Category Archives: Business and Law

Will Hutton – Fizzing with ideas for the UK economy, a new social contract and a vision for the UK as a centre for global innovation!

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This post was contributed by Tim Lewis, a 2nd year student on Birkbeck’s MSc Corporate Governance and Ethics.

When the organisers of the Birkbeck Business week booked Will Hutton (28th June 2012) to give the week’s final lecture on the title “It was bad capitalism that got us into this crisis – good capitalism that will get us out” they could not have predicted that this event would coincide with the zenith of another major news story. Not Germany’s unexpected exit from the Euro football championship to Italy in that night’s semi-finals, but the results of the FSA Libor interest fixing investigation into Barclays.

News of this scandal, combined with a software glitch at RBS, resulting in a payments backlog, earlier in the same week, were perhaps symptoms of the kind of bank-made, self-interested incompetence and poor service, that represent the bad capitalism that the UK economy currently finds itself in.

Against this backdrop, well ok a Powerpoint with the lecture title, and after a brief introduction from Professor Jonathan Michie, Will Hutton took to the lectern. Right from the start his examples and anecdotes, ideas and concepts, came tumbling forward in an avalanche of electric rhetoric and accompanying slides …

The Bad Capitalism that got us into this Crisis ....

Hutton’s definition of bad capitalism is the one advocated by the US Neo Classicists, with its strong emphasis on free markets, flexible workforces, unfettered by regulation, and prices governed by supply and demand. The dominance of this model, Hutton argues, whilst illustrating a necessary part of the capitalist system, has distorted the social impact of market changes. He sees boom and bust as an inevitable part of the economic cycle, a product of new technologies and innovation. However, Hutton argues, there need to be some interventionist mechanisms and reformed institutions in place to socialise the downside risk.

Hutton is unashamedly a Keynesian economist, by this he means ‘not just the Balfourism’ that lead to the UK welfare state, but the broader view of capitalism, advocated in Keynes ‘General Theory’.

The financial background that got us into this mess?

Hutton showed, through a series of graphs, the rise of UK financial capitalism starting with the relaxation of credit controls in the mid 1970s, which sowed the seeds of an exponential growth in banking, wages and credit. This created an unbalanced and unsustainable economy. He saw the crash that came as inevitable, and it benefited the wealthy disproportionately, bypassed the least advantaged and left a disastrous unbalanced social and economic geography.

More controversially, he argues that had we entered the Euro when Labour came to power in 1997, this may have given the UK a more stable trade credit and balance of payments position from which the industrial and manufacturing sectors could have enjoyed growth rather than further decline.

Hutton spared no punches in criticising both major political parties for getting the UK economy into this shape, but he describes former Chancellor and PM Gordon Brown as ‘the worst steward of the UK economy ever!’

Good Capitalism will get us out …

From this analysis, Hutton begins to define his vision of good over bad capitalism. Features of bad capitalism include, aside from a general lack of transparency and accountability; ‘unproductive entrepreneurship’ – CEOs requiring high remuneration unrelated to rewards or personal liability, and ‘ownership tourism’ – in which UK strategic companies are bought and sold by foreign owners without governments holding golden shares.

Good capitalism consists of the kind of stakeholder capitalism he has outlined in books and newspaper columns since The State we’re in (1996) and his most recent publication Them and Us (2011). Hutton advocates a collaborative approach: transparent, democratic, with committed owners dedicated to productive entrepreneurship, proportionately rewarded and dedicated to business outcomes measured through balanced scorecard, rather than the financial bottom-line.  The core values of this approach are fairness, due desert and proportionality.

Socialising Risk…‘A New Social Contract’

Linked to this economic vision is a more flexible and modern networked vision of intervention after market failure. Hutton proposes new institutions, including trade unions that act as ‘employment shock absorbers and enterprise partners’, rather than conservers of declining industries, the status quo or as advocates of ever-burgeoning pay demands. Hutton outlines a new workplace bargain, called ‘flexi security’, in which workers accept less job security in exchange for training plus lifelong learning and unconditional unemployment benefit. His vision includes provision for New Housing and forms of ownership beyond owner occupancy. In addition he advocates education reforms, including a variant of the German Berufsshule (apprenticeship) system. The current UK apprenticeship programme, while welcome, is inadequate he argues.

