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    Bitcoin is incredible, but the power of a currency is its credit - and Bitcoin hasn't got there yet.

    It’s a big week for Bitcoin. In the last forty-eight hours alone the value of one Bitcoin (1 BTC) rocketed from £328 to £511 and, as many predicted, in the past twelve it crashed back down again to a low of £322, a rise and fall of over 50%. It is currently fluctuating fairly madly around the £350 mark. But it is fair to say these look more like growing pains than death throes. 

    It is worth remembering that just a week ago Bitcoin was only worth £227, and seven months ago people were pulling out their hair because the market crashed from £169 to £84. It is still approximately forty times more valuable than this time last year, so there is one outcome of this latest spasm perhaps more significant than the price itself: now it’s got everyone’s attention.

    Bitcoin is being trumpeted as a paradigm shift by firebrand market analysts like Max Keiser and tech gurus like John McAfee. Both are urging everyone to clean up now before it’s ubiquitous. Speaking to Canadian television, McAfee said: “Bitcoins will be everywhere and the world will have to readjust. World governments will have to readjust.” And perhaps not coincidentally, Bitcoin prices rose nearly £20 in the three days after Keiser championed Bitcoin on Have I Got News For Youa fortnight ago.

    So, if the buzz is to be believed, one of two things can happen from this point:

    1. Obviously such rampant growth is unsustainable. Bitcoin is a classic flash in the pan, will-o’-the-wisp, dotcom-style bubble, and it will lead a few early sellers to riches and thousands of others to ruin and/or disappointment.
    2. Governments will attempt but fail to control the burgeoning cryptocurrency, which will undermine the increasingly exploitative and crisis-prone finance industry hegemons, peacefully ushering in a new era of decentralised democratic money unburdened by unfair fees and the dangers of things like toxic mortgages.

    It’s undoubtedly exciting, and bombast is tempting, but there is little point pretending to be Nostradamus when investors are still so flighty. All we can do is diagnose what’s going on right now.

    So what was behind the latest boom? A lot of Bitcoin’s growth has come on the tail of some huge media coverage this last month. Aside from the latest drama, two particular news stories last month boosted the currency’s profile. The first was the fairytale story of a Norwegian man who bought 5,000BTC when they were invented in 2009, at £14, and promptly forgot about them. When he remembered them this year, they were worth £550,000. Quite an advert.

    The second, somewhat ironically, was the FBI’s dramatic closure of Silk Road last month. As well as hearing about Bitcoin for the first time, people found out you could order pretty much any illegal substance from the comfort of your living room, anonymously - which is not something any other currency will offer any time soon. When the FBI arrested Ulbricht, the alleged head of Silk Road, they seized his ‘wallet’ containing 144,336BTC. (At the time, that was worth £17.3m, but just over a month later it is already worth over £50m.) As time goes on, this big-ticket arrest is looking more and more like a Pyrrhic victory for the FBI, because as even mainstream news sources acknowledge, the Silk Road is now thoroughly back online – along with a range of other competing black market sites (and now even more people know about them too).

    What’s more, the danger that bitcoins will somehow leach away the world’s tax revenues and lead to anarchy is rapidly dissolving, as governments decide how to cope with them. Yesterday, in an act that clearly knocked many off the fence and into the Bitcoin market, the US Department of Justice told the US Senate committee for Homeland Security and Governmental Affairs that Bitcoins are "legitimate financial instruments" – a statement at once bold and vague, but certainly the first step on the road to regulation and a huge boost to buyer confidence.

    The German government has already categorized Bitcoin as a ‘unit of account’, that is, officially recognizing it as money taxable under capital gains, which has lead many to speculate that others in the Eurozone may soon follow suit. However, not all governments have been so welcoming: in July, Thailand banned Bitcoin outright.

    Our own HMRC is suggesting bitcoins will soon be taxable in their own right as ‘single use vouchers’– a clumsy definition, as ‘vouchers’ have a relatively stable face value and bitcoins are repeatedly proving to have anything but.

    But, as it stands, it’s difficult to argue the boom is motivated by anything more than the desire to make a quick buck. The largest Bitcoin exchange, BTC China, led today’s selling spree, in a rather blunt demonstration that Bitcoin has not proven its worth as a social investment just yet. Whatever its increasingly extreme price swings may eventually portend, it hasn’t earned the right to be called ‘money’. As the Washington Post’s Neil Irwin quipped back after the last Bitcoin crash, in April:

    "If a currency can lose 75 percent of its buying power in two days, it may not be the best store of value. . .

    What makes money money is what you can do with it. If you can purchase the goods and services that you want and need with it, it is money; if you can’t, it isn’t."

    Bitcoin can be used in some shops around the States, a whole street in Berlin, thousands of online stores, and there is even a Bitcoin ATM in Vancouver. Some people have experimented living exclusively using Bitcoin– one successfully managed a Bitcoin roadtrip as early as 2011 (though he mostly paid other Bitcoiners to pay in US dollars…).

    But clearly to the vast majority of its buyers, Bitcoin remains a surreally lucrative, volatile asset; it has a hefty price, but does it have value? Its proponents call these wild swings ‘price corrections’ as the market realizes the currency’s true value, but the element of faith still outweighs the evidence.

    Bitcoin is, in many ways, incredible; but the entire power - indeed the entire point - of a currency is its ‘credit’. Time will tell if this week’s conversations in the Senate have changed all that. But for now, it looks like the main force behind the Bitcoin boom is indistinguishable from that which has been behind every other boom: buy low, sell high.

    N.B.: figures correct at time of publishing, but probably not for long.


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    The revival of the Tory-aligned National Liberal Party would offer a path into the Conservatives for Jeremy Browne and other right-leaning Lib Dems.

    The Staggers reported earlier on Tory MP Nick Boles's call for the revival of the National Liberal Party, which existed as a Conservative affiliate until 1968. The proposed alliance would mirror the relationship between Labour and the Co-operative Party. While Boles is claiming that this is a way of broadening support for the Tories in the country as a whole, and in three-way Lib Dem marginals in particular, I wonder if there's another thought in his head. He said in his speech to Bright Blue: "Existing MPs, councillors, candidates and party members of liberal views would be encouraged to join. And we could use it to recruit new supporters who might initially balk at the idea of calling themselves Conservative." 
     
    Now, I wonder if, when he says "existing MPs", he means existing Tories, or in fact whether he is talking to disgruntled Lib Dems on the right of the party who have already been asked the question - and rejected the chance to join the Tories in their current form. One obvious candidate might be (if you believe the rumours from a few weeks back) Jeremy Browne.
     
    I suspect this is the start of a sustained attack by the Tories on the Lib Dems, timed just as the differentiation strategy really takes hold. We've already alienated many of our former supporters on the left. Now, as we spin left to try and attract them back, we alienate those on the right who have stayed loyal to date. I always said it was a wrong-headed strategy. We're beginning to see why.
     
    Anyway, could someone find out if Jeremy Browne is having coffee with Nick Boles in the next few days? I sense a plot afoot...
     
    Richard Morris blogs at A View From Ham Common, which was named Best New Blog at the 2011 Lib Dem Conference

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    If the army was hoping that a hulking great monument would, literally and metaphorically, set their version of history in stone, they were wrong.

    Yesterday morning, Egypt’s military interim government unveiled a memorial in Tahrir Square commemorating those who died during the 2011 protests against Egypt’s longstanding dictator Hosni Mubarak, and during the 2013 demonstrations against its Muslim Brotherhood president, Mohammed Morsi. By nightfall, the memorial had been vandalised – it was sprayed with graffiti and the stone inscriptions were picked off. So why has this memorial to Egypt’s dead caused such offence?

    The problem is that the memorial was constructed by the very same people, namely the army and security forces, who killed the protestors being remembered. The army may see itself as the guardians of Egypt’s revolution, and many welcomed its removal of Morsi, Egypt’s first democratically elected president, but that doesn’t mean they have forgiven its heavy-handedness. If the army was hoping that a hulking great monument would, literally and metaphorically, set their version of history in stone, they were wrong.

    Meanwhile, today in Cairo, competing demonstrations have been organised by supporters of the military, Morsi supporters and secular revolutionaries to commemorate the anniversary of some of the most deadly 2011 clashes between protestors and security forces. The army has promised to react strongly against any group threatening violence. As Alastair Beach reports in the Daily Beast, Egypt’s military government is also due to sign a series of laws to force street protestors to seek government permission and to limit their protests to designated areas. It also wants to introduce jail sentences for those caught writing political graffiti.

    Commemorating the dead can be an important step to promoting national reconciliation, but Egypt can’t reconcile itself with the past while there is still no little agreement on who “owns” the revolution, and where power should lie in the new Egypt.
     


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    To deal with complex problems, we need a complete reconfiguration of public services, with a shift from the 'delivery state' to the 'relational state'.

    Today’s 'offer' by G4S to reimburse the public purse by £24.1m following revelations of overcharging is merely the latest turn in a series of outsourcing controversies that have shaken public confidence in the government’s public service reform agenda. This comes on top of the widely catalogued failures of the Work Programme and growing concern about the rushed privatisation of the probation service.  While each of these problems has its own independent sources, they are in fact signs of a whole public service reform paradigm in retreat.

    In part the problem is a lack of openness and it is right, as Sadiq Khan has argued, that all those providing public services should be subject to the same transparency requirements. But the problem goes much deeper than this.

    For 30 years, governments have deployed so-called 'new public management' methods to try to improve public services. These methods have taken two forms: bureaucratic targets imposed from the centre and external competition to incentivise improvement. The Work Programme and the probation reforms involve a combination of these 'delivery state' approaches. In both cases a silo of state provision is contracted out to (mainly) private providers who are paid if they achieve certain outcomes. My argument in a forthcoming IPPR paper is that such approaches are ill suited to tackling the kind of problems they aim to address.

    Long term unemployment and reoffending are examples of ‘complex problems’. The causes of such problems are not like billiard balls, which if hit at the right angle will with certainty go into the right pocket. Nor can such problems be tackled within departmental or contractural silos: their causes are multiple and interconnected across different domains.  So, for example, supporting those who are sick or disabled into work following long periods of unemployment requires a holistic and personalised approach that attends to all of the barriers to work, including physical and mental health problems, a lack of confidence, poor interpersonal skills and a lack of qualifications.  

    The Work Programme is by contrast a narrow job-focused programme and those providing it do not control most of the factors that prevent many people from accessing work.  This is why the private companies running the programme tend to 'cream' the easy candidates and 'park' the difficult cases: just 6.9 per cent of those referred in receipt of Employment Support Allowance were found work in the latest period against a 17 per cent target.  The probation reforms, based on the same model and dealing with similarly complex problems, are likely to suffer the same fate. 

    The challenge of complexity extends beyond reoffending and long term unemployment: there is a growing range of complex problems taking up a rising level of public expenditure.  These include the epidemic of mental illness, the army of young people not in education employment and training and the rise of chronic health conditions. Bureaucratic and market reforms have been effective at dealing with problems that have a small number of linear relationships and that can be dealt with within the bounds of a particular service. So, for example, contracting out refuse services has often improved efficiency and outcomes, and targets have been very successful at reducing hospital waits.  But these 'new public management' tools are ill suited to tackling complex problems.

