Monthly Archives: April 2007

Seven Days of Shame: Why the railways must be renationalised

On 14th March of this year, Southwest Trains (SWT), who operate the busiest railway routes in the country, announced a £700 million dividend for its shareholders. SWT’s parent company, Stagecoach, is owned by Brian Souter. He netted a £1 million windfall.
On 20th March – just six days after the shareholders’ wealthy reward – SWT announced a new ticket rate for commuters travelling between 10am and 12pm. The price hike? 20%. Adding insult to considerable injury, those travelling into London after 12pm will pay a further 3% – that’s on top of the inflation-busting New Year rise of 5.4%.
The next day, on 21st March, Gordon Brown announced a rise in fuel duty of 2% in his final budget. So much for encouraging us to quit the car and take the train.
Whilst the railways remain in the hands of profit-hungry companies, it is impossible to make train travel an affordable option. Yet we all now realise that climate change poses a horrendous threat and that urgent action is needed. Politicians of all sides agree that the status quo is unacceptable, and that much has to be done.
David Cameron says he will put railways at the heart of his environmental policies. Quite what that means is anybody’s guess. Once again, Mr. Cameron grabs a headline without grabbing the initiative – he offers no coherent or plausible policy on the future of our railways.
Michael Meacher has a plan, and it involves putting both environmental and passenger concerns at the top of the agenda. We currently have one of the most expensive and least efficient railway services in western Europe. By taking the railways and train companies back into public control, Michael would allow the government – who currently pay higher subsidies to the railway industry than before privatisation – to make trains a pivotal part of an integrated green strategy.
Michael Meacher wants to increase investment in the railway network, allowing more trains to operate on more routes. Ticket prices must come down. As soon as the railways are once again owned by the public, you remove the profit incentive – which is the key reason fares rise by such astronomical rates each year.
Our railways should not be dependent on a small group of people making huge sums of money at the expense of the millions of Britons who rely on trains, and who want to make a difference to the future of our planet by leaving their cars at home.

Labour Policy Watch

Rob Wall, a Labour member in Bedford has put together this remarkable website, which should be an invaluable resource for all of us concerned about the halving – or more – of membership and the 4m votes lost since 1997. It provides invaluable data that illustrates exactly why it is that Labour members are disillusioned and, in many cases, reluctant to go out campaigning.
It’s a work in progres and Rob Wall wants feedback from others to fill in the blanks. I don’t think such assiduous compiling of data should be taken for granted and urge people to use the site to add information and use it in arguments with the ‘carry-on-as-before’ crowd.

