There is much to welcome in David Miliband’s call for a ‘comradely and serious debate’ about the future for the Labour Party, as prompted by Roy Hattersley’s recent article in the Political Quarterly on social democracy.   He is certainly right about the spirit in which the debate should take place, but this initial foray will have to sharpen its edge drastically if it is not to fade into a merely pious exchange about abstract aspirations.   The starting point has to be what went terribly wrong in the last decade or two leading to financial collapse and cataclysmic defeat in 2010.   Those factors include financial deregulation which opened the way to toxic derivatives and the crash, a bonus culture that pumped up recklessness in the City and ballooned inequality, over-reliance on finance to the huge detriment of manufacturing, a naive belief in the self-regulation of markets, and an extension of privatisation into all public services on ideological grounds irrespective of outcomes.   David does not mention one of them.

The real problem with his analysis is the assumption that the structure underpinning the British economy is broadly sound – just get the phraseology about the super-structure right.  But even in that respect he doesn’t.    ”We should be reformers of the State, not just its defenders” – but the State does produce better outcomes than markets in many areas, notably in provision of key public services.   “We should be champions of local government” – yes, not diminish it by PFI and endless outsourcing as New Labour did.   “We should be clear about equality”  – indeed, equality of opportunity is a chimera without much much greater fundamental equality, and equality and liberty must be reconciled not just for the rich but for the poor too.   “We need a politics of economic growth” – yes, not supporting Tory austerity as certain recent moves have suggested.   “Make our internationalism work for Britain” – whatever that means.   “Continue to modernise the party” – but it’s already been shrivelled, do we really want more?   “And defend Labour’s record in government” – but if it was so successful, why does it need defending, why doesn’t it speak for itself?

But the real flaw is the neglect of what is so badly wrong with Britain today, which only a real Labour government can and should put right.   An unsustainable economic decline (the UK deficit on traded goods was a staggering £100bn last year).   The loss of control over the money supply to the banks which prioritised allocation to mortgages, offshore speculation and tax evasion over productive investment in industry and exports.   The need for a massive revival of British manufacturing as the only long-term lifeblood for the economy.   The fracturing of British society into ever more excessive inequality and the stifling of social mobility.   The re-democratisation of the outmoded British power structure, the need for which has been irrefutably demonstrated by successive scandals in the City, parliament, media, and police.   All these cry out for reform.

It’s not just the well-reported antics of Mark Kennedy that call in question the activities of undercover policing against political and protest groups.   It’s the almost total lack of accountability about the clandestine operations of police spies over the last 40 years.   The HMIC report on this episode draws attention to Kennedy’s failure to “follow codes of practice for undercover officers ” or to report his sexual activities with those he was targeting, but fails to equal attention to the much more serious charge that his handlers or the CPS, or both, deliberately ignored evidence that Kennedy had provided, in order to secure the false conviction of 100 protestors at a power station in Nottinghamshire.

Despite the revelation that 7 of the known 9 undercover officers had sex with those they were spying on (we don’t yet know how many more there were in this category), HMIC still thinks that spying on protestors should remain under the police’s counter-terrorism supervision.   Again the HMIC report doesn’t even raise the much more serious question of whether police action of this kind is justified at all, and should now be stopped, unless there is unmistakeable evidence of violence or violent intention.

Another disturbing aspect of this business is the mysterious role of the previously unknown Office of the Surveillance Commissioners (OSC).   Who are these persons?   Who chose them?   From what occupations are they drawn?   Who do they report to?   Which parliamentary select committee monitors their performance?   What are their terms of reference?   What is their response to these serious irregularities that have occurred on their watch over years, if not decades?   Who is calling them to account for their abject failures of supervisory responsibilities?   What other undercover or spying activities do they look after?   We need to know a great deal more about this parastatal organ, and I have put down PQs on all these points.

