Here you go, babe.” Curly hands me four crisp £20 notes. I flick through them wonderingly – this is a highly unfamiliar sensation – before tucking them away in a drawer. My housekeeping money. The phrase seems like something from another age.

My decision to give up paid work – not to mention the near-nervous breakdown that preceded it – appears to have focused Curly’s mind. In just a couple of weeks, he has drummed up two Saturday jobs and has enrolled on an evening course in carpentry. I didn’t even nag him; he just did it. And now he’s done it, he seems rather pleased with himself. There is something newly brisk and confident in his bearing.

“See you later!” The boys and I wave as he heads off for the station in his smart shirt, for all the world like a family from a 1950s TV show. As the door closes, I wonder what to do with the day. Shall I make jam? Bake a cake? Knit something? The last time I tried to knit anything was in primary school and it did not end well but, all of a sudden, I wouldn’t rule it out.

I’m not sure what has happened to me. I used to be thrusting and ambitious. I used to dash around in taxis, schedule high-level meetings, take off for Brazil at a moment’s notice. I used to want to be important and influential.

At the moment, I can’t think of anything worse than being important and influential. The very idea sends a shiver down my spine. I would definitely be a big disappointment to the sisterhood, if the sisterhood were to find out what I’m up to. Only the other day, there was an article in Sunday Times Style by an important woman telling us we should all try harder to be more important. For a brief moment, I wondered if she was right. Then I threw the magazine into the bin and squidged a dirty nappy in there, too, right on top of her smug, self-righteous face.

The funny thing is, actually, I don’t give a monkey’s left ball about all that. I don’t care about anything except for being calm and happy and enjoying my life again. Once Moe is down for his morning nap, I take my copy of Delia’s Complete Cookery Course off the shelf, blow off the dust and turn to the jam section.

“Slice one kilo of fresh pink rhubarb.” Aha. Funnily enough we got rhubarb in the Abel & Cole box this week. I get it out of the fridge and rinse it off. Larry appears in the kitchen. “Mummy, I’m bored.”

“Why don’t you help me make jam?”

“Jam’s boring.” Busted. I snap Delia shut and put down the knife.

“What do you want to do, then?”

“I want to go to the pub.”

“You what?!” “That’s what Ben’s mummy does. Ben gets crisps and plays Simpsons pinball.”

I have to hand it to Larry. That suggestion is so wrong and yet . . . so right. Feeling everso- slightly furtive, I ping a quick text to Ben’s mummy and take one of the twenties back out of the drawer.

If you believe the press, Labour has been hobbling toward its conference. So let me put the record straight: we have had a good year building a politics of One Nation, and we are in a strong position to win in 2015. Three years out of a serious defeat, five years after the collapse of Lehman Brothers signalled the end of an economic era, Labour under Ed Miliband’s leadership is renewing itself in deep and profound ways. We have an intellectual project - One Nation. We have an organisational project – the party as a movement. We are building the political project – One Nation Labour.

Ed Miliband describes One Nation as a country in which everyone has a stake, where prosperity is fairly shared and we make a common life together. That is the goal of our policy review.

Our immediate task is to deal with the crisis in living standards. Not since the nineteenth century have we experienced a decade in which we are poorer at the end than we were at the beginning. Wages are falling, jobs are chopped and diced and poorly paid, prices go up. Whole regions of the country lack a vibrant private sector. Too much of our economy has been about extracting wealth rather than creating it. Too many corporations have put their shareholders before their customers; worrying about the short-term rather than planning for the long-term. And there are too many sectors underperforming and relying on low skill, low waged jobs. Our tax base has been over-dependent on finance and property. As the economy begins to recover, David Cameron’s government is replacing police and nurses with an army of estate agents.

Labour has a real alternative. Not big increases in day-to-day spending; nor simply copying the Tories salami slicing. Our alternative is reform.

We will begin by dealing with the cost of living crisis and tackling the deficit. We will stop household bills rising so fast. We will cap the cost of payday loans, and work to provide people on low incomes with alternative sources of affordable credit. We will introduce workers on renumeration boards to ensure a fairer distribution of reward. There are no magic answers to rebuilding the British economy. Reforming our economy so that it works for working people will require everyone to play a part. Government alone cannot galvanise the creative energy and ambitions of millions of people.

Our state is over-centralised and unable to build the trust we need to develop the economy. It needs fundamental change. We will push down power and resources to combined authorities so that they can begin the task of renewing their regional economies.

In a time of fiscal constraint we will be guided by three principles of government. First, we will support local people taking on the power and responsibility to shape their services and communities. We will help people to help themselves and each other. Second, we will invest for prevention, in order to avoid the costs of failure. For example, we need to be building homes, not wasting money paying for our failure to do so through a rising housing benefit bill. And third, our policy will prioritise collaboration between the public, private and voluntary sectors to avoid silo thinking, silo services, duplication and waste.

Over the last year, the policy review has been making the One Nation political project a reality. We have organised conferences and scores of debates and round table discussion. We’ve published an ebook and at conference on Sunday we will be launching the new book One Nation: Power, Hope, Community edited by Owen Smith and Rachel Reeves.

