It’s a relief that even a City investor group (PIRC) is now challenging the accounts of Barclays, RBS, and HSBC, initially when the pay deal for Bob (greedy as Croesus) Diamond is put to the Barclays AGM in a fortnight’s time. It’s proposed to pay him £17m, largely made up of an executive share award (£7.8m) and a share bonus (£2.7m) on top of £3.7m payments under a 2008 share scheme plus another £1m under another 2008 share scheme. Assuming he doesn’t spend his £17m all at once, that’s £327,000 a week. In addition, he’s also already promised a further £2.35m next month under another performance scheme, plus another £6.75m share pay-out in 3 years time ‘according to performance’. But despite this munificence, what has caused the hoo-ha in the City is two other matters. (more…)
One of the areas where Labour should be setting out its vision, which everyone is crying out for, and where Labour would attract huge popularity, is by reasserting the role of an activist State in areas where the market has run amok, is out of control, or has massively failed. The railways would be a good place to start (though the list is a long one) and the McNulty report, out last month, is a perfect example of everything that is wrong with Tory policy on transport. Britain’s railways are the most expensive compared with the rest of Europe where they are still publicly owned. Why? Because, as the wealthy businessman Lord McNulty admits, privatisation has brought fragmentation when an efficient rail system requires a single linked entity. So what does the report recommend, and what are the Tories about to implement? Even more fragmentation. The maintenance of the track and signalling is now to be fragmented and put into the market, and indeed fragmented further into small companies like mini-Railtracks. (more…)
What is really striking about the UK’s biggest problems today is that they are all insuperable unless there is a strategic change in policy which almost always requires a big shift in the power structure.
The banking crisis will not go away so long as central banks, either in the Eurozone or the UK, believe they can solve it by shovelling vast quantities of money into the banks as a means of stimulating growth – €1 trillion in the case of the ECB funding in particular Spanish and Italian banks, and £325bn in the UK’s case via QE – when the problem will instead be solved by spending a fraction of those sums on public investment in needed economic projects and job creation. But that will require a fundamental change in the monetarist mindset of the likes of Merkel and Osborne.
There will be no long-term economic recovery of the UK while trading deficits in goods are colossal (£100bn in 2010) and constantly require the economy, whenever growth gets going, to be damped down or the currency devalued in order to prevent the balance of payments rocketing out of control. But that requires systematically prioritising manufacturing over the City of London, and the Tories who get half their funding from the banks will never do that. (more…)
As John McEnroe famously said at Wimbledon, ‘You cannot be serious?’ How can Osborne pretend he’s serious about saying ‘aggressive tax avoidance’ is ‘morally repugnant’ when a mere 2 weeks after his budget imposing a 15% stamp duty rate on tax avoiders who put expensive property in an offshore company (so that when they sell, they’re selling the company and not the property, and thus pay no stamp duty), tax lawyers in the City put up two fingers to the new rule by devising a multi-year rolling lease the value of which stays just under the £2m threshold and thus avoids tax? They make a mockery of Osborne’s moral protestations, yet he will do nothing to block this new loophole. (more…)
After Peter Cruddas, what? Now the brash, up-market barrow boy’s been topped, Tory central office has of course gone very quiet. But since the 23 dinners grace of Cameron/Osborne that we now know about raised several million pounds, it’s unlikely they will cease – just be ever so much more discreet. But this isn’t cash for access, it’s actually cash for policy change – and probably cheap at the price. Corrupt of course because it secretly bypasses elections, political parties, votes in the House of Commons and all the paraphernalia of democracy on which we pride outselves so dearly, but good business if you’re an insider in the ‘premier league’ and if corruption is your particular tipple, as it probably is. Never forget that the Tories were strongly opposed to the 2003 Anti-Bribery Act, campaigned to water it down, and even now want it repealed – no doubt one of the aims of the top league dinner guests. (more…)
After unveiling an anti-tax avoidance deal with the Swiss 2 weeks ago, the day before the budget, with the self-righteous puff “I regard tax evasion as morally repugnant”, Osborne is now under pressure to backtrack fast. What he did not say is that the tax rate he negotiated with the Swiss authorities that would be payable by rich UK nationals hiding their gains in Zug and other Swiss tax havens would be between 21-34% and that he would accept that HMRC would continue to be denied access to details of the owners and size of these accounts. The Swiss finance authorities, not to mention the super-rich UK account holders, must have been laughing all the way to the bank. Now it is revealed that the German government, forced by SDP-run regional parliaments, has obtained a deal with the Swiss whereby rich German nationals with accounts in Switzerland will have to pay tax at 41%, nearly double the UK rate. (more…)
