When is Gordon Brown going to stop pussyfooting around with the banks? Having very very reluctantly taken Northern Rock, Bradford & Bingley, and RBS into full or partial nationalisation, and having spend hundreds of billions of taxpayers’ money to do it, he then refuses to take control of these banks and instead outsources them, in the form of UK Financial Investments, back into the private sector, and to cap it all, appoints to chair this quango a US investment banker, Glen Moreno, who served for 9 years on the board of the notorious tax-haven bank Liechtenstein Global Trust. Then he appoints Sir David Walker, the grandest of City grandees, to pontificate on bankers’ bonuses, which he had himself enjoyed for several years. And then when the public anger boils over, he proposes a cap of £25,000 on bonuses, which entirely misses the public’s point that bonuses shouldn’t be paid at all to rich bankers.
The tax fiddling by many of the biggest companies in Britain on a monumental scale exposed by a lengthy and detailed Guardian investigation must rank as a final denunciation, second only to the credit crunch itself, of the corruption and greed embedded at the heart of the unfettered market fundamentalism of the last 30 years. It reveals that the vast tax gap left by these companies, which then has to be filled by other taxpayers paying far more tax than they otherwise should have to, amounts to a loss between £4bn and £13bn a year, with the likely true figure between £8bn and £12bn. But what is so devastating about this analysis is not just the scale of the tax avoidance which it exposes, but the contrived artificiality of the devices used to achieve the aim of evading tax.
In the wake of cash-for-questions in 1994, the Nolan Committee set up to deal with the abuseshied off regulating lobbyists. Now we have the even more serious cash-for-amendments in the Lords, yet still the Government seems to have no stomach for a compulsory lobbying register. In both cases all the excitement, and indignation, is directed at the lobbyists’ targets rather than the lobbyists themselves – because tilting at people in high places makes a much more juicy press story. But it leaves a hige black hole in political life which urgently needs to be brought into the light if the good that lobbying can often do is not to be submerged in all the murk of secret and subversive paid advocacy.
There are three reasons why Parliament today has a very low standing in the eyes of a large majority of the public. It has lost the confidence and trust of the voters because of widespread perceptions of the reappearance of sleaze, as evidenced currently by the allegations against several peers in the Lords and the recent row in the Commons about concealment of Members’ allowances. If confidence is to be restored, anyone found to have committed a serious misdemeanour in either House, once the evidence is proven, should be punished severely, including where appropriate expulsion from the House. But there are two other major reasons why Parliament has fallen well below the respect that is needed if it is to function properly. One is that the legislature patently fails to hold the Executive to account effectively, and the other is that in an electronic and increasingly participatory age Parliament is seen as remote from the electorate and not sharing in a two-way democratic dialogue that many voters now want. Both of these failures should be, and can be, addressed.
There was always going to be trouble over the Bolkestein EU Posted Workers Directive passed in 1999, but it has taken an ugly recession and fast rising unemployment to bring it to the fore explosively at the Lindsey oil refinery in Lincolnshire. The directive was designed to ensure that the EU was treated as a single labour marketplace where employers had a legal right to hire workers from anywhere in the (now 27) EU countries. The only conditions for the employer are that the employment contract is for a limited time and that local working regulations must be met, e.g. that in the UK at least the minimum wage (now £5.83 per hour) must be paid. But this raises the question as to whether this directive can be used by European companies to deprive local workers of potential jobs and to undercut pay and terms and conditions of work. In this harsh economic downturn this issue will not go away because the directive in its original crude form is not tenable in current political and economic conditions.