The HMIC report is typical Establishment whitewash – blaming a particular individual (who is certainly guilty of gross misconduct), but brushing over the much deeper and more worrying structural aspects of accountability.   How can it be justified that officers no higher than superintendent rank were given the power to authorise undercover police to fabricate false passports, rent new properties and live for years as spies?    How can this possibly be justified against peaceful campaigners?   And at what level in the police hierarchy was it decided that undercover officers should lie in court about their identity and the nature of their activities?   Who authorised this perjury and deliberate contempt of court?   They should be named and held to account for what is obviously a gross breach of their public responsibilities.

 Business, SMEs in particular, need funding fast, so why doesn’t Osborne just order RBS and Lloyds to ratchet up the lending?    After all he owns 80% of the former and 40% of the latter, more than those who talked about seizing the ‘commanding heights’ of the economy ever dreamed of.   Why instead did he go cap in hand to the Bank of England begging it to overseee the pumping of loans to small firms through a process known as ‘credit easing’, thus bypassing the banks even though he owns two of the largest?   Or why does Cameron refuse to stop the obnoxious payment of gigantic bonuses in the City piggery on the pretence that he can’t micro-manage the banking system?   It’s because the byword in neoliberalism is that the private market is untouchable – governments should get out of the way, never interfere, the market knows best – and the banks are sacrosanct.   Compare that with the treatment of those now being deliberately made homeless by government fiat – maybe a fifth of a million families: not untouchable, just violated.

The government’s own estimate is that ‘only’ 67,000 families will be affected by the housing benefit cap debated in Parliament today.   Of these, even the government itself admits that 12% of the families will lose as much as £100-150 a week, and another 17% will lose over £150 a week.    That is justified by IDS on the grounds that they should be working  and it isn’t fair that they’re getting more in benefits than many people in work.   This ignores however certain crucial facts.   No less than 60% receiving housing benefit are not able to work – pensioners, disabled, or lone mothers with young children.   The reason the housing benefit budget has soared in recent years is not because tenants (though it’s nearly always the landlords) who are raking it in, it’s because far too few houses are being built, so that demand far exceeds supply, forcing up prices and then housing benefit as a consequence.   And now the Tories are pushing the Right to Buy again, reducing the supply, pressing up rents still further, not least because social housing rents are now being deliberately adjusted upwards to match private rents in the locality.

One law for the bankers, another for families made destitute and homeless.   One law for the 99%, another for the 1% who inhabit a different planet.   One law of inviolability for the financial elite, another for the poorest whose exploitation is seemingly limitless.

There are two different universes at Westminster, completely disconnected.     One is about Hester who has sacked thousands and still presides over RBS languishing at a share price only half of what taxpayers paid for in the bailout, but who has already on top of his £550,000 salary (£10,575 a week) gained £11m in bonuses and incentives and looks set to pick up another £6m for a fairly unexceptional performance.   The other is about the poorest of the poor – those suddenly struck down by a breakdown or accident beyond their control, or evicted and made homeless, or an abused wife escaping a violent partner, or a man deprived of his job and left penniless by epileptic fits – the causes of human misery are endless – all of whom are about to lose their final lifeline, the Social Fund, which the IDS anti-welfare bill is abolishing.   Does one impact on the other?  Not for a second.

It’s not as though the Social Fund is a case of egregious generosity profligately thrown at the poor.   It is extremely mean, grudgingly parting with far less than  the absolute minimum needed for a decent life, just enough to eke out survival – that is if you’re lucky enough to get it.   The Social Fund was the creature of the Thatcherites in the 1980s, replacing the previous system of grants for things unavoidably needed like a cooker or a cot, but which could not be afforded on a poverty line benefit.   Instead of being determined by need, it was cash-limited and often a loan that had to be repaid, pushing weekly subsistence below the poverty line.   Even Thatcher however never proposed abolishing it.   But the Coalition is.

The Social Fund is bing cut by 39%, and the remaining £178m will then be dispersed  to local authorities but, crucially, not ring-fenced.   Given the current and future state of Town Hall finances, that means that all, or nearly all, will be diverted to other pressing needs.   After all, which local authority will want to establish a reputation for generosity, which will act as an instant magnet for the destitute for miles around?   There is not even a requirement on local authorities to report on any loans or grants they may make, so that there is at least some minimum measure of accountability.

