Michael Meacher MP

It’s bad enough that the Government has repeatedly misrepresented (civil servicese for ‘lied’) the facts about public sector pensions.   Cameron, Maude & co. have claimed the cost is expected to soar; their chosen stooge, Lord Hutton, nailed that one when he noted in his report that payments will “fall graducally to around 1.4% of GDP in 2060 after peaking at 1.9% in 2010-11″.    They claimed public sector pensions were ‘gold-plated’ when the average local government pension is just £80 a week.   They proclaim the injustice of low-paid private sector workers having to subsidise public sector pensions when in fact what they’re really subsidising are the enormous pensions and huge tax reliefs of the private sector business elite.   Even if the Government were true, their role shouldn’t be to level down to the worst pensions in the country (a race to the bottom), but to lever up the lowest private sector pensions to at least a minimum decent standard. (more…)

There’s a big story with a long backwash behind today’s latest official economic data.   The figures show real disposable income (the berst indicator of household economic well-being) fell 0.8% in the fist quarter of this year.   Reason: higher costs of fuel, basic goods and VAT exceeding the squeezed rise in pay.   As a result consumer spending dropped by 0.6% for the second consecutive quarter.   Result: Mervyn King (and everyone else except perhaps Osborne) believes that the fizzling out of consumer confidence will keep household spending flat or negative for at least the next year, and with consumer spending flatlining or more probably falling and UK export markets damped down by severe internal problems in both the US and EU, there’s no hope of a recovery for a long way ahead.   So much for Osborne’s private sector surge substituting for the public sector squeeze.   But was all this inevitable?   Not for several reasons. (more…)

Fortunately U-turns are a favourite ploy of Cameronian government, courtesy of the NHS reforms, criminal justice discounts, forest sell-offs, housing benefit cuts, Libyan interventionism, and maybe soon public sector pensions.   That’s lucky because it’s soon going to be needed over Osborne’s decrepit policy on growth – or rather non-growth.   The economy having flat-lined over the last two quarters, where is growth supposed to be coming from over the next year?   Consumers, terrified about their future prospects, are trying to cut spending and pay down debts wherever they can.   Rising commodity prices have pushed up inflation, made worse by the recent slippage in the value of the pound and by higher VAT, a Government own goal.   And the banks, scorched by the financial crash they caused by reckless borrowing, are now much more cautious about lending to business or householders and charging much higher interest. (more…)

Thursday’s strike over Government proposals on public sector pensions will bring to a head simmering tensions on several fronts.   Rising anger over the cuts, though the pensions dispute has nothing whatever to do with the budget deficit, will reinforce the resistance, thus far and no further, on an issue where the Government is seen to be acting manifestly unfairly.   It will bring Tory taunts (e.g. at PMQ on Wednesday) to a crescendo about Labour supporting strikes.   It will put on display Tory intransigence in arbitrarily imposing an unjust settlement and then goading the unions to strike against it.   It will give the union-bashing media a field-day.   And, most important of all, it will put to the test the Labour leadership and the unions in how to handle a virulent and revanchist counter coup determined to strip away working class and public sector advances of the last 60 years and shrink the State. (more…)

Ed M is reported as saying that “the most important thing for the unions is to get the public to understand what their argument is.   I don’t think the argument has yet been got across on public sector pensionsas to some of the injustices contained in what the government is doing.   I think strikes must always be the very last resort”.   I doubt if many people would disagree with this position.   The real problem remains however as to how exactly the arguments can be got across to the public when the media, and particularly the tabloids, are determined not to give a fair hearing to potential strikers, will certainly not provide a full or detailed explanation of the isssues, but rather will seize the opportunity to demonise the unions (and indirectly the Labour Party too) as wreckers or worse.   So how should this play out with the strike this week? (more…)

Political parties are always at risk of forgetting their real function of providing national leadership and instead turning inward into an internal struggle for power.    Ed Miliband is therefore right to insist today that the Labour Party concentrates full time on re-engaging with the public, winning back lost voters, and promulgating a vision to revitalise the enthusiasm and excitement of the nation.   That is a very demanding objective, and he’s right too that any deviation for personal or factional ends cannot be tolerated.   And it will depend on two fundamental conditions being fulfilled. (more…)

One’s first reaction to Ed Miliband’s abolition of shadow cabinet elections is that this is a step away from party democracy.   But on closer reflection this is a shrewd, and radical, break with tradition which makes a lot of sense in current circumstances.   Ed is faced with a shadow cabinet in which only 4 of its 19 members voted for him in the leadership election 9 months ago and which has shown itself signally unwilling to accept the message of that leadership campaign that the party wanted a change of direction.   A leader voted in on that mandate can be expected to take the necessary steps to deliver what he promised.    But there’s more to this than meets the eye. (more…)

Cameron’s caving in today to the deep and unpleasant prejudices of the hard-right retributionist lobby has banged shut the brief momentary expectation of a more liberal penal policy.   The objective of cutting prison numbers by 6,500 (a fairly arbitrary proportion of the 85,000 currently detained) was removed by scrapping 50% discounts across the board (not only in rape cases), failing to rationalise indeterminate public protection sentences which keep thousands detained long after their jail terms have expired, and announcing new mandatory jail terms.   This is wrong on every ground. (more…)

