – we all have agency. Attacking a politician for hypocrisy is completely legitimate. For example, I wrote a pretty blistering attack on Liam Byrne back in January. But it was a political, rather than a personal point: if you demonise some of the poorest people in society who receive money from the state while wrongfully claiming far larger sums yourself, then you should expect to face accusations of hypocrisy.

But because the right believe that the left is motivated by personal hatred towards those from privileged backgrounds, there’s nothing they like more than going for “posh” lefties. If you’re from a middle-class background or above and have anything other than a commitment to naked self-interest, then you’re a hypocrite, or so this line of attack goes.

Sometimes this is taken to absurd lengths. For example, one senior right-wing journalist attempted to pressure his fellow columnists to write a piece about the fact my ex-boyfriend was privately educated. I don’t mind right-wingers taking pot-shots at me – it’s what I expect – though I do object to others being dragged into it; at the time, I had to explain to him that he might be about to be publicly outed while he was being treated for cancer. Unpleasant, but the point that the journalist was trying to make was – “oh look, here’s a left-wing journalist who rages against privilege, but look who he’s sleeping with”.

My whinge aside, there’s always been a long tradition of people from relatively privileged backgrounds in the ranks of the left, such as George Orwell and Tony Benn, for example. And as long as they don’t crowd others out, and make sure they defer to working-class experiences, then there’s nothing wrong with it.

Above all, the left’s beef is with a system that is as unjust as it is irrational. Taking pot shots at the odd banker, or those who had no say over which school they went to, misses the point. After all, socialism is nothing personal.

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Businesses need funding fast, so why doesn’t Osborne just order RBS and Lloyds to ratchet up the lending? After all, he controls 80% of the former and 40% of the latter, more than those who talked about seizing the ‘commanding heights’ of the economy ever dreamed of.

Why instead does he go cap in hand to the Bank of England begging it to overseee the pumping of loans to small firms through a process known as ‘credit easing’, thus bypassing the banks even though he owns two of the largest? And why does Cameron refuse to stop the obnoxious payment of gigantic bonuses in the City piggery on the pretence that he can’t micro-manage the banking system?

It’s because the byword in neoliberalism is that the private market is untouchable – governments should get out of the way, never interfere, the market knows best – and the banks are sacrosanct. Compare that with the treatment of those now being deliberately made homeless by government fiat – maybe a fifth of a million families: not untouchable, just violated.

The government’s own estimate is that ‘only’ 67,000 families will be affected by the housing benefit cap debated in Parliament yesterday. Of these, even the government itself admits that 12% of the families will lose as much as £100-150 a week, and another 17% will lose over £150 a week. That is justified by IDS on the grounds that they should be working and it isn’t fair that they’re getting more in benefits than many people in work.

This ignores however certain crucial facts. No less than 60% receiving housing benefit are not able to work – pensioners, disabled, or lone mothers with young children. The reason the housing benefit budget has soared in recent years is not because tenants (though it’s nearly always the landlords) who are raking it in, it’s because far too few houses are being built, so that demand far exceeds supply, forcing up prices and then housing benefit as a consequence.

And now the Tories are pushing the ‘Right to Buy’ again, reducing the supply, pressing up rents still further, not least because social housing rents are now being deliberately adjusted upwards to match private rents in the locality.

One law for the bankers, another for families made destitute and homeless. One law for the 99%, another for the 1% who inhabit a different planet. One law of inviolability for the financial elite, another for the poorest whose exploitation is seemingly limitless.

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Workers at Primark in Northern Ireland have voted overwhelmingly for strike action after the company attempted to impose a pay freeze on its shop staff for the second consecutive year. Primark’s staff are paid just £6.84 an hour, yet in the past two years the company has seen its profits soar to an estimated £644 million. Union reps are meeting next week with strike action in February looking increasingly likely.

The fact that a call for industrial action by staff at Primark has made the news at all is testament to how organised workers’ struggle has become something of a rarity in recent times. This is reflected in the trade unions themselves, where there has been a steady decline in members in the last 30 years. Six-and-a-half million people were in a trade union in 2010, down from a peak of around 13 million in the late 1970s. These figures also conceal a large discrepancy between public and private sector membership, with only 14 per cent of private sector employees being members of a union compared with 56 per cent of those in the public sector.