So City directors now get on average £1.8m a year (£34,615 a week) and Hester piles another £6m on his mountain of incentives.    At the other end the IFS has predicted that another half million more children will be pushed down into povertyas a result of the colossal IDS benefit cuts of £18bn, and to cap it all the Social Fund last and final protection is being swept away.   Not exactly all in it together.

What political leader in Opposition has ever stopped in its tracks what looked like irresistible momentum towards a disaster?   No, I can’t think of one either.   Certainly not Cameron – can you remember any of the positions he took during the 5 years before the 2010 election, apart from slyly posing beside a dog-sleigh in the Arctic?   Nor Blair, except his flying off to Hayman Island off Australia to pay sycophantic homage to Murdoch’s News International just before the 1997 election.   Not even Thatcher who spent 4 undistinguished years as Tory Opposition Leader 1975-9 and failed to leave any mark whatever on the tumultuous struggles of the late 1970s.   Yet Ed Miliband has now twice outmanoeuvred some of the most powerful forces in the land and forced the government on to a humiliating defensive.   By any standards, given the lack of executive power, that is a stunning tactical and strategic achievement.

Murdoch, the most powerful media mogul the world has ever known, was within days of doubling his empire by the takeover of BSkyB when he was stopped dead by Miliband’s decision to force a Commons vote on the issue in the light of the hacking scandal.   Cameron was not only outwitted, he was deprived at a stroke of the secret pact he had made with Murdoch to buy political success for himself at the expense of handing over inordinate media power to Murdoch with all the evil consequences entailed, the depth of which we are only now beginning to understand.   It was a huge risk on Ed Miliband’s part since Murdoch was almost universally regarded in political circles as unchallengeable.   No other political leader has ever achieved such a feat, and probably never will.

Overturning the Hester heist is scarcely less.    In the face of banker lobbying and City greed the bonus momentum seemed unstoppable.   Cameron, as is his way, flitted around lighting like a butterfly on ‘popular capitalism’ and ‘shareholder power’, then deserting them almost at once by declaring that the RBS bonus was a requirement of the contract negotiated by Labour (which was a lie), and then once again changing course by the claim (almost certainly equally mendacious) that Hester and the board would resign and that this blackmail had to be bought off (Danegeld was implied though not explicitly mentioned) to avoid even higher costs to the Treasury.   A more demeaning posture for the government it is difficult to imagine.   As an alternative, Just say No! comes to mind.   Yet it was only Miliband’s intervention that finally forced a feeble and atrophied government, and an over-mighty and hubristic banking clique, to face reality.

No doubt Ed Miliband will not get the credit for this that he deserves.   Far too many in the press lobby and in parliament are so entrenched in their prejudice – besotted by PMQs which is low-farce pantomime far removed from real politics – that their judgement is blinded.   But having twice now taken on the mighty and felled them, most objective observers will see very clearly that this is a very significant and brave leader in the making.

Hester’s virtual £1 million bonus is an icon of everything that is currently wrong with Britain.   He is the personification of a self-engrossing greed that is destroying the moral fabric of society.   He is being paid a so-called bonus, 40 times the size of the total pay of the average worker, simply for doing his job for which he already gets a base pay of more than £1 million – in other words, his pay has been doubled for a performance which has not by any standards been exceptional, having presided over a collapse in the RBS share price even further below the break-even level for taxpayers who contributed £35bn to bail out the bank.   The Cameron-Osborne riposte – that the alternative to making the award would have been “worse for the taxpayer” – starkly demonstrates the government’s feebleness in succumbing to blackmail as Hester and his ilk hold the country to ransom.   And it makes a monkey out of the government that Cable can say on Tuesday that shareholders should use their power to rein in excessive corporate pay and then on Friday the government, the shareholder holding 83% of RBS shares, caves in with such an egregiously excessive handout.