    To deal with complexity we need a complete reconfiguration of public services, which means shifting from the ‘delivery state’ to the 'relational state'. This shift can be summarized in two words: connect and deepen.  First, services which are aimed at tackling complex problems need to be integrated much more at the local level so that they can develop coordinated approaches across different services. This means devolving pooled budgets in areas like welfare to work and probation to local authorities and city regions and holding them to account for the overall outcomes achieved. Rather than looking to the Work Programme for a model of how to reform the probation service the government would have been better advised to look at the successful experience of Youth Offending Teams.  These are based in local authorities and bring together mixed teams of professionals to take a holistic approach to reducing youth offending.

    Second, tackling these problems requires deep relationships in place of shallow transactions: deep relationships between citizens and professionals who can work together and get to know one another over time, and deep relationships between citizens who together can be empowered to solve problems for themselves.

    The coalition’s reform agenda is derivative of the kind of thinking that has dominated public service debates since the 1980s.  A more complex world demands a new approach.

    Rick Muir is Associate Director for Public Service Reform at IPPR.  His new paper Many to Many. How the relational state will transform public services will be published in January.


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    High Speed 2 hasn't even been built yet and it looks old-fashioned compared to Japan's maglev trains - but, like Concorde, their futuristic appearance is deceptive.

    Right now, there’s a group of ex-politicians from the US being shown around Japan's under-construction Tokyo to Osaka maglev line, the first stretch of which (between Tokyo and Nagoya) is due to open in 2027. When ready, its trains will be able to reach speeds as fast as 500km/h, far speedier than the 360km/h trains the UK will be getting with High Speed 2.

    That might seem like a bum deal for us - if we’re spending up to £50bn on a new cross-country rail line, our instincts might make us think that only the most advanced technology available will be value for money. It’s an understandable thought, but it’s misguided.

    First, here’s Motherboard’sMichael Byrne on what that group of ex-politicians is thinking of when they look at Japan:

    The proposal, simply called the Northeast Maglev (TNEM), is based on a new technology (old new technology, more accurately - it’s been in development for nearly 40 years) currently being tested on a short section of line outside Tokyo called Superconducting Maglev. Japan hopes to eventually drop some $100 billion on a 320 mile line between Tokyo and Osaka. The technology holds the current rail speed record of 361 miles per hour and offers a cruising speed of just over 300 miles per hour. The TNEM group hopes to convince President Obama and regional leaders to go in on a segment of maglev between Baltimore and Washington D.C., requiring some 30 miles of underground tunneling and theoretically cutting transit times between the cities from just under an hour to 15 minutes.

    While America may be known as the land of the car, the northeast corridor between New York City and Washington DC has a public transport network that Europeans would recognise (even if they may also laugh at its inadequate, antiquated infrastructure that is in need of significant investment). Trains run at capacity as they’re cheaper than flying and faster than taking the bus, and - like HS2 - new lines are necessary to increase capacity.

    Why not build maglevs if they’re the best trains you can buy, though?

    The first reason is one familiar to London Underground, which has multiple tunnels built to different widths and which each require unique types of trains to be custom-built every time they're replaced. That’s much more expensive than buying ordinary trains which comply to standard gauge, and the same would apply with maglev - as a new method of transport that’s still in an experimental stage, we might make a mistake and end up choosing a gauge that doesn’t become the international standard.

    Or, worse, we might get locked into having to buy our trains from the one company that has the patent on using that kind of maglev standard. We also wouldn’t be able to integrate the trains with the existing High Speed 1 line that goes through the Channel Tunnel, onto the rest of the European rail network. HS2 is going to be used for freight as well as passengers, so that connection is arguably vital for trade with the continent.

    Secondly, the thing with very fast modes of transport is they take a lot of time to get up to speed. This is the reasoning behind Elon Musk’s impractical vacuum-tube Hyperloop, which would - if it works, it’s only theoretical right now - fire passengers at 962km/h between Los Angeles and San Francisco, reducing the time for the 570km route between the two cities to 35 minutes. Over longer distances it would be cheaper and more practical to use fast planes, and it can’t be used over a shorter route because it needs the full length of the tube to get up to speed. This applies just as much to maglev.

    HS2 will be designed to handle speeds up to 400km/h, but there are few places a maglev train would be able to get faster than that before having to slow down again in time for the next station. Considering the physical size of the UK and the planned gaps between stations, going any faster than 400km/h isn't really any use.

    One thing that does go in maglev’s favour is that the 286km line between Tokyo and Osaka is expected to cost roughly £55bn, which is cheaper than the estimates of more than £50bn for the 192km first phase of HS2. Also, while maglev trains do require more energy to run than conventional trains (and, as mentioned, repairs and new parts are more expensive than off-the-shelf alternatives), track maintenance costs tend to be lower than for normal trains as there isn’t any wear or tear.

    In Japan, the government is facing criticism for investing in an ambitious new rail line despite forecasts that the country’s population with shrink significantly over the next few decades. That’s not going to be a problem for the UK, which could end up the most populous EU nation by the middle of the century - and for the key aim of increasing capacity, old-fashioned trains on wheels suit us just fine. Taking a punt on a new technology isn't worth the risk.


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    Angola, Cote d'Ivoire, Ghana, Mozambique and Tanzania are to form “High Level Prosperity Partnerships” with the UK. But this odd collection of new partners has one thing in common: all have oil or gas deposits.

    “I want to get away from the narrative of coups and corruption,” Britain’s African Minister, Mark Simmonds told businessmen, as they tucked into a full English breakfast at Simpsons on the Strand.

    It was the Minister’s chance to provide the first glimpse of what is being described as “High Level Prosperity Partnerships” in Africa. A full launch will take place (this evening) at Glazier’s Hall, on the bank of the Thames, appropriately looking North to the City of London. The initiative is being sold by the Foreign Office as a “cross government initiative”. Led by the Foreign Office it will include the ministry’s commercial arm, UK Trade and Investment and has the backing of the development ministry, DFID.

    The government has singled out are Angola, Cote d'Ivoire, Ghana, Mozambique and Tanzania for this treatment. Each has agreed to put up a named minister with whom Britain can link up, to develop trade and investment.

    So what about London’s traditional "best friends" on the continent – Nigeria, Kenya and South Africa? “We have a big footprint there already,” a spokesman told the New Statesman. “The idea is to work with business to develop new markets.”

    This odd collection of new partners has one thing in common: all have oil or gas deposits. Angola has long been a major partner for BP. Ghana is important for London-based Tullow oil. Mozambique and Tanzania both have gas fields. So too does Cote d'Ivoire. As the North Sea runs down Africa is becoming an important source of hydrocarbons and an excellent place for Britain to sell its oil expertise.

    The list also raises other questions. What role will DFID play in these relationships? Justine Greening, Britain’s development minister, will be at the launch. The suggestion that aid money would be used for military ends has already raised eyebrows. Should it now be channelled into winning new markets?

    And what of the choice of partners? Mozambique is facing a fresh challenge from the Renamo rebels, who have begun attacking government targets. Mark Simmonds said this morning that he’d personally phoned President Armando Guebuza, calling on him to spread Mozambique’s wealth more evenly and allow room for dialogue.

    Angola, which is reputed to be among the most corrupt and least equal country on the continent, also presents difficulties. There is little room for dissent and journalists have been routinely beaten up and jailed. Responding to the news that Angola was to be on the list, Leslie Lefkow of Human Rights Watch tweeted: “Angola?? Presumably the criteria for the partnership doesn't include transparency or respect for media and civil society.”

    Tanzania and Ghana present fewer government issues, but Cote d'Ivoire is just emerging from an appallingly divisive civil war. Laurent Gbagbo, the country’s former president, is now in the Hague, facing charges before the International Criminal Court.

    Africa has grown rapidly in the last decade and there are certainly greater opportunities for trade and investment. This has been seized on by China, which is moving rapidly to shoulder older partners from Europe and the United States out of the way. Developing a “High Level Prosperity Partnerships” backed by diplomatic muscle and with the wheels oiled with aid funding is David Cameron’s answer to this emerging challenge.


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    "We are the party of aspiration on the side of those working hard to succeed."

    Speech to the Association of Convenience Stores Heart of the Community Conference in London

    I was so pleased to be asked to speak today because what we’re talking about is not only important to you, but it’s also incredibly pertinent to the area I represent - Streatham.

    It’s the place where I was raised. It’s the place where I learned so many valuable lessons of life, and the place I now represent in Parliament.

    On Streatham High Road and across my constituency, in shops, on the bus and in my surgeries people tell me about the struggles they face, their hopes and fears.

    The worries they have about bills rising faster than their pay packets.

    The emotion, clear in their voices when they talk about the dreams they have for themselves and for their families.

    And my constituents know a bit about retail as well - Streatham High Road is the longest continuous high street in Europe.

    So in preparation for today, it was to the High Road I headed. And this is what local businesses told me:

    To watch the video please click here.

    So that was Raj and Naharajah and I’m grateful to them for helping to bring a bit of Streatham to you today.

    They, like you in this room, who own and run convenience stores, tell us something very important about the British character today.

    The determination to shape your own future – through sheer hard work.

    Because working hard – all hours of the day and much of the night – to put bread on the table and serve your communities; that’s what you do.

    Because convenience for us can mean a whole lot of inconvenience for you: struggling to make ends meet, striving to create a better life for your families and for your children.

    And you’re doing it at a time of unprecedented change on the High Street, with the problems clear for all to see.

    40,000 empty storefronts across the country: shop owners forced to close their doors for the very last time, the sale signs still hanging in the window and the post piling up inside.

    And it’s not just our small shops.

    The list of household names who couldn’t survive the slowest recovery in modern times takes your breath away: Woolworths, Comet, JJB and the others.

    These are the result of a cost of living crisis, which is hitting our businesses as well as our families.

    A crisis where business rates have ratcheted up; energy prices have soared; parking charges have put off customers who have less money now to spend.

    But let’s be honest: they also reflect a bigger change in how people lead their lives.

    The new digital age has produced great benefits for some, but has made things tougher for you.

    It demands that you adapt and change, as so many of you have done: from the corner shop offering new services like Collect+ for online shoppers, to department stores creating great shopping experiences.

    But all you’re asking for is a bit of help.

    So - as the pressures on you mount, politicians like me face a choice.

    We can shrug our shoulders and say “nothing can be done, it’s just market forces”.

    Never mind that the heart is being ripped out of local communities as independent shops die and high streets become mono-streets, identical in every way.

    Or we can act.

    The answer, to me, is clear: we have to act.

    Because Our community depends on it.

    Our society gains from it.

    And our economy is strengthened by it.

    Why? Because, first, you are truly the heart of the community.

    The rhythms of the community beat in your stores: think of the early riser out with his dog who stops by each day for a newspaper and a quick hello; the harassed parent on the school run; that impatient guy who demands to be served first because he’s double parked; the groups of unruly school kids spending their lunch money.

    You know what I’m talking about: you see it in your stores every day.

    The owner of a small business just down the road from me put it beautifully and simply.

    He said: “I’m not just a business, I’m a community centre”.

    He is absolutely right.

    Second, the kind of society we want to build.

    We have to act because starting and running a local store gives people the ability to be the masters of their own destiny – especially important in times past to those from immigrant communities who found other routes to success blocked off to them.

    Entrepreneurship – running a local store – makes real people’s aspirations and is a powerful driver of social mobility.

    So we will promote it.

    Third, our economy.

    We have to act because it’s in our long-term economic interests to do so.

    Because the diversity and innovation you bring keeps the big brand stores on their toes.