Effective policy making has to be part of a larger story and movement that gives it meaning and purpose. In the party there is a growing energy to build a new political movement that creates real change in people’s everyday lives. Politics is alive and thriving, it's just not happening around political parties. In the past we drove people away with our inward looking, controlling political culture. We championed innovation and entrepreneurs in society and business but we neglected to encourage them in our own organisation. But Labour is changing.

We are connecting once again with people. In constituencies across the country, Labour is turning itself from a declining party of the twentieth century into a vital movement of the 21st. We are rediscovering our traditions; those periods in our national history when working people joined together to build a better life for themselves, to win political representation and to secure for themselves a just share of national prosperity. The democracy and greater equality they created have been deeply civilising influences on our country. That is Labour’s heritage and we are now modernising our traditions for the digital age. Iain McNicol is embedding these reforms in our organisation.

During the last year, Arnie Graf has been up and down the country meeting hundreds of people. Hundreds have been trained to organise in local communities. Movement for Change are organising campaigns like the community network Home Sweet Home in Cardiff, working with tenants and landlords to improve housing standards. Parties can no longer simply be vote harvesting machines. To attract people’s active support they need also to be social and cultural movements. When people are reduced to votes and votes become transactions people drift away. The thousands of conversations in people’s living rooms, the meetings, the social media based campaigns, the friendships and solidarities that develop around neighbourhood campaigning are not about jolting the old machine politics back into life. They are about creating a different kind of politics; people winning power and building the self-confidence to create real change.

People organising together to agree a common good gives society the power to stand up to the centralising market and bureaucratic state. We need to achieve a balance of interest in the governing of our institutions, in which no one interest dominates over the others. Our politics is about the renewal and conserving of our common life and it is about a deepening of democracy which gives people more control over their lives. Policy grows out of this position and establishes permanent change.

Those who worry about Ed Miliband's determination to change the relationship between the party and the trade unions need to understand that he is right. The millions of working people who are part of the labour movement are our life blood. Without them we are nothing. But we cannot treat them as if they are the Dead Souls out of Gogol's novel. We need a fundamental change in our relationship with them.

Both the Labour Party and the unions have to face a hard truth about our historic relationship. We stopped talking to one another. We need to rebuild our relationship and that means changing it. Working people have everything to gain from a confident union movement contributing to rebuilding the economy. The country has everything to gain from a Labour Party with deep roots in our cities, town and villages.

In the year ahead, the policy review will be focusing on what really matters to people: work, family and place. Work that is fairly paid to support our families. Family because nothing is more important in life, and the place where we live that gives us a sense of belonging. This is the political centre ground: families, where they live and the work they do. Our answers to the cost of living crisis are part of our longer term goal to build an economy that works for all working people and not just the few at the top. That is the task ahead, a new political economy for One Nation.

More fight than meets the eye: “I don’t mind being serious,” says Reeves.
“I am quite serious”.
Portrait by Felicity McCabe for the New Statesman

On the outside, it is a picture of suburban prosperity – one in a row of semi-detached, Edwardian houses. Inside, the illusion of middle-class security dissolves. The family asks not to be named. The father just found a second job. He drives a delivery van from first thing in the morning to mid-afternoon. Now he will also deliver pizzas in the evening. The best part, says his wife, is that unlike previous jobs this one involves a proper contract. It isn’t agency work, which means the bank will recognise the salary as a stable income and perhaps agree to renegotiate their mortgage.

For the past three years, they have been relying on help from extended family to stay in their home. They have a son in junior school and a daughter studying for her A-levels. She helps out by doing weekend shifts at McDonald’s for £4.35 per hour. She has also joined the local Labour Party, which is how it came about that Rachel Reeves is drinking tea in the front room of this house in Grays in Essex, hearing the family’s story.

“I look at her and think of what I was like 17 years ago,” Reeves says afterwards of the eager teenage recruit. The shadow chief secretary to the Treasury also joined Labour when she was at school. John Major was prime minister and the economy was in recession. “I just felt that the government didn’t care about people like me or places like the place I lived.” She describes becoming politicised in the comprehensive school she attended, Cator Park in Bromley, south London. The sixth-form classrooms were prefab huts; there weren’t enough textbooks to go around. Friends who left school early went on youth training schemes with no jobs at the end of them. “That’s what exercised me and still motivates me, the sense of unfairness. If you come from a privileged background where there’s a lot of money, you have so many more opportunities than if you come from a low-income family.” A former teacher from the school remembers the young Rachel as “a bright, hard-working” pupil: “She must have been very good because not many people got to Oxford from Cator Park.”

Reeves’s parents, both teachers, were Labour voters but not members. Her mum finally joined the party in 2010, the year that she was elected to parliament. Reeves was promptly promoted to the shadow cabinet and is now, at 34, one of the most significant figures in the campaign to persuade Britain that it wants a Labour government. While Ed Balls, the shadow chancellor, is locked in mortal combat with George Osborne over the strategic direction of the economy, it is Reeves who talks about the human cost of coalition policy: the pressures felt by ordinary British households, the low wages, rising prices, soaring energy and fuel bills, insecure agency work with no rights, no holidays, no sick pay.

