Michael Meacher - Labour's Future

With Revenue and Customs paying an informant to expose secret accounts in the Liechtenstein tax haven, it might seem that the war on tax avoidance is gearing up.

But even if this results in recouping some of the £100m in back taxes owed by the super-rich it is still a flea-bite considering that a TUC study a month ago found tax avoidance by Britain's biggest companies and wealthiest individuals now amounts to £25bn a year. The Tax Justice Network has also recently documented that the wealthiest people in the world hold a staggering $11.5 trillions of assets in tax havens.

But what is novel in Britain is the way that wealth and power over the last decade have been consolidated in a tiny new class at the top. They are epitomised by the egregious earnings of Stephen Schwarzman, chief executive of Blackstone private equity, who took home £200m last year (£3.85m a week). But that is only the extreme example of a new hyper-wealthy elite marked not only by extravagance of personal consumption, but also by a hold on economic and political power rarely if ever equalled in the past.

Britain now has five distinct classes. The poor, conventionally defined as those with less than 60% of median earnings, have to get by on less than £217 a week. But included with them should be the 1.5m people whose household incomes are no more than £10 above that, and constantly afflicted by insecurity.

Next come the largest class, those around the median income in Britain today of £23,600 (or £454 a week). This embraces a wide range of occupations from sales assistants and retail check-out (£240 a week), through nursing assistants, secretarial, security work, plant and machine operatives, electrical and construction, civil service executive grades, sales reps, to nursing, police and fire service (around £520 a week). Mostly they are secure, though at the lower end they remain vulnerable to economic downturns or if housing equity turns negative, as it may well be about to do for several tens of thousands.

Then comes the comfortably off managerial and professional class. Middle class is now too diffuse a term to be accurately descriptive, and would now be seen as including many in the previous category. But the professional-managerial class includes those in teaching, health and engineering (from £650 a week), through marketing and sales managers, production managers, up to corporate and senior management (around £1,670 a week).

In the higher reaches of the income scale there has always been a rich class, which might be arbitrarily defined as the top 5%. Numbering 1.4m, their income, according to the latest official Survey of Personal Incomes, averages £96,000 a year, with average investment income on top of that of £12,400 (totalling therefore £2,085 a week). Some might think, however, that the real rich category is confined to a much smaller group, say the top 1%. Their average earned income is now £220,000 a year plus £35,200 investment income, so they take home just over £4,900 a week.

However, a wholly distinct class has now developed at the very top end of the income scale which is entirely separate in the influence it wields through being embedded in the power structure at the highest levels. Even this class, tiny though it is, contains a vast range. At its lower end it starts from the top 0.1%, numbering just under 30,000 persons, each with an average earned income of £754,000 plus £146,000 investment income a year (just over £17,300 a week). It then rises into the stratosphere. The latest annual survey of the chief executives of the top 100 FTSE companies shows them taking home on average £2.8m a year (£53,485 a week). But that is only the average in these ultra-select and powerful groups. The top end, represented by the £27m (£519,230 a week) paid to Bob Diamond of Barclays Capital, is seen by many as greed incorporated when living in the same society are those on a minimum wage of £198 a week. A ratio between top and bottom incomes, which was less than 50:1 only 30 years ago, has now risen to 2,620:1.

What is even more striking is that these Babylonian excesses are now locked in more closely than ever to the exercise of power. In the last few years this has been exemplified by the rise of private equity. Buying up large public companies with huge debt leverage, selling off the property portfolio to transfer the debt to the company, and cutting costs via large-scale redundancies is the economic and personal price paid by others to secure the 2% annual management fee plus 20% of the profits for the private equity partners under the so-called "carried interest" system from which they can extract £20m or more apiece.

There are countless illustrations of this intertwining of wealth and power at the highest levels. The taper relief loophole by which top executives pay tax at a lower rate than their office cleaners was closed in 2003, but private equity was uniquely given exemption by the government. Sir Ronald Cohen, a guru of private equity, remains a close friend of Gordon Brown, who has also just appointed Damon Buffini, boss of Permira which recently loaded AA and Debenhams with huge debts and job losses, to his new Business Council of Britain.

The indefensible non-domicile tax loophole, which benefits some 60,000 hyper-rich individuals with personal fortunes reckoned to total £126bn, has only survived intensive lobbying against it in the past because its beneficiaries persuaded Brown as Chancellor that the privileges of the City must be protected at all costs. And the storm over cash for peerages further exposes just how far wealth now suborns the governing process in the hope of underhand reciprocal gain.

There is now increasingly a consensus, even among the well-off, that these excesses of power and wealth have gone too far. There is even a substantial degree of cross-party support in the Commons that the tax asylum seekers slipping through the net via non-domicile tax status should be brought to book by ending this loophole. The Treasury Select Committee recently reported that the taper relief concession for private equity buccaneers should be modified and "carried interest" treated for tax purposes as the income it clearly is. As the credit crunch consequences bite ever deeper into the incomes, not only of the poorer half of the population, but also of not-so-wealthy Middle England, the cry against greed incorporated will get a lot louder.