But it’s not just the government which has shown itself to be such a pansy when confronted by its banking paymasters who contribute half of all Tory party funds.   The City is laid bare as a place of heinous self-interest with no sense of proportionality, no concern with fairness or due entitlement, no understanding of the need for restraint in the face of the call for public sacrifice, no appreciation that grotesque unfairness calls into question not only individual greed but the whole unregulated market economy that permits it.

It also raises the fundamental question of Who now runs Britain?    Cameron makes a speech only a couple of weeks ago about how he deplores crony capitalism and predatory capitalism and how he wanted to promote popular capitalism.   Two weeks later, with the virtual total ownership of RBS in his pocket, he then waves through a hugely offensive symbol of a deeply unpopular capitalism.   The government is revealed as weak-willed and week-kneed to a fault.   It will not force the banks it owns to lend to businesses even in a deep recession which the banks themselves caused.   It has to negotiate with the banks over Project Merlin, which is a feeble set of commitments, and when predictably it fails there are no sanctions.  

The government caving in to the banks on every single issue is a marker of where power now really lies.   And it is not with the government.   Britain is now less a democracy than a plutocracy, as Hester’s ill-gotten million-pound rake-off so starkly exposes.

There seems to be a plague going round the Shadow Cabinet, which is quite catching, the symptoms of which appear to be seriously muddled economic and political thinking.   After several comrades went down with this malady over the New Year period, the bug appears to have re-surfaced again, to judge by today’s remarks from the foreign affairs spokesman as reported by Guardian political journalists who seem intent on transmitting the disease.   Apparently despite having committed the party (without any consultation or debate) to retaining all the Tory cuts and accepting the Tory pay freeze to 2020, we still need to talk “a lot more” about bringing the deficit down.   He insisted that just because Conservative austerity economics failed, Labour would not become credible – to become credible, Labour needs to adopt the same kind of austerity policies as the Tories.   Make what you can of that.

He accepted that a stimulus was needed to get the economy moving, but then seemed to be under the delusion that Labour had won that part of the argument.   It certainly hasn’t.   Accepting all the cuts – that is, a reduction of expenditure of £109bn – plus a decade of pay freeze makes it quite clear that Labour concedes the Tory position that the economy isn’t going to get moving any time soon.   It is extraordinary that these remarks have been made just a couple of days after it was officially announced that the UK economy is now contracting, almost certainly already in the grip of a double-dip recession.  

He also insisted that Labour would support a cap on household welfare benefits (though not a cap on the excesses of corporate pay, like Hester’s £0.96m bonus) provided “it should not render people homeless”.   But that is exactly what capping household welfare benefits will do.   Expert assessments estimate that the Tory cap on housing benefit will force at least 80,000 families out of their homes.   What would the Labour cap be, if not exactly the same as the Tory one, and what would be its effect?

The idea that lining up with all the Tory austerity measures will give Labour ‘credibility’ is preposterous.   It will hardly even reduce the deficit which is supposed to be the whole object of the exercise because, as Ed Balls has rightly pointed out, even the OBR (that offshoot of the Treasury) admits that rising unemployment, falling national output and lower tax revenues mean that already £157bn more will have to be borrowed by the government than Osborne budgeted for 18 months ago.   Perhaps the foreign affairs spokesman should stick to foreign affairs.

By any standards the IDS so-called welfare reforms are extremely harsh, victimising the poorest for the follies of the ultra-rich bankers, bashing families with disabled children, pressurising the unemployed with over-the-top work capability tests into jobs that don’t exist (there are only 400,000 vacancies for 2.64 million jobless to fill), and forcing some 80,000 families to decant because housing benefit cuts mean the rent is no longer affordable.   So how do you sell a nasty, vicious package like this?   The solution the Tories have come up with is to create one superficially plausible idea and then repeat it over and over again to prove that the whole package is OK.    ’Nobody should get more in housing benefit than the average-paid hard-working employee gets from a week’s hard grind at work’ – who could possibly disagree with that?   A lot of people if they were told the truth.   But that’s not the point: it’s the Tories’ technique of under-the-radar attack that needs to be copied and used against them, because they are the ones who are far more vulnerable.