Media superficiality would have it that trade unions are little more than a quaint irrelevancy to 21st century life. The economic downturn has added to the scorn heaped on anyone viewed as rocking the boat by popularising the notion that the burden of the financial crisis is being shared equally. “Get on with it” perhaps best describes the attitude of most of the print media to discontented workers; and in the case of the Primark dispute bosses see nothing wrong with telling staff to meekly accept their lot – despite the fact that there undeniably is a great deal of money swilling around.

This attitude is not confined to the bosses of Primark, either. In Britain’s lightly regulated labour market employers increasingly have the power to do what they want to a degree unthinkable since the First World War. A recent report by the Fair Pay Network (FPN) – a coalition of charities and non-governmental organisations including Oxfam and the Trades Union Congress – and published by the Independent revealed that Britain’s largest supermarket chains are paying their staff poverty wages while making huge profits and raising executives’ salaries.

Not only has years of anti-union rhetoric affected how large companies treat their workers, but it has also had a discernible impact on the Left, which increasingly spurns trade union activity in favour of occupations, protests and flash mobs. The idea of autonomy is at the heart of the tactical switch; and the sacrifice and solidarity of the strike feels grey and outdated compared to the free-for-all of the tent city and the high-octane exertions of the Black Bloc. Little do they realise it, but even today’s protesters have adopted some of the commitment-less individualism of Thatcher-Blairism.

The political assault on trade union activity has been reignited recently, with Boris Johnson, a Mayor elected with the first preferences of just 19 per cent of his electorate, calling for a minimum turnout threshold on industrial action ballots. Others fantasise about going further, openly musing on whether “we” (meaning in reality society’s top 1 per cent) should permit strikes to happen at all.

Scratch an anti-trade union politician, however, and you will find the same contempt for democracy that has in the past lobbied against everything from the right of working people to vote to the right of the poor to receive medical treatment. For many the workplace already remains one of the few areas of life completely untouched by democratic accountability. A recent survey by the Chartered Institute of Personnel and Development(CIPD)found that only a third of British workers were engaged in any form of dialogue with their bosses at their place of work, another third were largely “disengaged”, while the remaining third were indifferent.

It is not as if the law as it stands comes down in favour of those democratically withdrawing their labour, either. There is in reality no such thing as the right to strike in law in Britain. Walk-outs are only possible because unions have immunity from any subsequent claims for damages.

Extending democracy beyond the confines of 19th century liberalism will not be done by erecting a tent in one of capitalism’s bustling metropolises, nor by inconveniencing shoppers in Regent Street. It will come through the tireless and unglamorous struggle of those, like the workers at Primark, who realise that by standing together they can claw a little back from those who would make off with everything given half the chance.

Trade unions are by no means perfect, but if the left is to become relevant again it must rediscover the notion that social justice begins at work.

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There are two different universes at Westminster, completely disconnected. One is about Hester who has sacked thousands and still presides over RBS languishing at a share price only half of what taxpayers paid for in the bailout, but who has already on top of his £550,000 salary (£10,575 a week) gained £11m in bonuses and incentives and looks set to pick up another £6m for a fairly unexceptional performance.

The other is about the poorest of the poor – those suddenly struck down by a breakdown or accident beyond their control, or evicted and made homeless, or an abused wife escaping a violent partner, or a man deprived of his job and left penniless by epileptic fits – the causes of human misery are endless – all of whom are about to lose their final lifeline, the Social Fund, which the IDS anti-welfare bill is abolishing. Does one impact on the other? Not for a second.

It’s not as though the Social Fund is a case of egregious generosity profligately thrown at the poor. It is extremely mean, grudgingly parting with far less than the absolute minimum needed for a decent life, just enough to eke out survival – that is if you’re lucky enough to get it. The Social Fund was the creature of the Thatcherites in the 1980s, replacing the previous system of grants for things unavoidably needed like a cooker or a cot, but which could not be afforded on a poverty line benefit. Instead of being determined by need, it was cash-limited and often a loan that had to be repaid, pushing weekly subsistence below the poverty line. Even Thatcher however never proposed abolishing it. But the Coalition is.

The Social Fund is being cut by 39%, and the remaining £178m will then be dispersed to local authorities but, crucially, not ring-fenced. Given the current and future state of Town Hall finances, that means that all, or nearly all, will be diverted to other pressing needs. After all, which local authority will want to establish a reputation for generosity, which will act as an instant magnet for the destitute for miles around? There is not even a requirement on local authorities to report on any loans or grants they may make, so that there is at least some minimum measure of accountability.

So City directors now get on average £1.8m a year (£34,615 a week) and Hester piles another £6m on his mountain of incentives. At the other end the IFS has predicted that another half million more children will be pushed down into povertyas a result of the colossal IDS benefit cuts of £18bn, and to cap it all the Social Fund last and final protection is being swept away. Not exactly all in it together.