No more new Labour: my radical challenge to Brown

From today’s Times:
Politics is in a curiously disorientated state in Britain today. On one side, old-style Toryism was voted out in 1997, and has now been replaced by a soft veneer of environmentalism and family-centredness that contrasts sharply with the excesses of private equity capitalism. On the other, the persistent shifting to the right under new Labour has now blown itself out, as the polls indicate, leaving a large segment of political space occupied by mainstream Labour opinion and probably a majority of the electorate as a whole largely disenfranchised.
This key part of the spectrum urgently needs representation to give it fresh direction — not old Labour either, but a modern progressive politics addressing the big issues now being ducked and championing key groups now being marginalised.
First, we need a change of direction to heal the divisions that are increasingly straining the fabric of our society. The Government has made some progress in reducing poverty, but not nearly enough. Inequalities are actually increasing. The average pay of the chief executives of the top FTSE 100 companies is now £46,150 a week, 250 times the minimum wage and 500 times the state pension, while at the same time there are still 12.5 million people, including more than 2 million children, living in households below the Government’s poverty line. This matters because reducing inequality leads to less violence, better health, longer life expectancy, lower teenage birth rates and higher educational attainment.
We need a new approach to cutting crime if we genuinely believe in being as tough on the causes of crime as on crime itself. It’s not sensible to go on banging people up even faster than we can build new prisons without tackling much harder the causes of criminality, and putting much more emphasis on reducing recidivism. Despite unprecedented increase in the use of custody, reconviction rates have soared. The hardline policy isn’t working.
We must drastically reduce the prison population, confining it to violent and dangerous offenders. We should provide instead secure units in the community where lesser offenders are required to attend compulsory courses on anger control, money management and parenting, and also to receive education and skills training and treatment for drug addiction and mental health needs, and are made to do unpaid work to repay the community.
Probably the best crime reduction value for money comes from parenting programmes and youth inclusion panels, bringing together local services to focus support on 8 to 13-year-olds at highest risk. Of course there are increased costs involved in intensive rehabilitation, but if prison places and reoffending costs can be significantly reduced, there should be a substantial net saving in public expenditure.
We need too to arrest the overcentralisation of power in this country. Key decisions, such as the replacement of Trident and the restoration of nuclear energy, should not be taken without consultation of the Cabinet, Parliament and public opinion.
Indeed, the most direct way to win back public trust and reconnect with the electorate is for the Government to be seen as genuinely accountable, listening and being prepared to adjust in the face of strong public demand.
It also means Parliament reasserting its authority by taking the right to ratify (or not) nominations to the Cabinet made by the Prime Minister, by appointing committees of inquiry where the Government refuses to do so (as over rendition flights), by ending the Royal Prerogative whereby the Prime Minister can unilaterally declare war and authorise military action, and through its select committees tabling its own motions for debate and voting on the floor of the Commons. Giving the public the right to initiate legislation through referendums is another issue to explore.
We also need much more vigorously to tackle the greatest threat facing the world today: climate change. It must permeate every policy area of Government — not just energy, but transport, industry, building, agriculture, public expenditure and taxation, and foreign policy. It is not enough merely to talk of the end of oil dependence when our electricity generation from renewable energy is, at just 4 per cent, by far the lowest in Europe.
We need an overall plan to meet the scientists’ target of reducing carbon emissions by at least 60 per cent by 2050. It is a colossal challenge, but a win-win-win-win scenario. It will increase energy efficiency hugely, create large savings for industry and some of our poorest households, protect our economy against sudden destabilising external shocks and safeguard us from climate catastrophe.
Finally, we must stop being subservient to the US. We can’t go on being America’s glove puppet, as we have been over Iraq and Lebanon, and, most worryingly, Iran. We need a foreign policy that robustly reasserts our own essential British interests and our commitment to the UN. The first demonstration of that should be strong opposition to any potential US or Israeli attack on Iran, and insistence that the nuclear impasse must be resolved by negotiation or by UN sanctions, not by violence.
We should take the advice not of the US but of British military commanders on the spot in speeding up our troop withdrawal from Iraq. And we should push for a wider international peace conference for a joint settlement of interconnected Middle East issues that cannot be solved one by one. The latest reports of a US change of heart about talking to Iran and Syria make this now a serious possibility.
It is because I believe that radical new policies of this kind would reenergise politics in this country that I am standing for the leadership of the Labour Party.