A lot of chickens are coming home to roost as the eurozone crisis approaches the end game.   As the crucial vote takes place in the Greek Parliament tomorrow on the latest austerity measures, even if it is passed thus unlocking the next €12bn tranche of the first bail-out, it’s now absolutely clear that this temporary sticking-plaster will have a short life.   The sums now point unmistakeably to bust.   The EU, IMF and ECB are enforcing measures which will push Greek sovereign debt , already at about 150% of GDP, to a staggering 200% by 2015.   Servicing the debt will take 12% of GDP, substantially more than the health and education budgets, whilst the cost of buying insurance against the country missing a payment on its bonds (through the so-called credit default swaps) has now become the highest in the world.   In effect Greece is now bankrupt. (more…)

So the ‘open public services’ bill is being stress-tested in Whitehall before the natives (you and I) are allowed to see it.   One hopes the stress-testing is rather more muscular and robust than that to which the banks were subjected – before they nearly crashed to oblivion.   But we have been afforded one tantalising glimpse.   It will include personal budgets for social care (nothing new there, already put in place by the last Government) plus parish councils taking control of parks and traffic restrictions – wow, that will really sock it to them in the big society.   But this is just the softening up to the real meat which is indiscriminate privatisation across the whole range of public services – the sell-off to ‘any willing provider’.   But recent events are flashing red lights even before the process gets under way. (more…)

As Oscar Wilde noted, losing one parent is a disaster, losing two is distinctly careless.   Cameron might reflect on that.   Backing off one policy may be serious, but backing off six, as he has done over the last few weeks, is beginning to look like a rather careless life-style.   The latest one, yesterday, beating a hasty retreat from Danny Alexander’s ill-advised attempt to lay down the law with the unions over public sector pensions whilst still supposedly in the middle of negotiations, is perhaps the most careless of all – an own goal which gratuitously exposed the Government’s weakness.   There has been bitter (and justified) resentment from women, especially those born 1953-4, about the gross unfairness of abruptly raising the retirement age when they were already so close to it, but the complaints got nowhere – until Alexander’s intransigence coalesced against him the biggest strike threat for a century.   Within a day the Government caved in.   We must thank Alexander for so brilliantly highlighting the reviving role of the unions.   But there’s still more to it. (more…)

This weekend the Greek crisis is developing into the perfect storm.   There are three immediate problems.   Who covers for sovereign debt?   Germany demanded that Greece’s private investors (banks, pension funds and insurance companies) should take a ‘haircut’, i.e. cover a proportion, perhaps a quarter, of the mooted €120bn second bailout through losses on their investments.   The ECB, France and the IMF feared that this would cause Greece to be declared in sovereign default (dubbed the ‘Lehman Brothers’ moment), leading to panic in the international financial markets.   Merkel has since given way on this.   Then, secondly, there is the uncertainty whether Papandreou’s new cabinet can get through parliament the EU-inspired austerity measures demanded as a condition for this new bailout.   And third, both of these pro tem measures may only apply for a limited time, what is the long-term solution that can finally settle this inexorably deepening Eurozone crisis? (more…)

Danny Alexander’s line on pensions is simple, clear – and wrong.   It is this: public sector pensions are ’unaffordable’, out of synch with private pensions, and have to be ‘reformed’.   Payments into pension schemes therefore have to be increased – for teachers, medics and local government workers their contributions could double from next April.   The retirement age has to rise – from 60 to 66 by 2020, hitting particularly hard women now aged 53-55.   And pensions, when finally received, have to be cut back – by changing the accrual rate from final salary to average over working life. 

The result is that local government workers, faced with an average additional 3% increase in their contributions which will then yield a much reduced pensions, are likely to abandon the local government pension scheme in droves as no longer worthwhile, thus adding to the State’s welfare bill in retirement and perhaps collapsing the investment funds which this pension scheme feeds.  It was fear of this that forced the Government to put up Alexander to go public on their case even while still in negotiations, throwing in concessions to the lowest paid to keep them in the scheme and to divide and rule the unions over any strike action.   But the Government case is misleading for much deeper reasons too. (more…)

It might just as well have been Gordon Brown hosing down the City grandees with paeans, as he did so often at the Mansion House, for their unmatched contribution to the British economy, their global aspirations, and their efficiency and innovativeness.   But last night it was Osborne offering a ‘new settlement’ for finance as though the greatest damage to the British economy, far greater than Hitler’s bombs ever inflicted, had never happened.   Not only was there no hint of redress (punishment would be too jarring an expression in such honourable company) for their recklessness and greed, there wasn’t even a scintilla of reform to jolt the proceedings.   There was a nod in the direction of the feeble Vickers report, proposing Chinese walls between the retail and investment operationsof banks, but the inefficacy of that was clearly revealed when share prices in the Big 5 hardly even trembled.   So, as they say, is that it? (more…)