Grays, in the parliamentary constituency of Thurrock, is the front line in that battle. Held by Jackie Doyle-Price of the Tories with a majority of just 92, it is the fifth most marginal seat in the country. On the train back to central London, Reeves reels off a list of things the coalition has done to make lives harder for those Essex voters who could decide a general election – the cuts to tax credits, the VAT rise, the axing of services. Is Labour doing enough, I wonder, to persuade people that things would be so different under a Miliband government? Reeves goes through the menu of things the Labour leader has pledged to ease the burden: a cap on rail fares; tougher regulation of energy companies; cracking down on the abuse of zero-hour contracts that bind workers to an employer with no guarantee of wages.

Meanwhile, the economy has started growing again. The Conservatives are confident that they can claim vindication for their austerity policies. Opinion polls show that Labour is still blamed for the downturn and not trusted to run the economy. “Of course it’s welcome that GDP numbers have turned positive,” Reeves says. “But people aren’t voting on headline figures, they’re voting on what’s happening to them and their families. And the idea that the jobs market is doing well, the idea that the economy is working for ordinary families – it rings hollow.”

That assertion is central to Labour’s general election campaign. The Tories will be portrayed as complacent stewards of a false recovery, handing wealth and opportunity to those who have it already and abandoning those who need help the most. The coalition parties recognise their vulnerability to that charge and a race is on to find policies that will advertise compassion for people feeling oppressed by the cost of living. The median annual salary in Britain is roughly £21,300, which is £3,300 below its peak in 2005-2006. Over the same period inflation has hovered around 3 per cent, with the effect that most people have felt their spending power slump. If that doesn’t start to improve, it will be hard for the Tories to boast of mending the economy.

“It’s clear that living standards will tower over the 2015 election,” says Gavin Kelly, the chief executive of the Resolution Foundation, the leading think tank studying Britain’s low-wage economy. “The politics of it will in part come down to a brutal blame-game about who is most responsible for the big squeeze that has dominated this parliament. But just as important will be whether any of the parties are capable of convincing a sceptical public that they have credible policies that will make a significant difference to household incomes. That hasn’t happened yet.”

A recent opinion poll for Resolution found that 51 per cent of voters would be more likely to support a party if they felt it had a plan for improving living standards. Yet roughly 40 per cent think none of the main parties has any good ideas in that regard.

To shift those numbers in Labour’s favour, Reeves tours the TV studios, diligently holding the line on the economy. It is not always the most rewarding part of the job. When we meet at her Westminster office a week after the trip to Grays, a lavish bouquet of flowers arrives during our conversation. It is a penitent gesture from Ian Katz, the editor of Newsnight, who the previous night had accidentally made public a private message on Twitter in which he described Reeves as “boring snoring” for her exposition of party policy on zero-hour contracts.

Less than a day has passed and already a media feeding frenzy is gathering pace. “Urgh. I don’t really have a comment, to be honest,” says Reeves, clearly wounded and exasperated when I ask what she makes of it all. “They invited me on to talk about the economy. They asked me about zero-hour contracts. I think that’s really important . . . It’s not exciting, but it matters. I know I’m supposed to make some flippant throwaway remark to show how chilled out I am about it all. But I don’t mind being serious about it. I am quite serious.”

Reeves had been back at work only a week after six months on maternity leave. This is not how she envisaged her return to the front line, but politics demands a thick skin. She is not squeamish about the ferocity of Westminster combat – so long as it is policy, not personality, at stake. “I’m not one of these people who think we should all sit down and hold hands and try to agree with each other,” she says. “I think there’s something to be said for sitting opposite each other, having a proper debate and sometimes shouting a bit at each other and heckling. If you can’t stomach that, then you probably shouldn’t be in this business.”

There is more fight in Reeves than meets the eye, but it is a tightly controlled pugnacity. It comes as no surprise to discover that she is an accomplished chess player, having competed at national level into her early teens. She now supports a charity that spreads the game in state schools. She proudly shows off a shot of her at the board taking advice from Garry Kasparov. Chess terminology is often plundered for political metaphors and I wonder what the game has done for her politics.

It helps with concentration, she says. “And looking ahead, working out your opponent’s next move.” It helps with making decisions under pressure. “With an extra half an hour, maybe you could come up with a better move, but you have to weigh up how much time you’ve got on the clock.”

It seems an apposite way back to our discussion of the economy. Isn’t Labour running out of time to start winning some of those big arguments? Reeves doesn’t deny the scale of the task. For the first time her voice, studiously modulated most of the time to guard against emotion, acquires a quaver of urgency. “I know we’ve got to cut through. I know we’ve got to win back the support of people that we lost. I know we’ve got to do all of those things. I think we are moving in the right direction. Under Ed’s leadership we are doing those things, but we’ve got to work harder and we’ve got to do more.” It is at least a partial admission that Labour’s plans for retaking power in 2015 are not proceeding with mechanical efficiency.

Part of the problem, I suggest, is that the opposition has spent three years arguing that austerity is the wrong economic prescription for the country and yet now it must build a political strategy on the assumption that cuts are unavoidable. Is Labour marooned between saying it hates coalition cuts and then saying it can’t reverse them?

