Wednesday, 29 June 2016

Democratic Deficits

Seeing as people much brighter than myself don't seem to know what's going to happen next, I still feel as qualified as anyone to offer a few more thoughts on the political carnage, post Brexit decision.

It strikes me it's all about democracy, or I suppose to be more precise, democratic deficits. The Parliamentary Labour Party have just voted 142 to 40 that they have no confidence in Jeremy as their Leader. Hilary Benn might have said Jeremy was 'a decent and honourable man' but all attempts to reason with him to go quietly have failed with him in turn citing a greater democratic mandate from 400,000 or so ordinary Labour Party members. 

Like most political disagreements, there is always another side to an argument and Jeremy has a point. For a party that could well be facing a general election in November though, it's clearly not good, but then one does have to wonder at the judgement of his team allowing photographers to snap a shadow cabinet meeting taking place amid a sea of empty chairs. A microphone picks up Jeremy whispering to an aid 'Seamus, not sure this is a good idea' as poor old Tom Watson sits next to him twiddling his thumbs nervously.

As I write this, we don't know who will emerge as front-runner in an inevitable leadership contest, but it could well be Tom Watson or Angela Eagle and they must be considering embarking on such a move with a very heavy heart indeed for the very survival of the Labour Party could be at stake here. Just like the referendum result, whatever the result of the leadership election, there's going to be some very sore losers indeed and to be honest I can't see reconciliation being possible, thus making a split and formation of a new party, SDP-style, a real possibility. 

If Jeremy wins, and I think it's highly likely, the Labour Party will be urgently seeking some new candidates because the rebels will be without a Whip and in any event as reported here on the Huffington Post website, compulsory re-selection of candidates is likely to be introduced:-
Jeremy Corbyn Plans ‘Mandatory Reselection Of MPs’ If He Wins Fresh Leadership Mandate

Supporters of Jeremy Corbyn have warned he will impose mandatory reselection of MPs and a string of other moves to give party members more control if he successfully defeats the Commons ‘coup’ against him. HuffPost UK has been told that a string of radical measures are being planned if Corbyn is re-elected, including recall by-elections and a new ‘lock’ giving the rank and file membership a veto over any future leadership elections.

Senior Labour sources say that a fresh election victory would give him the mandate to draft an even more ‘socialist’ policy programme, but more importantly would allow him to transform party democracy. Labour MPs voted overwhelmingly for a vote of ‘no confidence’ in their party leader, and letters requesting a leadership contest were expected to be submitted to the party general secretary Iain McNicol in coming days.

But furious pro-Corbyn figures in the party say that plotting MPs will “have sleepless nights” if they fail in their bid to topple him. Private polling done by trade unions shows that support among their individual members for Corbyn is as strong as it was when he won his landslide in September 2015, and in some unions is even stronger. “We will offer the most radical leadership reform package ever,” said one insider. “Reselection, recall, a lock on leadership elections that only members can remove. We will bring it.”

Allies of Corbyn were furious at his “rude” treatment by MPs at the Parliamentary Labour Party meeting on Monday night. The grassroots Momentum movement has always said it opposes plans to impose mandatory reselection of MPs, but some within the group think that the conduct of the PLP has forced a rethink. A string of rule changes will be implemented, with the backing of the party’s ruling National Executive Committee, to effectively shift power away from Parliament and towards the rank and file members and trade unionists. A party spokesman said in the wake of the PLP meeting that Corbyn felt deeply that it was upto members to decide his future.

“He believes in the democracy of the Labour party. That’s what’s at stake,” he said.


So what could be wrong with this, it's democratic after all? Well, it rather ignores the inconvenient fact that general elections are not fought under a similarly democratic system where every vote counts. Remember how that long-standing democratic deficit stored up the largely working-class anger that was unleashed last Thursday and how it's being stoked-up further by the determination of the political class to frustrate the Brexit decision. Remember how it stored up anger in 2015 when UKIP only achieved 1 MP with 4.5 million votes? Remember that landslide victory by Margaret Thatcher when more people voted against her and finally remember how the SDP failed to gain sufficient traction because of the first-past-the-post system?

