Is the EU Commission on the side of Farage?

October 24th, 2014

It is difficult to believe that some senior members of the EU Commission are not secret Ukippers.   To demand that Britain hands over more than €2bn because its economy is doing relatively well compared with the rest of the Eurozone, which is doing appallingly badly, is beyond satire.   The idea that Germany, where the Merkel doctrine of unwavering austerity has brought the eurozone low, should now receive a rebate at Britain’s expense of £780m  is the kind of black comedy normally associated with farce.   The UK contribution to the EU budget is already large at £8.6bn last year, and this surcharge would now make the UK by far the biggest top-up contributor.   What adds salt into the wound is that this surcharge stems from the EU charging the way it calculates gross national income to include more hidden elements such as prostitution and illegal drugs! (more…)

Deficit rise this year destroys case for austerity

October 23rd, 2014

The latest ONS Quarterly National Accounts tell a very significant story.   For the media it was immediately a matter of Osborne likely not being able to provide a pre-election giveaway in a big new tax break to be announced in his Autumn Statement on 3 December.  But that isn’t the real point at all.   A far more significant issue is that it spells the end of Osborne’s case that austerity is necessary to cut the deficit.   If the deficit starts to rise rather than fall, the case for continuing with austerity and perpetual spending cuts collapses.  That is exactly where we now are, although no-one, including the Labour Party, is saying so.   This is now the opportunity for Labour to say loud and clear that Osborne’s policy has hit the buffers and is now intellectually and politically bankrupt and that the alternative policy of expanding the economy, as opposed to endlessly contracting it, is now the only viable game in town. (more…)

Main reason MPs should be recalled for by-election is doing a poor or bad job

October 22nd, 2014

The government’s Recall of MPs bill which was debated in the Commons yesterday, a flawed version of Zac Goldsmith’s private member’s bill, states that 10% of constituency members (about 8,000 persons) can trigger a ballot for a by-election if an MP has been given a jail sentence or if Parliament agrees a recall petition is appropriate on grounds of ‘serious wrongdoing’ – though what constitutes that is not spelt out.   This is unacceptable for two reasons.  First, the decision shouldn’t lie with Parliament, but with the electors.   The government position is like saying ‘You can only make a complaint against the police if the police agree to accept it'; if that were the rule, there would be public outrage.   Second, the Commons debate dodged the question of the main reason why in the worst cases MPs should be subject to recall.   That is where MPs are patently failing to hold the government of the day to account, which is their raison d’etre for being elected there in the first place. (more…)

The Big 4 accountancy firms’ corrupt fiddles for the banks must be stopped

October 21st, 2014

The evidence piles up that the private sector auditors of banks have manifestly failed in their duties.   All the major banks received unqualified audit opinions from Dedloitte & Touche, PricewaterhouseCoopers, KPMG, and Ernst & Young.   Private sector auditors have a history of silence and are immersed in too many conflicts of interest.   The evidence is their silence at Barings and  Bank of Credit and Commerce International (BCCI), as well as at other debacles.   Accounting standards for banks are set by the International Accounting Standards Board, but astonishingly this is a private limited company in London funded by the Big 4 accounting firms who audit the banks and major corporations – a nice cushy cartel whereby the accountancy companies control by their funding the body that is supposed objectively to set their standards.   The rules have enabled banks to publish opaque annual accounts, and vast amounts of assets and liabilities have not been shown on their balance sheets. (more…)

Why austerity can’t eliminate the deficit

October 20th, 2014

As Osborne has yet again pronounced, the Tory mantra repeated like a broken record is that spending cuts will continue throughout the next Parliament until the structural budget deficit is eliminated by 2019.   Labour, to its shame, follows exactly the same line.   Yet the ONS Quarterly National Accounts published by the government demonstrate that this objective is fantasy and on current policies will never happen.   The reason for this is that the government deficit is only one component of the borrowing and lending by the 4 major sectors which takes place every year in the economy.   The other 3 are all the businesses operating in the UK, all the households or consumers, and the UK’s trade transactions with foreigners.   All the borrowing and lending done by all these 4 sectors has to sum to zero, because all borrowing has to be matched in accounting terms by exactly equivalent lending.   The ONS National Accounts figures show all too clearly the key problems in cutting the deficit and why on current policies they’re insuperable. (more…)

Derivatives still pose real danger 6 years on after global crash

October 19th, 2014

Despite the recent howls from the City of London about the new criminal offence of reckless misconduct by senior bank executives, little or nothing has been done to curb the very real and big risks associated with derivatives which were at the heart of the financial crash 6 years ago.   It is little understood that whilst banks have little interest in buying or selling commodities, they nevertheless spend vast sums speculating on the change in their prices.   This not only drives up the price so that ordinary people have to pay more for electricity, gas, water, copper, wheat or whatever commodity they’re buying, but it also generates huge profits and losses.   This institutionalised gambling by the banks was famously described by the investment sage Warren Buffett as ‘financial weapons of mass destruction’.   This is because the economic exposure of banks to derivatives, that is the hard cash needed to settle the outcome of the bets, is always highly uncertain until the contracts mature which could be 10-15 years into the future. (more…)

