Cable still does not have the measure of corporate greed

April 25th, 2014

Vince Cable, to give him credit, is the one member of the Cabinet who is seriously concerned about pay extremism in the boardroom.   The rest are seriously in favour of it.   But the measures he has so far put in place, albeit harried at every turn by the Tory Right, will achieve little.   He has given shareholders a binding vote at least once every 3 years on executive pay policy, and that each CEO’s remuneration package should be published as a single total.   He has now written to the chairmen of remuneration committees of Britain’s FTSE-100 companies insisting they do more to curb top pay, and if they do not, then with indeterminate menace their ‘business’ licence to operate’ could be undermined.   What the latter threat actually amounts to is anybody’s guess. All of this is still fairly feeble stuff when the ratio of the FTSE-100 chief executives’ total pay to the average earnings of their employees was 120:1.   This is up from 47:1 in 1998, a near 3-fold increase in the ratio in a a mere 16 years, and up from 25:1 in the 1970s.   All the evidence is that business is cocking a snook at these pleadings for restraint, led as always by Barclays which has just raised bonus payments by 10%, despite a one-third drop in pre-tax profits.   The strongest argument now being made that the message for moderation has now got home to business is that bonuses in 2013 fell 1% for the third consecutive year – though what is not said is that this is a minuscule drop for bonuses pitched at 4-5 times basic salary. (more…)

The downsides of stalling UK renewables are fracking and horrific human rights abuses

April 23rd, 2014

Britain as an island off the mainland of Europe potentially has greater capacity for production of renewable energy than almost the whole of the rest of Europe put together, mainly from onshore and offshore wind, wave and tidal power, and Scottish hydropower.   Yet UK electricity production from renewable energy, though it has increased in the last decade, is still very low and indeed still one of the lowest in the EU.   This is despite the mandatory EU requirement that Britain must generate at least 15% of its primary energy use from renewables by 2020 (whilst most other EU countries are obliged to meet a 20% target) which means that, since renewables make little contribution to transport or space heating, UK use of renewables for electricity production needs to rise to some 35% by 2020.    It is now about 8%, and if Cameron and Paterson have anything to do with it, that small figure may even begin to fall now.   But apart from such shockingly benighted foolishness in throwing away such a potentially world-beating British opportunity for our energy future, there is another darker side to this folly. (more…)

Valls and Renzi are pure Blairite, which means there’s little hope for Eurozone

April 22nd, 2014

Valls and Renzi, the new prime ministers of France and Italy respectively, have made clear their respect for Blair and their intention to follow his example.   That’s bad news for the Eurozone and for the EU in general.   Blairism is not an economic ideology, but rather a style of leadership that is far more about presentation than substance.   So far from representing any new economic ideas, it swallowed the existing free markets capitalist fundamentalism hook, line and sinker.   That’s why following the Blairite line in France and Italy, both countries in deep economic difficulty, is likely to be so self-destructive.   Free market deregulated capitalism isn’t part of the answer, it’s the central problem.   The international economy tanked in 2008-9 because the banks had too much power and negligently and recklessly abused it, and the UK has taken so long to recover because deregulated capitalism decimated British industry in the previous 3 decades in favour of the City of London, whilst at the same time generating the biggest inequality between the very rich and the very poor since the Edwardian age.   To regard  such a programme, which Blair eagerly promoted, as a model for recovery borders on absurdity.  (more…)

Labour’s hiring of David Axelrod won’t work without solid, inspirational policies to fight on

April 21st, 2014

You really can’t expect to win an election by importing an election guru from abroad – even one as well-proved as David Axelrod who helped win two presidential elections for Obama as his political adviser – unless there is a foundation of strong and resonant policies to inspire voters with in the first place.   At present there isn’t.   The 2015 election is clearly going to hinge around austerity.   Osborne is going to say that the 2.7% expected growth rate in 2014 shows that he was right all along and that austerity has worked.   In fact austerity hasn’t worked at all except to depress the economy.   What has produced this temporary spike is yet another surge in consumer spending, which accounted for 80% of last year’s growth, an incipient housing bubble, and a number of stealth increases in public expenditure which is now some 1.8% higher than it was in 2010.   The public’s impression is that Labour is simply following the Tories down the austerity route whilst at least things are now slightly better, however little, under the Tories.   So how is David Axelrod going to mobilise Labour’s grassroots, let alone win new converts, against that background? (more…)

