Michael Meacher MP

The news this weekend abounds with conflicts of interest:

*  Insider dealing (making a killing in buying or selling shares by using information to which one is privy inside an organisation, but which is not known to the public outside) persists in the City of London on a huge scale.   There were 1,485 tip-offs (‘suspicious transaction reports’) notified to the FSA over the last 5 years, leading to just 6 rogue dealers being convicted, compared with 584 in the US over the same period.   Why are we so complacent about this?

*  Notoriously the Financial Services Authority (FSA), the bank regulator, has failed over this issue to tackle the big names in the banking and trading establishment – unlike again what has happened in the US.   Might that be because the FSA is funded by the banking industry?

Well, well, well, it’s taken Vince Cable just 18 days in government to do a complete U-turn on the most fundamental issue for the British economy which will dominate British politics for the next decade.   He repeatedly and vehemently argued in Parliament over the last two years and through the election campaign right up to election day that immediate spending cuts could knock the fragile economic recovery on the head and risk a double-dip recession.    Less than 3 weeks later he’s just announced he’s changed his mind and is now pursuing the opposite policy, falling in line with the Tories.   It’s amazing what government can do to you – one of the fastest turnarounds on a fundamental point of principle in moder politics.

But he’s not the only one.   Chris Huhne, the new Energy secretary, who as Liberal Energy spokesman before the election rejected any new nuclear build as his party have always done, told us in his first interview after his appointment that he still opposed nuclear power, but that in deference to the coalition agreement it would still proceed provided there was no public subsidy.   And he clearly hinted that without public subsidy he didn’t believe it could go ahead at all.   Now, 3 weeks later, it’s all changed. (more…)

The real lesson of the unravelling Gulf of Mexico fiasco is that the mega-corporations abuse their power, if given half a chance by light-touch regulation, just like the banks.   And the costs of dealing with that abuse of power can well run into hundreds of billions of pounds.

Why did the Deepwater Horizon disaster happen?   Because the health and safety regulations for BP (and of course for the other oil majors) have been whittled down to a point of almost complete ineffectiveness.   The safety standards on the exploded rig, owned by Transocean but leased to BP, were the responsibility of the Marshall Islands in the north Pacific becase all 35 Transocean rigs were registered there under the flag of convenience.   The aim was to scrimp on safety inspections.   As a US Congressman has just noted: “Coastguard inspection of a US-flagged mobile offshore drilling unit takes 2-3 weeks, but the safety examination of a foreign flag offshore offshore drilling unit takes 3-4 hours”. (more…)

Why such fuss about the BP oil disaster in the Gulf of Mexico?   True, the leakage is large, but still nowhere near the size of previous oil spills.   So far at least 60,000 tons have leaked from the Deepwater Horizon explosion, but the Gulf War oil spill (1991) involved 1.4 m tons, the Atlantic Empress tanker (Trinidad & Tobago, 1979) 287,000 tons, Fergana Valley (Uzbekistan, 1992) 285,000 tons, the nowruz oil field (Persian Gulf, 1983) 260,000 tons, and Amoco Cadiz (Brittany, France, 1978) 223,000 tons.   The Exxon Valdez spill off Alaska with which the current Gulf of Mexico is being compared amounted to some 34,000 tons.   So what’s so special this time?   Answer: because it directly impacts on the US.

No matter that 2,000 major spillages in the Niger Delta has never been cleaned up by Shell, or that rivers and wellls in at least 7 African countries have been badly polluted, or that huge stretches of 3 Latin American countries have been ruined by spillages, blowouts and toxic dumping, or that at least 4 of the 7 ugly Oil Sisters currently confront dozens, even hundreds, of lawsuits even up to $30bn a time (Ecuador).   All this can be spun out, got rid of  modestly out of court, or brazenly faced down.   But not when America is involved and the US President himself takes up the issue.   That cannot be right. (more…)

The High Court judgement to prohibit the BA strike because Unite had failed to notify all eligible voters that there were 11 spoiled ballot papers brings the law into utter disrepute and reduces the judicial process to farce.   How would politicians feel if their election was disallowed because the number of spoiled ballot papers had not been notified to all their eligible voters?

Ever since the Taff Vale decision of 1906 the law has been repeatedly manipulated to make it virtually impossible for the unions to operate effectively.   That was the aim of the 6 Thatcher anti-trade union Acts, and this latest episode sharply highlights New Labour’s failure to reverse the grossly unjust tilt in the laws in favour of the employer.   That is yet another reason why Labour must now renew itself in its proper role of defending social and industrial justice.

The judge also stopped industrial action because in his view the cost of not blocking it would have been far greater for BA and its passengers.   Since when were judges authorised to make personal assessments about the impact of industrial action as opposed to whether or not it accorded with the law?

Of course nobody wants strikes, not least the strikers themselves.   But what redress is open to a union and its members if management is gung-ho on taking unilateral decisions that affect their jobs and pay if the last resort option of industrial action is denied them?   ACAS is clearly the best alternative, but if that fails and if pendulum arbitration is denied, the right to strike must remain a fundamental bulwark of a free society.