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Parts One and Two appeared earlier this week.

Once in office, the coalition has decided to run roughshod over the economic reality.

For the last 21 months or so they have pursued a series of tough austerity measures: aggressive cuts combined with huge reductions in public spending, believing that this is the only way to eat into the deficit.

This despite the waft of evidence that a weak and fragile economy requires an increase in government spending as the best way to stimulate the economy, especially as, naturally enough, in hard times, people choose to spend less. If nobody’s spending, the economy comes to a standstill, or worse.

The last few years has seen a resurgence in support for Keynesian economics: the view, by the English economist, John Maynard Keynes, that fiscal stimulus (more government spending) is essential in a recession. During the Great Depression in the 1930s, he called for governments to invest in infrastructure.

Advocates of this position have consistently warned that cutting the deficit when the economy is weak is dangerously detrimental, and will only serve to harm it further.

As Robert Skidelsky, the biographer of Keynes, explained:

“The reason for the slack [in the economy] is that the private sector is not spending enough to employ all those seeking work – whether because investment prospects are too uncertain, or because it is paying off debt. In these circumstances government spending is not at the expense of private spending: it compensates for its absence. If the government were to economise on its own spending at the same time as the private sector was spending less, the result would be a slide into even greater recession. Keynes called this the “paradox of thrift.”

Paul Krugman, the celebrated Nobel Prize winning economist, has been cautioning against rapid spending cuts, both in the US and the UK, for years. He has argued that the coalition are ignoring lessons from history with their severe deficit-reduction strategy, and that such a move will fail to stimulate enough real growth:

“Fiscal austerity will depress the economy further…The sensible thing is to devise a plan for putting the nation’s fiscal house in order, while waiting until a solid economic recovery is under way before wielding the axe.”

Why is the British government doing this? The real reason has a lot to do with ideology: the Tories are using the deficit as an excuse to downsize the welfare state. But the official rationale is that there is no alternative.”

A stagnating US economy with stubbornly high unemployment has led even staunch Republicans to concede that Krugman may actually have a point.

He is also backed by Carmen Reinhart and Ken Rogoff, authors of the universally-praised book, This Time is Different, in which they documented financial crises in over sixty-six countries, over a period spanning 800 years.

Both agree with Krugman that fiscal adjustment is necessary, just not at the moment, or to the extent that it is being implemented.

Rogoff argued that:

The important thing to do is structural reform. Make us [the US] grow faster. Improve our tax system, build infrastructure, education, view it as a crisis in that way [but]…I certainly don’t think slashing budgets…is the way to go about business.”

Instead, 21 months on, whilst sticking steadfastly to Plan A, this is the current economic reality facing Britain:

A stalling economy, unemployment the highest in 17 years, with an average of 23 applicants for each job, record numbers of people ‘underemployed,’ —  those working part-time through lack of choice — the longest ever period of wage stagnation, with analysts warning that the Chancellor’s 2011 autumn statement will see, between 2009/10 and 2012/13, real median incomes fall by 7.4%, levels not seen since the mid-1970s.

Noting a lack of any meaningful recovery has led to an increasing number of analysts to publicly question the government’s chosen path.

One of Britain’s leading economic think tanks told George Osborne to rethink the scale of the cuts, urging something more targeted:

…fiscal policy is too tight, and a modest loosening would improve prospects for output and employment with little or no negative effect on fiscal credibility.”

Another called for spending cuts to be aligned to economic growth, and fiscal consolidation to be less severe in a year where growth is forecast to drop below 1.5%. Cuts should be slowed until the economy was stronger and able to absorb them.

And in recent months, murmurings from various international bodies have got louder, with warnings that austerity drives are in fact harming, rather than healing, sick economies.

This month, the leaders of the IMF, World Bank, and WTO, expressed concern at over-aggressive deficit reduction programmes, and issued a joint plea for governments to:

…manage fiscal consolidation to promote rather than reduce prospects for growth and employment. It should be applied in a socially responsible manner.”

Finally, the public are starting to turn on the government, with a recent poll finding 59% of voters backing a slowdown in spending cuts.

The trouble for Labour is that more people blame them for the state of the economy than the coalition’s cuts.

In spite of several months of gloomy economic news, and despite the gathering calls for a Plan B, the government seems more determined than ever to press on, with the downturn used as cover for an irreparable and ideological shrinking of the state.

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