Our corrupt, self-protective, unaccountable Establishment

By chance several events in the last few days have highlighted poignantly how the British Establishment – the small political-economic-financial elite who went to the same public schools and the same universities (usually Oxbridge) – automatically close ranks to protect each other when they come under pressure.   Jonathan Burrows, a former MD of Blackrock Asset Management with a multi-million salary, was exposed as a chiselling fare dodger who had cheated Southeastern Railways out of £43,000 over several years, but because he was allowed to make an out-of-court settlement he avoided prosecution and wasn’t sent to prison.   What ordinary employee would have have been allowed such a getaway?   The Financial Conduct Authority (FCA) feebly admonished him as “falling short of the standards we expect” – can you imagine that being said to a burglar who had raided houses for several years and got away with £43,000?   The FCA is the same toothless body which is supposed to be holding the City to account after a decade of stupendous financial crime, but has yet to send a single City grandee to prison.
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Why won’t Labour tell the truth?

Why does Labour, when the Tories lie and lie and lie, keep on turning the other cheek?   Hardly out of an excess of Christian charity, more because of cowardice in failing to confront the British people with the truth.   Osborne, a snake oil salesman if ever there was one, began his time in office in 2010 by repeating over and over again that all the problems in the economy were all the fault of the previous Labour Government.   So why didn’t Labour make the obvious riposte that it was actually the bankers, whom Osborne for some reason had somehow forgotten to mention?   Why, even more worrying, has Labour failed to make even a bleep to counter these Tory lies over the whole of the last 4 years?   It would have been so easy.   The biggest budget deficit in Labour’s 11 years before the crash in 2008 was 3.3% of GDP whereas the Thatcher-Major governments racked up deficits bigger than this in 10 of their 18 years.
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Is Thatcherite ideology working?

In a general election a great number of things will be said, but only a few or even one really matters and that will determine who wins.   This 2015 election is in effect a referendum on Thatcherite ideology.    Here is what Labour should be saying, but isn’t.

Point 1:  For 35 years since 1980 the Thatcherites, which includes for this purpose Brown and Blair, have been pursuing major cuts in corporation tax on the grounds that that would stimulate the economy, produce a surge of investment, unleash higher wage jobs, and thus increase government tax revenues to pay down the deficit.   The opposite has happened: corporation tax has been cut from 52% in 1980 to 21% today, and the proportion of government revenues generated by corporation tax has almost halved to just over 5%.   But none of the benefits promised have materialised, so why do we not reverse this failed policy?
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Deficit nonsense

It is extraordinary that both the main parties have now put forward their plans for meeting the deficit, which is going to prove the centrepiece of the election, yet neither plan carries credibility.   Osborne has once again committed the Tories to £30bn of further spending cuts on a rolling 3-year programme, i.e. currently targeted at 2017-8.   Even if that were politically practicable, which is far from certain,  the idea that this will eliminate the structural deficit within that timescale is laughable.   The deficit this year is likely to end up at around £100bn, and because of the fall in the government’s tax take (caused by the continuing squeeze on incomes, very low wages and zero hours contracts), the deficit is already growing, not falling, and for the reasons just given will continue to rise further in future.   Osborne grandiosely claimed yesterday that “it commits us to finishing the job – and getting our national debt falling……….Once we have got rid of the deficit and have debt falling, we should be running an overall budget surplus”.   This is total arrant nonsense.
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Tories buy election

Democracy is a great system, except that those in power do their uttermost to subvert it, circumvent it, and twist it to their own ends, and quite often succeed.   Take the current state of play between the parties in Britain.   In March this year the Electoral Commission recommended there should be no increase in spending limits for candidates between now and the general election on 7 May.   It also proposed that there should be only an increase in spending of £2.9m for the ‘short’ 3-week campaign leading up to the election.   So what did the Tories do?   Ignoring the official recommendations of the Electoral Commission, they pushed through increases in permitted spending twice those proposed by the Commission.   This works hugely well for them because they have amassed an electoral war chest vastly greater than Labour’s, and will now be able to turn most of it to their own unilateral advantage.
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Lies, deceptions, ISC, MI5

The whole narrative of the UK government’s response to the brutal revelations of US rendition and torture at Guantanamo and ‘black sites’ spread across E. Europe, the Middle East and Asia has been one of subterfuge, deception and downright lying, in sharp contrast to the determination of the political class in the US to get (most of) the ugly truths out in the open.   It casts a profoundly dishonourable shame on this country both for its smothering blanket of secrecy and almost total lack of accountability for the grave misdeeds of Britain’s deep shadow State.   The duplicity of all UK governments over this issue in the last decade has been shocking.