“You’ve seen how we voted in parliament. We voted against the bedroom tax, we voted against the top rate of tax, we put down a motion saying we wanted a mansion tax. We have signalled how a Labour government would be different.”

It is a familiar argument – the opposition can indicate its general priorities now, but 20 months before an election it would be unwise to commit to a manifesto. What I haven’t heard before is the candid acknowledgement that follows of why pledging to repeal hated coalition cuts would be such a mistake. The reason is fear of leaving policy hostages that would be slaughtered by the Tory attack machine. “As shadow chief secretary I also know we can’t make promises we can’t keep. It’s important that we make sure everything adds up, everything stacks up. Otherwise we’re going to be ripped apart by the Tories in a general election campaign.”

That position is a compromise between Rachel Reeves, the angry young woman who joined the Labour Party in fury at Thatcher’s legacy, and Rachel Reeves, the studious chess player who wants to be sure the defence is solid before going on the attack. “It is important that we are credible as well as fair. People want to know that we’ve got hearts, but that we’ve got heads as well.”

Nick Pearce welcomes me into his London office. In his blue shirt and glasses, the director of IPPR has the “comfortable dad” look. He has just published an 11-page essay in Juncture, the think tank’s journal, in which he outlines his vision for welfare reform.

Pearce argues that we should stop fussing about with abstract measuring standards and focus instead on improving schools, hospitals and local buildings; that inequality extends beyond what people earn to the way they are treated by their bosses at work; that paternalism doesn’t help anyone because it takes power away from people.

Pearce, as my colleague Rafael Behr puts it, is known for “getting under the bonnet” of policy. He worked as a policy adviser to Gordon Brown when Brown was prime minister. A “thoroughly nice nerd”, he is widely credited with having revitalised IPPR.

His big idea is that the left has missed the point on welfare because it is too scared to co-opt ideas that usually belong to the right, such as individualism and conservation. Achieving a more equal society is a huge project – and it’s not just about wealth redistribution. “For example,” Pearce writes in his essay, “how might a commitment to equality need to be bolstered, or tempered, by demands for personal liberty, democratic self-government, the priority of human relationships, or the desire to protect and conserve things of value to people?”

Recent welfare reforms, he argues, are wrong-headed, because they did not work hard enough to embrace personal autonomy. “[T]housands of people now suffer repeated benefit sanctions and prolonged periods without an income, often for the most minor infractions of job search requirements,” he says.

We need to change our basic power relations, but to do this we need a groundswell of public energy. “What is it that really gets people politically engaged, excited and pissed off in equal measure? It tends not to be formal procedures,” Pearce says. “It’s about issues, it’s about the passions that underpin politics. I think that people are on the left because you’re trying to achieve certain things.”

Towards the end of our conversation, I ask him about his hobbies. “I look after [our] children . . . I watch more CBeebies than Newsnight, let’s put it that way.”

And is this influencing his world-view?

Immediately, he is back on message. “It does influence how I think . . . If you tried to close the children’s centres where my children go, we would chain ourselves to the railings. But people have had their child benefit and other things cut and that’s been achieved without the same level of protest.”

The reason for this, he says, is that it’s much easier to care about something you can see.

Nick Pearce’s essay is available in the next issue of Juncture and at: newstatesman.com/politics

When I received an embargoed copy of Nick Clegg’s opening speech to the Liberal Democrat conference, as my train made its way towards Glasgow, one line immediately stood out. The Deputy Prime Minister was soon to refer disparagingly to “some people in our party” who “don’t like us being too nasty to Labour”.

It was an unmistakable reference to my interview with Tim Farron in last week’s New Statesman, in which the Liberal Democrats’ president told me: “I really like Ed Miliband, so I don’t want to diss him. I don’t want join in with the Tories, who compare him to Kinnock.”

Referring to the unsuccessful 2011 Alternative Vote campaign, Farron added: “He wouldn’t share a platform with Nick, so he ended up with me, poor thing. I like the guy.” That Clegg took exception to the comments was not surprising; Miliband has repeatedly suggested that his head would be the price of a future Labour-Lib Dem coalition.

Two hours later, as Clegg walked out on stage, I waited in anticipation for his rebuke to Farron, the darling of the party’s left. But as he approached the relevant passage, the line was softened to “but let’s not be too nasty about Labour”. For the sake of party unity, Clegg retreated from an attack on his most likely successor as leader.

After I broke the news on the NS’s Staggers blog, the party leader’s team politely informed Farron’s staff, who responded with amusement. When the Lib Dem president signals his preference for a coalition with Labour over another with the Conservatives, he does so in the knowledge that he speaks for most of his party’s members. A poll for the grass-roots website Liberal Democrat Voice this month showed that 54 per cent of party activists would prefer a post-2015 alliance with Labour, compared to just 21 per cent for the Tories.

In his own speech earlier that day, Farron, the Lib Dems’ finest platform orator, had spoken ambitiously of his desire to “build and lead a new consensus”, in a resurrection of the pre-2010 language of progressive realignment. Should Labour become the largest party after the next general election but fall short of a majority, he has positioned himself perfectly as a Lib Dem Miliband can do business with.

Margaret Hodge is very sure of what she is trying to do. “I want to change the world,” she tells me over a mug of tea in the front room of her home in Islington. She is deadly serious.

