Money Talks

In his book, The Enigma of Clarence Thomas, the American political scientist Corey Robin provides a useful summary of conservative thinking on the intersection of money and political speech: "When it comes to political speech, Thomas proposes, men and women speak most forcefully not through the idle chatter of social media or cocktail conservation but through giving up their money as campaign donations. Donors 'speak through the candidate', Thomas writes". This is conventional enough, but Robin excavates the roots of this thinking in Friedrich Hayek's The Road to Serfdom. Specifically, the idea that the market reveals our true preferences through the price mechanism, whereby we "decide what to us is more, and what less, important". This suggests that the more we value something, the more we will pay for it. At the margin - e.g. if you're down to your last dollar - what you spend it on will surely be your priority, a true moral choice. But what if you're rich? To cap campaign donations would be to deny the rich person the ability to make a choice at the margin - i.e. at the limit of their possible expenditure. 

As Robin sardonically notes, "the Hayekian argument would seem to favour limitations on accumulations of wealth. How are the wealthy ever to make a moral choice if they never approach the end of their riches?" But this is obviously not the conclusion for soi-disant classical liberals like Hayek or contemporary conservatives like Thomas. The argument rather is that there should be no limit on the exercise of political speech through the medium of money, as that would be an abridgement of rights under the First Amendment. Along with the acceptance of corporate personhood - that rights nominally intended to be exercised by the individual are also available to corporations - this has led to a contemporary American polity in which the interests of large corporations and billionaires dominate the political discourse. Political speech is only meaningful in public forums, and increasingly they can only be accessed through money. Speech may be free, but in practice political speech is beyond the buying-power of the vast majority of citizens. It is no coincidence that social media has arisen in parallel with this development, offering the appearance of free speech but ensuring that the clamour of the crowd (or the occult working of the algorithm) muffles most of it. 

Before turning attention to the UK, one final observation by Robin: "Liberal critics will claim that Thomas's model is pure influence peddling, money buying access and legislation, the essence of corruption. Thomas counters that corruption happens only if there is a simple quid pro quo, a bribe, which is illegal. Influence and access, by contrast, are what all citizens seek. Influence peddling, in other words, is the essence of citizenship." It's obviously easy to disguise a bribe, so the fine distinction being made here between vice and virtue is not one that can readily survive in the real world. The equation of money and speech muddies the field by suggesting that cash can change hands in a virtuous manner, so the presence of cash or benefits in kind is not in itself evidence of corruption. What matters is the intent: influence versus bribery. Ironically, this means that larger donations are less likely to be considered questionable. Per Hayek, the more you give the more it is an expression of your true beliefs and thus a moral choice. It is easier to give a Senator, who has legislative authority over a Bill that will affect your financial interests, $1 million than it is to give a Sheriff who recently stopped you for speeding $100.

Unlike the US, the UK has recognised the right of corporations to make political donations since the Trade Union Act of 1913 superseded the Osborne Judgement of 1909. The latter had temporarily banned trade unions from funding the Labour Representation Committee (the forerunner of the Labour Party) after a Liberal-supporting member of the Amalgamated Society of Railway Servants had objected to the use of his contributions in this way. The 1913 Act made political funds lawful but also enshrined the right of union members to opt-out. Succeeding legislation has further tightened this and today members must opt-in to the political fund, if there is one. Historically, the trade unions were the largest contributor to Labour but that has steadily declined since the 1990s. Last year, in the run-up to the general election, they accounted for 27% of the cash donations to the party. In contrast, businesses and individuals accounted for 67%, with two individuals (Gary Lubner and David Sainsbury) jointly contributing more than the unions. 

Over the years, political donations by companies to all of the leading UK political parties have declined. This is partly due to the desire of publicly-listed companies to appear non-political in order to keep all of their shareholders happy (and avoid charges of wasting money that could go to dividends), but it also reflects the growth of private donations by rich individuals, many of whom will effectively be recycling company profits by virtue of their own large shareholdings. More broadly it indicates how much wealth has shifted from public corporations to private accumulations: patrimonial capital, in Thomas Piketty's phrase. Companies are these days more likely to make donations in kind, for example by seconding staff to work in politicians' offices, or by offering entertainment and other freebies that can be explained to shareholders as lobbying or public relations. It is the latter that is currently in the news for the simple reason that it has become pervasive. 