Creating An Ecosystem for Innovation and Growth…

By laying the foundations of a good capitalism, backed by the values of fairness and a new social contract, Hutton hopes to create new business ecosystems from which new enterprises, primarily SME-based and new sustainable innovation can flourish! It is this need for innovation that is the driving force behind the Big Innovation Centre, founded by Hutton in November 2011.

Getting us out of the state we’re in?

If this seems like a grand and utopian vision, Hutton is unrepentant, he concedes if we can move some way forward on this path, its far better than the austerity-driven ‘Plan A’ of the current Conservative /Liberal Democrat coalition.

Hutton argues there is no current debt problem. Debt in the 1930s depression was 19% of GDP. Today, the debt is just 3% of GDP and underwritten by 14 year government bonds. He predicts Chancellor George Osborne will in future come to regret Plan A, as Churchill did when tying the UK exchange rates to the gold standard in 1925. He predicts that continuing down the current path will lead the Coalition to fall before the current 2015 expiry date.

Time will tell if his predictions are well-founded, but Will Hutton offered a compelling analysis and challenging vision for the UK’s future prosperity, social equality and innovation that was well worth listening to. He left the lecture audience, fizzing with new ideas and insights. A fitting finale, to end Birkbeck Business week 2012!

Photo by Richard Beard

Civil liberties under threat

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This post was contributed by Guy Collender from Birkbeck’s Department of External Relations

Legal experts analysed and challenged the controversial police tactics used against protestors in the UK as part of Law on Trial at Birkbeck. 

The lawyers emphasised the role of protest throughout history, and argued that heavy-handed policing and cuts to legal aid are undermining dissent. The police, it was predicted, are likely to increase their use of stop-and-search powers during the Olympics this summer. The presentations largely focused on kettling – confining demonstrators to a small area – and the response of the authorities to occupations. 

Professor Bill Bowring, of Birkbeck’s School of Law and the International Secretary of the Haldane Society of Socialist Lawyers, chaired the public event on 19 June as part of Law on Trial – a week-long series of legal talks. He began by explaining the School’s progressive and critical approach to the study of law. Bowring said: “We do not take law for granted as something that comes down from above with some sort of divine status. We interrogate it.”

Kat Craig, a solicitor at Christian Khan and Vice-chair of the Haldane Society, continued by highlighting how dissent has played a “fundamental and crucial role” in changing society for the better, including gaining the right for women to vote. However, she pointed out that current major cuts to legal aid and the exclusion of certain areas of protest law from such support are undermining access to justice.

Craig spoke about representing protestors engaged in litigation against state bodies, including the police and Home Office. In particular, she mentioned cases against the police use of kettling, which has become commonplace during demonstrations, including student protests, in recent years. She said: “Kettling is indiscriminate. I am firmly of the view that kettling is an infringement of Article 5 [the right to liberty and security of person, European Convention on Human Rights]. The House of Lords and the European Court of Human Rights have disagreed, both saying that kettling is not a breach of Article 5.

Owen Greenhall, a pupil barrister at Garden Court Chambers and an Executive Committee member of the Haldane Society, referred to protestor occupations during his presentation. He briefly outlined the history of such events, from the Greensboro sit-ins at segregated food counters in North Carolina in the 1960s to the more recent protests in London in Parliament Square and outside St Paul’s Cathedral.

Greenhall highlighted the trend towards by-laws restricting certain activities in high-profile places, and the difficulty of challenging these new rules. For example, the Police Reform and Social Responsibility Act 2011 includes provisions for a “constable or authorised officer” to stop protestors engaging in “prohibited activities”, including using “amplified noise equipment”, erecting tents and using “sleeping equipment” in Parliament Square. A similar by-law has also been passed in relation to Trafalgar Square.