As the chair of the House of Commons public accounts committee (PAC), Hodge is in a good position to realise her ambition. The PAC’s dry, procedural-sounding remit to examine “the accounts showing the appropriation of the sums granted to parliament to meet the public expenditure” gives her latitude to investigate every aspect of our government’s finances. When she speaks, everyone from Google executives to the BBC’s senior management pays attention.

Hodge is the committee’s first female chair, as well as the first to be elected, rather than appointed. Although she was a minister for 11 of the 13 years of Labour government under Tony Blair and Gordon Brown, she feels that what she does now has a greater impact. Issues such as tax avoidance by companies including Starbucks, Google and Amazon and, more recently, the pay-offs for BBC executives have resonated with the public.

She works hard – particularly since the loss of her husband, Henry, to cancer in 2009. “I’m on my own now, so that’s become a way of managing my life, focusing my life. I put a lot of work in.”

Hodge has recently enjoyed a surge in popularity, yet she cannot escape the legacy of her time as a minister – the firstreport the PAC published under her leadership looked at the failings of a welfare-to-work programme that she had helped to design.

Taking on Labour’s failures isn’t new to her. At the 2010 general election, she fought the “Battle for Barking” against the BNP (the party’s leader, Nick Griffin, stood against her). “I really think they [the BNP] had a chance of taking over the council and taking my seat . . . The underlying issue was Labour’s failure to connect with people on local concerns. We looked inwards; we didn’t look outwards.”

Hodge went on to double her majority in Barking; the BNP lost all 12 of its seats on the council. The answer to the kind of concerns that led to Griffin’s popularity, she says, is to focus on fairness. “If you’re coming in as an economic migrant, you’ve got to work your time, you’ve got to earn your rights, and I think people get that, whatever your race. For instance, access to social housing ought to be based on how long you’ve lived in the area, not just your need. When I first said that in 2008, it was very controversial but that’s the way you deal with racism.”

The role of PAC chair has freed her from party politics. Though still a Labour MP, she no longer attends Parliamentary Labour Party meetings and relishes the freedom to speak her mind. Once, during a committee hearing, she threw Google’s corporate motto – “Don’t be evil” – back in its executives’ faces, declaring, “I think that you do do evil.”This outspokenness isn’t new. “I say it as it is. That’s the joy of being my age [she is 69]. I’m not trying to climb any greasy pole any more. It always used to get me into trouble but now, in this new role, it’s a positive.”

Would she ever consider returning to the front bench? “I don’t think so. I’ve got lots of ambition . . . but I don’t think I could go back to that. Your life has to move forward.” Hodge speaks proudly of her socialism – formed, she says, by her background as an immigrant Jew, which had always made her feel like an outsider. Her family came to Britain in 1949 from Egypt, where increasing Arab-Jewish tensions after the creation of Israel made it difficult to stay. Laughing, she says of her father: “If he was alive today, I think he would be completely gobsmacked by me being such a member of the establishment.”

Before she entered parliament in 1994, Hodge worked for a decade as the leader of Islington Council. She and her Labour colleagues were nicknamed the “loony left”. Her handling of a child abuse case at a council care home (for which she has since apologised) is what her tenure there is principally remembered for, but she feels that a lot of the council’s other work has “stood the test of time”.

“We did a whole load of stuff around the equalities agenda that was thought to be off the wall at the time and which is now absolutely mainstream. We invented Sure Start [in Islington] . . . We worked on maternity rights, which were terrible at the time. All this stuff about one-stop shops for services – we created them.”

She has a long political career behind her but Margaret Hodge isn’t done yet. She will be standing again in 2015 and says: “We’ll just have to see what the electorate does.”

After all this time, has she worked out how to change the world? She smiles. “I haven’t got an answer but I’ve got a question,” she says.

In the history of industrial relations the clash between workers and management has always come down to: "How can we be paid more for less work?". This applies to both sides of the employment divide. The Tolpuddle Martyrs, the first union members, were created out of a strike to prevent a pay cut and ever since then all industrial disputes have had at their heart wages and hours worked.

Karl Marx recognized the conflict and condensed it into the "‘Exploitation Rate" which essentially asks the question: ‘How many hours a day does it take for capitalism to make a profit?’ The more hours a day that a capitalist extracts from each worker in excess of what is needed to cover the cost of production, the greater the Exploitation Rate. Capitalists seek to maximize it, workers seek to minimize it.

At least conceptually the Exploitation Rate is a useful way to frame your thoughts around the relationship between capital and labour. But also it’s actually possible to get an idea how it has changed over time especially since the onset of the recent financial crisis. Using averages of hours worked, people employed and the profits made by US companies as a whole you can get a handle on the time at which, on each working day, on average, America begins to make a profit. In 2006 it was about 12:30pm. But since then it has dropped to about 11:45am which might not sound like very much but in the context of the working day it is an 8 per cent increase in the Exploitation Rate.

This effect has allowed American companies to start pumping out profits even in the midst of one of the worse recessions that the Western world has ever seen – the stock market has risen by over 90 per cent since its 2009 trough, while real wages have increased by only about 1.5 per cent. Workers now work longer and for less and the divisions between capital and labour have increased.