The first defence wheeled out by many Labour ministers when questioned on the subject was a variation of "Everybody does it; it's no big deal". This was a useful insight into their own worldview, particularly at a time when they were calling for sacrifices by welfare recipients, but it wasn't exactly smart. Equally unhelpful have been the party supporters who have attempted to dismiss football boxes or concert tickets as trivial during a cost-of-living crisis, or who pointed out that Conservative politicians have a worse record in accepting free hospitality, not to mention corrupt practice, though this is surely more down to the opportunity of 14 years in government rather than any moral peculiarity. The problem is that these manoeuvres imply that ethics might actually be relevant at a certain price-point, which simply leads to a discussion of what that price might be. £100,000 in declared freebies over a year plus a new wardrobe for the wife appears to be way in excess of that notional number to judge from public opinion. By now you might have expected the spin-doctors to have come up with a better line. That they haven't tells us something significant, and it isn't that Keir Starmer is politically tone-deaf or that the Number 10 operation is distracted by infighting.

What the government appears to be telling us is that buying influence is fine and that the only ethical requirement is that it should be publicly declared. The insistence on that public declaration is not a weak excuse but a proud boast. That act transmutes what could look like a bribe into a legitimate expression of political preference by the donor, a point Rachel Reeves made, though she was unintentionally revealing in describing a "scale" ranging from members and supporters (small donations) to "people who have been successful in life" (large donations). She isn't going to state that the degree of influence is proportionate to the amount of money, because that would be crass, but she is prepared to suggest that the largest donors don't have to be supporters, let alone party members. The fact that so many Labour politicians have appeared nonplussed at the idea that they would be swayed by some Taylor Swift tickets, which they only took for the benefit of their kids, is not them playing dumb. They understand that what will sway them are much larger donations, not to mention non-executive directorships and plum consultancy gigs.

The Labour Party's infatuation with American politics used to be largely restricted to the Blairites, but since Obama's first presidency, and the post-2008 counter-revolution it enabled, that infatuation has spread to pretty much all parts of the party other than the left and a few Blue Labour eccentrics. Indeed, the charge of anti-Americanism was a significant sub-text to much of the purge of the left after 2016. This goes beyond the traditional Atlanticism of the Labour right, or the West Wing cosplay of Labour's media outriders at the New Statesman and elsewhere, to a full-on absorption of American political norms, from the jejeune technophilia of the Tony Blair Foundation to a more transactional relationship with the donor class. But while the latter is rooted in its US context in a belief that money is political speech, in the UK it is rooted in a very different history, one in which money is authority. This explains the contrast between the cacophonous US party conventions with their loud protests and Labour's tightly-managed conference where protest is anathematised and dissenters are bundled away. 

The Vibes-based Order

According to Polly Toynbee, the Labour government is already being treated harshly by the press: "The honeymoon for Labour is over, say the massed ranks of the rightwing media. What honeymoon was that? It seems to have been over since 5 July." The party's honeymoon started immediately after the 2019 general election. In retrospect, Keir Starmer has enjoyed the longest personal honeymoon, in the sense of a period of indulgence by the media, of any party leader in history. Indeed, he has faced a quite remarkable lack of scrutiny ever since he entered Parliament in 2015. You could attribute this to his good fortune in facing a succession of incompetent Conservative Prime Ministers after 2019, but then the comparison with Tony Blair suggests otherwise. Labour's fresh-faced new leader in 1994 was ridiculed by much of the press as "Bambi" for his inexperience. The backdrop of sleaze and the loss of the Conservative government's reputation for economic competence after Black Wednesday in 1992 meant that a change of government was expected. The only question was whether Blair was an adequate replacement for John Smith, not whether he was an adequate replacement for John Major.

