Wednesday night’s vote in the Commons on the third runway was a showcase of Parliamentary impotence. The Tories craftily put down for their Motion the verbatim text of an Early Day Motion calling for a rethink on the third runway, which had been tabled by a Labour Member, John Grogan, and signed by 167 MPs, including 57 Labour MPs. If all the Tories and Lib Dems and smaller parties had held firm and all the Labour signatories had voted in accordance with the EDM they had signed, the Government would have been defeated. But none of these things happened, and the Government won by 19.
It is extraordinary how the economic case for the Heathrow expansion is full of unsubstantiated claims and unsupported assertions, without any solid evidence base at all. We are told that the third runway is essential for the business economy and for Britain’s future competitiveness. We are told that it is good for the balance of payments, and will create 100,000 jobs. We are told that there are extreme capacity constraints which must be alleviated. And we are told that business overwhelmingly wants it. Like all propaganda that gains currency from being endlessly repeated, all these statements are untrue.
Now that Alan Milburn has been made czar for promoting the working class to top jobs in the middle class citadel, the next thing they’ll be offering are social mobility allowances. Already a Cabinet Office report published two months ago has claimed, even before Alan Milburn had time to take credit for it, that social mobiloity is increasing. Sadly, the research proved nothing of the kind.
It is extraordinary, but very revealing, that the banks, after having had £500bn (equal to 34% of Britain’s entire GDP) made available to them by the Government (taxpayers) to preserve them and to get lending flowing again (which did not happen), have now this week been granted a further £50bn in credit guarantees to get lending re-started again to counter the banks’ threat to lend even less in the first quarter of 2009 than in the last quarter of 2008, yet there is no sign that lending is rising at all, let alone sharply as is needed, and the Government’s Mark 2 bail-out of the banks has not even been well received by the financial markets. This kow-towing to the banks’ demands without any quid pro quo must now represent the most infamous submission since the payment of Danegeld. It has got to stop. The Government has now got just two options, yet it is pursuing neither.
The Government was right to make an apology on 15 January for the lamentable and reprehensible failure of both the management of Equitable Life and the regulators (the Treasury, Finnacial Services Authority, and the Government Actuary’s Department) for so catastrophically letting down up to 1 million policy-holders over a whole decade (1990-2001). We now know, though the policy-holders did not, that the Society was on the verge of insolvency from 1990, yet was allowed to launch an aggressive marketing campaign which drew in hundreds of thousands of new policy-holders in ordder to pay out bonuses far in excess of earnings to members leaving the scheme – a sort of Ponzi scheme a la Bernie Madoff. By 2001 the Society was hiding a deficit of some £5bn. It then made a series of cuts to policy values through reductions in bonus, exit penalties and further cuts in 2002 which left some policy-holders with losses of over 30%. Those who had with profits annuities found their annual incomes cut in half. The Parliamentary Ombudsman has now found the regulators guilty of 10 counts of maladministration, and has recommended compensation. However, two big caveats remain before this deplorable saga can be finally settled.
Today the Government tried again to unfreeze the credit markets and get the banks lending again. In October, just 3 months ago, the Government spent an enormous £37bn propping up the banking system from collapse to get the banks to resume their normal function of lending to businesses and home-owners across the whole economy. The banks took the money, but did not increase lending. They reduced it in the last quarter of 2008, and are now reducing it further still in the first quarter of 2009. Now the banks are to be showered with further largesse to the tune of £50bn, offering them virtually unlimited insurance against losses on their assets. But is there any reason to believe that bail-out Mark 2, despite the eye-watering cost to the taxpayer, will be any more successful than Mark 1? And is this the best way to get lending flowing again? The answer on both counts is a resounding No.