Falling oil prices could scupper UK shale production

October 18th, 2014

Last Tuesday the share price of Chesapeake Energy, one of the leading US shale oil producers, fell 29% in a single day.  With internationally traded Brent Crude now trading at below $88 a barrel, a 4-year low and down from $100 only a few weeks ago, and the US benachmark West Texas Intermediate at below $85, down from over $107 in June, the fabled miracle of US shale is facing a near-death experience.   The oil consultancies estimate that US shale production will break even at $75 a barrel, so there is still some leeway for survival.    But the impact of tensions over Ukraine and the gathering conflagration in the Middle East, plus above all the global market fears of secular stagnation kiboshing the world recovery from lengthy recession, are putting the market for unconventional energy production under strain as never before. (more…)

Labour needs a shadow Minister specifically to tackle inequality

October 17th, 2014

The gravy train rolls on reaching ever more sickening heights of greed, selfish gratification and disregard for the ever deeper miasma of poverty that disfigures our country.   The latest figures show that the richest 10% of the UK population, who already owned 52% of UK wealth just before the 2008 crash, have become significantly richer since the crash because of the rise in value of financial assets, during a time when averages income have fallen 8% in real terms.   Britain now has 2 million dollar millionaires, if the value of equity in houses is included, up by almost a third since last year.   There are also now 44 billionaires in Britain, up from 8 in 2000.   The individual excesses continue apace, only getting ever more outrageous.   BG Group has just appointed a new chief executive, Helge Lund, previous boss of Norway’s Statoil company, with a £15m ‘golden hello’ and potential earnings of an additional £14m a year.   At the other end of the scale are 70 former NHS care workers for the disabled in Doncaster who have taken so far 85 days’ strike action resisting the further crushing of wages and terms and conditions for the lowest paid.   Their jobs were outsourced, holidays cut, and take-home pay cut by a third.   Care UK which won the contract and ousted them is owned by private equity firm Bridgepoint Capital and its chairman John Nash was recently made a peer after donating a quarter of a million pounds to the Tory party. (more…)

Social housing is being flogged off in billionaire investor bazaars

October 16th, 2014

MIPIM is the name of the sales fair to flog off Britain.   This is the latest extravaganza of market fundamentalism which is now sweeping Britain.   It is being pitched at this moment is a huge hall  in London which brings together property developers, billionaire investors from all over the world and, incongruously, local council officials from over Britain.   Their common interest, though from very different concerns, is public housing.   The property developers want to make a mint from knocking it down and putting up luxury flats in its place.   The investors are motivated by a juicy return on capital if they invest in a must-win bonanza.   And the local councils – and here’s the rub – are there because they are broke and have no other means of raising serious money.   The only people who aren’t there are the tenants of the public housing which is about to be demolished before their eyes.   Their homes, which many have lived in for 30-40 years, are about to be turned into someone else’s speculative asset without their even being consulted, let alone given a chance to impose a veto on a process which literally destroys their livelihood. (more…)

Osborne’s own policies are shrinking tax revenues, yet he demands even bigger spending cuts to compensate

October 15th, 2014

There are now unmistakeable signs that Osborne’s so-called economic recovery is fading, despite all the right-wing think tanks and pro-Tory media to talk it up.   A survey of 7,000 businesses by the British Chambers of Commerce has just found that manufacturers have suffered a sharp slowdown in export orders, and even more significantly domestic sales and orders – the part of manufacturing that has been faring better due to household expenditure based on rising debt – are now also reported to be slowing.   The third quarter growth figures also show the UK economy losing steam, down from ).9% in the second quarter to 0.7%.   The TUC has just reported that not since 1865-7 has there been a comparable squeeze on earnings for British workers, with an 8% fall in real earnings between 2007-14, and the fall is still continuing with the latest figures this year showing annual wage growth of 0.7% against inflation at 1.5%, i.e. a further real wage fall of 0.8%.   There is then a serious knock-on adverse effect in a reduced tax take for the government which is actually this year increasing the deficit (from the current £100bn to around £105bn) when Osborne’s whole object is ostensibly above all else to cut the deficit.   His austerity programme is now beginning to eat itself. (more…)

Self-employed to be removed from Health & Safety at Work protection

October 14th, 2014

Next week the government is intending to push through legislation which will remove the cover which self-employed people have always received over the last 40 years since the passing of the Health & Safety at Work Act.   Section 3 of this Act currently places a duty on all employers and self-employed people to ensure, as far as reasonably practicable, the health and safety of others.   The government is now proposing to change this to: “It shall be the duty of every self-employed person who conducts an undertaking of a prescribed description to conduct the undertaking in such a way as to ensure, so far as is reasonably practicable, that he and other persons who may be affected thereby are not thereby exposed to risks to their health and safety”.   This means that any self-employed person who is not on a prescribed list (not yet specified) will have no duties under the Act and will not be able to be convicted of any criminal act, or be issued with enforcement proceedings regardless of any risk that they pose to themselves or others.   This is one of the most dangerous pieces of deregulation on health and safety ever proposed. (more…)