The truth is that the media knew that Boris Johnson would be a disaster at some point and accepted that Labour had to be positioned as a credible replacement government once it had been secured against the left, and once Brexit had been "delivered". While the press was divided on the merits of the latter, there was unanimity on the former. It remains notable that the pro-EU commentators of the Guardian feel that Starmer deserves a long honeymoon despite his central role in sabotaging both the chance of a soft Brexit and a Labour government following his intervention at the 2018 party conference. It's likely that over time some will come to regret their order of priorities, accepting that their instinctive and irrational determination to stymie Corbyn and the left should not have trumped their pragmatic and rational desire to remain in the EU Single Market or Customs Union, but that day is not yet come, hence the petulant whining now about the triviality of £100,000 in goody-bags and the unacceptability of leaks about Number 10's office politics.

Before the sleaze and bitching took centre stage, the attitude of the liberal media towards the government could best be described as one of studied bemusement, both at its apparent priorities (cutting pensioner benefits) and its poor public relations (cutting pensioner benefits). John Harris insisted that "This country needs a lot more than the myopic parsimony of pen-pushers and bean-counters", while Jenni Russell pleaded "Keir, we can’t thrive if all you offer is misery". It's as if neither had spotted at any point over the last 5 years that Starmer had relentlessly moved Labour to the right and appointed a Shadow Chancellor committed to the Treasury View, or that his rhetorical style from day one has centred on the negativity of threats to the party (antisemitism) and threats to the country, both of which would require authoritarian crackdowns. Jonathan Freedland was a little more realistic in his take, claiming that "It’s hard to say that the honeymoon is over, because it never really began. You can’t blame Labour for that: it warned voters before the election not to get their hopes up, and it has stood firm against the menace of optimism ever since." Of course, he has always been an authoritarian masquerading as an even-handed liberal, so his sympathy for the Prime Minister comes as no surprise.

Freedland believes that Rachel Reeves is on the right track because lower interest rates mean "Investment becomes attractive, so the economy begins to grow", and from this all sorts of wonders will arise. He'll not thank you for pointing out that we had near-zero rates for a decade after 2008 during which investment was weak and growth anemic. His attempts to convert from his usual Eeyorish hand-wringing (see any article he's ever written on Palestine) to a Polyannish optimism doesn't convince, but he gives it a good go: "There is an extra prize in sight too. Britain with low interest rates, governed by a new, ostentatiously sensible government with an enormous parliamentary majority, will look like an island of political stability, especially as France and Germany contend with a surging far right. That will attract overseas investment, previously frightened off by the Tory follies of the Brexit years, which means yet more money in Treasury coffers available for public spending." Finally, those sunny uplands are in sight and the damage of Brexit is consigned to history. The purpose of all this nonsense is not to suggest that Reeves should alter course but that Starmer (subtext: still needs to develop political antennae) should make some popular gestures to signal "that better times are on the way". It's all about the vibe, man.

Right on cue we are now told that Starmer is under pressure to ensure his upcoming conference speech offers "hope", though hope of what exactly is unclear. When Peter Mandelson is reduced to lauding Ed Miliband as "a man with a plan", you know they are scratching around. That this demand for optimism comes not only from "party insiders" but "business leaders" is significant. It's clear that the government's focus on doom and gloom is beginning to undermine consumer confidence, and while some of this may be a deliberate ploy to cast whatever crumbs of comfort Starmer comes up with in a better light, it's also clear that this government will be no different to previous Labour administrations in having to toil under the yoke of "business confidence". As Michal Kalecki long ago pointed out, that is merely a way of disciplining governments, who in turn are expected to discipline labour. The idea that business leaders want a better vibe is absurd. What they want is for the government to ease off on any plans to increase tax on capital or to extend workers' rights. And it sounds as if Reeves considers delivering that, aka "stability", to be her chief goal.