This article appeared on Comment is Free on 20 June 2008: http://www.guardian.co.uk/commentisfree/2008/jun/20/taxavoidance.privateequity

Posted by Michael Meacher at 12:56 PM | Permalink | Comments (0) | TrackBacks (0)

There has been a great deal of hand-wringing about the Government’s failure to meet its child poverty reduction target, i.e. to cut child poverty by half by 2010. It is likely to do little better than get halfway there. But that misses the real point.

If you let markets rip, if you give priority to Big Business and the City for whatever tax cuts they want, if you keep the trade unions on a short leash and insist on hire and fire flexible labour markets which stunt trade union power, if redistribution is a No-go area, then of course you’ll get a situation where one-fifth of the population have to subsist on less than £220 a week, while at the same time the top 1% get income of £220,000 a year plus £35,000 in investment income, which means they take home £4,900 a week.

And when Mandelson says “we’re utterly relaxed about people getting filthy rich” and when John Hutton says that we should “celebrate” people being enormously rich at the top, then of course you’ll get the new super-class that New Labour has so enthusiastically cultivated where the top 0.1% (just 30,000 persons) each get an average annual income of £760,000 plus another £150,000 from investments, making it £17,300 a week. And within that group you’ll find the chief executives of the FTSE top 100 companies taking home £71,000 a week, right up to the top of the pile, Bob Diamond of the private equity outfit Barclays Capital trousering £520,000 a week.

But it’s not just unfettered markets which have wreaked this extravaganza of inequality, it’s also New Labour’s supine genuflecting to the corporate interests that control those markets that has equally done the damage – aping the Tories over their huge inheritance tax concessions which benefit only the top 1.4 million, rejecting any proper taxation of the non-dom billionaires, backing down over capital gains tax on private equity extortion, and blocking any EU withholding tax on assets squirreled away into tax havens.

So don’t be surprised. Nothing much is going to happen on the child poverty front until these economic fundamentals are altered. And on that score, not all is lost.

The sub-prime market fiasco, colossal securitisation of assets for short-term greed, and the international credit crunch are transforming the financial and economic markets (as the Japanese Emperor Hirohito said at the end of the war) not necessarily to their advantage. In addition, at home the traction of the New Labour neo-liberal agenda has collapsed, as the polls, the local government and London mayoral elections, and the Crewe by-election clearly attest. Even at Westminster the old factions that held up the Blairite project have frayed and are breaking up. For the first time for 15 years the way is now open to a new politics. In place of the Tory-New Labour one-party-state stranglehold of the past 3 decades, a progressive modern Left now has a historic role to re-enfranchise the half or more of the population who have for so long been disenfranchised.

That new agenda should address poverty with real solutions, not merely offering the crumbs that fall from the rich man’s table. On fuel poverty, why when the oil and gas companies are reaping a colossal uncovenanted gain from growing oil and gas scarcity relative to demand, do we not impose a permanent annual levy on these companies to tap their windfall gain, and use all the proceeds to help the fuel poor and to fast-track the spread of renewables technology?

Why not re-introduce the 10p tax rate band when Alistair Darling’s one-year-only compensation runs out in April 2009, and fund the £6.6bn cost by excluding higher-rate taxpayers from the benefit, taxing undeclared share-dealings on the Stock Exchange, charging capital gains tax on foreign owners (now exempt) when they sell their UK commercial property, and charging income tax on short-term (less than one year) share-trading rather than capital gains tax which is lower?

On the housing collapse, why when private house-builders will build next year only a third of the Government’s target, don’t we allow local authorities to borrow against the collateral of their own housing stock and build houses themselves, since the Council waiting lists now exceed 2 million (12,000 in my constituency alone)?

And to stop the obscenity of gigantic bonuses and rich-to-rich back-scratching, why don’t we set up a Fair Pay Commission to lay down guidelines on what is fair and reasonable remuneration, with the powers where necessary to enforce them?

Then we might see real progress on dealing with poverty.

Posted by Michael Meacher at 10:47 AM | Permalink | Comments (0) | TrackBacks (0)

After three decades of neglect and 1,634,000 households stranded on council waiting lists by 2005 (probably nearer 2 million by now), a house-building programme is finally getting under way. But it is nowhere near enough.

Investment in public housing has plummeted from 6.1% of government spending in 1981 to just 1.6% in 2005. What this means is that in current price terms the government is now spending £22bn less a year on public housing than it was spending at the end of the 1970s. Added to that the rent-setting formula for council housing has now been changed from the formula known as "pooled historic cost" to one that is partly related to the value of owner-occupied housing in the area. Rents have climbed steeply as a result. Those in council housing cannot hope to buy their way out in the private sector when the ratio of mortgage loans to income can be as much 8 or even 10:1.

A small increase in housing output will not necessarily stabilise, let alone bring down, house prices when the flow of house purchase lending, now at the staggering level of nearly £1tn a year, is rising so much faster. If extra house-building increases the stock by 1-2% a year, which the housing and regeneration bill - given its second reading yesterday - aims to achieve, while at the same time the credit available to buy it increases by, say, 5% or more a year, house prices won't fall.

What is really needed is a return nearer to historic levels of housing investment and a construction drive targeted at decent-quality council housing made available at rents related to the cost of construction and completely decoupled from ballooning prices in the private sector.

