Michael Meacher MP

A tory candidate said to me the other day that she had no idea what Cameron would actually do if the tories won.    I think we can help her.   Ignoring all the bucket-loads of political point-scoring, there are two unimpeachable sources of hard evidence.   One is what is now happening in Ireland where the Government is implementing a virtual carbon copy of tory economic policy.   Indeed the last Irish budget was hailed by the Daily Telegraph as a role model for the British Chancellor.

The former tory Scottish Secretary, Lord Forsyth, who is now chair of Cameron’s policy commission on tax, recently announced to the Conservative Intelligence (a bit of an oxymoron) conference that “It seems to me that we need to be able to reduce the overall level of public expenditure over a parliament by about £75bn (a year)”.   Now £75bn – just 1 year’s proposed cuts according to Forsyth – amounts to about 5% of the UK’s GDP.   That is exactly what the Irish have just delivered – 3 slash-and–burn budgets over the last 18 months which cut their GDP by 5%.   So what has happened?

The unemployment rate in the Irish Republic is now 12.5% and could well rise on the current trend to over 15% before the slump is over.   The rapid meltdown in the private sector has been exacerbated, not mitigated – not surprisingly when the prospects of profitability for private investment are so bleak, but contrary to current tory claims that rapid cutting of the deficit will produce a turnaround faster.   Mass mortgage defaults caused by unemployment and falling house prices are now forecast as the next stage of the Irish economic collapse.

All this is just in year 1.   Forsyth is recommending his tory Etonian friends to administer this poison per year for 5 years, which would cut UK public spending by a total of £375bn or 25% of GDP over the whole period.   That is almost unimaginable – it would amount to half of total current government spending at the present time!   But once again that is exactly what the Irish Government now intends to do, shrinking the Irish State by no less than 25% within less than half a decade.   Just think of what has happened in Ireland in the last year, multiply that by 5, and you will have some idea of what a Cameron Government is threatening to inflict on the UK. (more…)

The big energy companies are notoriously quick to put up petrol prices when wholesale oil prices rise but equally slow to put them down when oil prices fall, thus making large unwarranted profits at consumers’ expense by keeping prices sticky at the high end.   Now another market scam in energy supply has been unearthed by Which? in this month’s current issue.

CERT, the Government’s Carbon Emissions Reduction Target, requires the Big 6 – British Gas, EDF, Eon, Npower, Scottish & Southern, and Scottish Power – to help customers install energy-saving measures.   So far, so altruistic.   But that’s not how it ends up.

First, the most effective way of saving energy is solid wall insulation for Britain’s 6.6 million old and poorly- insulated solid-wall properties which could save a typical household’s gas bill by £420 a year.   But the companies don’t do this because under CERT rules customers have to stump up 80% of the cost  which can be around £7,250 for a typical home.   Instead they mail-out unsolicited light bulbs – a staggering 182 million of them – which save each household just £14 each year.   This invalidates the whole purpose of the exercise.

Second, and worse still, customers don’t realise – and are certainly not told – that they themselves are paying for these ‘benefits’.   The regulator Ofgem has recently estimated that the average household pays no less than £84 a year in ‘environmental levies’ on its energy bills, of which £45 goes directly towards funding CERT.   In other words, customers are being forced to fund carbon reduction out of their own (squeezed) budgets, and because the Government keeps no check on how this £45 is spent, it has minimalist impact in cutting carbon, but leaves the companies with large unearned profits.

Not bad for two scams – and more to come.

Tow key things were missing from the Budget – not surprisingly since the nearness to the election rendered their predictive authority otiose.   The first has been widely noted – any detailed specification of the public expenditure cuts proposed.   The second however has received little or no comment at all.   That is that after the near-total collapse of the financial and economic system there should be a full-scale Inquiry or Commission into the functions, methodology and impacts of modern banking, with detailed recommendations as to how financial markets can be made to operate safely, efficiently and sustainably.