In this light, the decision to abolish the Winter Fuel Allowance, the lack of embarrassment over donations and freebies, and the insistence that the autumn budget will be painful are all of a piece, intended to reassure business that this government will prioritise the interests of capital. As Phil Burton-Cartledge notes, "Starmer's lorry load of shopping bags and weeks spent in corporate hospitality boxes says loud and clear whose side he's on." But there's another signal being transmitted here, from the media to Starmer himself. The focus on petty corruption among politicians is always a matter of tone. For example, the real critique of Johnson's refurbishment plans for the flat at Number 10 was the assumed vulgarity of the wallpaper. This was held to reflect a lack of taste and (the misogyny being all too apparent) a wife out of control with ideas above her station. The more serious threat to take Johnson down came much later amidst Partygate. The refurb kerfuffle was simply a plea that he be more serious and statesman-like.

The liberal press want Starmer to be more Jupiterian, to borrow a French phrase, and thereby cement centrist, technocratic government as the natural order of things, even as France reveals the squalid reality of ostensibly progressive centrists allying with the reactionary far-right to block the left, all in the interests of "stability". You can also see this demand for tone at work in the British liberal press's coverage of the US Presidential Election, where the Democrats' turn to a strategy of ridicule directed at Trump and Vance has generated enthusiasm among centrists while successfully obscuring Harris and Walz's essentially conservative policy platform, thereby risking a repeat of the errors of condescension that did for Hillary Clinton. The Trump-Harris debate focused heavily on the character of the participants, with the only issue of policy substance being abortion, a topic that neither party is comfortable with and that has only appeared on the agenda as a result of the highly-political actions of the Supreme Court. 

Starmer will no doubt ride out the current wave of criticism over his designer glasses, his expensive if ill-fitting suits and his preference for a box at the Emirates, if only because there is no advantage to be gained in deposing a man who is clearly congenial to capital, to the British establishment and to Washington (regardless of who wins in November). The self-denying ordinance announced today - no more clobber, thanks - does not signal a retreat from his determination to cosy-up to donors, nor does it suggest that he particularly cares about the poor optics of having his expenses subsidised by the rich while some pensioners worry about whether they can afford to put the heating on this winter. What it does suggest is that he is sensitive to the framing of the press: the hint of haut couture is to be avoided as rigorously as sympathy for human rights while the freebies associated with the more demotic environment of football are dismissed as "fair dos", even though an executive box is the concrete form of de haut en bas. 

It amuses me to note that when he interviewed for his first chambers as a barrister after university he was almost turned down because of his poor dress sense, having turned up wearing a post-Punk cardigan. His interviewers could not see that this was a misjudgement of disguise by an ambitious young man determined to enter the liberal establishment and imagining that its dress code is the same in the Middle Temple as it is in a university. The question remains whether Starmer is more in the mould of Balzac's Eugène de Rastignac or Anthony Powell's Kenneth Widmerpool. Liberals secretly hope that he is Rastignac, a man who started penniless and ended up a peer of France by charm and administrative talent. Their fear is that he is Widmerpool, a vulgar petit bourgeois who lacks charm and whose process mania cannot compensate for his lack of elan or rhetorical skill. They wish he was a British Emmanuel Macron but he comes across like a more stuffy version of John Major, an adenoidal, narrow-minded suburbanite. No wonder they were secretly thrilled by the revelation that he wears (or at least inhabits) expensive tailoring.

Public Goods, the Social Wage and Universalism

My X thread about Deborah Meaden's comments on the winter fuel allowance has done numbers, as the kids say, but I suspect that those who criticised it, and perhaps some who appreciated it, didn't get the joke at the beginning or ultimately the point at the end, though the latter may be down to not reading the entire thread. Excuse me if I ignore the cardinal rule of both comedy and the British royal family and try to explain. 

Meaden trots out the classic argument of the rich against universal benefits: I don't need it so the taxpayer's money is being wasted. This is often accompanied by an assurance that the unnecessary government largesse is routinely donated to charity, so virtue triumphs in the end. You'll note that this argument and its corollary are less often heard when tax cuts for the wealthy are being justified, though the rationale is the same. If you're already incurring the top rate of tax on a large part of your income, why do you need more money? In that instance the argument in favour of tax cuts focuses on incentives: that the prospect of keeping more of your earnings will make you more productive, which can only help the wider economy. This is a consequentialist argument: what matters is the outcome, which is presumed to be good. There are similar consequentialist arguments against universalism, which can be summarised using Albert O. Hirschman's The Rhetoric of Reaction: giving money to people who don't need it discredits the benefits regime and so lowers public support for the needy (perversity); in benefiting everyone, no one gains in relative terms (futility); and an income guarantee weakens the effect of any incentive to expand income and so undermines the wider economy (jeopardy).