Now this historical point regarding the SDP might well prove to be extremely significant in the coming days if democracy delivers a split in the Labour Party again. I can see it being entirely appropriate and consistent with any decision arrived at from a leadership election for one disaffected group or other to decide that the stakes are so high that splitting away is the only honourable route to take. Unfortunately, it's also highly likely that such a split will lead to electoral oblivion precisely because of the refusal by the political class to accept that reform of the voting system is so obviously necessary. 

I must be a very simple fellow because I just don't understand what the problem is with the concept of every vote counting - I thought it was what democracy should be about. Such a system will either endorse or not the current leader of the Labour Party when each member has one vote (there is surely a real problem here with £3 mischief-makers though?). It could allow members to endorse or de-select every Labour MP. In turn Labour MP's could decide who they had confidence in to lead them in Parliament. Finally, by a simple majority of voters, the electorate could decide if any party had a majority of MP's sufficient to form a government. What's wrong with this, or are we happy to carry on with a system that gives us perverse results and a great deal of anger from people who increasingly feel disenfranchised?              


  1. Munich/London, 29 June 2016 – The AURELIUS Group (ISIN DE000A0JK2A8) has acquired Working Links, a leading provider of welfare and rehabilitation services with operations in the UK, the Republic of Ireland, and the Middle East. In the 2015 financial year, Working Links recorded revenues of around €160m. The acquisition was made for an undisclosed sum.

    Working Links delivers employability consulting and rehabilitation services across three markets: The aim of the employability services is to improve living conditions through employment, training, and personal skills development. The rehabilitation services aim to reduce reoffending and thus protect the public. The international specialist services include employability consulting services for domestic workers in Saudi Arabia and Kuwait, and also delivery of Job Path, the Irish Government’s flagship programme to support bringing long-term unemployed people back to work in six regions of the Republic of Ireland. This contract with the Irish Department for Social Protection (DSP) is delivered by Working Links in a 50-50 joint venture with FRS Recruitment Services, the Irish national recruitment agency with 35 years of experience in providing career advice.

    Since its founding in 2000, Working Links has delivered on more than 200 government contracts and programmes, helping over 350,000 people to return to employment and social inclusion.

    Phil Andrew, Chief Executive of Working Links: “Today marks an exciting new chapter in the history of Working Links. The long-term investment from AURELIUS will enable the organisation to accelerate its growth and transformation plans and to continue to provide best-in-class services for socially excluded people.”

    “The timing of this investment may seem surprising to some audiences directly following the UK’s decision to leave the European Union. However, AURELIUS has always sought investment in complex situations, including turbulent macroeconomic backdrops which often create interesting investment opportunities that fit with our investment model”, said Dr. Dirk Markus, CEO of AURELIUS. “We do not expect detrimental consequences for Working Links due to Great Britain’s upcoming exit from the EU, nor do we expect consequences from Brexit to negatively affect the AURELIUS Group.”

    1. From previous blog postings:

      Anonymous29 June 2016 at 11:28
      From Aurelius website:

      "AURELIUS focuses on the acquisition of companies with development potential through operational engagement. With respect to the acquisition of subsidiaries, AURELIUS strives to identify, analyze, develop and exploit all available opportunities in the market.

      With a strong capital base, international contacts and a large team of specialists in financial and corporate management we will bring your company back on the road to success."

      Sounds like Lurking Winks were up shit creek...

      Anonymous29 June 2016 at 11:33
      Even better is this from Aurelius UK website:

      "We are a pan-European investment group focused on creating value through the operational improvement of companies with development potential. Established in 2004, we are publicly listed in Germany and we operate from offices in Germany and the UK.

      We have a track record of successful investment in more than 50 companies in numerous geographies, industries and sectors. Aurelius improves the operational performance of companies by providing management capabilities and financial resources for investing in products, sales and R&D. Aurelius has liquid cash resources for investment of over £200m."

      Wonder if Gove gave his golden shareholder approval? If so, why? Surely MoJ had undertaken suitably thorough checks on WL? Is this a bit like the Green/Chappel/BHS fuck up, i.e. "Sold it to the wrong geezer"?