As it happens, the £26,000 housing benefit cap will do a lot of damage which cannot be defended.   It will push over 130,000 more children into poverty as well as pushing down a great many more even further below the poverty line (which is 60% of median household income).   And the IFS have calculated that the government’s welfare cuts will ratchet up child poverty by a third of a million.   Not as innocent or ‘reasonable’ as Tory propaganda makes them out to be.

But fastening on one killer point is a technique the Labour Party should use aggressively itself.   Here are a few examples:

*  The richest 1,000 persons in Britain could pay off the entire budget deficit themselves alone: so why are they paying nothing?

*  Tory austerity hasn’t cut the deficit at all: it’s increased borrowing by £157bn.

*  Labour didn’t overspend at all: it was the bankers’ bailout that ballooned the deficit by £120bn.

*  A million jobs could be created, without any increase in borrowing, by taxing the ultra-rich.

*  It costs £8-10bn a year keeping a million on the dole: why nolt for the same money create half a million jobs?

Cameron’s  seeking to explain away yesterday that the national economy was now shrinking by 0.2% in the last quarter of 2011 won’t wash.   He blamed high inflation, Labour mismanagement and the eurozone problems.   High inflation is irrelevant to a contraction of national output which is clearly down to lack of demand because of squeezed incomes.   So far from Labour mismanagement being the cause, it was Labour relaunching growth in the first half of 2010 after the deep slump of 2008-9 that produced an economy growing at more than 1% a year in the second half of 2010, which Tory austerity managed first to flatline through the first half of 2011 and then actually to contract at the end of 2011.   As for the eurozone crisis last summer, the UK economy was already falling into decline up to a year previously.   Cameron’s points are all bogus.

Cameron-Osborne are desperate for growth, so what has happened to all their attempts to kickstart it?   They chopped back the public sector because private sector jobs would rapidly step into the breach.   In fact for every 13 jobs lost in the public sector, only 1 has been created in the private sector – for the very obvious reason (to all except perhaps them) that when demand is faling private companies are understandably reluctant to invest and take on more workers.   Then the weak pound, already 25% devalued compared with 2 years ago and now having slipped further against the dollar from $1.6 to $1.55 over recent months, was supposed to prompt an export-led recovery.   Amid the global slowdown it failed utterly to do so, such that the deficit in traded goods in 2011 may show very little improvement on the all-time worst record of a £100bn deficit in 2010.

Then Osborn was reduced to serving up himself what he had previously denounced against the Labour Government as “the final resort of governments when all else has failed”, namely quantitative easing to the tune of £75bn to jerk an inert and singking economy into life.   It was his final resort, and it has failed totally.   Then we were told in the March 2011 budget that the “march of the makers” was under way.   Yet in the last quarter of 2011, only 6-9 months later, factory output fell by as much as 0.9% and constuction activity by 0.5%.   The makers didn’t march: they retrenched with a loss of 395,000 jobs in manufacturing since the recession.

This is a catalogue of unmitigated failure.    Government policy is finally reaching a dead end.   Another round of QE is fabricating further useless money after other useless money.   Counting on the eurozone to sort itself out sustainably after Merkel’s uncompromising obsession today with further austerity is whistling in the wind.   The truth is, as many of us have been saying for years now, it’s jobs or bust.

The news that the public sector net debt has now passed the £1 trillion mark isn’t really news since it’s long been on track to reach £1.4 trillion by 2014.   What is far more disturbing is that the government, in its obsession to cut the public sector deficit regardless, has completely ignored the impact this is having on the private sector deficit in driving the slump.   The government’s answer to drooping demand and consequential languishing growth is to pump colossal amounts of new money into the economy via so-called quantitative easing (i.e. printing money), first £200bn under the Labour Government and now a further £75bn under this government, but it has had virtually no impact at all in stimulating growth, either here or in the US, because the lack of base money (M0 in the jargon) is not the cause of the crisis.   The real problem is what is happening to private sector debt.