    That’s good for British retail and good for our consumers.

    So we must give you the support you need to succeed.

    And we can do it if there is the will.

    In the Labour Party we have that will – because:

    We believe in strong communities.

    We are the party of aspiration on the side of those working hard to succeed.

    We want healthy and competitive markets that work for all.

    Now I know you don’t want to hear too much political point scoring, so let me give credit where credit’s due.

    In inviting Mary Portas to conduct her review, the Government showed the right intent and highlighted many of the issues critical to the future of the high street, although – even she’s been disappointed with their follow through.

    Broader measures like the Employment Allowance that cuts £2,000 off the National Insurance bill of all businesses are very welcome too.

    And the ACS has worked with the Government on its recent Strategy for Future Retail, which contains many sensible ideas to improve policy-making and encourage the spread of best practice.

    But here’s the thing: I believe the scale of the challenges you face requires action of an altogether different order.

    That’s why Labour has different priorities and will take different actions if we are elected.

    Since David Cameron became Prime Minister business rates have already risen by an average of £1,500 with another increase of £430 coming next April.

    This is squeezing businesses on our high streets who are already struggling.

    So – instead of yet another corporation tax cut for large businesses, we will help you by cutting business rates in 2015 and freezing them in 2016.

    Benefitting 1.5 million business properties.

    You know – there’s nothing stopping George Osborne matching our commitment to cut then freeze business rates in 2015 and 2016 when he delivers his Autumn Statement in two weeks.

    He should do it. And if he does, we will support him.

    Next, instead of sitting on our hands while you get clobbered by huge energy bills, Ed Miliband has made it clear we will freeze gas and electricity prices for 20 months while we reform a broken energy market.

    This will benefit every business in the country – large and small except for six: the big energy companies themselves.

    This freeze will save the average small business over £5,000.

    On planning we would give local people a real say over the future of their high streets, we will give local authorities the power to create vibrant High Streets by ensuring diversity.

    And we will look carefully at the ideas in Bill Grimsey’s high street review. Bill used to run Iceland and Focus DIY so he knows a thing or two about retail.

    And it’s not just about existing stores, but about helping young people who want to get going in business too.

    That’s why we asked the former MD of Innocent Drinks – Jamie Mitchell – for advice on how to support young entrepreneurs.

    Finally, supporting you also means supporting your customers too.

    The cost of living crisis means people can’t spend so much in your shops.

    That is what is driving our desire to strengthen the National Minimum Wage and promote the payment of a living wage.

    But I want to be clear: we will retain the social partnership model whereby the minimum wage is agreed by – you – business, employees and government working through the Low Pay Commission.

    And we will not force anyone to pay a living wage, but we do want to help make it worth your while to do so.

    In order to do these things we need to win in 2015.

    Let me tell you, we’re working hard on that too!

    But we don’t need to wait for government to act.

    Let me finish by telling you about a burning passion of mine over the last twelve months, which I think encapsulates our approach.

    One day, about a year ago, I was on the bus home from Brixton and I saw that the term ‘Small Business Saturday’ was trending on Twitter.

    Serena Williams was tweeting about it, Jessica Alba, and other celebs.

    I search the term on Google and I discovered what all the fuss was about.

    On one of the busiest shopping days in America, people are encouraged to spend their money locally, with small firms and to celebrate what they do.

    And it really makes a difference: on that one day it helped drive .5bn worth of sales in their small businesses.

    When I read this, I thought: we have to do this here.

    So I suggested we hold it on Saturday 7 December – one of the busiest shopping days of our year.

    We put out the call for people to organise.

    And the response has been incredible.

    American Express owns the rights to the name and they agreed to throw their weight behind a grassroots campaign for the very first UK Small Business Saturday.

    Business organisations large and small – including, of course, the ACS – representing over one million businesses support it.

    It celebrates local firms, attracts new custom to them and perhaps inspires others to start their own businesses too.

    Bigger businesses, like Lloyds and O2, have endorsed it.

    Over a third of local authorities, of all political parties and in all nations of the UK are taking part.

    And I asked the Government for their support and they’re in too – Vince Cable and the Prime Minister have both signed up.

    So now it’s set to be the UK’s biggest ever celebration of small businesses.

    Across the country groups of supporters have organised everything from Christmas Fairs to entrepreneur networking events to festivals. The Small Business Saturday bus is touring the country.

    Of course, it’s not the only thing that can be done to support small businesses, and on its own isn’t enough.

    But it’s a chance to act together for something that we care about, to show the power that we, the people, can have.

    Because in the end, we can give into fatalism, or give reason for hope.

    We can rage against the dying of the light, or we can organise for brighter days.

    We can’t do everything, but we can do something.

    And on 7 December this year – Small Business Saturday – we will be doing something important – for those who dream of creating a better future for themselves and their families; for those who work so hard to realise their dreams; for all those who are the beating heart of our communities – you, our local stores, our small businesses.


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    The ten must-read comment pieces from this morning's papers.

    1. Labour must step in to rescue a generation of doomed youth (Daily Telegraph)

    Ed Miliband wants to honour his promise to help the young, but it will not be cheap, says Mary Riddell. 

    2. Why the future looks sluggish (Financial Times)

    The glut of savings in leading economies has become a constraint on demand, writes Martin Wolf. 

    3. Childcare – like life – is about so much more than economics (Guardian)

    Miliband, Cameron and Clegg just don't get it: parents want options, and the recognition that there is more to life than money, says Zoe Williams. 

    4. China’s reforms will help propel its economy to the top of the global league (Independent)

    The shift in the one-child policy will have a profound social and economic effect, says Hamish McRae. 

    5. A new generation of politicians is coming (Times)

    Kennedy’s political generation shared values and experiences, writes Daniel Finkelstein. So did Clinton’s. Age can trump ideology.

    6. The SNP has no Plan B (Financial Times)

    We are being asked to give up the benefits of a full UK partnership, says Alistair Darling.

    7. Bombs in Beirut are overspill from the conflict in Syria (Independent)

    The war itself, and the vast refugee crisis, garner steadily less attention from the outside world, notes an Independent editorial. 

    8. Our exploitative sexual culture must be resisted in the real world too (Guardian)

    The internet's failings – the abuse, the hate, the ranting – are humanity's failings, and must be tackled face to face, says Jackie Ashley. 

    9. Romanians are already here, being paid £30 a day (Times)

    One way to reduce immigration would be to enforce the minimum wage properly, says Daniel Knowles.

    10. The days of believing spy chiefs who say 'Trust us' are over (Guardian)

    The world now faces total electronic penetration, with huge power to those who control it, writes Simon Jenkins. After Edward Snowden, we would be deluded to accept any assurances.


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    The party isn't planning to "scrap benefits for under-25s". It's planning to guarantee them work or training.

    There's been much outrage this morning at a report in today's Telegraph that Labour is planning to "scrap benefits for under-25s", with party supporters accusing it of entering a race to the bottom with the Tories. But the reality is more complex than the fury suggests. 

    The first point to note is that the idea is contained in an IPPR paper due to be published later this week; it isn't, contrary to what the Telegraph suggests, party policy (yet). The second is that the report itself doesn't even propose scrapping benefits for the under-25s. Rather, it calls for a new means-tested "youth allowance" for 18-24-year olds who are not in work or education. This would be set at £56.80, the same level as the youth rate of Jobseeker's Allowance, and would be conditional on participation in "purposeful training" or "intensive" job hunting. This might seem objectionable but it's some distance from abolishing all benefits for the young. 

    But there's another important detail that's been missed entirely. Were Labour to adopt the plan (with an announcement likely to be made in Rachel Reeves's first speech as shadow work and pensions secretary in January), it would do so only on the basis of guaranteeing all-under 25s a job (paying at least the minimum wage), or a place on an approved training scheme. The upfront costs will be high, but so will the long-term savings. This enlightened approach contrasts with that of the Conservatives, who have proposed removing all benefits from under-25s who aren't "earning or learning" but haven't offered anything resembling a jobs guarantee. 

    As Labour a spokesperson told me: "Labour policy is a jobs guarantee for young people.

    "Ed Miliband has talked about making the welfare system work for young people, with a compulsory jobs guarantee, to sustainably bring down the social security bill.

    "Compare that with Cameron's simplistic attempts to take benefits from all young people, which would harm the severely disabled, which were drawn up on back of a fag packet to try and please Tory conference."

    There are plenty of questions that remain for Labour. How will these jobs be created? Party sources suggest that companies will sign up to the scheme voluntarily but it isn't clear what incentives will exist for them to do so. Will jobseekers be offered a choice of posts are be forced to accept one unsuited to them? And how will it all be paid for? 

    But to one question at least - is Labour planning to scrap benefits for under-25s? - there is a definitive answer: no. By promising to guarantee them work or training, it's actually planning to increase them. 


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    Boris Johnson's time as mayor has been marked by expensive vanity projects masquerading as practical transport upgrades.

    East London's cable car, connecting the Greenwich peninsula with the Royal Victoria Docks, is - to the surprise of absolutely nobody - proving itself quite the failure. The latest revelation is that only four people used it as part of their commute in the week ending 19 October, according to ridership figures uncovered by Snipe London.

    Taking the cable car more than five times in any week triggers a discount for those who pay with Oyster cards, but considering the cable car connects two conference centres on either side of the river it’s unsurprising that so few people find it of any use. Here’s Darryl Chamberlain of Snipe:

    23,029 journeys were recorded that week – well down on the 42,463 a year previously. The sharpest drops were seen at the weekend, indicating the cable car’s novelty as a tourist attraction is fading.

    Indeed, the cable car’s second busiest day that week was Thursday, with 3,521 journeys, a figure likely to have been boosted by a teachers’ strike that day. Across the week, 468 students and teachers were carried free as part of a schools’ scheme.

    On top of the four regular Oyster commuters, just 18 multi-trip passes – allowing users to pay in advance for 10 journeys across a year – were sold, compared with 41 last year.

    This is, of course, just for one week. It might seem unfair to look at such a small dataset and declare the whole project a failure, especially seeing as there might have been some kind of post-Olympics boost last year that is no longer present.

    I’ll direct you to the work of Boris Watch, a blogger who has been doing excellent work keeping on top of the data that comes out of both Transport for London and the office of the Mayor of London. Here’s a chart he’s made of ridership data for the cable car so far in both 2012 and 2013:

    It started out not-great (if you exclude the Olympics, when it provided a direct link between two venues), and from there it’s been getting worse. This is why TfL has started referring to it as a tourist destination in itself - after all, despite what the Tube Map might claim, neither end of the cable car is particularly close to either North Greenwich or Royal Victoria stations - instead of pretending any more that it's of use as a commuter link across the river.

    I actually took the cable car last week, as I was heading to Royal Victoria Docks and it was on my (admittedly, unusual) route. Here's what it's like to take it, at night:

    It's hard not to feel that if the cable car had been located somewhere in central or west London (that is, somewhere tourists might want to visit) instead of east London - and its views of mudflats, the Beckton Sewage Works, and yuppie apartment blocks - it might have done considerably better.

    Boris' own transport projects are all in some kind of trouble, to an extent (unlike the ones, like the Overground, which he inherited from Ken Livingstone and which are exceeding all expectations). The New Bus For London is being rolled out to more routes around the capital despite being more expensive to run and, apart from aesthetically, arguably inferior on all the counts that matter (emissions, manoeuvrability, capacity) compared to the standard hybrid buses it is replacing. Boris’ attempts to sell it to Hong Kong were thwarted as the transport authorities there pointed out that its air conditioning is - as many Londoners discovered this summer - completely ineffectual. Their frequent breakdowns don't help sell them either.