Meaden's argument is different in that it isn't simply consequentialist but utilitarian (a narrower form of consequentialism), which means it concerns itself with calculable efficiency, the greatest possible good,  rather than just an assessment of good versus bad. Specifically, it seeks to maximise aggregate utility through discrimination: "Lots of people should not get winter fuel allowance…lots should", as she put it in her tweet. The former group have a negligible marginal utility because they are rich, the latter have a high marginal utility because they are poor, and there is an implied gradient between the two where everyone can be positioned. One paradox of utilitarianism (among many) is that achieving this macro optimality requires a granular focus on the micro foundations - the utility calculus of the individual - hence Meaden's focus on her own circumstances. Solipsism is a hallmark of vulgar utilitarian reasoning: "I don't need X" or "I never had Y growing up". Jeremy Bentham's "felicific calculus" may have inspired the concept of utility in the emergent field of economics, but its ambitions to be a coordinating mechanism for society soon gave way among theorists (from Jevons to Hayek) to price as the only reliable signal of utility in aggregate. But while absent in the market, utilitarian calculus lived on in the realm of discretionary welfare, notably in the form of personal need assessments and means-testing.

Public goods, in the sense employed in economics, bypass the problem of individual assessment by operating wholly at the macro level. We assume, quite reasonably, that there is an aggregate benefit for society delivered by the provision of certain goods and services, such as roads. Economic theory holds that these goods are characterised by two features: they are non-excludable (i.e. freely available to all), and they are non-rivalrous (i.e. my use does not compromise your use). In reality, most public goods are imperfect in terms of this abstract defintion (or "impure", in the jargon). Nationalised utilities in the postwar era charged for use of gas and electricity, which meant you could be excluded (i.e. cut off). Today we still have toll roads, albeit with electronic turnpikes, such as part of the M6, the Dartford Crossing and the Humber Bridge. These are still classed as public goods, because the charges are treated as an impost (a supplementary tax based on use), but you will be excluded if you can't pay the toll. Likewise, roads are rivalrous because, as Adam Driver said in the 2023 film Enzo Ferrari, "two objects cannot occupy the same point in space at the same moment in time." In other words, congestion makes vehicles rivalrous (think of parking spaces).

In the UK, the logic of public provision was extended in the postwar era to many areas of the economy and public life previously subject to the market, giving rise to the concept of the social wage: the benefit that we individually gain from collective effort, whether in the form of public goods (roads, libraries), welfare services (the NHS, state schools) or direct financial payments (state pensions, unemployment benefit). In reaction, conservatives challenged both the extent of the social wage and the categorisation of its components, particularly in areas where the public sector was seen to be pushing back the private sector, such as health and education. Central to this reaction was the insistence that genuine public goods are few and far between and that what is left over within the scope of the social wage should be treated as a discretionary benefit and therefore means-tested (returning to the approach of the inter-war years). At the margin, among market fundamentalists, this reaction has led to continuing attempts to narrow the scope of public goods even further by either converting them to state-supplied commodities (e.g. road-pricing) or by privatising them altogether (e.g. railways and water companies). 

It came as no surprise that some of those disputing the intentionally ridiculous comparison of public goods (roads) with a benefit (the Winter Fuel Allowance) should also be advocates of road-pricing. For them, "confusing" the two was a purity violation (to borrow a term from moral foundations theory), but not because they are champions of public goods but because they want to advance the narrowest possible interpretation of them. Their apparent inability to see a joke (clearly the WFA is not actually a public good) is similar to the media suspicion that advocates for public goods want to impose broadband communism or nationalise sausages - i.e. not entirely sincere. This po-faced response also points to a narrow conception of public policy discourse in which the mathematical calculus of liberal economics is all that matters: utility is not a laughing matter. This narrow perspective also means that such critics cannot see that Meaden's comments are not the self-evident common sense that they imagine but actually a highly political statement and one founded (consciously or not) in the ideological presumption that social policy should be determined by aggregate utility, i.e. utilitarianism.