The government's aspirations are not ambitious enough. It proposes 200,000 new homes a year to 2016 (last year's total was 169,000), then 240,000 a year to 2020 - 3 million in all. But new household formation alone is now running at 220,000 a year, and if the accumulated unmet housing need of the half-million or more households living in overcrowded, bad quality or damp housing is to be dealt with within a 10-year programme, then at least an extra 270,000 homes a year is now required.

More pressing still, the government is proposing to build an extra 15,000 social rented homes a year, nearly all through housing associations. Council housing still remains largely taboo, since the Blair government only built an average 300 council houses a year compared with the 14,000 built even at the end of Thatcher's reign in 1990. But the latest surveys show that at least a further 20,000 social homes for rent are needed each year over and above the extra 15,000 in order to meet what is called "urgent newly arising" need and to halve, as the government intends, the numbers who are homeless or in temporary accommodation (currently 101,000). To achieve this, local authorities should now be allowed to borrow on the open market, as housing associations can, against the security of their existing housing stock. At present local authorities are forbidden to do so.

Less appealing in the new housing bill is the proposal to create an unaccountable regulator which would transfer key responsibilities away from elected ministers. This new quango will have control over such sensitive issues as the criteria for allocating accommodation, the nature of housing demand to be addressed, the extent to which demand is to supplied, the terms of tenancies, the levels of rent, procedures for addressing tenants' complaints, and even anti-social behaviour. After stock transfer, RSLs, ALMOs and right to buy have shifted half of council housing away from local government, this latest move could now go a long way to removing all the rest out of local democratic control.

Worse, profitmaking companies are to be allowed for the first time to register as social landlords under a lighter burden of regulation. And for the first time means-testing is to be included in the definition of social housing. This abandons one of fundamental founding principles of council housing which was to provide high-quality housing for all sections of society, not housing of last resort for those who can't afford anything better. Only 30 years ago, according to Professor John Hills, 20% of the richest tenth lived in social housing. Now, if this bill goes through, council estates will further concentrate deprivation and council housing will be further stigmatised when what the government ought to be doing is to promote council housing as a tenure of choice for those who wish it.

From

Posted by Michael Meacher at 11:35 AM | Permalink | Comments (0) | TrackBacks (0)

Extract from my contribution [scroll down to 3.09pm] to the Queen’s Speech debate, 14 November 2007

I believe the Government urgently needs some commanding themes by which its distinctive vision can be clearly understood. I want to propose three.

The first is democratisation which the PM himself adumbrated in his first statement to Parliament. But it has to stretch a great deal further than simply giving Parliament a vote before the country goes to war. Parliament needs real new powers on a much broader front – electing Select Committee members, ratifying (or not) Cabinet nominations made by the PM, approving (or not) the membership and terms of reference of Committees of Inquiry proposed by the PM, and setting up our own Parliamentary Commissions to investigate matters (like extraordinary rendition) when the Government itself refuses to do so.

But it isn’t just in Parliament where there’s a democratic deficit. A far bigger one now exists outside. Power has become so centralised over the last 30 years and the regulatory authorities so enfeebled that so far from regulating corporate power, the biggest businesses have increasingly co-opted the power of the State for themselves for their own commercial ends. The current loosening of controls over major power station, airport and incinerator developments, the failure to regulate unhealthy food advertising because of objections from the food industry despite the epidemic of obesity, the withdrawal of the SFO investigation into corruption allegations against BAE, and the relaxation of the gaming laws to permit a flood of gambling casinos are just a few recent examples.

Accountability today has all but vanished. Perhaps the most telling case is Northern Rock. It is now costing taxpayers £23bn in loans, plus a £2bn interest charge – almost equal to the entire annual defence budget – yet nobody is held responsible. The Bank of England, the Financial Services Authority and the Treasury are all blaming each other. What action is being taken, and by whom, to face up to the fundamental mistakes made that led up to this crisis, including the reckless lending practices of the chief executive of Northern Rock as well as the flawed structure of regulation put in place a decade ago? Why wasn’t Northern Rock temporarily taken into public ownership, as was done in the case of the secondary banking crisis in 1974, in order to avoid a run on the bank and to retain depositors’ confidence without this colossal haemorrhage of public funds? The answer to that of course is that the neo-liberal agenda of privatisation, de-regulation and unfettered markets is still, unaccountably, being imposed above everything else, even at phenomenal cost to the taxpayer so that public ownership, even temporarily, is ruled out.

And what action is the Government going to take over the mania for securitisation, collateralised debt obligations and all the other opaque and dodgy financial derivatives which have so dramatically and comprehensively destabilised the markets? Despite all its de-regulatory instincts, does the Government now acknowledge that stricter regulation of financial markets is now necessary if the frenzy for newfangled financial instruments, which are actually designed to be deceptive over risk and value, is to be curbed?

Equally, at the other end of society, the checks and balances against the arbitrary use of power have all but evaporated. Civil liberties have been drastically eroded, and the introduction of ID cards and 2-months detention without charge, both of which I deplore, are still being mooted. Workers who have been in their jobs less than two years can still be arbitrarily dismissed without any rights, and temporary and agency workers remain an exploited underclass – mainly at the behest of the CBI which this Government should be much stronger in resisting. Accountability, or indeed any redress, against alleged misdemeanours by the police, judges, banks, private utilities or big corporations is almost non-existent. Today powerlessness is widely felt to be endemic throughout society, and it will require an awful lot more than focus groups or citizens’ juries to put it right.