The social and environmental arguments against a third runway – the huge worsening in air pollution, noise, climate change emissions, and quality of life for 2 million long-suffering people in west London – are overwhelming. Acutely aware of this, the Government offered 3 sweeteners to soften the pill. The third runway would initially operate at only half capacity when opened; aircraft using the third runway would meet strict greenhouse gas emissions standards; and CO2 emissions from UK aviation in 2050 would be limited to 2005 levels. These ‘concessions’ are scarcely worth the paper they’re written on. A promise to limit the runway to half its potential (for more than a very short time) is hardly credible when Governments of both parties have 4 times in the last 30 years given firm pledges there will be no further expansion and a cap on flight numbers, and have each time quickly broken them. The promise to limit additional capacity on a new ‘green slot’ principle to the most modern aircraft is too open-ended to impose any serious constraints on noise, air pollution, or emissions. And the commitment to reduce aviation emissions in 2050 to their 2005 level (37.5 million tonnes) artfully conceals the fact that that level of emissions will be 30% of total UK emissions in 2050 if the Government achieves its promised total 80% cut by that date. But what is so bad about the Government’s insistence on still giving the go-ahead is that its economic case doesn’t stack up either.
It has become common to describe what Israel has done in Gaza as “utterly unacceptable”. That is true, but it doesn’t begin to measure up to the barbarity of what is being deliberately and relentlessly perpetrated by the Israeli army. The UK in the 1970-80s suffered several terrorist atrocities which killed a number of our citizens, but the UK Government didn’t flatten west Belfast in retaliation. These killings in Gaza are on such a scale and so vastly out of proportion to the provocation that has occurred that they can only be adequately described as war crimes, and the UK Government should be joining with others in demanding that Israel should now be held to account in the international court for these crimes.
Today David Miliband will say in the course of his Indian trip that the so-called War on Terror was misconceived and may have caused “more harm than good”. Pity the Foreign Secretary didn’t have the courage to say this 7 years ago, pity it has been left till just 5 days before Bush disappears from office, but at least he has now officially laid bare the terrible canard which has lain at the heart of US geostrategic policy throughout the Bush Presidency. What a tragedy the Foreign Office didn’t have the guts, directly after 9/11, to condemn and reject this cloak for US domination which has cost hundreds of thousands of lives in Iraq and Afghanistan. The real lesson for the future is that this country should never again, as in the Blair era, kow-tow to every imperialistic demand of a US President. We should have our own foreign policy.
There could not be a clearer example of the collapse of corporate accountability in Britain than the case highlighted two days ago of Lloyds TSB being found guilty of criminal money-laundering over a 12 year period, yet none of the top executives responsible have been held to account. It is the most flagrant example yet of how leaders in business (and frequently in the civil service too) esape with impunity when a scandal for which they are responsible is unearthed. The lax regulatory and prosecuting culture in the UK desperately needs to be changed if criminal and corrupt behaviour at the highest levels is to be stamped out.
Despite the use of overwhelming military power to kill more than 800 Palestinians, a third of them children, and to inflict more than 3,000 casualties, and despite the shelling of a UN school and the house in Zeitoun containing 100 Palestinian evacuees as well as other atrocities, Israel rather than Hamas is now caught in a trap it cannot escape. Fifteen days of relentless pounding have not broken either the will of Hamas to resist or the firing of rockets. Israel is now confronted by a dilemma they have hitherto been loth to face up to.
Two separate critical energy issues have now come to the fore. One is the Russian-Ukrainian spat over energy pricing which has exposed UK, and Europe’s, over-dependence on Russian gas supplies. The other is the over-dependence of UK businesses and householders on the pricing policies of large energy suppliers in a privatised and liberalised energy market. Both these key problems, which are likely to cost Britain dear, result from both the Tories and New Labour regarding energy as just another market commodity and not as a crucial protected national asset essential for preserving our national security. That policy needs to change.
What is to be done if the survival of the real economy – the jobs, homes and incomes of millions of people and the viability of countless businesses – depends on getting the flow of lending going again, yet the banks resolutely refuse to lend on anywhere near the scale required, and have just announced that they are now proposiing to cut credit still further in the first quarter of this new year?
As we enter 2009, there are four issues at the top of the political agenda – the handling of the financial-economic meltdown, post office privatisation, Government support for the third runway at Heathrow, and the collapse of policy to meet housing need. The first three have had a lot of attention, the fourth far less than it deserves. It should be centre-stage for 2009.