The real risk with climate change is feedback effects as key thresholds hit

April 20th, 2014

What would it take to get the lead countries in the world to take climate change seriously?   The 4th report of the UN International Panel on Climate Change produced by 1,250 of the world’s top scientists and approved by 194 governments, has just been published with the irrefutable argument that diverting funding from fossil fuels to renewable energy and cutting energy waste would reduce expected annual economic growth rates of 1.3%-3% by a minuscule 0.06%.   Given the imminent risk of cataclysmic climate upheaval within the next 20 years, you might think such a deal couldn’t be resisted, but that of course is without reckoning with the political lobbying power of the oil, gas and coal industries.   But there is another argument which ought to give governments pause enough even to override the selfish pleading of the vested interests putting profits before human survival.   And that is the very real risk of dramatic feedbacks. (more…)

Another nail in the coffin of the ‘greenest government ever’

April 19th, 2014

What public health risk killed nearly 30,000 persons in the UK last year?   Second only to smoking.   We assume this sort of thing occurs in developing countries with over-rapid growth like China or in car-choked Los Angeles in California, but not in the UK.   Think again.   The pea-souper smog in London in December 1952 killed over 4,000 residents.   It is now regarded as one of the worst public health disasters in the UK over the last century.   Last year, 60 years later, a far bigger disaster has erupted – nearly 30,000 people died in the UK from filthy air – waves of sooty particles known as PM2.5s which are so minuscule that they can penetrate deep into the lungs and cross into the bloodstream.   They then cause heart and lung disease and cancer, and aggravate asthma.  When PM2.5 levels are raised, the air goes hazy and visibility is sharply reduced.   They are emitted largely by diesel engines.   So why is this whole issue being ignored?   Why hasn’t a commitment been given to phase out diesel engines? (more…)

NHS charges for crutches, walking sticks, neck braces are testing water for gradually full-scale charging system

April 18th, 2014

The Tory aim of transforming the NHS into a fully private-charging system before the election, no doubt with means-testing for the poorest, has taken a further step this week.   It began with Blair’s independent self-standing foundation trusts, went further with Cameron’s offer to ‘any qualified provider’ to compete for any NHS contract, accelerated with his cascade of privatisations and outsourcings throughout the NHS, rose to a new level with the Blairite ex-minister flying a kite for a £10 tax on everyone to pay for their health services, and now has been taken on and applied from within the NHS itself by GPs in a clinical commissioning group (CCG).   This has only come to light because of the investigatory efforts of the anti-cuts group, False Economy, which makes one wonder whether it is already more widespread.   The NHS South Warwickshire CCG are proposing to charge for 15 different kinds of aids and devices for persons who are disabled or are recovering from an accident or operation.   They include trusses for hernias, spinal supports, knee and hip braces, lumbar and abdominal supports, cervical support, toilt aids and equipment, walking aids and crutches, bed mobility aids, etc. (more…)

Asset-backed securities precipitated the crash: let’s do it again!

April 17th, 2014

It is almost unbelievable, but true, that at the highest levels of today’s capitalism it is being proposed that the asset-backed securities which provoked the banking crash in the first place should now be relaunched as the best avenue for recovery.   Both Draghi, president of the European Central Bank, and Carney, governor of the Bank of England as well as chair of the Financial Stability Board, have given their support in the last few days to a resumption of securitisation.   The latter may have an arcane name, but the idea is clear enough.   The banks, instead of waiting 25-30 years to get their money back on a mortgage loan, transform what is an illiquid asset (property) into a liquid asset by pooling them and slicing them into smaller securities that are then sold for immediate cash to investors.   It’s being argued that that’s not only good for banks by enabling them to lend more (and thus make more profit) and to reduce their exposure to risk, it also (it is said) raises economic growth by increasing overall investment.   This is a schoolboy howler: it may accelerate the financial merry-go-round of exotic financial derivatives, but it certainly won’t increase investment in real things. (more…)