Today, 6 April, the start of a new fiscal year, marks the point when the government’s Grand Impoverishment Programme takes effect. Working tax credit is being withdrawn from families with children who cannot increase their working hours from 16 to 24 hours a week, not for lack of trying, but because employers are busy laying off workers rather than extending hours. IFS calculates that no less than 212,000 families, including half a million children, will be pushed below the poverty line by this measure alone as a result of losing £74 a week. In the case of a couple working 23 hours a week between them with an income of £15,500, they would have received tax credits worth £110 a week, but will now lose half, £57 a week, out of that. (more…)
It is maddening that the enormity of the real scandal in economic policy has been buried by the furore, justified as it certainly was, over Osborne giving away a £3bn tax cut to multi-millionaires paid for by a cut in tax allowances for 4 million pensioners. That is certainly bad enough. But it is far outweighed by the sheer magnitude of the ideological perversity – or wickedness, to use an old-fashioned word that is highly relevant in this context – of right-wing economic policy-making which is condemning both the UK and the Eurozone to years, or even perhaps decades, of avoidable austerity. That policy is quantitative easing (QE), or its variant credit easing, in the UK and its Eurozone equivalent of long-term refinancing operations (LTRO). What both these policies are based on is the idea that the way to get economies moving again is via monetary stimulus, if necessary on a colossal scale, rather than using government finance for direct investment in the economy and job creation. The latter would be overwhelmingly more successful at generating jobs and stimulating growth, but is rejected because virulently right-wing governments in both the UK and Eurozone insist that economies must be exclusively private market-led and that the State should play no direct part in economic investment at all. (more…)
The nature of the British state and the government’s contempt for personal freedom come to a head with new laws proposed for the Queen’s Speech next month. It was already known that the government intended to bring forward a law to allow the police and MI5/6, without a warrant, to access data from every phone call, email, taxt message and internet browsing. Now the government is proposing to add secret courts to total surveillance. It will extend closed procedures used in certain terrorism-related immigration appeals to any civilian trials where ministers decide evidence is too sensitive to be disclosed, even where they are themselves defendants. The East German Stasi would have been proud of such a totalitarian constraint on freedom and removal of the powers of the State from scrutiny. But the motives behind these new measures are deeply sinister. (more…)
Words that we will never hear again will continue to resonate the caustic hypocrisy of Tory politics. ‘We’re all in it together’, a piece of flagrant brazenness when it was first trailed by Osborne in 2010, has now become a millstone around the Tory neck. Everything they have done in the last two weeks contradicts their pretence of shared sacrifice, and this is not an impression they will find it easy, or indeed possible, to shake off. What is exposed is not so much the absurdity of the original claim as the arrogance that led them to believe they could get away with it. Putting a grannies tax for millions of the poorest pensioners next to a £3bn pay-off for multi-millionaires isn’t just a crass misjudgement, it’s a sign of such overweening confidence that Osborne & co. thought they could get away with anything. Their class myopia is unravelling the Tory project fast. (more…)
The most important outcome of the Bradford West by-election is undoubtedly the rejection of the 3 main political parties who secured the support of only 40% of the electors. This increasing disaffection with conventional politics, with the Labour-Tory share of the votes down from 97% in the 1951 election to just 65% in 2010, was accentuated in Bradford West by the very high proportion of Asians in the electorate (38%), the still raw wounds in the Muslim population about the Iraq and Afghanistan wars, and the very significant revolt among the younger Asian generation against being told how to vote by their elders (Bradreeism). But that cannot conceal that disgust at the Westminster establishment (the expenses scandal, the continued uncovering of sleaze of which quarter million pound dinners with Cameron are only the latest awful example) and distrust of the two main parties (the rise of the SNP, Cameron’s failure to win even against Brown) are widespread and growing. And these are revealing signs of the direction in which politics is going from Europe. (more…)