      Anonymous29 June 2016 at 11:41
      Curiouser... This from WL own website seems to suggest UK Gov have also been bought out? That was never in the plan for CRCs was it?

      "Working Links is pleased to announce that it has been acquired by Aurelius, a specialist investor with a long-term commitment to our future.

      The deal will enable Working Links to accelerate our growth and transformation plan, and move to the next level of development in a rapidly evolving marketplace.

      While our ownership has changed, our founding values and purpose endure and we remain committed to helping as many people as possible to maximise their full potential, and move from social exclusion to inclusion. Our change in ownership will only strengthen our capacity to deliver better services for the people we work with, and value for money for our government partners in the UK as well as internationally.

      We thank our previous shareholders, UK Government Investments, Capgemini, Manpower and Mission Australia, for the pivotal role they have played in our success to date. Here in the UK alone we have delivered lasting employment for over 300,000 people. This is a legacy we are proud of and we look forward to building upon this foundation of success with Aurelius support."

    2. Selous in a written reply April 2016:

      "No Community Rehabilitation Company (CRC) has withdrawn from the Transforming Rehabilitation Programme. As part of the Transforming Rehabilitation reforms, CRCs are required to deliver the services set out in their contract. CRCs can decide to contract with other organisations to deliver some of those services. If these sub-contractors decide to no longer provide services, the CRC will decide whether to re-tender or provide the service themselves. This should not affect the number of offenders able to access the services.

      We are not restarting the tendering process for probation providers. CRCs are in the process of finalising their supply chains. Contract Management Teams closely monitor arrangements to ensure consistency of service provision and that prime and sub-contractors comply with the terms of an Industry Standard Partnering Agreement set out in the original tender documents."

    3. MoJ document relating to share sale:

      "Sale and Purchase Agreement and Articles of Association – Summary

      The provision of probation services is currently carried out by 35 Probation Trusts. These are to be reorganised into 21 Community Rehabilitation Companies (CRC), one per contract package area (CPA). Initially the Secretary of State (Authority) will own the 21 CRCs; and following a procurement process the Authority will sell the 21 CRCs to the successful bidders.

      1. Sale and Purchase Agreement Parties
       There will be a standard form Sale and Purchase Agreement (SPA) to purchase the ordinary share capital of each CRC in each CPA. The Authority will be the seller under each SPA and the obligations of the purchaser under each SPA (the Purchaser) will be guaranteed by a Purchaser’s guarantor.

       Each Purchaser will acquire the ordinary share capital of a CRC under each SPA. The SPA provides for a timing gap between signing and completion. At completion the Authority and each CRC will enter into a deed of amendment in the agreed form. The deed of amendment will amend the then existing services agreement between the Authority and the CRC to reflect the commercial agreement in respect of services to be provided in each CPA.

       Each CRC will trade between its date of incorporation and completion under the SPA. The Authority will warrant at the date of signing the SPA that certain statements in relation to each CRC are true and accurate. The contents of the Data Room will be disclosed against these warranties and usual limitations will apply to any warranty claim.

      2. Articles of Association Function
       The Articles of Association set out the basic management and administrative structure of each CRC and regulate the internal affairs of each CRC (they are its constitution).

      Special share
       The share capital of each CRC will comprise ordinary share capital and a special share capital (sometimes referred to as a "Golden Share"). The Purchaser will acquire the ordinary share capital from the Authority under the SPA. The Authority will continue to hold the special share after completion of the SPA."

  2. Aurelius is a private equity firm that acquires, restructures and eventually sells companies. This is not a company that is in it for the long-term.

    There is a democratic deficit when public services are traded like any other commodity.

    As for Corbyn, he was elected fair and square. Many don't like the referendum result but it was fair and square. Many labour supporters feel alienated from the elites in Westminster, which must include those self-righteous MPs, many of whom added to the alienation with their expenses claims. They could not move against Corbyn following the recent local council elections because the results weren't as bad as was predicted and every by-election has been won under Corbyn's leadership. Now they blame him for the Leave vote when in fact that was more about the fallout from globalisation. What is the point of having a labour leadership that in power behaves like the tories?