Continue reading "A real vision for Labour" »

Posted by Michael Meacher at 08:16 PM | Permalink

Some useful proposals – though the devil may lie in the detail, not yet revealed – but disappointing on the vision and no razzmatazz of new ideas for a new leader, largely because Gordon Brown has already been leading on the domestic policy agenda for the past ten years and now has nothing much new to say.

It’s good that after two decades of neglect of social housing amidst the triumphalist ideology of private ownership, the national scandal of housing need is now at least being noticed. Council waiting lists are now above 1 ½ million and there are over 100,000 homeless, yet only 100 Council homes were built last year (down from 13,000 a year at the end of the Thatcher era). The housing stock is only growing by some 185,000 a year at present, yet the number of new households being formed each year is about 220,000. We are still going backwards. Building an extra 40,000 homes a year, as the Government proposes, is clearly nowhere near enough to meet the yawning gap of housing need. And how many of the 40,000 will be social housing anyway? And why are local authorities still not being allowed to build more Council houses themselves if they wish, borrowing against the security of their own existing housing stock?

Changes to the planning system, as is proposed, might seem sensible when some planning decisions have clearly taken far too long. The 8 years spent on the Heathrow Terminal 5 decision is usually quoted here (though much of that was accounted for by the time spent on Ministers’ desks after the planning report was submitted). But today’s proposals are motivated by very different criteria. National Policy Statements will be drawn up which will enable an array of major developments – nuclear power and nuclear waste facilities, coal-fired power stations, airport expansions, major road schemes, and large waste incinerators – to be put through without the public having a say on whether they are needed or safe, or where they are to be located. This rather conflicts with Brown’s stated wish to bring more democracy into public decisions.

A Climate Change Bill is very welcome, but again its contents leave a lot to be desired. It promises a review of progress in cutting carbon emissions every 5 years which is far too lax when the UK is way off track to meet the Government’s objectives. Clearly annual targets, published and enforceable, are urgently needed. Moreover, air travel and shipping emissions are omitted, even though they are the fastest rising sources of emissions. Nor are mere targets sufficient anyway when other Government policies, notably a tripling of airport capacity by 2030, are diametrically opposed.

Democratisation has also been one of Gordon’s ostensible goals, which is also desperately needed. But it has to stretch a great deal further than simply giving Parliament a vote before the country goes to war – a concession which after the Iraq debacle would probably be inevitable anyway. Parliament needs real new power on a much broader front – electing Select Committee members rather than letting the Whips use the patronage to gain a wider acquiescence, ratifying (or not) Cabinet nominations made by the PM, approving (or not) the membership and terms of reference of Committees of Inquiry proposed by the PM, and setting up their own Parliamentary Commissions to investigate controversial issues (e.g. extraordinary rendition) when the Government refuses to do so. Nor can the idea of greater democracy cut much ice when the Government is still intending to pursue the ID cards folly and, even worse, extend the 28-days detention without charge in defiance of the 800 year old habeas corpus.

And what is not in the Queen’s Speech is perhaps even more important than what is. There’s nothing about redressing the centralisation of power which is such an indictment of the current state of Britain. There’s nothing about redressing the grotesque inequality of income and wealth – nor was there is in the Pre-Budget Report a month ago. And there’s nothing about restoring the ethos of public service which has taken such a battering under Blair – indeed it’s taking a further hit currently with the huge cutbacks in BBC funding which threaten public service broadcasting. Et tu, Gordon?

Posted by Michael Meacher at 11:22 AM | Permalink

There’s still time for the Government to turn the tables on the Tories over the inheritance tax debacle, but only if before the Finance Bill is published they take the radical line they should have taken at the outset.

Instead of ignominiously caving in to Osborne’s stunt, they should have used the opportunity to create a newer and fairer inheritance tax, whilst strenuously arguing the case that this is a tax confined to the very rich and that to relax it means that more taxes have to be raised from poorer households. At present only the richest 6% pay it (approx. those with incomes over £70,000 a year) which is less than in most other countries, much less than was paid in Britain even 25 years ago, and (as a matter of interest) much less than was paid in feudal England centuries ago.

A much more attractive alternative than Osborne’s would:

commit the Treasury to raise the threshold regularly so as to ensure that nobody except the richest would ever be liable,

freeze exemption levels above the threshold and close the loopholes, and introduce sharply progressive rates on the most valuable estates,

then hypothecate the proceeds, not to swell the Treasury’s coffers, but to redistribute it to finance long-term care for the elderly.

This would, at one go, resolve a very serious current problem about the funding of long-term care in old age and at the same time achieve a fair and generous redistribution from rich to poor which would prove extremely popular.

If that were then combined with a proper tax on the so-called non-domiciled rich – not Osborne’s footling £25,000 which would be a fleabite to billionaire tycoons like Philip Green – Labour might begin to regain its reputation for social justice and tackling inequality, which has spiralled out of control to grotesque levels in the last ten years and is now the no.1 domestic issue in Britain today.