    Barclays Cycle Hire also seems to be in trouble, with ridership slowly declining year-on-year, which means it is unlikely to (as originally hoped) eventually cover its own operational costs. This is despite £5m sponsorship per year from Barclays. The cable car is called the Emirates Air Line on the Tube Map because Emirates was supposed to have underwritten the costs of building and running it, but a budget overrun had to be footed by the taxpayer

    These are needless, frustrating expenses for TfL, which has some pressing issues to sort out elsewhere. Having to raid the budgets of things that are actually useful (like, say, the Underground) to finance boondoggles, while also dealing with a decreasing subsidy from central government, makes those inflation-busting London transport fares even harder to take.


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    Regular blood transfusions and five-year-olds doing "adorable" things aimed to help the North Korean dictator become the world's oldest man.

    By living to 82, North Korea’s late dictator Kim Jong-Il outlived the average citizen by over 12 years, but his former doctor has revealed that the country’s mad autocrat had been hoping to make it to 120 and had tasked a research team to ensure that he became the world’s longest living man.

    So, what were their recommendations for long life? According to Chosun, a South Korean newspaper, the research team decided that ensuring that Kim Jong-Il laughed regularly was essential. "We invited a stage actor to perform a comedy and got five- and six-year-olds to do adorable things,"  his former physician, Kim So-yeon, who defected to the South in the 1992 toldChosun.

    Kim Jong-Il reportedly loved foreign films too, amassing a collection of 20,000 movies and professing a love for “Daffy Duck” – so who knows, perhaps a daily dose of Disney was also just what the doctors ordered.

    He also received regular drug transfusions from younger men, his food intake was regularly recorded and his longevity research team researched the medicinal properties of 1,750 herbs.

    Dr Kim hasn’t been put off by her patient’s failure to live to 120, and blames it to Kim Jong-Il’s “greed” rather than her method. His $700,000 a year cognac bill can't have helped boost his life expectancy. Nor can the fact that, according to his official biography on the North Korean state website, he didn't defecate. Although if you believe that, you believe that he was born under a double rainbow at the precise moment a new star was born.

    Dr Kim’s published a book on her longevity research, so you, too, can try out the Kim Jong-Il diet. I’d rather not.


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    A poorly-judged tweet from Tony McNulty and the misdeeds of the Reverend Flowers meant Cameron ended Miliband's winning streak.

    After a succession of defeats to Ed Miliband, today's PMQs was the strongest David Cameron has enjoyed since the conference season. The email by Labour aide Torsten Bell describing Ed Balls as a "nightmare" and the woes of the Co-operative bank (a Labour backer) meant Miliband arrived at a disadvantage, but Cameron notably raised his game.

    Miliband started well by questioning Cameron on the threatened closure of a Sure Start centre in Chipping Norton (which lies in Cameron's constituency), noting that the PM had even signed a petition against the move - "imagine what he could do if he were prime minister?" Cameron's failure to keep his pledge to protect Sure Start and to prevent the closure of centres (there are now 579 fewer than before the election) means he is on weak ground on this issue.

    But Cameron quickly turned the session in his favour after quipping that Labour's plan to fund expanded childcare through a bank levy (which, he claimed, they had already pledged to spend on 10 other policies) was "a night out with Reverend Flowers" (a reference to the drug-using former Co-Op chief). Rather than keeping his flow, Miliband hit back with an attack on the Tories' unsavoury donors (adding, in a coded reference to Andy Coulson: "and that's just the people I can talk about in this House"), but by choosing to play on Cameron's turf, he quickly lost control of the exchange. In a neat put-down, the PM quipped that, in the form of the Co-Op scandal, he had "finally found a public inquiry he doesn't want". Miliband regained some ground by quoting Nick Boles's excoriating remarks on the failed modernisation of the Conservative Party, but it was the PM who ended in front. Miliband's unusual eagerness to resort to insult (Boles's comments showed Cameron was "a loser", he said) was evidence of his weakened position.

    At that stage, the contest was still finely-balanced but two further events swung it decisively in Cameron's favour. First, owing to the impressively swift work of his team, Cameron read out the text of a tweet sent mid-session (a PMQs first) by former Labour minister Tony McNulty (who failed to make the shortlist for the Brent Central selection this week), which declared: "Public desperate for PM in waiting who speaks for them - not Leader of Opposition indulging in partisan Westminster Village knockabout." Then, after joking that Michael Meacher had been taking "mind-altering substances" with Rev. Flowers, he was forced to respond to a point of order from the Labour MP (following cries of outrage on the opposition benches), stating that he was willing to withdraw the remark if it caused offence, but adding that "it’s very important that we can have a little bit of light-hearted banter and a sense of humour".

    In the circumstances, given Miliband's earlier defeat, it seemed like a rather desperate attempt by Labour to trap Cameron (it was clear that no offence was intended). Meacher's point of order handed Cameron another chance to rouse the Tory benches and to end the session on a high. Labour would be wise not to hand him such opportunities in the future.


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    Plus: Rafael Behr asks "What is Milibandism?", Alan Johnson on "What makes us human" and the NS's friends and contributors choose their books of the year.

    GENERATION ED: RAFAEL BEHR ASKS “WHAT IS MILIBANDISM?”
    IN THIS WEEK’S POLITICS ESSAY . . . AND IN A SPECIAL REPORT FOR BBC NEWSNIGHT TONIGHT

    COVER STORY: IS APPLE DYING?

    BRYAN APPLEYARD ON HOW THE TECH GIANT’S CROWN IS SLIPPING

    BOOKS OF THE YEAR: ED BALLS, JEMIMA KHAN, LIONEL SHRIVER, DAVID BADDIEL, VINCE CABLE, DAVID SHRIGLEY, ALAN RUSBRIDGER, SIMON HEFFER AND OTHERS CHOOSE THEIR FAVOURITE READS OF 2013

    PLUS

    ROGER MOSEY’S DIARY ON BRICKBATS FROM FORMER BBC COLLEAGUES

    “It’s daft to assume you can only be counted as a [BBC] supporter if you think the corporation should expand still further or that it should have the whole licence fee for ever.”

    ALAN JOHNSON: WHAT MAKES US HUMAN?

    ANDREW HARRISON ON THE LEFTY POLITICS OF DOCTOR WHO

    MEHDI HASAN: MUSLIMS HAVE A MORAL DUTY TO CONDEMN CHILD MARRIAGE

    MARTIN GAYFORD ON THE DEATH AND LIFE OF MICHELANGELO BUONARROTI

    FROM THE ARCHIVE: DORIS LESSING

    THE POLITICS ESSAY

    GENERATION ED: LABOUR IS WINNING THE BATTLE OF IDEAS

    In this week’s Politics Essay (and in a special report for BBC Newsnight tonight), Rafael Behr, the NS’s political editor, explores Ed Miliband’s mission to bring back socialism and reshape the British economy using the three principles of responsible capitalism, predistribution and “one nation”.

    Behr argues that Miliband is winning the battle of ideas and that: “It is worth taking seriously the possibility that Britain will one day be governed by a creed called Milibandism.” Though this is not yet a view shared by many in Westminster, he believes that it is “getting harder to write Miliband off”:

    A coherent pattern is discernible in the Labour leader’s actions. There is a consistent analysis of what is wrong with Britain and a systematic outline of the remedy.

    Pushing the pendulum

    “The critics are wrong to say that Miliband’s project is erratic or hastily assembled. (If anything, the charge that it is too determinedly intellectual is more fitting.) Milibandism takes a deep perspective, charting long political cycles from the postwar period to the present day . . . Miliband sees David Cameron engaged in a futile effort to breathe life into the corpse of an expired doctrine. He ascribes to himself the role that Thatcher once played, appearing at first as an unlikely leader, doggedly pursuing ideas that threaten to disrupt a complacent orthodoxy. Just as the Iron Lady once anticipated the swing of the pendulum away from suffocating statism, Miliband believes it is swinging away from market fetishism. Or, rather, he thinks it has the potential to move in that direction. ‘Sometimes you have to push the pendulum,’ Miliband once told me.”

    Reforming the party

    “For Miliband, being trusted by the rank and file as an embodiment of traditional Labour values is about more than job security. One part of his agenda that gets little attention but that aides insist is central to the project is the transformation of the party from a rusty bureaucratic apparat to a network of grass-roots activists. That work is led by Arnie Graf, the 69-year-old American pioneer of ‘community organising’, about which Miliband is evangelical. The principle is to win political support street by street, focusing on hyper-local issues and engaging people who would otherwise never go near a constituency party meeting.”

    What Milibandism lacks

    “There are still gaps in Miliband’s programme. His account of how Labour would champion hard-pressed consumers against wicked corporate interests is not matched by a determination to reform the public sector. He is more comfortable talking about market failure than failures of the state. His vision of party reform risks being lost in back-room haggling with the trade union leaders who finance the whole Labour show. His personal ratings, while improving, are still below the levels that usually indicate momentum towards Downing Street.”

    The tenacity of Miliband

    “It has always been easy to list the ways in which politicians might fail but it is getting harder to write Miliband off. He has displayed a tenacity that disorientates his enemies. Conservative attacks are contradictory. He is weak yet dangerous; ridiculous yet sinister. The latest Tory line is that he is a con artist, offering flimsy populism in the face of complex problems. So they recognise at least that the left can be popular.”

    COVER STORY: IS APPLE DYING?

    With the death of Steve Jobs, Bryan Appleyard fears the tech giant’s crown is slipping. The company is failing to innovate, he warns, and its Silicon Valley rivals are closing in.

    “The reason [for Apple’s lowered share price] is market scepticism about the post-Jobs regime. [CEO Tim] Cook is not Jobs and, since the iPad, there has been no spectacular product launch, only the usual stream of updates and improvements. His more conventional management practices are said to be counter-innovative. In addition, competitors are thriving, and most importantly Google and Facebook seem to have solved the puzzle of how to make money out of advertising on mobile devices. All of which is just another way of saying that Steve Jobs is dead.”

    A corporate freak show?

    “Consider this: Apple makes very few products – Cook once said its entire range could fit on a tabletop – and they are more expensive than the competition. So how has it become one of the biggest companies in the world? It has done so through the power of mystique, aspiration and industrial design; through, in short, the narcissistic, brutally competitive aesthetic obsessiveness of Steve Jobs. Apple continues to be formidably profitable – its stores, for example, have the highest sales per square foot of a retail outlet in the world. Yet Apple is not a viable business model: it is, like Jobs, an unrepeatable corporate freak show. Can it possibly be, post-Jobs, a freak show that runs and runs? The reviews are not yet in but doubt is priced into the shares.”

    What can Apple do next?

    “The next move in this game is, therefore, the cyborg – the part-human, part-machine, dreamed of by science-fiction writers. This is all about wearable computing or ‘technologically enhanced clothing’, as [editor of the Cult of Mac blog Leander] Kahney puts it. The widely rumoured iWatch may be the first step in this direction, though this would hardly be revolutionary, as there are many such devices already on the market. What follows may be, for example, clothing that tracks your vital signs – blood pressure, heart rate, and so on – giving you instant feedback so that you can adjust your behaviour. Apple Stores could thus become, in part, clothing outlets . . .This would be a move in the great Jobs tradition: the annexation of a new industry.”