NHS must be exempted from TTIP

October 13th, 2014

The only way to stop the US-EU trade deal (euphemistically called the Transatlantic Trade and Investment Partnership, TTIP) from interfering with the freedom of an incoming Labour government to reverse NHS privatisation is by demanding that the UK government vetoes TTIP unless health services are clearly and fully exempted.   At present they are not, and the government minister Lord Livingston has confirmed that the NHS will be covered by TTIP.   As a result a US investor such as Blackrock or Invesco) profiting from NHS privatisation could use TTIP to sue the UK government if it could prove to a panel of 3 trade lawyers sitting in secret, one of which would be chosen by the investor, that its rights under TTIP had been breached.   That could occur if, in the words of the EU’s Chief Negotiator, there was a claim”for example by expropriation without compensation, a denial of justice or manifestly arbitrary treatment”.   In such cases the tribunal would be able to award unlimited compensation and there is no right of appeal. (more…)

It’s vital that tomorrow’s Commons vote recognises the Palestinian state

October 12th, 2014

It is significant that tomorrow’s vote in the Commons for Britain to recognise the Palestinian state alongside the Israeli state comes not at the behest of the government, but on the initiative of an MP (the redoubtable and resourceful Labour MP, Grahame Morris) under the relatively new procedure that allows Back-Benchers to choose the issue for debate on the floor of the House.   The government would never have allowed this to be debated and voted on if they could have prevented it, and if this resolution supporting Palestinian statehood receives a majority, which seems likely, it will insist that the vote is purely advisory and simply ignore it.   It is yet another abuse of the House of Commons that the government has quietly and unobtrusively adopted the principle, without consultation or consent, that the only votes it will accept are those put forward by government itself as part of its own business programme.   This not only means that debates and votes on international matters not initiated by the government are ignored, but also domestic petitions that gain enough signatures to earn debate on the floor of the House. (more…)

The lessons of Heywood & Middleton

October 11th, 2014

The by-election result in Heywood & Middleton in the Manchester conurbation is deeply worrying for Labour.   It is true that people take liberties in by-elections that they would be unlikely to take in general elections, but it is designed to show their real underlying feelings which it would be unwise to discount or explain away.   It is also true that Labour’s proportionate share of the vote rose by 1%, but that was largely because the Tory vote fell dramatically and the LibDem vote plummeted, and it doesn’t explain why the UKIP vote rose by 35%.   The real reason for this disturbing result is the disillusionment felt by so many working class people in Labour’s northern strongholds that they have been neglected and that their interests have not been properly represented by the Westminster establishment (shades of the No vote in the Scottish referendum).   This was expressed poignantly on the doorstep as ‘the Tories are going to continue with cuts till 2020, and you’ve said you will do the same, so why should we vote for you?’

As we enter the eighth year of continuing austerity this is the first vote in a northern constituency that expresses the resistance bubbling up against a regime of endless cutbacks – average wages already fallen 9% in real terms and still falling, low-paid insecure jobs (even if you can get one) whether self-employment on pittance incomes or zer hours contracts, with benefit cuts forcing people to leave home or use food-banks, and with no sign of any change for the foreseeable future.   What people are crying out for, and want desperately to hear from Labour, is the alternative to austerity that would give them hope and inspire them to come out to vote.   That is a policy of public investment to kick-start the economy on a sustainable course (when the present so-called recovery is already fading before 90% of the population have even felt it), a policy of job creation in house-building, infrastructure and green economy, a policy of rising incomes which will increase government tax revenues which will pay down the deficit much faster (when it’s still £100bn and actually rising this year).

Of course immigrants are blamed for all this disillusionment by Farage, the con-man ex-investment banker posing as a man of the people behind two pints in a pub).   But immigrants are not the root of the problem – austerity is.   All the studies undertaken of the immigrant contribution to the British economy shows that they provide a net benefit, there are a higher proportion of them in work than in the white host community, and a smaller proportion of them are on benefits than in the white community.    There are undoubtedly problems of providing public services, particularly housing and education, in some areas, but that of course is exacerbated by Tory government cuts of 40% to local authority budgets.

Ebola a much-needed wake up call for the West

October 9th, 2014

The President of the World Bank, Jim Kim, got it right when he said last night of the international community: “It’s late, really late……We were tested by Ebola and we failed.   We failed miserably in our response……..Every developed country should be prepared to send trained medical staff to West Africa………We don’t need to stop all travel from these countries.   It’s going to be impossible to stop people.   The way to stop the flow the patients from these countries getting to the rest of the world is to have programmes that will treat people (in their home countries) and increase survival dramatically.   It’s possible”.   But it isn’t nearly happening.   The WHO reports already 3,900 deaths in West Africa from Ebola, though with no sign that the epidemic was being brought under control. (more…)