Posted by Michael Meacher at 03:29 PM | Permalink

Payment of £14bn in City bonuses this year, according to Office of National Statistics data just published, exposes just how decadent this country has now become in the huge and growing rift in inequality between rich and poor. The great divide opened up in the 1980s under Thatcher; now New Labour has made it a lot worse – and that’s official.

City bonuses rose 30% in this last year from an already enormous £10.9bn in 2006. Average total pay for FTSE 100 Chief Executives increased last year by 37% to £2,875,000 a year, that is £55,288 a week. That’s 98 times their employees’ pay, 276 times the national minimum wage, and 658 times the basic State pension.

Inequality is now becoming the No.1 top political issue in Britain today. When nurses on low pay are being told they can only have a 1.9% increase this year and when prison officers and other public sector employees are smouldering over pay restraint as well as other issues, Bob Diamond of Barclays took home £23 million last year and Bart Becht of Reckitt Benckiser walked off with £22 million. It is shameful that in New Labour Britain such pay obscenities have been allowed to happen, indeed been encouraged by their let-the-markets-rip philosophy. As Peter Mandelson put it so charmingly: “We are quite relaxed about people becoming filthy rich”. What about the 12 million people in Britain today who are so poor that they have to subsist on Income Support? Since wealth and poverty are two sides of the same coin, where does that leave the poorest under the current neo-liberal economic agenda? Out of sight.

Several policy changes are needed:

The divide between top pay and average and low pay has now become so cast that it cannot be justified under any conceivable rational system of incentives. We need a Pay Commission to be established to set down guidelines (with tax sanctions to back them up) for a reasonable pay range between top and bottom which offers incentives that are consistent and fair throughout the range.

Bonuses, performance payments, so-called fringe benefits, and stock options are now so extensive and so concentrated on the richest in society that for this 1-2% or so at the top there should be a super-tax on these super-rich for their very large extra payments over and above basic salary, perhaps 50% on the first £250,000, 60% over £1 million, rising to 70% over £5 million.

We need an early Parliamentary debate and wide-ranging public discussion on this issue when it is stoking house price inflation, generating deep resentment among badly done by employees in key public sector services, and undermining all sense of any balanced social cohesion throughout the country.

Graphic: ONS

Posted by Michael Meacher at 09:20 AM | Permalink

(Photo: Labour Behind The Label)

The news that three major discount clothing retailers - Asda, Tesco and Primark - import clothes from factories in Bangladesh where workers are forced to work up to 80 hours a week for only 4p an hour in some cases has made the supermarket chains launch an investigation into press reports about conditions in these factories. As though they didn't know!

Bully for the investigative media - what's left of it - but the point is it shouldn't have to depend on such freelance initiatives. The big private companies are major players in the UK and international economy, and the way they operate have huge ramifications - for consumers, suppliers, workers, job opportunities and job losses, labour standards and workplace rights, the environment and climate impacts, resource and energy use, waste generation and pollution, as well as for competitiveness and more generally for the country's social/economic image.

So as in this particular case involving gross exploitation of workers in Bangladesh, the public is entitled to know the facts, the economic realities, and the shameful treatment that lies behind cheap merchandise in our shops. The lesson of this episode is that the scope of the Freedom of Information Act should be extended to, say, the top 1,000 biggest private companies whose influence on our society and way of life equals, if not surpasses, the impact of the public sector. This must be one of our demands on the new Brown Government which has made such a point about strengthening accountability.

Posted by Michael Meacher at 12:40 PM | Permalink

I think there are four key challenges now facing the EU. First, Europe's economic problems cannot be solved with supply side reforms alone. Weak domestic demand in many cases, made worse by the constriction of the Stability and Growth Pact, should be tackled by setting up a counter cyclical European Recovery Fund and by developing ECOFIN as a real political counterpart to the European Central Bank.

Second, the EU's response to the global economy should be smarter than simply posing a choice between liberalisation and protectionism. It should seek to stabilise exchange rates and prevent speculative capital flows from destabilising healthy economies through a Tobin tax. It should press for an international clearing union to smooth trade imbalances by requiring countries to recycle their surpluses to maintain global demand. And it should take the lead in benchmarking social and environmental standards into world trade rules.

Third, the EU should give its social model a more distinctive European form. To deal with collapsing corporate provision, it should set up a European social fund into which companies should contribute a proportion of their profits to meet at least some of the spending needed to guarantee security in retirement as well as providing at least minimum standards for a European childcare guarantee.

Fourth, it must democratise EU politics so as to enable Europeans to feel involved in a common political debate about their future. Maybe a new Preseident of the European Council should lead on Europe-wide elections so that electors voted more as Europeans.

Posted by Michael Meacher at 01:54 PM | Permalink

Posted by Michael Meacher at 09:24 AM | Permalink

Meacher: why Spectator readers should vote for me

A leadership election opens up, uniquely, the opportunity to debate and decide on the future course of a government. I am standing because I believe there are several areas of policy where a fundamental change of direction is now needed. And though Spectator readers may initially be sceptical about the relevance of my policies to them, I believe that if they read on with an open mind, they'll find much that they agree with. I'm sure they'll agree, for instance, that New Labour and Tory policies have become similar, almost overlapping, which means that politics has become increasingly fixated on personalities, as though a blanket consensus on policy had been achieved. This is ridiculous. Old-style Toryism was rejected in 1997, and now New Labour - the continuing moving-right show - has clearly faded. It's time, not for Old Labour either, but for a mainstream Labour approach - which may well represent majority opinion within the electorate but has been suppressed for over a decade - to be reasserted as a modern progressive politics with new solutions to today's profound problems.