If you doubt the Osborne-inspired complacency is fantasy, look around

April 14th, 2014

Osborne preened himself – yet again – at the IMF conference 2 days ago that the Western economies are now set for a prosperous future even as central banks steadily withdraw the lifeline that kept them afloat after the 2008 crash.   The line is that normality is returning after the unfortunate blip 5-6 years ago that required more than $3 trillions of funds to be pumped into the US economy and £375bn of quantitative easing into the UK economy to prevent a catastrophic credit crunch.   The idea that such enormous sources of demand can be gradually but increasingly withheld and that interest rates can be pushed up again to a ‘healthy’ 2-3% without any disturbance to markets is pure complacent folly.   There are two grounds for serious pessimism.   One is that the recovery internationally, not just in the UK, from the longest recession since the nineteenth century remains weak and fragile.   The other is that the levels of debt in the system remain disturbingly vast and dangerous, and indeed the whole emphasis of policy has been to encourage this as the last desperate throw to snatch growth from the jaws of stagnation, but without any regard to inflating future risks. (more…)

Tory lies: why no Labour rebuttal?

April 12th, 2014

One of the few good things that Blair did as party leader was to set up a prompt, robust and effective rebuttal machine to counter lying Tory propaganda.   It worked.   Within hours of false, misleading or selective Tory claims being aired, a strong Labour rebuttal was in place in the media.    It is worrying that such a mechanism seems to have been dropped since the last few days and weeks have seen a veritable cascade of Tory folderol which not only demands instant repudiation but offers the opportunity for a stinging counter-blast, ending along the lines of “I’ll stop telling the truth about you if you stop telling lies about me”.   But alas it hasn’t happened.   The Tories are being allowed to get away with outrage after outrage.

The defenestration of Miller has taken place without scarcely a word from Labour, even when the Standards Committee made the unconscionable decision to reduce her payback by 90%, when you might expect Labour to be demanding her head from the start.   Cameron has the gall to claim the NHS has been performing better than ever before when in fact he has nearly brought it to breakdown because of remorselessly rising pressures and mounting debts and when patients now have to wait up to 4 weeks to see their doctor and then far, far more than the 18 week limit achieved by Labour to see a hospital specialist for an operation.   But the opportunity for a powerful rebuttal was missed.   Osborne makes the risible claim that he’s aiming for full employment when he himself is responsible for holding the level of unemployment at the highest level for 30 years – a golden opportunity to throw back in his face that not only has he kept joblessness stuck at 2.4 million or more for 4 years, yet at the same time he has hardly reduced the deficit at all (it’s still stuck at £111bn). (more…)

Relax – Cameron says spy agencies acting entirely within the law

April 11th, 2014

It was the Blairite press officer Jo Moore who in 20o1 on the day of 9/11 coined the infamous phrase: “This is a good day to bury bad news”.   Cameron seems to have learnt the lesson when yesterday he used the furore over Maria Miller’s avarice and arrogance to quietly give a welcome to a report from the surveillance commissioner  giving the all-clear to Britain’s spy agencies following the Snowden revelations.   In vintage Cameron style, just as he tried to smother the row swirling around Miller with cavalier bravado: “She’s apologised, done the right thing, and we should now move on”,  so here he paraphrases the watchdog’s report as: “agencies undertake their role conscientiously and effectively, and public agencies do not engage in indiscriminate mass intrusion”.   So that’s all right then, nothing to worry about. (more…)

Beware Osborne’s massaged figures

April 9th, 2014

According to the writing on Osborne’s tin, we now have the fastest rate of growth of any major Western country.   But as with all tins, it’s as important to think about what it doesn’t say as what it does say, as well as to wonder whether what it does say is realistic and can be delivered.   On both counts more than a pinch of salt is needed.   What it doesn’t say is, first, that a forecast is not an actual happening.   Consistently since 2010 the OBR and the Treasury have optimistically over-estimated annual UK growth levels, and though there clearly will be some modest growth this year it is extremely unlikely to reach anywhere near the latest IMF figure of 2.9% because all the essential foundations for sustainable growth – rising business investment, rising demand through rising wages, rising productivity, and rising exports net of imports – are all absent.   Second, Osborne’s tin also omits the rather important point that the UK economy after 4 years of austerity is still way behind all the other major G7 economies.   In particular US output following Obama’s stimulatory policies is now 5% above pre-crash levels while UK output depressed by Osbornian austerity is still 1.4% below its pre-2008 level. (more…)

