Cameron, over-hasty as always on rhetoric, has to retreat over action on ISIS

September 2nd, 2014

Cameron on Friday was waxing bellicose about a “greater and deeper threat to our security than we have known before” because of ISIS.   Compared with Hitler in 1939?   Compared with the IRA during the 1980-90s?   But Cameron’s statement to the House yesterday was remarkable not only for the way he has been forced to backtrack over the weekend because of the legal and political constraints, but also for its very limited focus on British jihadis.   There was nothing about the central issue of how to deal with the ISIS threat on the ground, and nothing either about how to counter the radicalisation of young Muslims which is at the heart of turning them towards jihadism.   It was restricted entirely to trying to stop fighters returning to the UK, as it is estimated some 250 out of 500 have already done, and the proposals even on this were weak on detail and effectiveness. (more…)

Rushing into new anti-extremist powers has a troublesome history

August 30th, 2014

Here we go again.   The undoubted threat represented by ISIS and the return of its recruits to the UK is leading to calls for new banning orders for extremist groups, new civil powers to target extremists, and measures to target persons even when have actually not broken the law.   It has also led to proposals to revoke the passports of returning British citizens, a power already being used after it was introduced in April this year via royal prerogative executive powers – an anachronistic means of acquiring new powers without explicit parliamentary authority.   The emphasis is being put on strengthening terrorism prevention and investigation measures (TPIMs) which replaced control orders and are almost identical with them, when the independent reviewer of terrorism legislation David Anderson has recommended stronger ‘locational constraints’ and required attendance at probation service meetings, though these are unlikely to make a decisive difference. (more…)

Blair should be sacked from his post as Quartet Representative in the Middle East

August 28th, 2014

Following the latest example of Blair’s shameful support for brutal regimes in the Middle East, I have sent this letter to all four members of the Quartet – Ban Ki-moon at the UN, President Obama, President Putin, and President Barroso of the EU Commission:

Ban Ki-moon,
United Nations,
UN Headquarters,
New York,
28 August 2014

Dear Secretary-General,

I write as a former Minister in the Blair government in the UK from 1997-2003 and a member of the Front Bench of my party in the UK Parliament for 29 years (1974-2003) to request that you and other members of the Quartet for Middle East affairs should now urgently review the position of Tony Blair as Quartet Representative.

The third war between Israel and the Palestinians has (hopefully) just concluded, but the task of achieving a long-term and sustainable peace settlement between these two nations will be an extraordinarily sensitive and difficult one, and I wish to propose to you that Tony Blair is utterly unsuited to this task, or indeed to any other representational role in the Middle East, and should be replaced.

He is almost universally viewed, as junior partner with President Bush, as author of the disastrous invasion of Iraq in 2003, the results of which are still today being played out catastrophically across both Iraq and Syria. His reputation is thus indelibly linked with attempts to control the Middle East in accordance with Western interests, which has been the bane of the region over the last century and is fundamentally opposed to the development of free, independent, self-governing, democratic Arab States throughout the area.

In particular in the Israeli-Palestinian context Blair is seen as overwhelmingly pro-Israeli which effectively rules him out as a fair and balanced negotiator working in good faith with the confidence of both sides. His prejudice in favour of Israel was constantly displayed in the UK Parliament during previous wars, and it is perfectly clear he does not command the trust of the Palestinians at all. (more…)

Unrepentant banks put up two fingers to regulators

August 27th, 2014

Today it is reported that the Financial Conduct Authority (FCA) has imposed a fine of £14m on RBS for deficient mortgage record-keeping and poor advice to borrowers.   It has still not imposed any penalty on RBS for its far more serious offence regarding the sale of US mortgage-backed securities.   By contrast, only last week the US regulator fined Bank of America $16.7 (£10.2bn) for misleading investors in its mortgage-backed securities – nearly 1,000 times more than the penalty just announced for the British bank.  This colossal difference in the impact of regulation between the US and UK goes a long way to explain why the UK banks are still continuing to get away with impunity after nearly crashing the entire British economy.   ‘Light touch’ regulation (a euphemism for its almost total absence) still rules.   But it’s even worse than that, with the UK banks now sticking up two fingers at the regulators at every opportunity. (more…)

Stop austerity & cut deficit by printing money & sending cheque to every household (except rich)

August 26th, 2014

Arnaud Montebourg, France’s economy minister who has just resigned, is quite right.   He denounced austerity policies as “absurd” because they had brought about “the most destructive crisis in Europe since 1929″   He rightly attacked the Eurozone’s fiscal stance as “the cause of the unnecessary prolongation of the economic crisis and the suffering of the European population”, and he correctly demanded a major change of policy away from “the extreme orthodoxy of the German right”.   Montebourg is not the only one who has been railing against the absurdity of counter-productive policies which are relentlessly dragging down the Eurozone into deflation.   Renzi, the young Italian prime minister, has rightly been demanding an easing of over-tight fiscal policies and a longer timescale to generate the growth to enable his country to overcome its excessive indebtedness.   Italy, like Japan before it, has now endured nearly two decades of falling living standards and in the absence of growth will soon find maintaining its interest payments unsustainable. (more…)