The intersection of reactionary conservativism (minimse public goods) and liberal utilitarianism (maximise efficiency) has resulted in the steady erosion of the principle of universalism. A feature of this has been the tendency of liberals to adopt the conservatives' framing, talking about universal benefits as if they are public goods that had been erroneously categorised. This explains why the discussion of the viability of such benefits tends to centre on excludability (as a positive) and rivalry (as a negative). For example, "It is absurd to give the wealthy cash that they do not need" leads to the insistence that they be excluded so that the needy can have more (or, more likely, that the benefits "bill" can be reduced). The idea that the cash can simply be clawed-back through taxation is rarely entertained and then only to complain about its "redundancy", despite the obvious operational superiority of using an existing mechanism over creating a new means-testing regime. In contrast, rivalry tends to occur within the arena of universal benefits through engineered scarcity: the competition to get through on the phone to book a doctor's appointment, or going private to beat the waiting list. This framing of benefits as if they were public goods is adopted partly to avoid a frontal attack on universalism, which obviously remains popular (e.g. the NHS), but it also reflects the extent to which half a century of neoliberalism has shifted the discourse of social policy away from the collective to the individual through the vocabulary of representative agents, marginal utility and incentives.

The joke that opened the thread was an ironic response to Meaden describing the Winter Fuel Allowance as a "universal scheme". The WFA isn't universal - I don't get it and you probably don't either. You might counter that this is because it is for pensioners only, but then why describe it as universal? Well, you might retort, child benefit is universal but the childless don't get it, do they? Indeed, but they have no need of it. I, on the other hand, have fuel bills to pay but do not qualify for the WFA. The truth is that it was introduced by Gordon Brown (no fan of universalism) in 1997 as a targeted electoral bribe, to be paid to a Tory-inclined cohort and therefore a priority to be won over by a Labour government. But while she described the WFA as universal, Meaden's argument against it employed the language of the miscategorised public good: to paraphrase, "rich people like me should be excluded from it". I parodied this by pointing out the insanity of extending this logic to an actual public good, roads. In doing so I was also highlighting the absurdity of centring the public policy debate on the personal circumstances of individuals who are definitionally atypical of society: the rich.

The wider point is that not only are there very few "pure" public goods, which are both non-excludable and non-rivalrous, but there are nowadays very few genuine universal benefits either. Most of what we imagine to be universal, like the state pension, depends on National Insurance contributions. The truly universal - available to everyone regardless - are the minimal benefits when all other contributory benefits have run out, and the state has long aimed to restrict these to a minority who, by virtue of their dependence on them, are seen as recalcitrant and therefore worthy targets for public contempt. It's also worth noting the long-running campaign of the media to make even these minimal benefits discretionary: not to be paid to the feckless, to single mothers popping out babies and certainly not to asylum-seekers. The two-child cap, which was heavily promoted by rightwing newspapers, is literally a pointed refusal to accept that benefits should be universal. That it is targeted at the demonstrably innocent isn't simply an example of cruelty, it is a clear statement that need is irrelevant. Deborah Meaden's insistence that she doesn't "need" the WFA and her advocacy for means-testing are actually old hat. The bleeding-edge of social policy thought is the denial that society has any obligation to the needy.

The Lessons of Grenfell Tower

The media discussion of the Grenfell Tower Inquiry Phase 2 Report has increasingly focused on the operational failures of the building firms involved, with calls for criminal prosecutions, and on the deficiencies of the regulatory regime, with dismay at the risks entailed in cutting red tape and a consequent demand for tougher government intervention. What has been increasingly lost in this orchestrated campaign is the role of the local authority, the Royal Borough of Kensington and Chelsea (RBKC), and in particular its policy towards social housing. A good example of this was the Guardian's immediate analysis by Peter Apps, a housing expert critical of the industry, which doesn't mention RBKC once. This could be justified given the tenor of the report itself. The execuitve summary, which is probably all that many journalists will have read, largely limits itself to criticising RBKC's poor oversight of the Tenant Management Organisation (TMO) that had in turn failed to "observe its basic responsibilities" towards the tower's occupants. What the report doesn't do is question the very existence of the TMO. Why was this arms-length function deemed necessary by a council that had the primary responsibility for its tenants?