During the question and answer session, concerns were expressed by Craig about the likely increase in the use of stop-and-search in East London during the Olympics.

Listen to the audio recording of the presentations

Last summer’s riots centre stage during Law on Trial

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This post was contributed by Guy Collender from Birkbeck’s Department of External Relations

The fear was tangible. Office workers scurried home early, shops were boarded up, and watching the nightly news became a habit borne out of anxiety. Are the riots still spreading? When will order return to the streets?

The rioting in England last summer sparked much soul-searching. Is our society broken? Can we expect more looting and violence on our streets? Or were the activities of those four nights last August an aberration?

Politicians, the police, commentators and the rioters themselves quickly rushed to varying conclusions to explain what caused the outbreak of civil disorder, which quickly spread across London and to other cities, including Birmingham, Nottingham, Liverpool and Manchester. David Cameron spoke about “criminality, pure and simple”, Ken Clarke blamed a “feral underclass”, and others blamed the police, government cuts, inequality and marginalisation for causing the anger and violence that erupted during those summer evenings.

All these issues and the drama of the riots were re-visited during a talk at Birkbeck about a pioneering research project to understand the lives and motivations of the young people out on the streets, and fill the void left by the absence of a major official public enquiry. The talk on 20 June was one of the highlights of Law on Trial – a week-long series of events organised by Birkbeck’s School of Law about crime, order and justice.

Professor Tim Newburn, of LSE, explained how the unusual and rapid research collaboration between The Guardian and LSE (funded by the Joseph Rowntree Foundation) began, and he shared its findings based on one-to-one interviews with 270 people involved, or close to, the riots.

Newburn summarised the results of the Reading the Riots study, which were printed in The Guardian last December. The majority of those involved in the riots were young (65% were between the ages of 10-20); 79 per cent were male, and their main activities were identified as follows: anti-police (24 per cent), looting (40 per cent), criminal damage (14 per cent), and as observers (22 per cent).

The rioters’ accounts revealed how many regarded the events as exciting (“the best three days of my life”), an opportunity to loot, and a way of expressing their widespread anger and hostility towards the police. Many of the young people also spoke about poverty, austerity and the lack of opportunities. Of the adults prosecuted for rioting, 35 per cent of them were claiming out-of-work benefits (as compared to 12 per cent within the working age population).

Newburn said: “It has come to an extremely bad position where young people talk about this [the riots] as an exciting opportunity. The sheer widespread mass looting that occurred is of a completely different order.”

Emphasising that “there is no simple explanation” for the riots, Newburn listed a range of reasons, including a “broad sense of disenchantment”, “a substantive experience of social marginalisation”, and “a sense of diminishing opportunities in modern England.” He also warned that riots are “more, rather than less, likely” in future because the conditions that caused them in the first place are still present, and may even be deteriorating. Almost 40 per cent of those interviewed said they would get involved again in future. This is a sobering thought indeed, especially as the eyes of the world will be focused on London this summer during the Olympics.

Results from the second phase of the Reading the Riots study, based on interviews with police officers, defence lawyers, victims and vigilantes, are to be published in The Guardian in early July.

 

 

 

JENGbA – Joint Enterprise Not Guilty By Association

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Presentation at Birkbeck on Wednesday 9 May 2012; 7 – 9pm.

Debbie Johnson, a student on Birkbeck’s MA Gender, Sexuality and Culture:

The Joint Enterprise Law is hailed as the answer to ‘gang crime’ in Britain.  However, an alarming number of teenagers are currently serving life sentences for being ‘guilty by association,’ or simply being ‘in the wrong place at the wrong time.’  This includes being imprisoned for crimes they did not commit, could not have foreseen, had no intention of committing or even in numerous cases – tried to prevent happening.