    Apple’s USP

    “At the moment, Google is the favourite for gold, with Facebook as a possible silver if it can control its appalling public relations and crass handling of private information. Apple is on the ropes. I hope it won’t stay there for long for one simple reason. None of these companies is especially loveable; they are all power- and money-hungry operations that seem to think they have a right to remake the world in their own image . . . Yet Apple has a redeeming feature. It does, in spite of everything and thanks to Steve Jobs, make things beautiful.”

    BOOKS OF THE YEAR

    As 2013 draws to a close, the NS asks friends and contributors including Ed Balls, Jemima Khan, Lionel Shriver, David Baddiel, Stephen King, William Boyd, Robert Harris, Vince Cable, David Shrigley, Alan Rusbridger and Simon Heffer to share their favourite books of the year.

    Ed Balls opts somewhat unexpectedly for reading on a culinary theme:

    “My favourite (cook)book of 2013 is The Vietnamese Market Cookbook (Square Peg, £20) by Van Tran and Anh Vu, founders of the BanhMi11 street-food stalls in London. The recipes are not hard and the ingredients fairly easy to come by. But the balance of flavours is subtle and it is easy to get things out of kilter. I can recommend the pho ga noodle soup and the summer rolls, while the shaking beef with black pepper is sublime. For any amateur cook who likes new flavours and is willing to take risks, this book really is worth a try.”

    His colleague Rachel Reeves, the shadow work and pensions secretary, also makes a more personal choice: “The book I’ve most enjoyed reading this year is Janet and Allan Ahlberg’s Peepo! (Puffin, £6.99) – to my baby daughter.”

    Robert Harris’s novel An Officer and a Spy earns a place on two of our contributors’ lists with both the Evening Standard editor, Sarah Sands, and Andrew Adonis naming it a favourite read of 2013.

    THE DIARY: ROGER MOSEY

    Roger Mosey, who has recently exchanged the BBC bunker at Portland Place for the bracing air of Cambridge as the new Master of Selwyn College, ducks a series of brickbats from former colleagues who take exception to the suggestion that his erstwhile employer should slim down:

    Some colleagues asked whether I’d miss the newsroom on a busy day and the answer is emphatically no. As a newcomer to Cambridge, I’m knocked out by the city and its people and by what the university achieves, and it’s impossible not to have a song in your heart as you cross the bridge from the Backs into King’s College on a fresh autumn morning. I can say what I think now, too, which is cheering after 30-odd years of friendly corralling by BBC minders.

    That was the spirit in which I wrote a piece for the Times a couple of weeks ago suggesting that in tough times the corporation could still do its job while being slightly smaller. Deviation from past orthodoxy is as welcome to some former colleagues as a cat bringing in a mangled sparrow but there was plenty of support, too, including some from unexpected internal sources. The brickbats seemed to be about the principle of criticising the BBC rather than the argument itself. So let me be clear: I believe wholeheartedly in the BBC. But it’s daft to assume you can only be counted as a supporter if you think the corporation should expand still further or that it should have the whole licence fee for ever.

    ALAN JOHNSON: WHAT MAKES US HUMAN?

    The former health secretary Alan Johnson is the latest contributor to our series asking “What makes us human?” in partnership with Radio 2’s Jeremy Vine show. Johnson gives a moving account of his childhood and concludes that endurance and love are an intrinsic part of our humanity:

    I was fortunate enough to spend the first 13 years of my life with two incredible women who happened to be my mother and my sister. My sister, Linda, has been part of my life ever since but we grew up, raised families and now live on opposite sides of the world. If you asked us to define humanity, we’d both say that it was personified in the tiny frame of our mother, Lily, who had deep compassion, enormous courage and a capacity for selfless love that is the essential element of what makes us human . . .

    Lily believed in God, although she never went to church. Our moments of worship came when she found a shilling piece to feed the empty gas meter; or a piece of coal as we joined her on the trail of the coal man, picking up the chunks of black gold that dropped from his sacks as he delivered to the big houses in Holland Park. Faith and belief are very human traits, as are laughter and joy.


    PLUS

    Kate Mossman listens to the “exhilarating” new Lady Gaga album, Artpop

    Laurie Penny on the Bad Sex Awards and British smut-shaming censoriousness

    Kevin Maguire’s Commons Confidential

    Charles Bremner’s Letter from Paris on the hapless François Hollande

    Felicity Cloake on truffle trouble and the mushroom mafia in the food column

    Rachel Cooke watches Last Tango in Halifax and the final series of Borgen

    To purchase a copy, visit www.newstatesman.com/subscribe or visit the App Store


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    Rafael Behr on "Milibandism" and the Labour leader’s mission to reshape capitalism in Britain.

    You are invited to read this free preview of the upcoming New Statesman, out on 21 November. To purchase the full magazine - with our signature mix of opinion, longreads and arts coverage, including Bryan Appleyard's cover story on the decline of Apple, Alan Johnson's personal reflection on his family, and an archive piece from 1958 by Doris Lessing, plus our books of the year special - please visit our subscription page.

     

    It was the kind of challenge that made Tony Blair and Gordon Brown wince. “When are you going to bring back socialism?” called the man in the crowd to Ed Miliband at a rally in Brighton on the eve of his party’s annual conference in September. The Labour leader paused before offering a response that his two predecessors would not have dared deliver: “That’s what we’re doing, sir.”

    When, later that week, Miliband used his conference speech to call for a freeze in energy bills, Conservatives needed no more evidence to declare that Ed had definitively coloured himself red. He was portrayed by hostile media as a left-wing fanatic, dragging his party back to the 1970s with price controls and assaults on free enterprise. Yet the attack on energy companies was popular. It steered the conversation about Britain’s economy away from Budget discipline – where the Tories feel secure – to the squeeze on household finances. David Cameron found himself in need of a response to what Miliband had branded “the cost of living crisis”.

    The Labour leader followed up that success by shuffling his shadow cabinet, promoting young MPs from the 2010 parliamentary intake and sidelining veterans. In Westminster, this was interpreted as a consolidation of power, elevating a cadre of “Milibandites” largely at the expense of “Blairites”. When he was first elected to the leadership, Miliband had promised to “turn the page” on New Labour. Now it seemed the whole book had been burned.

    Is Miliband writing the sequel – or has his leadership been an exercise in smudging the line between “Old” and “New” Labour scripts? The purpose of this essay is not to judge whether he has found the formula for winning the next election. No one knows that. I contend simply that, beneath the froth of volatile daily news, a coherent pattern is discernible in the Labour leader’s actions. There is a consistent analysis of what is wrong with Britain and a systematic outline of the remedy. With Labour leading in opinion polls 18 months before an election, it is worth taking seriously the possibility that Britain will one day be governed by a creed called Milibandism.

    This is not a view widely held in Westminster. Even many Labour MPs are sceptical. The standard version of Miliband’s story is that he got the job by subterfuge – gaming a faulty election process with the help of trade union bosses – and was promptly exposed as lacking an agenda. He has been forced ever since to rely on disjointed tactical manoeuvres to stay in the game. In this view, his postures have been dictated less by conviction than by the need to manage tensions between factions of left and right, Blairites and the rest.

    Miliband’s friends concede that the circumstances of his election put him at a disadvantage. He had no base in the parliamentary party, no political machine. He was pilloried in the media from day one. Compromise was needed to secure his position. That does not preclude the existence of a bigger strategy. The Labour leader’s closest advisers have always insisted that there is a long-term plan and that its outline would be visible in time for a 2015 general election. Are they right?

    ***

    The first step in understanding Milibandism is to recognise why a page needed turning after the New Labour era, which had, after all, achieved three successive election victories. The defeat of 2010 marked the end of a journey that began with the trauma of Neil Kinnock’s defeat by John Major in 1992. That result taught a generation of rising Labour stars – Blair, Brown and Peter Mandelson – that society, not just the economy, had been refashioned by Tory rule. The opposition would be locked out of power for as long as it denied that liberated markets had made people prosperous. Labour could not ignore the aspirations of a self-made middle class, nor urge it to pay higher taxes for the sake of equality.

    In 2002, at a reception in Hampshire, Margaret Thatcher was asked what she considered her greatest achievement. She replied: “Tony Blair and New Labour. We forced our opponents to change their minds.” She was half-right. Labour’s mind was altered by fear of perpetual defeat but the party’s heart was anguished. The New Labour government exuded anxiety at the thought of being exposed as explicitly left wing. Blair never lacked self-confidence but Labour governed with the jumpiness of an occupying army. Under Gordon Brown, that brittleness, incarnate in the prime minister, became a governing pathology.

    In that context, the financial crisis that erupted in 2007 was a moment of both exultation and existential panic for Labour. The cause of the calamity appeared to be turbocharged market capitalism run amok on a global scale. It might have been a moment of vindication for the centre left but Blair’s and Brown’s successes had been predicated on partial surrender to the enemy ideology. So Labour’s demoralisation was more complex than the usual disappointment at having been beaten. The formula that had been devised in the mid-1990s for escaping opposition was felt to be obsolete at best, treasonous at worst.

    Two days after the 2010 election, Stewart Wood, an Oxford academic and Downing Street adviser under Brown, was sitting in the front room of Ed Miliband’s home in north London conducting a post-mortem on the defeat. The question the two men grappled with was this: was there an appetite in Britain for a new political offering from the left – one that could find mass appeal with radical determination to fix broken markets; one that would promise to work on behalf of the consumer, not simply strengthen the hand of the state? The conversation ranged from the monopoly-busting crusades of the US presidents William Howard Taft and Teddy Roosevelt to Germany’s postwar reconstruction under Chancellor Konrad Adenauer. Might an optimistic story of what the British left did next be salvaged from its crushing defeat?

    Fast-forward to the summer of 2013 and Wood, by then ennobled as a peer, along with Miliband and his chief speech-writer, Marc Stears (another Oxford academic), were dividing their time between the same front room and the nearby Kalendar café in Highgate, channelling the spirit of that conversation into the Labour leader’s game-changing conference address.

    The critics are wrong to say that Miliband’s project is erratic or hastily assembled. (If anything, the charge that it is too determinedly intellectual is more fitting.) Milibandism takes a deep perspective, charting long political cycles from the postwar period to the present day. The first phase encompasses a period of consensus about active state management of the economy, Whitehall-led intervention and support for the welfare state. That unravelled in the 1970s – a decade of interregnum marked by economic stagnation and inconclusive elections. The breakthrough was achieved by Margaret Thatcher. Her 1979 victory was narrowly won but – helped by splits on the left and suicidal Labour opposition – it evolved into ideological hegemony. Individual ambition, released from state control, would be the motor of progress. Riches would trickle down the social hierarchy.

    This phase lasts up to the collapse of Lehman Brothers bank in September 2008. New Labour, in this view, limited its ambition to compensating the losers from the new consensus with revenues skimmed from the winners. Brown’s Treasury achieved redistribution by stealth – an approach made easy in the short term since the City of London served as a cash cow. That option closed when boom turned to bust.

    According to this analysis, the coalition is another interregnum. Miliband sees David Cameron engaged in a futile effort to breathe life into the corpse of an expired doctrine. He ascribes to himself the role that Thatcher once played, appearing at first as an unlikely leader, doggedly pursuing ideas that threaten to disrupt a complacent orthodoxy. Just as the Iron Lady once anticipated the swing of the pendulum away from suffocating statism, Miliband believes it is swinging away from market fetishism. Or, rather, he thinks it has the potential to move in that direction. “Sometimes you have to push the pendulum,” Miliband once told me.