Not democracy, but plutocracy

(From Tribune.)
When Sir Hayden Phillips was appointed in the wake of the cash for honours episode, a lot more was at stake than simply new arrangements for party funding. In the background was a long-laid plan for the Americanisation of British politics
Sir Hayden’s key recommendation – a £50,000 cap on donations, with some restrictions on national or local spending – would, if accepted, lead inexorably towards ever greater dependence of all the political parties on rich donors, whether companies or individuals, as in the US. Apart from reproducing in Britain the cancer at the heart of the American plutocracy, it would emasculate even further the sense of shared involvement which has always been at the heart of British political democracy.
The essence of the US political model is that parties exist for fund-raising and vote-getting purposes at elections, not for political education or for participation in the political process through lobbying of leaders or ministers. Political leaders, who are dependent for their election on a war-chest drawn from rich donors, overwhelmingly big business, owe no allegiance to operating political parties or to any particularly distinctive political or class ideology. American politics is thus driven by this alliance of convenience between a narrowly drawn political elite and the business plutocracy that sustains it on condition of rewards and kickbacks from whichever party wins.
British politics is still a long way from reaching this point. But the signs of seismic change in this direction in the last days of the Blair era are all too apparent. A donation cap of £50,000 would virtually cripple the mass financing of the Labour Party via the trade unions whilst still allowing the Conservative Party to draw in full on its traditional source of funding from wealthy corporate and individual donors, only spread more widely than before. Though some of the finance gap, probably only a small part because of public distaste, may be met by State funding, the dependence of British politics on rich donors would be remorselessly increased.
There are several ironies in this situation. A scandal that arose from the demand to clean up British politics from the alleged corruption of selling peerages in exchange for huge cash contributions has now been turned on its head by efforts to suppress the one element in the current system that is genuinely democratic – the contribution by millions of union members to a political fund legitimised by a regular vote. By contrast, large-scale contributions by companies are not subject to any vote of either shareholders or employees.
Another irony is that the Hayden Phillips proposals seem to be targeted at reducing or eliminating trade union influence when the real corrosive power behind the scenes is wielded by business funding. The Phillips review proposes “individualisation” whereby each union member opts in or out each year of contributing to political parties. Collective trade union funding would largely come to an end. Yet all the evidence suggests that union monies have had no influence whatever in subverting the political process over the last two decades, while corporate monies exert very considerable power in overriding democratic channels and due legal process. The Ecclestone affair, the kow-towing to Murdoch, Blair’s over-close relationship with BP and BAE Systems (and those are just the ones we know about), the alleged cash for peerages episode itself, together with the policy of keeping employee workplace rights firmly under the thumb of the employers, all point in this direction.
But radically increasing dependence on business and other wealthy donors is only part of the present landscape that is moving. Several other proposals currently floated are coming together like pieces in a broader jigsaw. There is already talk of introducing primaries for the election of party leaders. No.10 has been strongly pressing for a loose “supporters’ network” as an addition to, and perhaps eventual substitute for, party membership. The advantage for the proponents of this political model is that ‘supporters’ could be readily targeted by email while bothersome members continually demanding a participatory role in policy-making could be dispensed with. Already Labour Party Annual Conference has been reduced to a grandstanding for the Leader’s speech, and now the idea of it being held less frequently, say biennially, is being talked about. Party subscriptions have been raised to £36 a year – a further discouragement to low-paid members when ‘supporters’ are not charged anything at all.
Again there is a bitter irony here. All of these measures will conspire to increase power in the hands of the political leadership. Yet the single biggest failure of the British political system today is the over-centralisation of power within a narrow, unelected clique around the Prime Minister which excludes the Cabinet and the elected Parliament, together with the almost total breakdown in the democratic checks and balances for holding the Executive and particularly the Prime Minister to account.
Britain now has in effect a President without the counter-balances of the Presidential system in the US where a separately elected Congress can act as an effective check against arbitrary Presidential rule. In Britain, by contrast, the unitary hierarchy of power from Prime Minister downwards undermines the constitutional necessity of a separation of powers, as the current questions over the independence of the Attorney-General’s advice about the legal case for the Iraq War and the closing down of the SFO investigation into suspected corruption in the Al Yamamah arms deal with Saudi Arabia make only too clear. There is no case whatever for changing party funding arrangements in a manner which will consolidate yet further Prime Ministerial power linked to private deals with big business – quite the reverse.
For several decades, the power of the Prime Minister has grown. It is still growing, and now needs to be cut back as a matter of urgency. The current proposals however for restructuring party funding do not represent the modernisation of politics in Britain. They reflect rather the emasculation of the existing balance of power which will lead inexorably towards the Americanised system where corporate coffers buy political parties. That’s not democracy, but plutocracy.