We have a terrible tendency to believe that everything in economics reverts back to some kind of historic norm. This isn’t surprising given that our experience confirms this; all recessions are mere blips and normal service can be expected to resume after a brief period of time and we return to a path of enduring and rising prosperity. But something has changed in our economies; the nature of employment is fragile – underemployment through increased part-time working, zero-hour contracts and no-pay internships have fundamentally reduced the bargaining power of labour. Rising pay isn’t going to be the thing that starts to reduce the Exploitation Rate.

So, if the Exploitation Rate is going to decline again, the only thing left is an increase in company costs. Western economies (particularly the US and UK) have benefited from ultra-low interest rates since 2008. Long-term borrowing costs have been kept low by the use of unconventional monetary policies like quantitative easing (QE). The markets have, effectively, been rigged in favour of stock owners and corporate bond borrowers and to the disadvantage of savers who receive a fixed income from the bond markets. It’s another factor that has increased the Exploitation Rate as interest payments haven’t eaten into profits.

But this is set to change. The UK has stopped its QE program and the US is seeking an exit strategy from their Gargantuan pump-priming policy. So if there is a threat to company profits, and by extension the stock markets going forwards, it comes from the right-sizing of bond yields and not from the pay demands of workers.

To reinforce this, the shock decision by Larry Summers to withdraw as a candidate for the top slot at the Federal Reserve caused bond yields to fall, the US dollar to weaken and stock markets to rally. Summers had been associated with stopping the process of QE earlier than his rival, the current deputy chair Janet Yellen. The episode only serves to reinforce the idea that we have a set of asset classes hopelessly dependent on the continuation of a policy that serves no purpose other than to perpetuate a collective desire to avoid reality. If I was Larry Summers I’d be pretty happy right now – at least I won’t now go down in history as the guy who bust the stock market.

Source: Bloomberg

According to figures from the Office of National Statistics (ONS) retail volumes fell in August despite analysts expecting a rise. We answer five questions on the surprise drop.

By how much did retail sales fall in August?

They fell by 0.9 per cent according to the ONS. This was a surprise for analysts who expected a 0.4 per cent increase.

What’s responsible for the fall?

The ONS said the fall was due to consumers reining in spending, particularly on food.

Sales of food fell by 2.7 per cent in August compared with the month before.

Morrisons last week said higher levels of spending it had seen in London were not reflected in other parts of the country.

How do August’s figures compare to last year?

These latest figures, which are based on a monthly survey of 5,000 UK retailers including all large retailers who employ 100 people or more, are still up on the same time last year.

They’re 2.1 per cent higher than August last year, when the Olympics affected spending.

What does this all mean in relation to the economy?

Retail figures are considered an indicator of consumer confidence and the economy as a whole. The retail sector actually accounts for around 6 per cent of the UK economy.

However, according to latest estimates the economy grew by 0.7 per cent in the second quarter of the year.

What do the analysts say?

David Tinsley, UK economist at BNP Paribas, speaking to the BBC said:

"It is probably a sign that upbeat expectations were getting a little out of whack with what the economy is capable of delivering," he said.

"If there is an ex-post rationale for the decline in sales, it seems to be largely down to the weather. Food sales were exceptionally strong in July... as the temperature improved markedly. While August was also pleasant, that level of sales was probably difficult to sustain."

Today provides further evidence that the bedroom tax is proving one of the coalition's most pernicious policies. A survey by the National Housing Federation of 51 housing associations has found that more than half of those residents affected by the measure (32,432 people), fell into rent arrears between April (when the policy was introduced) and June, a quarter of those for the first time ever. 

Ministers have defended the policy, which reduces housing benefit by 14% for those deemed to have one 'spare room" and by 25% for those with two or more, on the basis that it will encourage families to downsize to more "appropriately sized" accommodation. But they have ignored (or at least pretended to ignore) the lack of one bedroom houses available. In England, there are 180,000 social tenants "under-occupying" two bedroom houses but just 85,000 one bedroom properties available to move to. Rather than reducing overcrowding, the policy has largely become another welfare cut, further squeezing families already hit by the benefit cap, the 1% limit on benefit and tax credit increases (a real-terms cut) and the 10% reduction in council tax benefit. 

David Orr, the chief executive of the National Housing Federation, said at its annual conference today:

"This is the most damning evidence yet to show that the bedroom tax is pushing thousands of families into a spiralling cycle of debt.

"If these figures are replicated nationwide, over 330,000 households could already be struggling to pay their rent and facing a frightening and uncertain future.

"What’s more, people can’t even move to smaller homes to avoid the bedroom tax because there aren’t enough smaller properties out there. Housing associations are working flat-out to help their tenants cope with the changes, but they can’t magic one-bedroom houses out of thin air. People are trapped.

"What more proof do politicians need that the bedroom tax is an unfair, ill-planned disaster that is hurting our poorest families? There is no other option but to repeal."

These appalling figures prove once and for all that while this government stands up for a privileged few, a debt bombshell is exploding for a generation of people. While the nation's millionaires get a huge tax cut, thousands more now confront arrears and eviction from which they'll never recover. This is final proof as if we needed it, that the hated tax must be dropped and dropped now.