    His confidence is fuelled by evidence that the trickle-down mechanism stopped working well before the bubble burst. This point was the central argument in his conference speech this year. “For generations in Britain, when the economy grew, the majority got better off. And then somewhere along the way that vital link between the growing wealth of the country and your family finances was broken,” he said. Average wages began stagnating around 2003, even as the economy looked buoyant in national statistics. For many households, there has been a relative decline in income, which was masked by Treasury tax credits and rising personal debt. Benefits (a substantial portion of which goes to people in work) and credit cards covered up for the systemic failure of our economic model. Those at the top of the income scale were spared the squeeze as the proceeds of growth flowed upwards to a narrow wealthy elite.

    According to the Resolution Foundation, a think tank that has heavily influenced Miliband’s thinking, the richest 1 per cent now takes home 10p in every pound of income earned in the UK. The bottom half shares 18p in every pound. Most people’s spending power has been eroded by inflation. Net income for low-to-middle-earning households has fallen by an average of 7.5 per cent in the post-crash period.

    This, say the Milibandites, is a structural malfunction in the economy, not just a consequence of recession. It shows little sign of abating even as growth returns. Conservatives’ celebrations of economic recovery risk looking like the triumphal march of a class that was insulated from the privations of the downturn. Whereas Thatcher’s success was achieved by tapping into the aspirations of a rising middle class, Miliband sees the future of politics as belonging to the party that addresses the anxieties of a “squeezed middle” that fears downward mobility. For most of the postwar era, each generation has presumed that it will do better than the last – its children will be better housed and schooled and have better jobs. That expectation has gone.

    If that is the diagnosis, what is the remedy? So far, Miliband’s programme is largely emblematic, although he has been more candid about his intentions than previous opposition leaders at equivalent stages in their bids for election. The agenda can be divided into three parts.

    Responsible capitalism

    A year after winning the leadership, Miliband told the Labour party conference that his mission was to restore morality to business. He drew a distinction between “predators” and “producers”: those who get rich by exploitation and those who add value to society. That rhetoric was abandoned as it became clear that MPs were squirming when asked to flesh out the line with concrete examples. Yet the concept survives in Miliband’s attack on big energy companies, his pledges to crack down on tax avoidance and his plans for more regulation of payday lenders. He believes that people feel powerless before mighty corporations.

    This also expresses a structural weakness in the economy. The great liberalisation programme of the 1980s and 1990s transferred public assets to private hands on the presumption that competitive market forces would improve performance. That process, argue the Milibandites, was only half-completed. Shareholders got their dividends but customers did not get better service and regulators were weak.

    As a result of the Thatcherite settlement, politicians surrendered control over things that people deem essential in their daily lives – trains, water, heating, phone lines. It put citizens at the mercy of companies that enjoyed near-monopolistic positions or quasicartels in broken markets. Alongside beefier regulation, “responsible capitalism” means changing the way companies are run so that employees are better treated and better paid. It means, for example, favouring small businesses in the tax system and offering incentives for bosses who pay the “living wage”.

    Predistribution

    The offer to make capitalism more ethical was derided as unworkable. Miliband’s next big idea was ridiculed as unpronounceable. The term “predistribution” was coined by the Yale professor Jacob Hacker, who defines it in its simplest terms as “making markets work for the middle class” (although in the US “middle class” is a broader concept that includes many of what in Britain would be thought of as working-class households).

    The conventional left-wing approach to correcting inequality has been the reallocation of resources from rich to poor. This is problematic in various ways. First, at a time of Budget scarcity, the resources to achieve real social change are inadequate. Second, there isn’t much public consent for a system in which the state confiscates money from some people to give it to their neighbours, regardless of how needy they are. Third, it deals with the symptoms, not the causes. Redistribution alone cannot counteract the forces that drive inequality in a liberalised market economy.

    The “predistribution” approach puts the emphasis on changing the structures that make it hard for people without privileged backgrounds to get ahead. That could take the form of universal childcare, so more women can take jobs. It means recognising the central role that a housing shortage plays in holding back many people’s life chances.

    This, say the Milibandites, is about much more than spending priorities. It requires what Stewart Wood has called “a supplyside revolution from the left”. It is a counterpart to the Conservative assertion that employee protection stifles enterprise and must be stripped away for the good of economic efficiency. The predistributative reply is that productivity is boosted when staff feel secure, rewarded and well trained and have a stake in the company.

    One nation

    Public disaffection with the coalition has not translated into automatic support for Labour. Much of it has been channelled to Ukip. That is partly because Labour is tarnished as just another face of a discredited political establishment. It was also inevitable that a crisis in liberal globalisation would generate a backlash in favour of insular nationalism. In austere times, people become more jealous in preserving the privileges they have – fearing competition from job-seeking immigrants; resenting sharing public services with outsiders.

    In Miliband’s view, the Conservatives are also gaming the politics of fear and division, blaming foreign “benefit tourists” for pressure on the NHS, for example, and pretending that there is a neat division between industrious workers whose taxes fund the welfare state and idle layabouts who milk it. Recognising that he cannot win an arms race in that kind of rhetoric, the Labour leader wants to present himself as the author of a different, inclusive politics.

    The “one nation” rhetoric is an attempt to retell Labour’s history of building the NHS and the welfare state as part of a national story. The institutions founded under Clement Attlee, Miliband argues, are cherished fixtures of British identity. He has been influenced in this respect by the young Australian writer Tim Soutphommasane, whose work was brought to the Labour leader’s attention by Jon Cruddas, head of the party’s policy review.

    Soutphommasane, born to a refugee family, believes the left must “reclaim patriotism”, resisting liberal squeamishness about even discussing identity politics. Too often, that has surrendered the flag to blimpish reaction on the right.

    In policy terms, “one nation” translates as a determination to address those issues of social division on which Labour is least trusted by voters – immigration and welfare – in a manner consistent with the party’s self-image as a champion of fairness, defender of the vulnerable and bastion against prejudice. So, for example, the hostility to welfare spending must be met by asserting that job creation and higher wages reduce the benefits bill more reliably than cruelly ill-targeted cuts. Anger arising from a housing shortage should be neutralised by building homes, not by blaming foreigners for jumping council house queues. To sceptics, that is more evasion than confrontation of the issues. For the Milibandites, it is acknowledging public anxiety without indulging bigotry.

    The ambition not to fight on terms dictated by the right comes back to Miliband’s critique of New Labour, specifically its habit of taking internal opposition as proof of modernising vigour. Even self-styled Blairites concede that there was a tendency to see the approval of the Tory press and the outrage of the left as badges of honour. Miliband rejected that approach in the 2010 leadership contest when he declared, “As your leader, I will never leave this party behind.”

    His determination to honour that pledge is beyond doubt. To his critics, that has led to craven compromise with militant leftists whose instincts drive Labour into the electoral wilderness. His friends point out that a leader who is not suspected of being ashamed of his party ends up with much more room for manoeuvre over time. (The contrast is drawn with Cameron, who in opposition tried to “decontaminate” his party’s toxic brand with postures that outraged the Tory right.) For Miliband, being trusted by the rank and file as an embodiment of traditional Labour values is about more than job security. One part of his agenda that gets little attention but that aides insist is central to the project is the transformation of the party from a rusty bureaucratic apparat to a network of grass-roots activists. That work is led by Arnie Graf, the 69-year-old American pioneer of “community organising”, about which Miliband is evangelical. The principle is to win political support street by street, focusing on hyper-local issues and engaging people who would otherwise never go near a constituency party meeting.

    Graf’s approach is intended as a remedy to apathy. Miliband has described voters’ pessimistic surrender to the status quo as a greater threat to his prospects of winning an election than active support for the Conservative Party. Earlier this year, the Labour leader told me: “The right wins when there is fatalism, when no one can see a way out of their problems. We win when we convince people that there is a way and that we can set Britain in the right direction.”

    Miliband’s critics can think of many greater obstacles to a Labour victory. Chief among them is an economic revival that might allow the Tories to claim vindication for their austerity programme. If wages begin to recover in real terms along with national GDP, a central plank of the Miliband platform will crumble beneath him. His advisers are confident that won’t happen. Tories in the Treasury predict it will. Ed Balls’s commitment to the intellectual tenets of Milibandism is notoriously doubtful, although his determination to get Labour elected with Miliband as leader is unquestioned. As a pair, the two Eds are trusted less than George Osborne and Cameron as stewards of the economy.

    There are still gaps in Miliband’s programme. His account of how Labour would champion hard-pressed consumers against wicked corporate interests is not matched by a determination to reform the public sector. He is more comfortable talking about market failure than failures of the state. His vision of party reform risks being lost in back-room haggling with the trade union leaders who finance the whole Labour show. His personal ratings, while improving, are still below the levels that usually indicate momentum towards Downing Street.

    It has always been easy to list the ways in which politicians might fail but it is getting harder to write Miliband off. He has displayed a tenacity that disorientates his enemies. Conservative attacks are contradictory. He is weak yet dangerous; ridiculous yet sinister. The latest Tory line is that he is a con artist, offering flimsy populism in the face of complex problems. So they recognise at least that the left can be popular.

    The Conservatives should consider also the possibility that what Miliband says expresses something more substantial than a retreat to the pre-Blair era of Labour politics. Milibandism is not a complete doctrine but it is much more than nostalgia for the kind of high-taxing, spendthrift social democracy that its opponents want it to be. It does not seek to reverse the accommodations that New Labour made with Thatcherism. The times pose a different challenge. Blair was confronting a mismatch between a party that didn’t like the way the economy worked and a public that largely did. Miliband is reaching out to a public that doesn’t like the way the economy works but doubts the capacity of any party to fix it.

    If it pays off, the reward is a mandate to reshape British politics on terms chosen by the left in a way more profound than Blair and Brown did. It would refute the idea – the New Labour neurosis – that Britain is innately conservative and that egalitarianism must be smuggled past the electorate.

    No one claims that Miliband hides his agenda. No one should have been surprised that he called himself a socialist one afternoon in Brighton. He has said it all along. Days after winning the Labour leadership, he told the BBC of his plan: “It is my form of socialism which is a more fair, more just, more equal society. And that is the path that I will want to take our party on.”

    He has been true to his word. He has taken Labour on the journey that he outlined three years ago and brought it within sight of power. Ed Miliband’s toughest challenge now is to turn his ideas into a campaign that persuades enough of the country to abandon its present course and follow him further down that same path.


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    The tax burden on high-earning individuals has gone up not because politicians have been taking them for all that they’ve got, but because they’re the ones earning all the money in the first place.

    I think I've identified a new logical fallacy. It's quite a specific fallacy, admittedly, so best I can tell no one’s bothered to give it a name – but it's popping up with infuriating frequency nonetheless.

    You can spot this fallacy in action whenever the thorny topic of rich people and their taxes rears its head. This piece of obvious trolling, for example, comes from the beloved mayor of London who is, as ever, concerned for the welfare of the forgotten and disenfranchised:

    The top 1% of earners now pay 29.8% of all the income tax and National Insurance received by the Treasury. In 1979 – when Labour had a top marginal rate of 83% tax after Denis Healey had earlier vowed to squeeze the rich until the pips squeaked – the top 1% paid only 11% of income tax. Now, the top 0.1% – about 29,000 people – pay an amazing 14.1% of all taxes.