JENGbA campaigners Gloria Morrison, Patricia Brown and Karen Horlock spoke at Birkbeck last Wednesday evening about the implications of the Joint Enterprise Law (JE) and why we should be concerned about its current application.

The evening began with a short film detailing the history of JE.  It is a law over 300 years old for the prevention of illegal duels holding equally culpable all in attendance, not only the combatants but also the medics or any witnesses – they would all be ‘guilty by association.’  It is this law which has re-emerged as Britain’s answer to ‘gang crime.’  However, its current application is targeting large numbers of working class families in Britain particularly those from Black, Asian and Ethnic minority groups.  JENGbA are campaigning for the reform of the Joint Enterprise Law.

Karen Horlock spoke first relating how the JE law had devastated her family.  Her son is serving a life sentence for a crime he did not commit and despite having witnesses to testify that he was not present at the crime, he was imprisoned because he knew some of the people involved and by JE law is ‘guilty by association.’  Karen questioned why her son – a 30 year old married man – has been imprisoned under an archaic law supposedly used to prevent teenaged gang crime.  Karen further explained the impossibility of the appeal process; it is inadmissible to use evidence used during the trial, you are required to find fresh evidence ‘how do you find DNA evidence to prove you weren’t there?’ said Karen to the stunned audience.

‘It encourages lazy policing,’ said JENGbA campaigner Sharon Spencer sat in the audience, the police no longer need to find evidence, you are guilty simply by knowing the person who is involved, ‘people have been imprisoned for a phone call.’

Patricia Brown then spoke about her son.  While walking home from school with a friend, they were attacked by a much older boy, Patricia’s son managed to break free, he was 15 years old at the time and ran home scared.  Later it was discovered that his friend had stabbed the older boy.  Patricia’s son was sentenced to 15 years in prison for a crime he did not commit, was not present at and – as also required by JE law – had no forethought or knowledge of.  Patricia was visibly distressed, speaking just above a whisper, she like Karen is still grappling with the enormity, and pain of what has happened to her son.

Campaign Coordinator Gloria Morrison then gave what proved to be a rousing finale to the evening.  Gloria outlined JENGbA’s aim to not only campaign for the reform of The Joint Enterprise Law but for solidarity with all miscarriages of justice.  Gloria cited many examples of social injustice against working class people including the deaths in police custody of Christopher Alder and Anthony Grainger.  She invited everyone present to JENGbA’s fundraiser on Tuesday 26 June 2012 and also an upcoming presentation on Monday 21 May 2012 to include John Carlos who performed the iconic black power salute at the 1968 Olympic Games, Doreen Lawrence the mother of murdered Stephen Lawrence and Janet Alder the sister of murdered Christopher Alder.

Liz Feteke – Director of Institute of Race Relations:

Room incredibly packed – must be seventy people.
Very diverse audience, age-wise, gender-wise, race-wise a real representative cross section of the population.  People in the audience shaking their heads when they hear the sentences of the people convicted under JE.
 
Karen Horlock explains how JE works and what happened to her son, also the lack of evidence in JE cases, and the long term impact on the health and well being of her family.
 
Patricia then spoke of her son’s case and the media handling of a high profile case.
 
More people coming in as Gloria does her ‘state of the nation’ address on JE.
 
Questions are very challenging. One lady in the audience reveals that her godson has been sentenced for 18 months for a crime he did not commit, and he has gone off the rails now. A lot of focus on the media

Anna Foldvari, Birkbeck MA student:

We heard the voice of the voiceless. Thanks to JENGbA we heard how frequently in the name of justice and order, injustice occurs in the UK. The fact about the destruction of the lives of hundreds and thousands of ordinary and innocent people and their families cannot be hidden anymore. The horrid experiences of families and innocently imprisoned people cannot be denied anymore because JENGbA and the amazing people behind it raise their voice. They are here and they are campaigning against an outdated, politically charged law which application is so very often motivated by racism and middle-class anxieties. And because change is desperately needed, responsible citizens cannot turn their head away and cannot sit with their hands folded.”

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