Continue reading "From the Spectator (3 March 2007)" »

Posted by Michael Meacher at 10:09 AM | Permalink

(From the Independent)

Labour leadership contender answers your questions, such as 'Why not sell your flats to help fight against poverty?' & 'What's your guilty pleasure?'
Published: 05 March 2007

Are you a socialist? What does that mean today? MIKE WOODBRIDGE, Brighton

Yes, I am. A socialist believes that while the market has its proper place, the fundamental principles underpinning society should be equity, social justice, equality of opportunity, and democratic accountability. Even where the market is a dominant force, socialists believe it should be regulated to ensure high environmental, social and labour standards.

Why, as a socialist, do you own so many houses? GARY BROWNE, Glasgow

As I have regularly stated in the register of Members' interests, I own four flats. I have saved throughout my life, and put my savings into property. I don't think [that] is contrary to socialism.

Given your views on poverty, why not sell some of your houses and give the money to charity? Or are you just another hypocritical politician? V AHMAD, Birmingham

I already give a significant amount to charity . I agree there is an urgent need to build much more social, affordable housing but selling my flats which are already occupied would not contribute one iota to that.

Isn't it delusional of you to challenge Gordon Brown for the Labour leadership? MAURICE BURKE, Birmingham

No. There should be a contest because only an election enables us to debate the real policy issues. I also believe that members of the Labour Party should have the right to choose their own leaders. I believe, too, that as New Labour, of which Gordon Brown is perhaps the main architect, has moved continually ever further to the right, the mainstream majority of the party has been left disenfranchised and without a voice. It is not sensible to assume the results of any election before the electors have had a chance to deliver their opinion which may sometimes come as rather a shock to the chattering classes. Not too many people I guess expected David Cameron to come from behind and win the Tory Party leadership.

Don't you think Gordon offers Labour the best hope of winning the next election? VALERIE EVANS, Cardiff

Have you seen the last two polls? Both put the Tories 11 per cent ahead, and one poll found that if Gordon was leader, the Tories would be 13 per cent ahead.

I am a Labour supporter, but I despair that Gordon Brown has been such a coward over the war, talks nonsense on 'Britishness' and seems so in love with Rupert Murdoch that he will hand the next election to Cameron. Do you agree - and if not, which bits do you disagree with and why? DAVE FISCHER, Sheffield

Cameron has certainly, at this stage at least, improved the Tories' poll ratings, but not, I think, for the reasons you give.

A majority on the Labour left support John McDonnell and see your campaign as a spoiler which will only split the vote and stop a contest. Will you stand down if John has more nominations when Blair resigns? SUSAN PRESS, Calder Valley

There is no evidence whatever that a majority of people on the Labour Party left and the affiliated trade union movement support John McDonnell for leader. I have a great deal of respect for John, but I don't believe he can get the necessary 45 nominations, whereas I believe I can. I am not splitting the vote, but rather giving the centre-left the chance, to run a candidate who can pass the nominations threshold. But I do agree that whichever of the two of us has the larger number of nominations, the other should stand down when Tony Blair resigns.

Why not use that photo of you on Blackpool beach (very Daniel Craig) for your campaign posters? CONOR MURPHY, Reading

Good try. At least it shows I'm healthy.

Do you think Blair should stand down now?STEVE HARRISON, Bolton

The sooner he stands down, the better.

Why did you vote in favour of the invasion of Iraq?DEAN PALMER, Norwich

I made the biggest mistake of my political life when I supported the war, on the grounds that the Prime Minister repeatedly gave chapter and verse about Saddam's weapons of mass destruction and assured us that if only we knew all the intelligence available to him, we would have no doubts about the necessity for this action. I still find it deeply disturbing for democracy that a prime minister can so massage and fabricate the evidence in order to push through a preconceived war plan.

Do you think Blair lied to his MPs and lied to the country over Iraq?JEFF TERRY, Dundee

I think the highly selective manipulation of such evidence as there was, together with the highly prejudicial use to which it was put, was deeply dishonest.

You claim you were misled that Saddam had a WMD programme. Yet you say the West has no right to tell Iran not to develop nuclear weapons. Aren't you being rather inconsistent over Iraq and Iran?JIM ROLAND, London NW11

No, these are two quite separate arguments. Yes, we were certainly misled over Saddam's alleged WMD programme. While we should try to prevent Iranian nuclear weapons by negotiation and UN sanctions, we cannot say that nuclear weapons are indispensable for our own security, and then say Iran does not need them for their own security, especially when Iran (unlike the West) is surrounded by seven states which are nuclear-armed and some very hostile.

Do you truly believe that the US government knew about 9/11 but failed to prevent it?CHRIS QUIGLEY, by email

Clearly the US government did not know the precise time and location of the al-Qa'ida attack, but equally clearly there was a great deal of intelligence beforehand which, for whatever reason, it seems that they did not follow up.