It is extraordinary that, according to the first forecasts of the newly formed OBR in 2010, the government was expecting the level of private household debt, already £1.57 trillion, to rise to a staggering £2.13 trillion by 2014-5.   It should be emphasised that this was not something they feared would happen or were simply allowing to happen, but rather it was a deliberate aim of monetary policy that it should happen.   The plan was that the deficit provided the perfect excuse to squeeze the public sector, shrink the Welfare State, but ever-increasing private household debt would provide the extra demand to maintain at least some modestly decent growth.   The opposite has happened.

In the private corporate sector deleveraging (i.e. paying off debt) has gathered pace because the corporates are sitting on mountains of cash (at least £70bn) but not investing because demand is being squeezed.   Equally in the private domestic sector households are being forced to pay down their debts and cut their consumption as rapidly as they can as the only way to get by.   The effect is massive private debt deflation, which is the real cause of the slump.  

The debt deflation forces are far larger today even than those that caused the Great Depression in the 1930s.   In the 1920s private debt rose by 50%; in the decade to 2009 it rose by 140%.   The debt-to-GDP ratio is still much higher in both the US and the UK than when the Great Depression began.   The only way to stop the slump, before it bottoms out with incalculable damage in joblessness and loss of national output, is to restore that level of private demand.   There are two ways to do that.   The better by far would be a jobs and growth strategy which would begin to pump demand back into the private sector.   The other is (as in Greece) to write off a high proportion of the private debt and make the banks take a ‘haircut’ as a penalty for seeking to grow rich by showering the populace with mountains of irresponsible and unsustainable loans.

Why are the Tories now standing at their highest polls since the election?   This has of course given Ed Miliband’s Blairite enemies, both in the Shadow Cabinet and the PLP, the chance to dump on the leadership which is always the silver lining for them when there’s bad news.   They like to claim that, given the government’s vicious austerity programme, Labour should now be 10-15 points ahead, not 5 points behind.   But the truth, as so often, is very different and much more complex than that.   The real reason is that Labour has allowed the public to get imprinted on its mind (much assisted of course by huge right-wing media hostility) two crucial facts, both of which are wrong.   In addition Labour has failed to get across – indeed not even seriously tried to do so – two other equally crucial facts about the deficit.   For these reasons, if the austerity deepens and lengthens as it will, then so far from that experience forcing the electorate back into Labour’s arms, it will actually have the opposite effect and will likely increase the Tory lead.   This is why.

Stop anyone in the street and ask them what they think about the economy, they are likely to say two things.   It was caused by Labour over-spending, which left a colossal debt to be paid off, and although what the Tories are doing is painful and harsh, it had to be done because there was no alternative.   Both beliefs are wrong.   The last Labour government did not over-spend: the budget deficit was 3% of GDP before the financial crash of 2007-8 and 11.6% after it because of the massive bank bailouts.   That needs to be repeated over and over again by Labour spokespeople, but it isn’t being.  

The second belief is equally wrong: one way to cut the deficit is to chop expenditure, which is the government’s route, but the other, much better way is to create needed jobs (house-building, infrastructure improvement, laying the foundations for the green economy) which reduces the enormous costs of unemployment and increases Treasury revenues through income tax, NICs and VAT when people work and earn.

Labour then needs to get across two other crucial points.   One is that creating jobs does not mean borrowing more money when the debt already enormous.   Capital gains tax at 28% on the increase in wealth of the richest 1,000 persons in Britain since 1997 – no less than £297bn according to the Rich List – would yield £83bn, enough to pay off half the deficit and still leave enough to create half a million jobs.   The other crucial point that Labour should continually be making is that the Osborne strategy has been tried twice before, by the Geddes Axe in 1923 and the May Committee in 1931, and on both occasions it led to persistent anaemic growth which was only brought to an end by the Second World War.