Every time a high-level major disaster occurs in public life, with disturbing implications for the life of the nation, a top-level inquiry is set up with a wide brief to investigate the causes and handling of the disaster and to recommend reforms to prevent any recurrence.   There has been no greater financial/economic disaster for almost a century than the huge recession since 2007.   Yet no inquiry has been set up or is planned.   Why not?   It’s not difficult to see the reasons.

It would expose the failure (in 2002-7 as in 1986-9) to damp down or halt the bloated credit and housing bubbles that contributed so drastically to the collapse when the derivatives scam broke.   It would reveal embarrassingly the mishandling of monetary policy by the newly created MPC which by keeping interest rates too low for too long encouraged the excessive leveraging which laid the foundations for the out-of-control boom.   It would uncover the recklessness with which fancy new financial instruments – credit default swaps, collateralised debt obligations, structured investment vehicles – were allowed to proliferate explosively with very little understanding of the risks they entailed.   And it would display starkly the negligence of the regulatory order as well as the visceral greed of the bonus system driving an uncontrolled expansion.

But if for these reasons Government (i.e. No.10) won’t set up a Commission of Inquiry, why doesn’t Parliament (i.e. the newly-created Back-Bench Business Committee of the House) set up its own?   Or since the City fund managers are always grumbling (rightly) about the exorbitant fees charged by investment banks to underwrite rights issues, why don’t the fund managers set up their own independent and rigorous inquiry?   I’d like an answer.

     Class is still a taboo word even though class differences and inequalities are now wider than for almost 100 years.   But slowly and painfully New Labour in the face of defeat is inching back from Mandelson’s infamous “wholly relaxed about people becoming filthy rich” to some inkling of fairness.   The Budget was littered with signs of retreat from the most egregious excesses of the past.   The new 50% top tax rate is targeted exclusively on those with over £150,000 a year (just 1% of the population).   The loss of personal allowances hits those above £100,000 a year (2% of the population).   Frozen inheritance tax thresholds are directed at the top 6%.   The bankers’ bonus tax is mainly focused on the top 7-8%.   And the mansion stamp duty tax will affect only homes worth more than £1 million - just 1.5% of properties.  

      Of course the rabid Tory press scream that this is a spiteful attack on hard-working middle and high-earners.   But if they thnk this is aimed at Middle Britain, what does that tell you about how out of touch they are?   The median income in Britain today is just £22,000.   One third of the population has to survive on less than £15,000, so Middle Britain is broadly those between £15-30,000 a year, whereas none of the Budget taxes will affect anybody below £70,000 a year.   This is not spite, but tell-tale signs of a switch back towards fairness.

     Of course the Budget should go further to have a serious impact on class injustice:

*  Instead of at present the poorest tenth paying 46% of their gross incomes in tax while the richest tenth pay just 34%, this gross unfairness should be reversed.

*  Instead of at present the rich being exempted from payment of national insurance contributions above 1.5 times national average earnings, this arbitrary cap should be removed so that they pay their fair share like everyone else.

*  Instead of at present the rich being able to redefine income as capital gains and this pay only 18% instead of 40%, CGT should be put back level-pegging with higher income tax at 40%.

*  Instead of at present the rich, mostly the top tenth, pocketing 91% of the nation’s wealth while the bottom tenth have no net wealth because they owe more than they earn, a new tax on wealth should be brought in, preferably a gifts tax rather than an inheritance which can be too easily avoided.

Picking your way through the holes, crevasses and craters of the Budget where far more was invisible than apparent is difficult, but here goes.   The deficit is now £167bn, and Darling intends to achieve the proposed halving (i.e. a cut of £83bn) within 4 years by tax increases yielding £19bn, public expenditure cuts worth £38bn, and economic growth providing the rest, which must mean around £26bn. (more…)

Alistair Darling is adept at playing a poor hand well.    Today he will announce triumphantly that the deficit is coming down faster than expected (perhaps to £165bn, from higher bonus tax proceeds and lower unemployment costs than predicted) and that with cuts in stamp duty for first-time house-buyers, a green infrastructure fund, a capital growth fund for SMEs and more government business to go to them, and more robust lending targets for the banks, Britain is out of the woods and on its way. (more…)