    In other words, even though tax rates have fallen, the tax burden borne by the rich has grown. Ergo, we should stop being so beastly to the poor lambs.

    Can you spot the hole in the logic there? I don't think it's particularly subtle, but it seems to have evaded Boris "he was an Eton scholar, you know" Johnson.

    Tell you what, here's another example of Elledge's Fallacy at work. (Hmmm. The name needs some work.) This time it's from the Mail's This Is Money website, and dates from February 2012, but the quote concerns a similar set of numbers to those outlined by Boris:

    Michael Spencer, chief executive of the City broker Icap and former treasurer of the Conservative party, said: “The debate about tax in this country has sadly become more and more about politics and less and less about what is good for the economy and for growth. All we hear about is ‘the rich must pay more; soak the rich’. Well the facts are clear; the rich are paying much more."

    Actually, the facts are not clear. The facts are very, very unclear.

    That’s because there are two numbers that could explain the rise in the share of income tax paid by the ultra-rich. One is the tax rate they pay; the other is their taxable income. Their share of the tax burden has gone up not because those latter day sans-culottes Gordon Brown or George Osborne have been taking them for all that they’ve got, but because they’re the ones earning all the money in the first place.

    All those figures quoted by Johnson and Spencer show is that inequality has gone through the roof. According to the Resolution Foundation, the share of national income going to the top 1 per cent of earners has, over the last 30 years, risen by a half (from 2 per cent in the late 1970s to around 3.1 per cent in 2010). Over the same time period, the share going to the bottom 50 per cent shrank by a quarter, from 16 per cent down to 12 per cent. Include bonus payments, which are mostly earned by those at the top, and the share of income going to the bottom half of the UK workforce stood at just 10 per cent.

    Let me say that again: half of British workers, put together, take home just one pound in every ten earned in Britain.

    Now there are all sorts of reasons for this (lower top tax rates, the rise of the City, globalisation, spiraling executive pay). Some of these are down to government action; some of them aren’t.

    But the ultimate result is the same. Britain could have been paying flat taxes for the last 30 years, and the share of tax paid by the rich would still appear to have soared. That's because – I can't believe it's even necessary to spell this out, but there it is – they're the ones with all the money.

    The upshot of all this is that figures showing the total share of income tax paid by the rich tell us nothing about whether they’re over-taxed or not. There may be good reasons to lower taxes on the rich – to stop the City decamping en masse to Zurich, say, or to prop up Britain's all-important luxury yacht business. (I doubt it, but what do I know.) But there is nothing in the figures quoted by Boris and his ilk to back up this point.

    All those figures tell us is that the biggest earners are taking home the biggest chunk of the money. That, oddly enough, we already knew.

     


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    A Conservative strategist says the party pulls two points ahead of Labour in Tory-held seats when the sitting MP is named.

    There was much gloom among the Conservatives recently after a poll by Lord Ashcroft of their 40 most marginal constituencies showed Labour ahead by 14 points (a larger swing than nationwide) in the 32 seats in which it is in second place. But the pessimists in Cameron's party have been cheered by some new data reported today. In a piece on why the Conservatives believe they can win a majority in 2015, Dan Hodges quotes one "Tory analyst" as saying of Ashcroft's poll: "We reran it in the seats we hold but included the name of the sitting MP. We were ahead by 2 per cent."

    The bounce, the Tories suggest, is attributable to "incumbency advantage" with sitting MPs benefiting from greater voter loyal than their unelected counterparts. The existence of this effect is not disputed. In 2010, both Tory and Labour incumbents performed disproportionately well. Labour's vote fell by 5.2 per cent in those seats where the incumbent stood again, compared to 7.4 per cent elsewhere, while the Tories' rose by 4.1 per cent in incumbent seats, compared to 2.9 per cent elsewhere. But without seeing the full results of the poll (the wording of the questions, the sample size, the weighting) it's hard to judge its reliability (it is always wise to be sceptical of off-the-record briefings on private polling).

    So, it's worth asking, why don't the Tories publish the poll for all to see? Under the rules of the British Polling Council, they may even be forced to do so. As the BPC states, "In the event that the results of a privately commissioned poll are made public by a third party (i.e. external to the organisation that commissioned the survey, its employees and its agents — for example the leak of embargoed research) the survey organisation must place information on its website within two working days in order to place the information that has been released into proper context." Lord Ashcroft, it is safe to say, will be watching closely.


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    An inequality test should be applied to all government policies to assess whether they will increase the gap between the richest and the rest.

    Today’s report on personal debt from the Centre for Social Justice makes for sobering reading. With average household debt at £54,000, nearly twice the level of a decade ago, it is clear just how many are struggling in austerity Britain.

    We’re told that the causes of this astonishing personal debt are people being forced to use credit to pay bills as the cost of living rises, as well as the legacy of cheap credit before the financial crash. These are clearly significant issues, but the reality is that they are part of a far wider, systemic problem. One that many seem unwilling to recognise. The gap between the rich and the rest has widened alarmingly over the past 30 years, with the UK now experiencing one of the highest levels of income inequality in the developed world. Study after study, in both the UK and internationally, has shown that as inequality rises, so does household debt.

    According to research by the Joseph Rowntree Foundation, single people need to earn at least £16,850 a year before tax in 2013 for a minimum acceptable living standard. Couples with two children need to earn at least £19,400 each. But according to the ONS, just under half of people don’t get £19,400. About a third don’t get £16,850. For years, people have been told that if they work hard, they’ll get the rewards, but that simply isn’t true anymore. This is partly a result of a greater proportion of UK jobs being low paid. The proportion of jobs classed as low paid by the OECD is now among the highest of developed nations, and around 20 per cent of employees earn below the Living Wage.

    Another issue is the increasing amount of insecure work such as temporary work and zero-hours contracts. Being trapped in a low-pay-no-pay cycle understandably plays havoc with budgeting. A further problem is a result of inequality driving up prices. This is most obvious in housing costs, where the average person trying to find a home finds themselves in a market where they are competing with people who are buying second homes, and with investors who are fuelling speculation-driven property inflation. In fact around 85% of new-build properties in central London and 38% of re-sales are estimated to have been purchased by overseas buyers.

    Perhaps the biggest problem is also the simplest. Pay for FTSE Director’s may have increased by 14 per cent in the last year, but for the average employee pay continues to fall behind prices. We’ve now had four years of pay falling in real terms for most people. To tackle the debt crisis, the government needs to focus on reducing the UK’s high levels of income inequality. An inequality test should be applied to all government policies to assess whether they will increase the gap between the richest and the rest. Raising the level of National Minimum Wage and incentivising employers to offer jobs that pay a reliable income is a key way of tackling debt, driving demand in the economy, and reducing social security costs.

    We also need a more progressive tax system, including proposals like a property speculation tax to stop the rich pricing the rest of us out of a home, but also a fiscal rebalancing away from consumption taxes like VAT, because they hit average and poor people hardest and hold back spending. Inequality is more than a driver of debt, it supresses our economic recovery and fractures our society. If the government wants to tackle debt, it needs to tackle inequality first.

    Duncan Exley is director of The Equality Trust


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    Young British people are choosing to emigrate to China, armed with strategies for chasing success. Why?

    William Vanbergen came to China at the age of 21, just after he finished his university studies. He came with the intention of creating something: a business. He had saved £6,000 selling double-glazed windows back in England, and using that he started a little company in Guangzhou, China’s southern metropolis.  

    Ten years later, Vanbergen’s company, which helps Chinese children apply to Britain’s elite schools, has offices spread across China as well as its own schools, the latest of which saw a $100m investment. The entrepreneur has been witness to China’s economic phenomenon and the resultant growth of China’s middle class. “I’ve seen a 25 to 30 per cent increase year-on-year in demand for overseas education”, he reports.  

    And he’s seen a rise in expats in his adopted home of Shanghai, in young plucky Brits who’ve made the journey to the East, to pursue careers and entrepreneurial ambitions. “You feel the buzz here, there’s an energy in the air. England is dreary and slow, and you need a lot of money [to start a business]. Everything’s been done. But where there’s change, there’s opportunity”. 

    Many have made their way to the Oriental giant over the years. But whereas those foreigners who achieved fame and fortune in China before sometimes stumbled into success, either by accident or serendipity, the intentions of those who come now seem qualitatively different. They chase success, with deliberate strategies.  

    Take Jamie Bilbow, for instance. The 25-year-old is a TV chef in China, after using smart marketing, "buzz"-generating tactics. I wrote about his story in the Independent. Such tactics included entering a televised Mandarin speech competition, and using a three-wheel bike to sell falafels to the Chinese public. The latter was a deliberate ploy, as the sight of the Brit calling out for custom in the traditional Chinese manner drew large crowds and national media.  

    Or Paul Afshar, who came to Beijing in his mid-twenties in 2011, started a business and has now sold the business in the past month, in two brisk years. His company specialised in selling air pollution protection products, a massive growth area in the smog-plagued capital.  

    There are countless examples, with more still coming to study Chinese or to take up internships. Alastair Douglas set up Tic Two, a company that provides internships in China. The 26-year-old Scot (another entrepreneur) says demand has come from both sides, as Chinese companies are hungry for more international staff, and students from western countries increasingly value knowledge of Chinese language, culture and business practises. 

    With a tough jobs market for young people and the general misery of austerity, Britain in the past few years has felt like one long, collective sigh. But those who journey to the East can find themselves leapfrogging a few rungs on the career ladder, fast-tracked into positions simply unavailable back home.  

    "It took me a few months of networking and an unpaid internship at City Weekend before I landed myself the Managing Editor role at Talk, the oldest expat magazine in China”, says Nyima Pratten, a 25-year-old with an interest in media, and a graduate in Management and Chinese. She feels Shanghai has more of an entrepreneurial spirit than Beijing (the two rival cities have vocal and loyal supporters) and that you have to do a certain level of hustling to get jobs, which may not be advertised. “People are very driven here and individuals are able to network and forge relationships with high level industry players in many social situations”, she explains. 

    UK and Chinese business relations saw a boost recently with the much-publicised visit by George Osborne and Boris Johnson. Announcing new visa regulations for Chinese visitors, and helping to secure investment for Britain’s nuclear industry and Manchester airport among others, the two were jovial, light-hearted and pandering to their Chinese audience. Some saw it as kowtowing and obsequious but their visit seemed to signal an increased, if a little eager, determination to encourage Chinese-British trade.  

    Does it herald a British "pivot" towards the East and especially China? America, South-east Asia and Australia now increasingly shape their economic, foreign and military policies in China’s direction. Time will tell exactly how Britain will deal with the ambitious outbound expansion of China’s corporations and what influence we might see domestically from the Brits in China who eventually ping back home. 

    Just in case you may think setting up in China is all-too easy and the streets are paved with gold, fair warning. “The first 10 per cent of establishing a business in China is the hardest”, says Chris Dobbing, a 24-year-old entrepreneur based in Beijing. “Registering a business in the UK takes maybe 10 minutes to do online, but it can take months in China”. Chinese business practises can also be ruthless: where there’s opportunity, there is also rapid copy-catting, suppliers who will think nothing of upping costs if they smell a client’s success and unscrupulous business partners.    