By a striking coincidence turkey-fattening season in the City, otherwise known as bonus time, happens to be rolled out at the same time as the rest of the population is being told the pay freeze, after last year’s big 4.2% drop in real wages, is now expected to last till 2020.   However, for the City’s 1,200 ‘code staff’, i.e. those ’responsible for taking and managing risks’, it’s not all gloom.   They’ll be getting on average £1.8m this year, 78 times the average wage.   Not bad for those who took and managed risks so skilfully in 2008 that as a result it required a UK bailout of £70bn, tore a hole in the Government budget amounting to 8.5% of GDP or £120bn (the difference between the deficit of 3% beforehand and 11.6% afterwards), and is still being projected to lead to a national debt of £1.4 trillion in 2013-4.   Quite an achievement for just over a thousand people, some of the very richest in the country.

Apart from these lucky one-percenters who’ve done such sterling service for the nation, the other 99% as the Occupy Movement so rightly calls them face a grim prospect, a lost decade as previously in the US.   But in the US average wages have stagnated, not for a decade, but for nearly 40 years.   It needs to be understood that in the UK on current policies there is no guarantee that the country will return to ‘normal’ annual pay increases even after 2020.

There are 3 reasons why the ultra-rich are insulated from this disastrous scenario for the rest of the nation.   First, uniquely they decide their own rewards.   Technically it’s through remuneration committees, but these are self-chosen groups of chums who mutually back-scratch for each other.   Second, pay is but a small fraction of their really big rewards.   The latter are incentive schemes of every shape and form piled one on top of another, stock options, so-called fringe benefits (anything but fringe), golden handcuffs, vast share hand-outs, and often very large terminal payments even as a reward for failure.   Third, remuneration as well as property transactions are increasingly undertaken offshore so that huge sums are vested in tax havens free of payment of tax.  

This whole situation of grotesque inequality is potentially explosive, the first signs of which bubbling up are the UK Uncut demonstrations against corporate tax-dodging, the LSX Occupy protests, and the August riots driven partly by hatred of the police but also by revulsion at bankers’ bonuses.   Today’s announcement by Vince Cable about giving shareholders a vote on lavish pay awards is not so much a sledgehammer to crack a nut as a nut to crack a sledgehammer.

A Land Registry inventory of title deeds, just published, is yet another piece of evidence revealing the hypocrisy of Osborne’s “we’re all in it together” in austerity.   What it shows is that in just two central London boroughs the ownership of property worth £88.5bn has been transferred offshore to escape payment of stamp duty and inheritance tax.   It is estimated that this costs the Exchequer about £1.7bn a year in tax evaded.   Whilst this is concentrated in the richest areas of London, this tax dodge is now spreading to other cities like Manchester, Derby and Leeds.   We are told that money is so tight that the cap on housing benefit and the cutback for families of disabled children must be maintained whilst the super-rich are laughing all the way to their offshore bank.

It’s not as though the government didn’t know about these wheezes and have been surprised by these latest revelations.   The truth is they’ve consistently followed a policy of ignoring tax-dodging by rich individuals and big corporations, always preferring to look the other way or, like Nelson, put the telescope to their blind eye.   Dave Hartnett, the head of HMRC, was rumbled letting off Goldman Sachs – the giant vampire squid itself – a huge tax levy in a secret deal.   Vodaphone was allowed to walk away with a £6bn tax let-off – why did it require UKUncut to draw this to the nation’s attention?   The number of tax inspectors has been reduced, after lobbying from Big Business, by 26% from 99,200 in 2005 to just 73,700 in 2010, and tax collected has correspondingly dropped in the last 3 years from £462bn in 2008 to £436bn in 2010.  

This is a case, as everything else with this government (and New Labour as well), of the rich socialising the losses and privatising the gains.   The bankers crash the economy, but keep their bonuses, and the rest of the population picks up the tab.   The super-rich make stratospheric gains in both wealth and income and then don’t pay their taxes, and the rest of the population have to pay more tax.    How long is this country going to go on tamely accepting austerity when, if the super-rich were made to pay their due taxes, there need be no austerity at all?