MPs, press, police, bankers – none can be left to regulate themselves

April 8th, 2014

Cameron’s obstinate defence of Maria Miller against the large majority of his own party and the public who want to be rid of her for her greed, arrogance and sheer callous disregard for decent standards in public life needs some explaining.   Maybe he doesn’t want to be pushed, he wants to put in the knife himself in his own time in the reshuffle after the European elections.   Maybe he doesn’t want to be pushed around by the media or his own party (again), and prefers to tough it out.   But he’s shedding political goodwill by the gallon over this shoddy episode.   Sooner or later he’ll call it a day.   The rule for Prime Ministers is, if the media keep up a barrage for 5 days or more and if the political hostility in Westminster is still growing, he’ll staunch his losses and cut her loose.

But it’s not just this tawdry saga itself, it’s the way that judgement on it within Westminster has been manipulated.   The Commons Committee on Standards has 10 MPs on it plus 3 lay members (none of whom have a vote), and the MPs split 5 Tory, 4 Labour and 1 LibDem.   Why did they deal so excessively leniently with Miller, reducing by nine-tenths the payback required by their own independent standards commissioner?   And why was the tone of their admonition of Miller so mild when that can be politically weighted and can carry great influence – their vigorous condemnation of Denis McShane MP for over-claiming £12,000 led to his resignation from the House (and possible imprisonment) while their exoneration of David Laws MP on a pretext for wrongly claiming £40,000 allowed him to stay in Parliament and now return to ministerial office. (more…)

Tory backwoodsmen attack on renewables is potty

April 7th, 2014

If one wanted a clear example (out of many) where ideology trumps common-sense in Cameron’s Tory party, you couldn’t do better than their latest knee-jerk reaction against onshore wind turbines.   They are a significant and fast-growing source of electricity in the UK and by far the cheapest source available to provide the low-carbon energy to meet Britain’s mandatory target of 15% of all energy consumption to come from renewables by 2015.   Cameron appears to be floating the idea of including in the 2015 Tory manifesto either a cap on onshore turbines’ output or lower subsidies to make it harder or even impossible to operate them or tighter planning restrictions to prevent them being built.   This crackers.   To meet the legally binding target it would then be necessary to build more offshore windfarms or more nuclear power stations, both of which are far more expensive.   Electricity from offshore turbines costs over 60% more than that produced by onshore turbines, whilst the new nuclear station at Hinckley Point C (if it is ever built at a cost of £14bn) is expected to produce electricity at twice the current price.   Is Cameron mad or simply the cat’s-paw of his more wacky backbenchers?  (more…)

Maria Miller should resign or be sacked

April 4th, 2014

It is shocking that Cameron, who has repeatedly said in the past that he is cleaning up on MPs’ expenses, now says he is giving “very warm support” to Maria Miller, the disgraced secretary of state for culture, media and sport.   Miller, a haughty Tory lady of the grande dame variety, became an MP in 2005 and designated a house in Wimbledon as her second home (and thus eligible under parliamentary expenses) on the grounds that she spent most of her time in a rented house in her constituency (Basingstoke).   She then made claims for 4 years on the Wimbledon home, but stopped claiming when the expenses scandal broke in 2009.   The Commons committee on standards in their report just published found that she had over-claimed on her mortgage.   The standards commissioner, Kathryn Hudson, recommended that Miller be made to pay back more than £44,000.   The Commons committee on standards, for reasons not disclosed, did not support Hudson’s recommendation.   Instead they merely criticised Miller for frustrating the investigation for over a year by declining to give direct answers to questions about her claims for taxpayers’ money.   They ordered her to repay just £5,800.   Then to cap it all, her ‘apology’ to the House of Commons yesterday which was minimalist (30 seconds), did not even mention the money she had been ordered to repay, and from her manner clearly lacked sincerity. (more…)