The reason Corbyn’s winning is that he rejects the Tory austerity ideology, and so do a majority of the public

The arrogance and intolerance of the Blairites is breathtaking.   Faced with the prospect of a runaway victory for Jeremy Corbyn who has come from repudiated outsider to front-runner in scarcely more than a month, their sole response is to prepare a coup against Corbyn if he is elected leader under the section 47 procedure of the Labour Party rules.   It is hard to exaggerate the folly and selfish indulgence of such a move.   For the Party to spend 3 months in continuous debate and hundreds of hustings in accordance with the legitimacy of Party democracy, and then have an insider palace coup seek to overturn it via back-rooms intrigue within the PLP would be utterly disreputable.   It would split the PLP and likely also the Labour Party as a whole.   Maybe that is what they want: if they cannot get their own way, they would prefer to bust the Party rather than accept democratic choice.   That has always been the way: the Right has always used the Party as a base for its own domination and access to government, while the Left has always remained loyal to the Party it seeks to represent.
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Tory welfare reform is pure political mischief, but at least 124 of us voted against it

It is extraordinary that the Labour party could have got itself into such a muddle over welfare reform (which is Tory-speak for crippling welfare cutbacks) when Osborne’s sole motive for this bill, which had its second reading today, is to create divisions within Labour and label it as the party of shirkers.   The bill is awful.   Despite some useful provisions on apprenticeships, it ignores the plight of children in low income working households, removes the concept of child poverty from the statute book, increases the number of children living in poverty, worsens work incentives for people with below average incomes, and cuts the incomes of sick and disabled people.   The attempt of the interim leadership to square all this with Labour’s need to get on-side with public opinion, repeatedly corrupted by Osborne and the Tory tabloids ranting against the poor and jobless, predictably got the worst of both worlds – a split party and an unconvincing compromise presented to the electorate.
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So Tory ministers lying to Parliament is now OK?

The revelation that British air crews have been engaged in bombing operations against ISIS in Syria for the last 10 months, in strict defiance of a Parliamentary vote two years ago prohibiting this, should be a matter where ministerial heads roll.   The excuse given by the Prime Minister’s office that they were embedded with US forces and not operating under a British chain of command is risible.   The vote in 2013 was explicit that there was not to be any British military involvement in the Syrian conflict.   For Fallon as defence secretary then secretly to allow 20 British personnel, including 3 pilots, to take part in U.S.-led bombing missions against ISIS targets in Syria is direct defiance of a Parliamentary red line irrespective of whether British air crew were operating under U.S. or British command structures.   This a very serious abuse of Parliament.   If Parliamentary sovereignty is to mean anything, Fallon should stand down or be forced to resign.
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Osborne shows his true colours: in the pocket of the banks

Osborne’s sacking of Martin Wheatley, head of the Financial Conduct Authority (FCA) says it all.   His sin was that he was too tough on the banks.   The banks are the most powerful section of the Establishment which runs Britain, and Osborne is one of their chattels who does their bidding when half of the Tories’ annual income comes from the UK finance sector, so Wheatley had to go.   This is a political ousting of the worst kind.   Wheatley was a tough regulator which was needed, and is still needed, when almost every week new scandals are unearthed in the finance sector, when the banks cost the UK £70bn in bailouts and a doubling of the national debt to £1.4 trillions, and when new areas of systemic financial risk including the revival of derivatives that caused the crash in the first place and the growth of the shadow banking sector threaten another financial armageddon.
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Where does all this Tory faux-triumphalism come from? It’s as fleeting as hot spit in a spitoon

Far too many people seem to be accepting that Cameron-Osborne, with a slim and fragile majority of 12, are ‘masters of all they survey’ and have both the opportunity and will to bring in the Tory nirvana and crush the social democratic settlement of the late 1940s for ever.   Nothing could be further from the realities.   Given that the German brutality towards the Greeks has left a very bad taste in the mouth about the nature of EU solidarity/partnership/co-operation, Cameron may soon find himself cornered by being unable to offer any significant EU change except as a post-dated cheque which carried no credibility and could now well lose the EU referendum in mid-2016, in which case the Tory hard-right which numbers nearly half of the Tory back-benches would bid to force him out.   His most likely successor, Osborne, could by then in serious trouble as UK economic growth deflates further for lack of demand.   The three last quarters have seen growth implode from 0.9% to 0.6% and then to a mere 0.3%, and all the signs are that the 2nd quarter of 2015 will show little or no sign of recovery.   The picture could look very different by the middle of next year.
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Why should a teacher or senior nurse pay a higher tax rate than a millionaire fund manager earning 200 times more money?