The Cameron technique becomes clearer by the day.   Pick up a problem that is causing public anger, make an instant speech declaring himself fully on-side, and then hit it with a wet flannel.   Bankers crash the economy and spark a slump – set up a Commission years later, then endorse its conclusions that are too feeble to have much effect.   Predatory capitalism – remove a knighthood from Fred Goodwin.   Executive pay excesses – give shareholders a vote, which they’ve got already and don’t use.   Obscene bankers’ bonuses – publicly state a cap of £2,000, but no sanction, so Stephen Hester of RBS and his ilk still each get £2.1 million or so.   No money for anything – cheer up, we can still afford a new yacht for the Queen.   And now lobbyists making millions out of an inside track to government contracts – we’re setting up a register, but it’s not enforceable and only covers a fraction of the lobby landscape.

The new so-called lobbyists’ register, going out for consultation this weekend, is the wettest, feeblest, most innocuous measure you could dream up – just right for this Cameron government.   It’s pitted with loopholes.   Ministers won’t be forced to declare meetings with lobbyists if they happen to be their friends.   In-house lobbyists will not be expected to register because because any meetings they have with Ministers are already recorded, but patchily and not readily publicly available.   The expected coverage of register, 275 lobby firms with 1500 employees, is a minute fraction of the industry seeking to influence government for profit.   The amount of information to be provided would give just the bare outline, still concealing the latest financial background that reveals the true network of influence.  

Above all the government report rules out a statutory code of conduct.   Without a mandatory register backed up by effective sanctions the whole exercise is a whitewash.   In one sense it is even worse because it appears to be taking action on an issue of acute public concern without actually making hardly any change at all – a perfect Cameronian device.   What better let-out for Ministers than to be able to say that they can’t reveal their meetings with their lobbyist friends because they were ‘private’?   This surely must count as the first victory of the lobby industry in making utter monkeys out of the government.   It has all the smack of firm goverment of a bucket of warm spit.

Ed Miliband scores again, with Cameron forced on the defensive over crony capitalism and hopping about like a half-swatted fly.   Miliband is a much under-rated man.   Having won the leadership with steely determination and against all the odds, he achieved more than any Opposition leader has ever done by bringing to heel the most powerful media organisation the world has ever known.   He has avoided cheap gibes and easy pot-shots, which Cameron to his discredit excels at, and has concentrated on the big things that really matter, not being afraid to take on the vested interests and risk the ire of the rich and powerful.   You can always tell when you’re winning in politics – it’s when your opponents, having roundly abused you, then meekly succumb and join you in attacking what up till then they had been defending till it became indefensible.

Corrupt and greedy capitalism is a rich furrow to hoe, not least when austerity is tightening its grip on all its victims.   There is so much to go for, and the field is wide open.   Southern Cross showed how the interests of the Qatari investment funds took precedence over 30,000 dependent and dementing elderly.   The City is still being allowed to hand out over £4bn in bonuses this year at the same time as benefits are cut for families of the disabled.   Kraft was allowed to gobble up Cadburys, Siemens to snap up a huge train contract that could still put Bombardier out of business, but the City of London (which pays half of all Tory party donations) is always cossetted even to the point of vetoing a Eurozone treaty.

There’s floods of money for prestige projects like HS2 (£33bn) and Boris Island (£40bn), with a new yacht thrown in for the Queen, but virtually no affordable housing being built for the 1.8 million families on the Council waiting lists.   Inequality has ballooned to stratospheric levels at the top, but all that Cameron offers, flitting in and out like a dilletante butterfly, is giving shareholders a vote which, with 57% of shareholdings held either abroad or by pension funds, will have hardly any effect at all.   Making Fred Goodwin, the villain of RBS, give up his knighthood will make him smirk all the way to the bank; why not make him give up his pension?   Philip Green gets away with giving his wife in Monaco a £2bn dividend to escape £250,000 tax, yet Osborne boasts the government is cracking down on tax.   Passers-by who went into trashed shops during the August riots and took bottles of drinking water were sent to prison, but the bankers who pushed up UK debt to £1.4 trillion are let off scot-free – none sent to gaol or even prosecuted. 

Keep going, Ed!   The country’s behind you – this is a winning theme.