At least Cameron got one thing right when he said yesterday that lobbying was the next scandal to hit politics.   One of the worst aspects of the corruption associated with New Labour over the last decade has been the multifold increase in lobbyists’ infiltration into every niche of the parliamentary domain, bribing, suborning, secretly manipulating, spinning their scams, nearly always offering payment to oil the wheels for under-the-counter influence.   So much of the New Labour project was built on this money-driven marketisation of politics, so many New Labour apparatchiks were actively engaged in it themselves, that nothing was done to stop it  – indeed it was enthusiastically encouraged on the side. (more…)

The expulsion of Byers, Hewitt and Hoon is entirely justified  – and necessary  – when indeed nobody has done more to bring the Labour Party into disrepute (the grounds for expulsion under the party’s rules) than they have.      But the implications go far deeper.   We are witnessing the final denouement of what was infamously called New Labour.   The Blairite version never had a distinctive ideology of its own apart from taking over the Thatcherite one it inherited.   It was simply a power project from start to finish, and now its underlying motivations of self-interest, money-making and power manipulation have been nakedly revealed, reinforcing ever more strongly earlier examples from the Derek Draper ‘lobbygate’ scandal, the policy for sale exposed by the Ecclestone affair, the peerages for major donors to Labour’s 2005 election, and the Labour peers last year who offered to assist in amending legislation in exchange for substantial payment. (more…)

With the Tory party poll lead slipping, it is only to be expected that a right-wing press (Telegraph, Mail, Sun, Express) are avid to portray the BA strike as ‘a return to the 1970s’.   It is nothing of the kind as the following facts show: (more…)

Chilcot is a ticking time bomb, dormant for the moment, but still primed to explode within a few months.   And then what?

Three central issues arise out of Chilcot.   The first is what happens if in accordance with the known facts the inquiry concludes that Tony Blair committed without consultation to a war in Iraq 11 months before the invasion, played down intelligence briefings that evidence of Saddam’s WMD was sporadic and patchy, invented or inflated claims to show that the threat was much greater than he knew it to be, and tried to prevent the Attorney General’s judgement reaching the Cabinet that the war was illegal without a second UN resolution and then leant on him to change his mind?

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What a contrast.   After 16 children are found to have been abused in Birmingham in recent years, half of them from care homes, 6 social workers are sacked for falling so far short of acceptable standards of care management.   On the same day a Roman Catholic cardinal insists that priests who have abused children, but admitted the fact in the privacy of the confessional, are protected by sacramental absolution from being identified and made to face the consequences of their offences. (more…)

Nobody has ever heard of Linda Cook, but she’s yet another symbol, the latest symbol, of what’s sickening Britain.   She was former head of Shell’s gas and power business, didn’t get the chief exec role, so she left – but only after getting her pension pot more than doubled to nearly $25 millions (about £16.5m).   That’s the equivalent of awarding her an extra 15 years of pension contributions.   As if that were not enough, she also received a $7.6m ‘golden goodbye’. (more…)

Unite, the Tories tell us, has installed 59 of its members as Labour parliamentary candidates, and a new Left conspiracy is now emerging headed by Charlie Whelan.   It just shows what unadulterated rubbish the media can sometimes serve up, regurgitating Tory propaganda, when the truth is the opposite.   Whelan for a start is an unabashed Right-wing bruiser and fixer.   (more…)

One issue that you can guarantee won’t be debated in this coming election dominated by cuts, cuts, cuts is: what kind of public services do we want in this country and how should be paid for?   The Audit Commission has made a stab at this, but come up with rather trite (and Tory) conclusions – devolve them to local level and farm them out to voluntary, charitable or community organisations.   That would produce very uneven services across the country (postcode lottery) and return to the post-war Lady Bountiful in place of universal rights and entitlements.   Back to the 1930s – any takers? (more…)