It is clear from the report that the TMO existed to outsource responsibility and thereby remove day-to-day management of the tower as a concern for councillors and council officers. One telling example of what this meant in practice is the report's observation that "RBKC took little or no account of an independent and highly critical review of fire safety carried out for the TMO in 2009. It did not even know about a further independent and highly critical report produced in 2013 because the TMO had failed to disclose it to RBKC." This, like a number of other observations in the report, essentially charges RBKC with ignorance when the actual charge should be wilful neglect. The strongest criticism of RBKC's performance in the lead-up to the fire was reserved for council officers: "RBKC’s building control department failed to perform its statutory function of ensuring that the design of the refurbishment complied with the Building Regulations." In other words, there has been a scrupulous determination to avoid questioning the political logic of social housing management in the borough in favour of a focus on the regulatory regime.

Where the report cannot avoid addressing the failures of the council is in the response to the tragedy, but again the tenor is very much that this was an organisation simply overwhelmed by the challenge or unsuited to the immediate demands placed upon it: "RBKC’s systems and leadership were wholly inadequate to the task of handling an incident of such magnitude and gravity, involving, as it did, mass homelessness and mass fatalities." A telling comment is that the victims and survivors of the fire received far more effective support through community groups than they did from the council, but that this was ultimately down to the council's dismissive attitude towards the community rather than any difference in resources or competence: "one of RBKC’s failings was to make too little use of the local voluntary organisations and to fail to have adequate standing arrangements to enable them to be called on in the event of a major emergency." In other words, there was a lack of trust not only between tenants of the tower and the council, which the report could pin on the TMO, but a more wide-ranging lack of trust between the community of North Kensington and RBKC.

There are two unusual characteristics of RBKC that need to inform an understanding of the tragedy and its aftermath, both of which I highlighted in the post I wrote a year after the fire: Candide in Kensington (a critique of Andrew O'Hagan's whitewash of the council in the London Review of Books). The first is that the council is very small both in terms of population and territory. It is, in fact, the smallest borough in London by population if you exclude the oddity of the City of London. If it were to be merged with the neighbouring (also small) borough of Hammersmith and Fulham, the combined authority would still only be the sixth largest in London, about the same size as Wandsworth. A larger authority would not only have greater capacity in terms of emergency housing, but it would likely also have more officers devoted to building control and health and safety. The limitation of size has been recognised for years, however this hasn't advanced beyond the pre-fire "Tri-borough" arrangement for shared services (also involving the City of Westminster) where the focus was very much on cost-cutting during the post-2010 austerity years. There is no real justification for the separate but adjoining boroughs, but it has historically suited both main parties, with the Conservatives having exclusive control of Kensington and Chelsea (except for the northern wards) and Labour dominating Hammersmith and Fulham for all but a brief period between 2006-14.

The second characteristic is the longstanding antipathy towards the direct provision of council housing, one reason why the borough was notorious for slum landlordism up until the 1960s. Historically, it always preferred to operate at arms-length through charities and housing associations rather than directly providing and maintaining council homes. This is the root explanation of the TMO, a desire to outsource its residual responsibilities as a landlord and an implicit acknowledgement that it "doesn't do" council housing. That the phase 2 report essentially buys into this narrative of council incompetence (the recommendations are largely about training council staff up to be able to better manage its services and contingency planning) means that the political worldview behind its poor performance is not brought into the light. The borough is a stark example of social segregation, with the richer southern wards politically dominating the rump northern wards and treating the social housing residents of the latter as at best an afterthought and at worst as importunate and ungrateful (as many were characterised by O'Hagan). That the report locates this lack of trust between authority and people in the TMO is an evasion and an example of the unwillingness of public inquiries to address the political context of failures, something seen in the torturous Hillsborough saga and more recently in the Contaminated Blood scandal.