Labour should champion a wealth tax which would be extremely popular

August 25th, 2014

It is worth remembering that the most popular item in Francois Hollande’s manifesto which propelled him to the French presidency was imposing a high rate of tax on the very richest in the country.   Admittedly his popularity has nose-dived since then, but that is for totally different reasons to do with France’s economic straitjacket within the Eurozone.   Taxing the small category of excessively rich people still remains popular in France, as it is in the UK.   A recent YouGov poll found that 74% in the UK favoured it, with only 10% against, and actually the the rich were slightly more in favour than the poorest groups.   Vince Cable on behalf of the LibDems has been pushing the idea of a mansion tax on properties worth more than £2 millions, but Labour has yet to indicate its support either for that or, preferably, a wider tax on the generality of wealth. (more…)

Private pension markets are riddled with internal contradictions and are not working

August 24th, 2014

Thatcher ended the best pension scheme the UK has ever had, and pensions have never recovered from the consequent decline as constant mis-selling scandals continue abundantly to demonstrate.   Barbara Castle’s SERPS schme in the 1970s was generous particularly to the low-paid and to women, highly popular, and provided universal protection against poverty in retirement.   Thatcher reduced its generosity by cutting the accrual rate, gave individuals an incentive to opt out of SERPS into personal pensions which turned out to be much poorer quality, broke the link between earnings and the basic State pension, and allowed individuals to opt out of occupational schemes which had previously been a key element of the social wage.   These opt-outs led to a great mis-selling scandal as commission-hunting salesman persuaded many to shift to poor defined contribution (money purchase) schemes.   The State retreated from guaranteeing earnings-related retirement income to merely providing a low means-tested safety net, and as the State basic pension steadily declined relative to earnings it inevitably led to a large rise in pensioners subject to means-tested benefits. (more…)

Holding bankers, doctors, business executives, MPs, police, media to account must lead to sacking/prison in worst cases

August 23rd, 2014

Once again it is instructive how they do things in the US, the citadel of capitalism, which is so very different from the secretive British State which protects its elites even from their worst wrongdoings.   The Bank of America has just been fined $16.7bn for misleading investors in its mortgage-backed securities, a colossal sum which vastly exceeds any penalties imposed on UK banks which were paltry by comparison, even though they were guilty of exactly the same malfeasance.   But there were two other codicils attached to the Bank of America settlement which have been singularly absent from the UK.   One is that the bank is now required to pay $7bn in consumer relief to communities still struggling to recover from the housing crisis the bank caused.   It is required to reduce the mortgages of homeowners in negative equity and to reimburse some who incure higher tax bills as a result.   Why is the same not being imposed on the Big 4 UK banks – HSBC, Barclays, RBS and Lloyds?   The other crucial point about the Bank of America judgement was that it specifically “did not preclude any criminal charges against the bank or its employees”.   Indeed Angelo Mozilo, chief executive of Countrywide Financial taken over by Bank of America, is currently subject to a new investigation by prosecutors. (more…)

It’s time for Labour to speak out on corporate governance

August 22nd, 2014

Whilst the economic debate surges around austerity, recession and claims of recovery, it’s remarkable that next to nothing is being said about the flaws of corporate governance.   As a result the dominant theme of shareholder value is accepted almost without question.   Yet it is deeply compromised both in theory and in practice.   Most obviously it isn’t only shareholders who bear risks or supply important inputs: both taxpayers and the workforce do.   But the fundamental problem with shareholder value is short-termism.   The average time that a share is held for is now measured in days.   There are several reforms needed that could diminish or eliminate the blight of short-term churning of shares or the short-termist outlook of senior managers obsessed with enhancing the share price above all else as a means of boosting their bonuses.   Directors’ legal duties should be reformed so that they are required to promote the long-term success of their company as their primary aim.   Ending the requirement for quarterly reporting would remove one of the key pressures that makes for a very short-term perspective.   Capital gains tax should be changed to encourage long-term share ownership.   Corporation tax breaks should be used to favour investment and penalise companies sitting on cash surpluses. (more…)

Obama wants jihadi cancer to be halted, but how?

August 21st, 2014

It is extraordinary that after an 18 month ISIS rampage of beheadings, torture and executions across northern Iraq and Syria, and after the killing including crucifixion of 500 Yahidi men because of their Christian faith, the brutal murder of one man has now aroused such passion in the West.   But that of course is because he was an American.   It even brings Cameron scurrying back from his holiday to take charge – but to do what?   This is a real turning point in the West’s confrontation with the international jihadism that was unleashed by the illegitimate and disastrous Bush-Blair invasion of Iraq a decade ago.   The jihadist movement is now far stronger in the territory it holds, in its related clusters in Nigeria, Libya, Somalia and Yemen, in its resources from kidnapping, control of oilfields and smuggling, and in its tactical capacity to disrupt the West.   They face Western nations in the mirror reverse of uncertain response, bruised by a decade of war weariness in Iraq and Afghanistan, hobbled by the veto on boots on the ground, and rather lamely having to appeal to allies in the Middle East to take a leading role. (more…)