Evasion 1:  The Blair government systematically denied any involvement for years, even though government memos were disclosed which showed that Straw delivered British Terrorism suspects to Guantanamo and even though Blair knew that the US was torturing its prisoners.
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Carney declares Mission Accomplished on banks

Last month Mark Carney, head of the Financial Stability Board as well as governor of the Bank of England, told us that the problem of banks being ‘too big to fail’ had been solved.   If only.   He wants systematically important banks such as HSBC to hold more equity and debt, enough to absorb losses when they come under pressure.   He is pinning his hopes on the new concept of ‘total loss-absorbing capacity’ (TLAC),  which he reckons should be worth between a fifth and a quarter of risk-weighted assets, as sufficient to prevent a taxpayer bail-out at the next financial crisis.   He described this as a “watershed in ending too big to fail”.   However this is declaring Mission Accomplished a bit too soon.   There are grave doubts whether his ‘solution’ is anywhere near adequate.
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The killer argument against PFI

We have always known that PFI was a con trick (i) to take construction and management costs of hospitals and other public buildings offline so they don’t appear in the national accounts, and (ii) to secure the extremely lucrative privatisation of yet another public service at taxpayers’ expense.   But the evidence of how the new outsourced authorities manipulated this fiddle has not hitherto been made so blatantly transparent as in the latest case to come to light.   Six months ago the Treasury approved a PFI for the £360m Midland Metropolitan hospital in Birmingham.   As a result the Sandwell and West Birmingham Hospitals Trust will be forced to pay out £18m for 30 years, i.e. £540m in total – an extremely bad deal for taxpayers.   So how was it ever justified in the first place?   Answer: the NHS Trust Development Authority, that is the hospital’s regulator, opined that “income growth assumptions are significant”.   With the NHS in its near-bankrupt state plus the intention to move care out of hospitals over time, this is not just a heroic assumption, it’s fantasy.
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Home Office gives UK citizenship to murderer

Immigration has now become toxic in British politics for well-understood reasons – excessive pressure on public services, concentration of immigrant communities in ghettos, lack of integration, etc.   But it is not till now that the truth is finally coming out about the almost unbelievable incompetence of the Home Office in the mismanagement of this problem, most of it under Theresa May’s current stewardship.   The Tories made it a big deal in 2010 that they would reduce immigration figures below 100,000 in this Parliament, but the number for this year has risen to 260,000 – a bigger missed target even than Osborne’s missed target for the budget deficit which he pledged would be a mere £40bn this year, but is actually £100bn.
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Labour’s missing link

It’s good news that at last Labour is launching a 10-point list of policy commitments which should silence those who continue to say on the doorstep that they don’t know what the party really stands for.   These are all powerful points, and if repeated enough by party spokespersons and party activists on the ground, they should succeed in making the Labour case a strong, positive and evocative one.   But there is one key element which is missing, and the omission of this could seriously harm Labour’s prospects in pulling back absconders to UKIP in England and the SNP in Scotland where the 2015 election looks likely to be settled.   That key missing element is the commitment, if Labour wins, to shift away from the failed policy of endless spending cuts which have lost all sense of purpose to the already proven policies of economic expansion, growth, jobs, and higher incomes.
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How far was the UK complicit in CIA rendition and torture?