The Finance Bill which starts next Monday in the House Purports to stop hedge fund and private equity fund managers from claiming artificial costs to reduce the tax they pay on their ‘carried interest’ (i.e. their personal share of the profits from the funds they manage).   The Treasury thinks this will raise over £350m a year from the few thousand hedge fund and private equity personnel.   Of course Osborne announces a crackdown on tax avoidance in every budget, but it usually turns out to be a fraction of what he claimed, like the Swiss deal which was supposed to yield £5bn, but actually raised only just over £100m.

Once again he shows himself willing to hurt, but afraid to strike.   He omits the most obvious way by which private equity fund managers currently shrink their tax bills, by arranging to pay 28% capital gains tax rather than 45% income tax on their carried interest.   If ever there was a tax fiddle, carried interest was it.   Carried interest is their remuneration for managing other people’s money, and should therefore be taxed as income tax.   Their ability to pay CGT on what is properly income also allows fund managers to avoid paying any national insurance contributions on a major portion of their income.
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The IMF saves Eurozone from itself, but much more than ‘haircuts’ needed

Who would have thought that the IMF, the pillar of international capitalism set up by the Americans after the war to police the global economies in the interests of the Washington Consensus, should come to the rescue, not of the finally compliant Greeks, but of the triumphalist yet wayward Eurozone (for which largely read Merkel and Schauble)?   Nothing, certainly not condemnations for the Left around the world, could have exposed so ruthlessly the rigidity, greed and intransigence of the German establishment.   Nothing, equally, could have thrown Greek politics into such a vortex of unpredictability, with Tsipras relieved from having to defend the indefensible, and with his party saved from splitting and having to depend on the far Right to win the votes in Parliament.  But the relief may be short-lived as the IMF has itself laid down extremely harsh terms as the price for its consent to the deal.
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The macro-economics of the budget are truly awful

This is an edited version of my speech in the House of Commons on the Chancellor’s Summer Budget:

All the hoo-hah about the Budget has centred on the £9 so-called living wage in 2020, even though the living wage in London is already £9.35. It is therefore not a living wage at all, but a slightly revamped minimum wage. Nevertheless, it is the macroeconomics of the Budget that really matter and those are unreservedly depressing. If this is such a wonderful economic recovery, as we are constantly being told, why are average wages still 6% below their pre-crash level seven years ago? Why was the growth rate in the last quarter—the first of this year—just 0.4%, with an annual rate of just 1.5%? Why has productivity been flat for the past five years?

We all regard productivity as crucial, but the UK’s investment as a percentage of GDP is now among the lowest in the world at barely 14%. By the time depreciation is netted off the growth figure, we are actually down at just 2.5%, which hardly even keeps up with our rising population.
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The Greek ‘deal’ represents the supplanting of European democracy by neoliberal economics

Arguably the so-called deal that has been forced down the throats of the Greek people represents the worst of all worlds.   It imposes even more draconian terms than were on offer even a week or two ago, with very little conceded in terms of debt relief, but with such added conditions of austerity as will make it nigh impossible for the Greek economy to achieve the growth necessary to pay down the indebtedness which had reached 175% of GDP.   This is not a creative solution of EU solidarity which is the constant refrain of European rhetoric, but a brutal punitive assault which all but turns Greece into an EU economic protectorate, including a requirement to place the country’s most valuable publicly owned assets into a €50bn privatisation fund controlled by the EU.   This is the end of Keynesian economics in Europe and its replacement by capitulation terms reminiscent of those imposed on Germany by the Versailles Treaty after the first world war.
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