Time for Labour to set out how it will re-set energy markets in 2015-7: here’s how

August 20th, 2014

Current UK energy policy is a colossal failure.   It is supposed to (1) deliver cheap and affordable energy to consumers, (2) provide security of supply, and (3) shift from carbon fuels to renewable energy as a key part of tackling climate change.   But under the current privatised regime the UK is monumentally failing on all 3 counts.   On affordability, the most recent figures for domestic electricity prices show that despite its wealth of natural energy resources, the UK has the fourth highest prices in the EU (excluding the new East and Central European accession states).    Other studies over a number of years have consistently concluded that UK electricity prices are consistently higher than they would have been without privatisation.   At the same time the UK has some of the worst statistics in Europe for fuel poverty.   What is most shocking of all is the number of UK pensioners who die from extreme cold every winter at a rate double that of Finland  despite the latter’s much colder winter climate.   Indeed the UK rates are also far higher than for countries with similarly severe winter weather like Sweden and Germany. (more…)

Average FTSE-100 chief executive now gets £90,385 per week, 143 times more than their staff

August 19th, 2014

The inequality between business leaders and their workforce has now reached an all-time high.   According to the pay consultancy Manifest/MM&K, the typical FTSE-100 chief executive is now paid £4.7 million a year (over £90,000 a week), whilst the typical FTSE-100 employee gets 143 times less.   This is the average position, which means there is a considerable range of outliers around this mean.   Whilst the ratio is capped at 75:1 in the case of John Lewis and 65:1 at TSB bank (still very sizeable differentials), the inequality at the other end of the spectrum runs off the scale.   The boss of mining company Rangold Resources was paid £84,600 last year, no less than 1,500 times the wages received by his African mining workers.   Even in companies located in Britain, the inequality is vast, and growing.   Sorrell, boss of the WPP advertising firm, took home nearly £577,000 a week last year (paying himself, in effect, nearly £30 millions a year), some 780 times the pay of his average worker.   Lord Wolfson, boss of Next, took home £88,500 each week last year, 459 times the average pay of his shop-floor staff. (more…)

Is this the kind of US healthcare system the UK is headed for?

August 18th, 2014

A deep and alarming insight into US healthcare has recently been published by two authoritative figures within the system which holds profoundly worrying lessons for where UK healthcare may be heading under the Tory Health and Social Care Act of 2012.   Healthcare in the US is a magnet for thieves.   Medicaid hands out $415bn a year and Medicare, a federal scheme for the elderly, nearly $600bn.   Total health spending in the US is a colossal $2.7 trillion a year, or 17% of GDP, twice the proportion in the UK.   Nobody knows exactly how much of that is stolen, but Donald Berwick, former head of the Centres for Medicare and Medicaid Services (CMS), and Andrew Hackbarth of the RAND Corporation have made the most thorough and detailed attempt to establish the facts.   The have concluded that fraud, and the extra rules and inspections required to fight it, add as much as $98bn, or about 10%, to annual Medicare and Medicaid spending, and up to $272bn across the entire US healthcare system.   By 2013 federal prosecutors had over 2,000 health-fraud probes in operation. (more…)

What is to be done in Iraq?

August 17th, 2014

As ISIS (the Islamic State of Iraq and the Levant), following on from overrunning a third of Syria and Iraq, is now trying to encircle Baghdad which could make the survival in its present borders untenable, there are very few options left.   Western airpower alone cannot halt ISIS except temporarily, and neither the US nor any of its European counterparts including the UK are going to risk Western boots on the ground on sufficient scale to halt and reverse the ISIS advance.  Supplying Western arms to the utterly demoralised Iraqi army, which is by far the most likely option chosen by the West, carries a greater risk of advanced Western munitions falling into ISIS hands  than stalling the ISIS conquest.   The only force now that can break the demonic sectarian spiral that has been unleashed across the Middle East are the regional powers of Sunni Saudi Arabia and Shia Iran, sworn enemies but conceivably brought together by their mutual fear of unlicensed barbarity lapping dangerously close to their borders.   If that breakthrough is not secured, and only utter desperation will pave the way for it, ISIS will carve out both the new borders and institutions for Iraq in a manner that could end up genocidal for the Shias.   How then might this unholy alliance be achieved? (more…)

To catch people like Rebekah Brooks & Bob Diamond we need strict liability

August 16th, 2014

In her memo to her own staff over the hacking scandal Rebekah Brooks wrote “We were all appalled and shocked when we heard about these allegations yesterday………I have to tell you that I am sickened that these events are alleged to have happened…………..Not just because I was editor of the News of the World at the time”.    In similar mode Bob Diamond, former chief executive of Barclays, declared to the parliamentary commission on banking standards that he felt “physically ill” when he learnt that Barclays employees had been making false rate submissions in the Libor scandal and that he was “disappointed because many of these behaviours happened on my watch”.    These testimonies make it absolutely clear that we need new rules which target personal managerial responsibility when something disgraceful happens. (more…)