How Gordon Brown allows billions to slip through his fingers

From The Daily Express (30 March 2007, not in online edition, so no hyperlink.)
I WOULD like to introduce you to the luckiest people in Britain.
There are about 60,000 of them – and they have won the National Lottery jackpot without ever buying a ticket.
These are the super-rich people who enjoy what is officially called non-domicile status as taxpayers – but I prefer to call them tax asylum seekers, in search of refugee status for their money.
How did this happen? In this year of amazing grace it is worth remembering that it is the last survival of the slave trade in Britain’s tax system.
It was originally introduced by Pitt the Younger in 1799 to relieve colonial fortunes – many derived from slavery – from his new-fangled income tax.
Because the inheritors of this tax loophole today have some connection with a foreign country, our tax authorities give them a sweetheart deal like no other in the world.
Basically, they pay tax only on the income they choose to bring to Britain. They can hide the rest of their money in a letterbox bank in a tax haven, or even flaunt it through yachts and palaces and public fortunes overseas, and Britain never sees a penny of it.
When you and I begin to earn any substantial money we have to pay 40 per cent tax on it. But according to top accountants Grant Thornton, the tax asylum seekers pay an effective rate of 0.4 per cent on their money – 100 times less.
AT A time when the NHS is being cut, when nurses’ pay is being cut, the Treasury waves goodbye each year to tax on personal fortunes worth £126billion.
That would provide more than enough to pull the NHS out of debt and pay for all of Tony Blair’s failed IT schemes.
I have nothing against people who become super-rich by hard work or invention. But these particular super-rich people are having a laugh at our country.
They treat it like a club – they can drop into it just when they like and use all the facilities without paying a membership fee. They just give a tip to the doorman – and the doorman’s name is Gordon Brown.
He bows gratefully and waves them in. If they are British or Commonwealth citizens, the tax asylum seekers can vote in British elections – and help decide tax levels for other people. They can give money to political parties, and buy influence and access to power. They can even be members of the House of Lords and vote on laws for other people.
Amazingly, Parliament has never approved or even debated the privileges of the tax asylum seekers, at least not in modern times. The status of nondomiciled taxpayers is a relic from more than 200 years ago, when it was invented to spare tax on men who had made their money in the colonies – often from the slave trade.
Parliament has never created any rules to govern nondomicile tax status. These have been invented by our tax authorities, who are regarded internationally as extremely easy going. However hard it is for them to enter the Kingdom of Heaven, the super-rich have no difficulty entering the United Kingdom of Tax Haven.
In 1997, the Labour Party – and Gordon Brown as Treasury spokesman – came to power promising to get a grip on this issue. For five years as Chancellor he did nothing.
Then, under pressure, he announced an urgent inquiry.
It still has not reported. Thank goodness it was an urgent inquiry – I don’t think it can hold out until 2020.
The super-rich have very good lobbyists and for decades they have bamboozled the Treasury with two arguments.
First, they claim that the super-rich bring inward investment into Britain. In fact, the rules for non-domicile status give the super-rich a cast-iron motive to keep money out of Britain, not bring it in.
SECOND, they argue that without the nondomicile rule, the superrich would pack their bags and leave, ruining the banks, estate agents, fine art dealers, luxury boutiques and football clubs which take their money. But this is unlikely, because no other country in the world offers them such a perfect hotel for their money. Not even the US under George W Bush, the most pro-rich president in American history.
It is time that Parliament had its say on this ancient anomaly. It is making a mockery of our tax system and devaluing our whole country.
At the very least, Brown should publish the results of his long-running review of nondomicile tax status. Five years is more than enough time to collect evidence and views.
The British people and Parliament are entitled to know how many people have claimed non-domicile status in the past 10 years; how many were refused; what was the total amount of tax paid by non-domiciled taxpayers; and what estimate the Treasury has made of the income and assets they hold overseas.
If the Treasury has any reliable evidence of economic benefit from non-domicile tax status, they should publish it so that it can be weighed against the potential revenue from ending this enormous loophole.
Better still, Gordon Brown can use his last year at the Treasury to end the anomaly and make the super-rich pay the same taxes as any other resident taxpayer. It would be especially fitting this year for him to abolish a rule which is the last relic of the slave trade.