More broadly, the attitude of the RBKC points to the political elephant in the room, which is the UK's troubled relationship with housing. The fundamental problems of the UK housing market are not inadequate supply and high prices - these are merely epiphenomena - but a lack of capacity in the system, which is the consequence of the end of central planning (i.e. the expansion of council housing) and the concomitant financialisation of housing as an asset class with the take-off of Right to Buy and mortgage deregulation in the 1980s. It cannot be stressed enough, that the UK has only properly housed the population, whether owner-occupiers or tenants, during the postwar era of central planning, and then only towards the end of the era when supply caught up with demand. Basically, the late-1970s. All states make provision for spare capacity, but not always in the same areas. For example, the UK has always sought to maintain a domestic defence industry, notionally to ensure national security but also to reinforce its geopolitical delusions. Doing so entails a need to keep that industry busy, hence the easy encouragement of military adventures and the selling of arms to dodgy regimes. Continuing to build social housing capacity would have left us with a public good and fewer property millionaires; continuing to produce arms for sale has left us open to the charge of aiding and abetting genocide.

Other states are more concerned with capacity issues such as food security or medical supplies. The former can give farming interests an outsize influence on land planning and retail prices; the latter can mitigate the dangers of a public health crisis. The criticism this weekend over the poor preparedness of the NHS for the Covid-19 pandemic should be read less as an attack on the serial incompetence and cheese-paring of Conservative ministers since 2010 and more as a long-overdue recognition that the state has been reducing its capacity, and therefore its contingent capabilities, across the board since the 1980s. This, as much as formal deregulation, has been a consistent theme of all governments since Margaret Thatcher. And it is not simply a naive belief that the free market will provide, but a conscious desire to reduce the public responsibilities of the state. Of course, the state never shrinks, not just because its prime directive is self-preservation but because the reduction in provision simply promotes costly demands elsewhere. Thus the lack of council housing investment has been more than offset by the increase in the cost of housing benefit, which simply means that state resources have been diverted from the needy to rentiers.

Might there be a sea-change in government policy? Labour have certainly talked up the issue of planned capacity in some of their proposals, such as Great British Energy, but the substance to date has looked a lot like marginal or cosmetic gestures while the insistent drumbeat from both the Prime Minister and the Chancellor has been that austerity remains the only game in town. The idea that fiscal responsibility will stimulate private sector growth ("expansionary fiscal contraction") was comprehensively disproved under the Cameron and Osborne regime, but even if it proved true this time, an expanding private sector will simply compete with the state for real resources, which means the likelihood of major investment in capacity isn't on the cards. The idea that you "fix the roof while the sun is shining" is about as intelligent as equating the economy with a household. The greatest historic investments in British public capacity, in areas such as housing and transport, occurred during periods of relative economic turbulence, such as the 1930s and 1970s, as much as during periods of growth. You have to build capacity regardless, rather than waiting for a fiscal surplus that will only lead to the competing demand for tax cuts, and that means accepting that real resources must be diverted from private consumption.

It took over six years after the Grenfell Tower fire for all of the former residents who survived to be permanently rehoused, though often in inadequate accommodation, with the council reluctant to prioritise their needs and its new housing provision continuing at a snail's pace. It is hard to see any evidence that the RBKC and the TMO have changed their attitude over this time. Talking of her recent discussions with the residents, Gillian Slovo noted that "They told me about a council, the Royal Borough of Kensington and Chelsea, and its managing agent, the Tenant Management Organisation (TMO), that treated them as if they should have no voice in the way that they lived. They drew a picture of one of the richest boroughs in England ignoring them because they lived in social housing." The current leader of the council, Elizabeth Campbell (who lives in the ultra-rich Royal Hospital ward), has predictably apologised in light of the report's findings - how could she do otherwise? - but the commitment to learning and improving will be meaningless until such time as she and other politicians are prepared to address the two key characteristics of RBKC: that it is too small to be effective and that its reluctance to invest in council housing will always leave it in conflict with the community of its northern wards. Both are issues of capacity.