You have suggested that the US government knew about the 9/11 attacks (which is pretty obvious I reckon, but fair play to you nonetheless). How complicit do you believe the UK Government was in 7/7? PAUL HUGHES, by email

Not at all.

Do you also believe that the FBI shot John F Kennedy, that Princess Diana was murdered and the US government has covered up the landing of aliens?BEN TROTTER, Cirencester

No. Such allegations are cheap and rather silly.

What steps will you propose to counter global warming? DR GEORGE BLAIR, by email

We should rapidly increase our use of renewable sources of energy (windpower, solar, and micro-generation in people's homes). We should require the airline industry, like every other industry, to reduce their greenhouse gas emissions each year. We should increase vehicle excise duty sharply for gas-guzzling cars and use the proceeds to subsidise bus and rail, and smaller-engine cars. We should give each family a carbon entitlement which then has to be reduced each year.

How often have you flown in the past 12 months? FIONA MILLS, Edinburgh

Not at all.

You criticise the 'Westminster bubble' but said you spent the last two months talking to MPs about your campaign. Does this not show you have the same disrespect for people's views as the rest of the Westminster bubble? MARSHA JANE THOMPSON, by email

I said that when people around the country come to vote, they may well take a quite different view of things from the inward-looking Westminster scene, and should be listened to. But I also extensively canvassed my colleagues in the Parliamentary Labour Party because they alone are the ones who make the nominations.

Why did it take you so long to announce your intention to stand for the Labour leadership when John McDonnell has been campaigning up and down the country for months?MAX MITCHELL, by email

I have been told that John McDonnell announced his candidature without consulting his colleagues. I thought it right first to consult extensively to confirm that my candidature would have the necessary range of support.

What are your guilty pleasures (apart from homeowning)?ALICE SHERWOOD, Tadworth

Wouldn't you like to know! Dropping childish comments in the waste paper basket is one of them.

You always look a bit boring. Are you? ROB JACKSON, by email

No. Why? Are you?

Posted by Michael Meacher at 12:28 PM | Permalink

The public sector pay increase announced yesterday is unduly harsh pay settlement for the million public sector pay workers who are being told they can only have a 1.9% increase when inflation is now running at 4.2% - in other words, they are getting a 2.3% pay cut.

The reasons given are, firstly the state of the public finances, which is of course the Chancellor’s responsibility, but I don’t see why nurses should have to bail him out. If there are to be stringencies I don’t think nurses should only get an increase of less than 10 pounds a week, when junior doctors are getting nearly 20 pounds a week, senior civil servants 40 pounds a week extra and judges 80 pounds a week extra.

The second reason given is the need to keep inflation under control. But the Treasury itself said the inflation increase has been a blip and inflation will fall this year anyway. I don’t see why a temporary blip should be used as an excuse to impose a real terms pay cut on some of the poorest and most needed workers in our society.

This is bound to play badly on the chancellors standing with the unions. They expect him to be fair and equitable in the way he settles public sector pay and I don’t think this increase meets that criterion. This pretty miserable settlement should be reconsidered.

Posted by Michael Meacher at 05:10 PM | Permalink

From

There are three reasons why there should be an election for a new leader when Tony Blair finally goes. Only an election confers democratic legitimacy on the succession. Second, party members expect to have a choice about who should lead them. They have hardly been listened to for most of the last 13 years, and have every right to demand that their voice be listened to now. And third, there are major differences of view about the government's direction of travel which need to be understood, debated and voted on within the party. There are other, better alternatives.

New Labour has over-centralised power at the top, which has undermined democratic accountability at all levels. Its economy, driven exclusively by market forces, has played down intervention to secure a stronger manufacturing industry, a more balanced regional policy, and a lift out of its low pay, low skill, low productivity base. Its authoritarian civil society has eroded civil liberties across the board. Its deregulatory philosophy plays down environmental standards and labour rights.

Its indifference to, indeed embrace of, inequality -- "New Labour is relaxed about people getting filthy rich", as Peter Mandelson told us so charmingly -- has presided over a sharp increase in the gap between rich and poor. And its obsession with privatisation is leaching away the public service ideals which lie at the heart of a caring and committed society.

Because Labour and Tory policies are now so similar, politics has increasingly focused on personalities. But that is a fundamental misapprehension. A large part of the electorate on the centre-left, perhaps even a majority, has effectively been disenfranchised for the last three decades. Old-style Toryism was discarded by the voters in 1997, and now New Labour -- the continuing moving right show -- has clearly run its course. It's time, not for old Labour , but for a new implementation of core Labour values in a modern progressive politics addressing today's profound problems.

We need a new foreign policy which is based on fundamental British interests, not subservience to the US, particularly over the middle east. If our political status is to rise across the world, it is not sustainable to continue as America's glove puppet. We need a new social policy if the growing divisions within our society are to be healed. It is not sustainable for £9 billion of city bonuses to be doled out last year while 12.5 million people, a fifth of the population, remain in poverty.