The report published today by the US Senate Intelligence Committee, chaired by Dianne Feinstein,  makes horrifying, even disgusting, reading.   The tactics used against prisoners held at Guantanamo Bay or foreign CIA  black sites (i.e. torture chambers) included water-boarding (simulated drowning), ‘rectal rehydration’ (leading to anal fissures and rectal prolapse), sleep deprivation for a week or more imposed on those shackled, forced to stand and naked, hooding, iced-water immersion, slamming against walls, and threats of sexual and physical violence against prisoners’ families.   The Senate committee also notes that at least 26 of the detainees were ‘wrongfully held’, and the evidence used against them was often based on hearsay or mere rumour.   In extreme cases Khalid Sheikh Mohammed was water-boarded 183 times, and Abu Zubaydah 83 times who emerged an utterly broken man – maybe the aim of the exercise.   This was justified by the CIA on the grounds that the information extorted by torture ‘saved lives’ by revealing future plots.   The Senate committee after years of investigation stated it could find not a single case of this kind, only that torture revealed false information (anything to stave off further torture) or information already gleaned by more traditional forms of intelligence gathering.
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Why Lima is likely to be different from Copenhagen

When thousands of delegates from more than 190 countries descended on Lima for the latest round of UN climate negotiations in this last week, hopes were running high that it would provide the platform leading to a new global deal at Paris in December 2015.   The hopes were well grounded.   A month ago the US and China declared that they would work together to cut carbon pollution, something they notably did not agree to do in 2009 which brought about the collapse of the Copenhagen summit and the drift of the last 5 years.   Under the deal China committed to capping its output of carbon pollution by 2030 or earlier, and to increase its use of zero-emission energy by 20% by 2030.   The US agreed to reduce its emissions by 26-28% from their 2005 levels by 2025.   The EU, the next biggest global emitter, had earlier pledged to cut emissions by 40% from their 1990 level by 2030.   All this was meant to curb greenhouse gas emissions which have risen steadily despite UN talks over the last 20 years.
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Church of England report nails Tories for explosion of poverty and hunger

The report published today by the Church of England, H.M. proxy Opposition and  including representation from all the main political parties, delivers a hefty body blow against a government which a week ago told us that, if they won the election, they would take the country back to the Britain of the 1930s.   Even before we get there, the revelations in the report about Britain today are bad enough and already make grim reading.    In the last 18 months 835,000 individuals were sanctioned (i.e had their benefit stopped and therefore were left penniless for at least 4 weeks, often for trivial reasons).   A high proportion of them were sanctioned twice, which meant they were deprived of all income for 13 weeks.   This is, unsurprisingly, the main cause for the huge proliferation of food banks, of which there are now over 500.   When asked to explain this, the Tory business minister, one of Osborne’s acolytes, made the fatuous remark that it was “because more people know about them”.   He then added that “the truth is that poverty is coming down” when in fact the truth is it’s rising fast.   He also referred to the growing number in jobs and that that was the “single best way” out of poverty, blithely ignorant that there are now more working households in poverty than those dependent on benefit.
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Osborne decimating the State will finally trigger the resistance

Osborne’s central objective, he would have you believe, is to cut the deficit.   He has failed: the deficit he predicted would be £40bn this year turns out to be £100bn and, worse still, it is actually now rising because of the fall in the government’s income (tax receipts) brought about by his own policy of squeezing wages.   His other key concern is holding down and reducing taxes.   In this he’s succeeded: such reduction in the deficit as there has been is almost exclusively the result of cutting public expenditure and benefits, the only exception being the rise in VAT which hits the poor far harder than the rich.   In Osborne’s parallel universe the State is the residual item: it has to make do with what the first two principles leave over.  Indeed I would argue that the shrinkage of the State as a result of the first two strictures is not just an unfortunate side-effect, but the real latent objective of the whole exercise.
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Osborne is bang to rights – when is Labour going to take him down?

Osborne over-reached himself badly in this last week, what with bare-faced lies, twisting of the figures to save his own skin but which no independent expert can validate, childish responses to well-placed questions which left him rattled and blustering, concealing his real underlying motive to take Britain back to the enfeebled state of the 1930s, insisting in every other breath that he has a long-term economic plan which is true only in the sense that it’s the wrong one, and now to cap it all taking on the BBC with accusations of ‘utter hyperbolic nonsense’.    Yet he continues to dominate the landscape because the Opposition still does not have a recognisable alternative macroeconomic policy, their appeal to cutting less far and more slowly over a longer period does not present a convincing shift away from austerity, and above all does not go for the jugular that Osborne has handled the deficit disastrously with maximum pain to the country and minimum benefit because he’s fixated on decimating public services rather than generating sustainable growth (which his ‘recovery’ soon to fizzle out certainly isn’t).
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