It’s a strange beast, progress. Like sitting on a train in a tunnel, unsure whether you’re moving or not, it can be hard to get one’s bearings. Sometimes, you might even be going backwards and not realise it.

The quest for women’s rights is a bit like sitting on that train, and quite frankly, it’s not so much of a suped up supervoyager (when nature calls, these high-tech, high-speed Virgin trains now genuinely have toilet robots which tell you ‘hilarious’ jokes about what you can and can’t flush), than it is like something from Arriva Trains Wales. It’s filthy, it crawls along at a snail’s pace, and it only ever takes you as far as fucking Crewe.

We’ll stop with the engine analogies lest someone mistake us for enthusiasts, but there is a point there. The assumption that we’re always moving forwards, slowly throwing off shackle after shackle of patriarchal norm, isn’t actually the case. We’re not saying that things are so bleak that we’re all at risk of becoming 1950s housewives, poised to re-don our pinnies, set our hair, and get cracking on the pavlova - not quite. To our grandmothers, progress looks like the Great British Bake Off (men! In jumpers! Making giant pouffy meringues! And loving it), but if things could, you know, jog on a bit, then that would be ace.

Thing that happened: An Indian American Woman won Miss America

But that’s progress, right? Well, ish. Say what you want about Miss America (OK, we will: it’s an outdated, steaming shit of an event which has women flouncing up and down in bikinis like tap-dancing barnyard animals and pretending that they’ve ‘always had a passion for world peace’), but this is a triumph for diversity, and the fact that an Indian medical student won the crown represents the melting pot that is the United States of America. Hey, maybe it even shows the American Dream in action. Right?

Well. As the comedian George Carlin quoth, it’s called the American dream because you have to be asleep to believe it. And there seem to be a hell of a lot of sleepy racists out there. Some feminists were this week confused as to what they should be more angry about: the fact that Miss America exists in the first place, or the deluge of racist abuse that aspiring doctor Nina Davuluri received on winning (clue: both are rubbish). Questions as to whether Davuluri was ‘American enough’ to be Miss America of course completely ignored the fact that everyone in that mass of a country was an immigrant once, bar of course Native Americans (FYI, the first Native American winner was in 1926. They didn’t even let black women compete until 1970.)

Thing that happened: Playboy published a party guide that was all about consent

But that’s progress, right? It would have been incredible had it been real, but it was the work of a group of anti-rape culture college hackers (the same guys were responsible for tricking everyone into believing that Victoria’s Secret had brought out a line of anti-rape ‘panties’ in 2012). Labelled the ‘Playboy 2013 Top Ten Party Commandments’, the document poses as a student’s guide to good sex which, ‘Playboy’ says, involves ‘asking first’. Hugh Hefner even declared himself a feminist in a mock question-and-answer session.

Unfortunately, Playboy still exists, and it’s busy concentrating on things other than sexual consent. Things like announcing that Kate Moss is to model nude for its cover to celebrating its fortieth birthday, hosting parties for disappointing Vogue editor Alexandra Shulman (we thought better of you, we really did), and invading Gymboxes around the country with its ‘Playboy Bunny Bootcamp’ and new form of BMI (‘Bunny Measurement Index’ – vom). Apparently, the Playboy brand is still set to be a part of our consciousness for a very, very long time. What the hell, 2013?

Thing that happened: France has moved to ban child beauty pageants

But that’s progress, right? As probably the best response ever to a row with Vogue magazine which saw the fashion rag dress up a bunch of ten year olds in tight clothes and heavy make-up, the French Parliament voted ‘non’ to creepily dressing kids up like their own Barbie dolls. The bill protects the under-16s from not only appearing in the pages of Vogue with peacock feather eyelashes, but also from being marketed child-size products from the sexy adult world, such as padded bras and high heeled shoes.

Unfortunately, as you can probably deduce from the whole Miss America charade, beauty pageants for ‘adults’ (let’s face it, teenagers) still abound everywhere. And anyone who’s sat down to a relaxing session of ‘Toddlers and Tiaras’ knows that the government in the US and UK haven’t been quite as enlightened as France.

Thing that happened: Theresa May was appointed to David Cameron’s cabinet as Home Secretary, one of only four women to hold one of the Great Offices of State. The cabinet boasts three other formidable females, and has benefited in the last few years from the voices of enthusiastic female MPs such as Louise Mensch.

But that’s progress, right? As an organisation that has never been particularly friendly to women yet brought us the first female Prime Minister, feminism’s relationship with the Tory party has always been ambivalent. And while enough Conservative supporters have brought up the four women in the cabinet with us as proof that the historically misogynistic state of Tory Towers is ‘improving’, it’s, well, four women. Four women who aren’t exactly flying the flag for women’s rights. As @Sophia_Phan pointed out on Twitter recently, even Voldemort had more women in his cabinet. We’re not outright saying that therefore David Cameron should get a tattoo saying ‘Worse than Voldemort’ across his neck, but in the event that he did come to this fully autonomous position, we’d be fully supportive.