Of course some will still argue that the price of a strike is too high.   In that case the only real alternative, if the right to strike in certain circumstances is to be suspended, is for the management prerogative – the overriding right to manage – to be suspended as well, and the two sides would then argue their case before an arbitration tribunal whose decision would be final and binding.   I suspect that, like Solomon threatening to cut the baby in two to divide equally between the two claimant mothers, we would soon discover that the owners and controllers of capital weren’t actually in favour of a fair and balanced system of conflict resolution which avoided the costs of a strike, but only of a system which guaranteed the right to manage unfettered combined with the use of the law and the media to browbeat the unions into submission.

Mandelson’s plaintive excuse for washing his hands of the Cadbury debacle on the grounds that the decision “was one for the shareholders of Cadbury” is really pathetic. What are Ministers for? Their role is, not tamely to roll over when confronted by the damage inflicted by market-driven neoliberal capitalism, but to change the rules governing the operation of the economy or of society where outcomes undermine the public interest. What clinched the takeover was the short-term purchase of a quarter of Cadbury shares by hedge funds which bought them up very late in the day in the hope of a quick bonanza. One answer therefore to this latest brand of predatory capitalism would be, as the union Unite is now recommending, to limit votes in a takeover situation only to long-term shareholders, thus eliminating any role for the hedge funds. But that is surely not adequate. What about the primary stakeholders, the employees, 6000 UK workers in the case of Cadbury who now stand to lose their job in large numbers to pay off the debt of this heavily leveraged bid?

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There are nostalgic reasons for rejecting the Kraft takeover of Cadbury – another iconic British comapny lost overseas – but the real arguments are rather different and much more compelling. First, a nation’s strategic control over its own industrial base can gradually be whittled away to the point where its economic survival and prosperity can be put at risk. Industry is a closely inter-connected network, and when increasingly key industrial decisions are taken overseas on the basis of foreign not domestic interests, the viability of that network can be seriously undermined. The hollowing out of US industry is one example, and (as in so many other ways) the UK shows signs of following. Second, as most other countries have concluded, there are strategic companies of such central significance to the economy that they cannot be let go. By contrast British governments, both Thatcherite and New Labour, in thrall to a deregulatory neoliberal philosophy, have refused to intervene in the loss of such key companies as BAA, PowerGen, National Power, British Steel, Rover Group, Jaguar, ICI, Boots, Cazenove, P&O, and Pilkington. This glorification of the market against the integrity of the nation may well come to be seen as damaging as unfettered financial markets are now seen to be.

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Today’s leaked report on massive failures in defence procurement deserves an answer, though the proposal by the report’s author, businessman Bernard Gray, that the relevant MoD division should be privatised is plain silly. Putting public procurement into private sector hands would be like appointing a ferret to choose the hens for the chicken run. But that doesn’t mean that the devastating charges in the report shouldn’t be taken very seriously. To suggest that today’s defence procurement range is £35bn over-budget and 5 years late on delivery, that it can take 20 years to produce major kit like a plane or a ship, that it ends up costing twice the original tender, and that anyway it doesn’t function as specified, is a stunning set of indictments. Of course we need to see the detailed evidence in support of each of these claims, and the 269-page report should be published as soon as possible, not suppressed as the Government seems determined to do (with all those aspirations to a new era of openness once again dashed). But there was already enough evidence in the public domain about huge cost overruns, long-delayed delivery, and inadequate performance to give Gray’s denunciations an aura of credibility. So what needs to be done?

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Even if the wind turbine manufacturing plant in Newport, Isle of Wight, closes today as the Danish owners intend and they regain legal possession of the site from the workers’ sit-in, the dispute has highlighted two lessons that will not dissipate. One is that the perceived conflict between jobs and environmental protection is now changing and they may well in future reinforce each other strongly. Of course there are still differences of interest in some sectors – most notably over nuclear, airport expansion and the third runway at Heathrow – but the centre of gravity in the economy is unmistakeably shifting from the old, traditional industries to the green, sunrise industries and the new, cleaner technologies. The latter is now the second largest (after IT) and fastest growing global industrial sector and is expected to be one of the main drivers leading the world out of the credit crunch. Which is precisely why the precipitate closure of Britain’s only major wind turbine factory is so embarrassing to the Government after it has trumpeted hundreds of thousands of new jobs deriving from the green recovery.

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The collapse of the National Express franchise for the East Coast rail service may well foreshadow the redrawing of the entire privatised rail franchise system. The loss of this £1.4bn contract, the most expensive in the country, will have a major impact on the 5-year funding settlement for the railways which will have to be met by the taxpayer in higher fares. But it presages a wider crisis in that the £35bn settlement for the 2009-2014 maintenance and upgrade system is based on the assumption that rail fares will increase by an average of 7% over this period, when in fact because of the recession passenger numbers are falling so that fares are increasing on the East Coast line by only about 1%. There is the further immediate issue of the conditions under which National Express can walk away from its £1.4bn contractual liabilities with the loss of only £72m in loans and performance bonds since the Department for Transport cannot legally demand that the company pay the full cost of the contract. This is yet another flagrant example where a company privatises the gains in conditions of economic growth, but then leaves the taxpayer to socialise the losses when the economy deteriorates. Is this a way to run a railway, let alone a range of other major public services?

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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.

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After the banks have had a stupefying £500bn put at their disposal, a sum equal to a third of Britain’s entire GDP, it is not surprising that many other (and often more deserving) candidates have lined up for a Government bail-out, most notably Jaguar Land Rover. Should they get it?

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