    But the rewards are manifest. “Forget the BRICS”, says Dobbing. “It’s all China. In the last few years, China’s basically added an India to its economy. But we need much greater engagement. Right now in the entire UK parliament, there’s only one person who speaks Mandarin”.   

    British companies have taken notice. The British Chamber of Commerce in Beijing has seen a 120% uptake in applications since 2011 for their initiative which helps British companies to establish themselves in China. The number of visitors and residents to Beijing and Shanghai has seen significant increases in the past few years. Exports have recorded a 16% growth from 2012 for the first six months of this year.  

    Do you care about any of this? Does any of this genuinely matter to you? Of course China is geopolitically and economically vastly important, but how can China help you, right now, sitting there reading this article? Well, it will help if you think of "China" as an idea.  

    But first, what’s the value of this story of entrepreneurs in a far-flung locale? It was Rolf Potts, the travel writer, who noted that expats' experiences often don't filter back home because some expats never return, or if they do, don’t tell their stories.   

    But in this global age, with abundant publishing platforms and the ease of communication, it is important that overseas Britons not only lead the way, but their stories are told in order to better understand how markets and societies evolve.  

    Websites like qz.com, catering to internationally savvy business people, and primarily designed for mobile and tablet users, have refocused their reporting on"phenomena" rather than traditional "beats". 

    What this means in practise are readable, angular stories exploring how, for example, the health-conscious taste for coconut water  is outpacing palm plantations' supply in south-east Asia. And what "Japanese maple trees tells us about the US economy". It suggests that people want to know how trends connect and how individuals' habits have effects across borders.     

    Those young entrepreneurs now achieving their goals with the stimulating aid of a new emerging market might indicate a small but growing trend whereby migrants from Britain, America and European nations grows from a trickle into a stream, all flowing to emerging economies. Appetites for their 'exotic' stories and international phenomena can only grow if increasingly people decide to move.  

    And what is there to learn from China, as an enterprising idea? In China, and much of Asia, there is a culture and speciality of small business. There are grandmothers who sell yoghurt out of ice boxes on the side of roads, students who turn their dorms into warehouses selling products on Taobao (China's ebay), and rural migrants who set up stalls, or if they are families, restaurants in the big cities. It makes the idea of starting a business much more humble and homely than the den of dragon's sorcery with which Britons associate it. 

    And perhaps those Brits who journey over start noticing the pluck of those rural migrants, or more likely, they hear about the successes of others and want a piece of the action. For those of a more romantic bent, an element of manifest destiny, a small part that has enveloped the idea of adventure must take root - "Go east, young man. Go east and seek thy fortune".

     


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    As a veteran of many Console Wars, Alan Williamson believes that the best console is the one you have with you.

    This year brings the most boring games console launch in history. I don’t mean that in a hyperbolic, share-this-incendiary-link-with-your-friends way: having lived through and been an active combatant in four generations of console wars, like many former soldiers I have now become an advocate for peace.

    The First Great World Console War broke out in the early Nineties between Sega’s Mega Drive and the Super Nintendo Entertainment System (Nintendo’s progress in the 1980s was more a swift annexation). Both manufacturers were then broadsided by the introduction of the Sony PlayStation in 1995. Since then we have descended into effective Cold War, an ever-escalating technological arms race between equally weighted armies with few casualties. While there was isolated fighting in smaller Handheld Console Wars, a gaming Vietnam where Pokémon waged a guerrilla war for children’s minds, the Fourth World Console War ended with over eighty million consoles sold for each belligerent. I’d make an analogy about PCs and the United Nations, but I think the metaphor is already stretched to breaking at this point.

    Each generation of the Console Wars had its own innovations, each console its own personality and fan base. The second saw the birth of affordable 3D graphics and some of the most critically-acclaimed games of all time, such as Legend of Zelda: Ocarina of Time, Metal Gear Solid and Final Fantasy VII. The third was dominated by Sony’s PlayStation 2 (don’t blame me, I had a Dreamcast) but also saw the beginnings of online play and the rise of Xbox megabrand Halo. We’re now at the tail end of the fourth generation, which has brought consoles mostly up to speed with PCs through high-definition graphics and digital distribution of games.

    The war has reached a stalemate: Sony and Microsoft still rule in their home countries, while a Nintendo Wii gathers dust in every living room of the developed world. As a consequence of the global recession, game publishers have tried to extract even more revenue from a squeezed market. Witness the rise and demise of the loathed ‘online pass’, now replaced by the euphemistic ‘season pass’; paid downloads on day one that unlock content already on the disc; pre-order bonuses; and free to play games - or as I like to call them, pay to play games. History will show this generation as one that expanded the monetisation of games as much as the experiences themselves, often to the detriment of fun and artistic merit.

    So here we go again with two new omnipotent wonderboxes, the PlayStation 4 and Xbox One. The games look much the same as the old ones: of course, similar criticisms were levelled at the Xbox 360, but even a layman could appreciate the beauty of Project Gotham Racing 3 compared to its predecessor. Perhaps it was the somewhat-sweaty razzmatazz of Earl’s Court at Eurogamer Expo in September, but I just couldn’t tell the difference between Forza Motorsport 5 and Forza 4, and I’ve played over fifty hours of Forza 4. With big franchises like Call of Duty and Assassin’s Creed launching on both consoles, as well as their predecessors, the choice is based more on ideology and available funds rather than real quantifiable differences. In fact, with so few games available, it makes less sense to buy a PS4 than a PS3.

    Games journalists are in a difficult position. Those who haven’t been invited to New York for a complimentary gold-plated PS4 (I’m writing on a train travelling through Slough, but thanks for asking) will have pre-ordered the expensive new consoles to support their job, adding buyer’s remorse to an increasingly-dominant business model of offering their words online for free, funded by advertising. This model relies on hyperbole: every month a new ‘best game ever’, every day an announcement of something on the horizon, every minute a constant stream of rumour posts. It focuses on sensationalising games and the machines that play them, rather than criticising them. It encourages critics to follow the zeitgeist rather than dwelling on the games that linger in our minds. It blurs the lines between editorial and advertorial: after all, what is a news post about a PlayStation TV commercial if not advertising?

    The YouTubeisation of publishing elevates every berk with a webcam and an opinion to the same level as the seasoned journalist. The Twitterisation of news encourages news-breaking, but not fact-checking. This isn’t unique to coverage of videogames, but the medium is entangled with technology and therefore at the forefront of innovations in publishing. Meanwhile, channels like PlayStation Access and Nintendo Direct show that publishers can successfully skip the middleman and advertise directly to customers. A new generation of games consoles deserves newer, deeper ways of looking at them - something outlets like Press Select, Boss Fight Books and my own Five out of Ten are trying to address. But we may be at the stage where readers are better served by the groupthink of their peers than the proclamations of journalists, where real decisions are made and discussions are had below the line.

    While we’re keen to proclaim that videogames now generate more revenue than cinema, few have asked whether that was sustainable or even desirable. While digital distribution has led to a bigger market for indie developers, especially on the PC and smartphones, the biggest successes like Call of Duty and Battlefield are better for their publishers than the people that make them. In the UK we’ve seen the closure of much-loved studios like Blitz Games and Sony Liverpool, while other British studios like Rare have lost their lustre; the team that made the charming Banjo-Kazooie and Viva Piñata now produce bland sports titles, a reflection of the wishes of their corporate overlord Microsoft. The industry undervalues its creators and programmers, encouraging a ‘crunch’ culture with unpaid overtime and ridiculous hours. This system where distributor-takes-all reminds me of the Hollywood visual effects studio Rhythm and Hues, which won an Oscar for Life of Pi before declaring bankruptcy. If videogames really are such an important industry, they can do a lot better than emulating Hollywood in content and working culture.

    Some pundits believe this may be the last console generation. I’d like to believe otherwise. I have fond memories of consoles and continue to make more: they provide a cheaper entry point into the fantastic worlds of fiction that games offer, without the expense or complexities of a PC. Yet perhaps games have outgrown the traditional model of consoles: the exponential growth of indie games is better suited to the less restrictive system of a personal computer, mobile phone or even the Ouya ‘microconsole’. Valve’s SteamOS promises the power of Linux married with their friendly distribution platform. While Sony and Microsoft are taking steps to open development on their consoles, their revenue model is built on strict control of the system: they focus on making money off the games they sell, not the platform itself.

    Even more exciting are devices like the Oculus Rift, a virtual reality headset that offers a sea change in the way we play games. However, according to its creators it requires tremendous computer horsepower to be convincing - more than even the Xbox One and PS4 can provide. For years, consoles offered the best way to play games, but with that advantage gone they’re like digital cameras in a world where everyone has a camera built into their phone. I choose that analogy carefully, because I think portable consoles like the Nintendo 3DS are much better than an iPhone for games, but there’s a trade off between quality and the utility of having an all-in-one device. The best console is the one you have with you.

    “War never changes,” mused Ron Perlman in the introduction to 2008’s Fallout 3. But this is a war that needs to change if games consoles are to expand, or merely retain their cultural relevance. Consoles used to represent inclusivity and the comforts of socialising with friends, but now they are targeted at an audience - and a medium - which is growing up and leaving them behind.

    What should I buy?

    I don’t play games, but I’d like to start

    Nintendo’s latest console, the Wii U, is an underrated box. It’s cheaper than the competition and can play older Wii games as well as its new, shinier ones. Nintendo still make the best games, appealing to both children and adults like the videogame equivalent of Pixar. Unfortunately, also like Pixar, they release one great product every two years. Super Mario 3D World and Legend of Zelda: The Wind Waker are better than anything PlayStation and Xbox can offer this year.

    Not only is the iPad a great computer, it’s also a great way to play games. But please avoid the mainstream tosh like Candy Crush Saga and instead try innovative titles like The Room, Year Walk and Device 6.

    As an alternative, the website Forest Ambassador lists free five-minute games that work on most computers, and has the feel of a hippie art gallery. Hopefully, that last sentence will tell you whether you’ll like it.

    I play games on my phone and want something better

    The Nintendo 3DS goes from strength to strength with life absorbers like Animal Crossing and Pokémon X, plus the usual Mario, Mario Kart and Zelda. Since you probably won’t use the retina-bursting 3D functionality, you may as well buy the cheaper 2DS. It can also play games from the vast library of DS titles.

    Steam is a free download for any computer running Windows, OS X or Linux and has an unrivalled library of games, from the biggest new releases to smaller (but no less compelling) games like Spelunky, FTL: Faster Than Light and Redshirt.

    I want the best gaming experience available

    PS4, Xbox One or a monster gaming PC. Choose a side, then spend the next five years of your life attacking the option you didn’t pick in internet comment threads.

    Alan Williamson is Editor-in-Chief of the videogame culture magazine Five out of Ten


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    George Bingham, the fifth earl of Lucan, served in the rifle brigade before moving into politics, winning the 1904 Chertsey by-election for the Conservatives. He became the only Conservative ever to lose the seat when he was swept aside by Frank Marnham in the Liberal landslide of 1906.

    Marnham only served one term, asking parliamentary questions about the exemption of sheepdogs from the dog licence and the number of road signs in each county council denoting danger to pioneering motorists. Surrey had 420.

    Both lasted longer than John Fyler, who resigned 15 months after he won the 1903 by-election and is not recorded as speaking in the Commons at all. Philip Richardson, elected in the 1922 by-election, won a silver medal at the 1908 Olympics in the men’smilitary shooting team.


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