On the bright side, Mumsnet’s survey into the political affiliations of women shows us deserting the Tories in our droves. Most of us would rather vote Labour, whose shadow cabinet is a lot more female-friendly (and has therefore been given the affectionate term ‘Millie’s Fillies’ by the Daily Mail.) Cameron take note: we can and will vote with our feet.

I am in mourning. In mourning for my once great and principled party which, judging by the past week, believes in very little that it once held dear.

From opposition to nuclear power to being against a replacement for Trident and supporting a 50p tax rate for the highest earners, we’ve seen these and other totemic policies abandoned. It makes me think some commentators are right when they say that Nick Clegg has all but completed his transformation of the Liberal Democrats from a party which was to the left of Labour (or at least New Labour) to one that is now an annex to the Conservative Party. 

I’ve long argued that what Clegg wants to do is turn the Lib Dems into a British version of the German FDP. The free-market FDP wins a very small percentage of the vote but seems to remain permanently in government as a parasitical attachment to the conservative coalition led by Angela Merkel.

That kind of thing must surely not be the aim of the Liberal Democrats. Of course we’re pluralists and believe in working with other parties. But we shouldn’t ignore our own history and rubbish our own principles just so our mnisters can keep their hands on red boxes.

Our history brings up names like Keynes, Beveridge, and Grimond, radical social liberals. And, yes, other names such as Roy Jenkins and Shirley Williams. As councillor and London Assembly Member Stephen Knight reminded us at a fringe put on by Liberal Left at this week’s Liberal Democrat conference, our party is a successor to two fine traditions, not just liberalism but also social democracy. Some would like to wipe the SDP from our history, but others, such as Vince Cable, continue to self-define as social democrats and we will not allow that fine tradition to be forgotten.

But over and above policy matters, what has upset me most this week has been the way some in our party, including Nick Clegg, treat those on the left. We’re belittled, patronised and treated with ridicule. Like embarrassing relatives, we're tolerated but not wanted.

Perhaps the worst example of this came during Clegg’s Q&A session when, before she’d even asked a question, Clegg made belittling comments about my colleague and friend Linda Jack, the chair of Liberal Left and one of the nicest and most principled people in our party.

When Linda did ask a question, she asked Clegg whether people such as her still had a place in the party. Clegg answered by not answering; he just talked about that morning’s economy motion. Any reasonable leader, regardless of whether they agreed with a certain individual, would have said, "Of course you have a place in our party, we’re a broad church". 

He said no such thing, which makes many of us feel like he’d really quite like us to leave the party so the transformation of the Liberal Democrats from a social liberal party to an economic liberal party will be complete.

Well, I have a very clear message for Mr Clegg and his acolytes: we’re going nowhere. As Janice Turner of the Social Liberal Forum said at the Liberal Left fringe, "this is our party too." Of course we’ve done good things in government, from re-linking pensions to earnings, to enacting Equal Marriage, but we’ve also compromised and capitulated too often and acquiesced too much.

So, after three years of biting my tongue, hoping for a better day and defending his leadership, I now call on Nick Clegg to go. What residual respect I had left for him was destroyed this week by the way he and his ilk referred to and dealt with those who dared to disagree with them.

Those of us on the centre-left of our party, who I believe continue to be its mainstream, will, despite it all, continue to fight for what we believe. A couple of years ago, at a Lib Dem conference not long after the coalition was formed, Nick Clegg told delegates, "we’ll never lose our soul."

Sadly, I fear we have.

Mathew Hulbert is a Liberal Democrat borough and parish councillor in Leicestershire

Earlier this month a stork was arrested in Egypt on suspicion of spying. The apparent spy devices were in fact monitoring equipment geologists had attached to the bird to track its migration path, but sadly the suspected spy never received a fair trial. Instead it was killed and eaten by villagers, which no doubt sent out a powerful message to other feathered agents.

It isn’t the only bird to have fallen fowl (sorry) of the law. One eagle was arrested in Sudan last year, and a vulture was detained in Saudi Arabia in 2011, both on suspicion of being Israeli spies. As with the stork, they had been electronically tagged by scientists. In India, a pigeon was arrested for spying for Pakistan in 2010. The pigeon fared much better than the spy stork, as it was reportedly given its own air-conditioned cell.

In 2010 Egypt blamed a series of shark attacks on the Israeli spy agency, Mossad, claiming it had deliberately introduced man-eating sharks to damage Egypt’s tourist industry.

While sharks are in cahoots with Israelis, squirrels are the preferred weapon of choice for the British intelligence services – or so the Iranians believed when they arrested 14 spy squirrels.

Animals can be criminal masterminds, too. In Nigeria in 2009, a goat was arrested for armed robbery. Police detained the goat after it was claimed the creature was in fact an armed robber, who had used black magic to transform himself into an animal after stealing a Mazda.

This all sounds very silly, but MI5 did consider using gerbils to identify spies and terrorists at airports in the 1970s, while the US is looking at inserting spy equipment into insects to create insect cyborgs and training bees to detect explosives. In the 1960s the CIA tried (and failed) to bug cats as part of Operation Acoustic Kitty.

But it is sea creatures you really have to be suspicious of. Dolphins and sea-lions have been trained by the US to locate and mark landmines, as well as suspicious swimmers.