We need a new penal policy if we are going to be genuinely as tough on the causes of crime as on crime itself. It is not sustainable to go on banging people up even faster than we can build prisons without trying to deal with the underlying causes of criminality and doing more to reduce recidivism. We need a new climate change and energy policy if we are not to become over-dependent on imported fossil fuels. It is not sustainable, let alone not legal, to go on fighting wars to grab control of the remaining reserves of Middle East oil when anyway the oil will soon run out.

So what should be done? To end the continuing horrendous carnage in Iraq, to complete our troop withdrawal and break the impasse over Palestine, we should use our political clout to initiate a wider international peace conference bringing together all the relevant actors for a joint settlement of the related middle east issues of contention which from experience cannot be resolved singly. That must include not only Iraq and Palestine within such a grand bargain, but above all a negotiated, not a military, settlement over Iran. If the US were to attack Iran, I would not put at risk a single British soldier or a single RAF pilot in support of such a crazed venture.

Domestically, the Unicef report marking Britain bottom of the table for children's experience shows how urgent it is to reverse the growing rich-poor divide. Less inequality leads to less violence, stronger community life, better health, longer life expectancy, lower teenage birth rates, as well as more social mobility and higher educational attainment. We should start by raising the national minimum wage (one of Labour's best achievements) quickly to £6 an hour, and then soon to £7 an hour. And recognising that wealth creation is not an individual but a team effort, we should move towards a system where there is no more than an acceptable ratio between top pay and bottom pay, so that pay rises at the top draw up the lower paid behind them too.

Globally we are at war against climate change. Business as usual, while relying on improved technology as a get-out card, is a fool's game. We need a profound change in every aspect of government and our way of life -- not just energy, but transport, industry, building, agriculture, public expenditure and taxation, and foreign policy, in order in every area to give absolute priority to combating climaten change. We need a crash programme, as we have done before in wartime, to develop renewable sources of energy, in which we are very well endowed, plus a massive programme to improve energy efficiency and energy conservation.

Peace, social justice, climate survival - those should be our top priorities. That is why the future lies with a centre-left agenda, and clearly there must be a centre-left candidate to lead this agenda forward who has the necessary nominations in the Parliamentary Labour Party to stand. I am fully confident I do have that necessary level of support, and that is why I am standing.

Posted by Michael Meacher at 03:39 PM | Permalink

Things have been hectic today, so much so that a planned video interview that was going to appear here has had to be put off until next week. As has been well documented, both on televison and radio as well as on a number of blogs, I declared today that I am standing for the leadership fo the Labour Party.

We need an election. We cannot stumble on without the issues being debated. We have seen inequality grow to levels higher than at any time since the 1930s. The world has become a less safe place in which to live. We are simply strolling without the necessary urgency along the path to controlling carbon emissions and dealing with climate change.

Elections have their own dynamic and the ballot could be 3-4 months away. Some of the coverage has predictably focused upon the issue of MP nominations. I am confident that I have the required supoport to be on the ballot. That's not an issue that can be settled until the nominations are actually made. Until then I intend to spend that time campainging hard to make sure the arguments - the alternatives to New Labour - are heard.

The BBC's James Landale seemed to be the only journalist who picked up on the real issues when he said on News 24 that the point of the campaign was to pick up the banner of the Labour left and wave it as loudly and visibly as possible. That's why taking the railways back into public ownership, rejecting renewal of Trident and the gross discrepancies between the highest paid and the lowest were issues I raised at the press conference this morning.

Crucially, he also said the interesting thing will be to see how these policies resonate with party members over the coming months.
Do they want to see Trident renewed? Most polls suggest otherwise, that people know there is no enemy against which they can be used, not terorrists, not rogue states.

Do they want to see the wage packets of the lowest pay to also rise when city bonuses are handed out? I think the answer is yes.

Do they want to see a massive investment in renewable energy technologies, cutting carbon emisisons and providing jobs in manufacturing and in research and development? Addressing global warming does not require wearing a hairshirt, it requires committment and innovation - and the rewards are huge.

If, as I believe, the centre-left is actually the mainstream, then these arguments should resonate loud and very clear. Only by putting them to the party can we see if that is the case. I think I have the policies, experience and expertise required for the job - now I want the party to have the opportunity to decide.

Posted by Michael Meacher at 08:03 PM | Permalink

From Sunday Telegraph, 24 December 2006

Britain is now one of the most unequal countries in the world. A recent report on boardroom pay reveals that the average salary of chief executives of the top FTSE 100 companies is now a staggering £46,154 a week. That is 115 times the average wage in Britain today, 249 times the national minimum wage, and 519 times the basic state pension.

Continue reading "Wealth is gushing up in Britain, not trickling down" »

Posted by Michael Meacher at 02:37 PM | Permalink

The pressure exerted on General Sir Richard Danett to pretend there was not “a piece of paper, however thin” between him and the Prime Minister will deceive nobody. Dannett saying the British military presence in southern Iraq “exacerbates the security problems” is not answered by Tony Blair responding that “we’ll withdraw completely from Iraq as the Iraqi forces are able to handle their own security.” In fact, Dannett is saying, irrespective of the state of Iraqi forces, the presence of British troops is making the security situation worse, not better, and we should therefore withdraw. When is the PM going to listen to the advice of his own Chief of General Staff?

Posted by Michael Meacher at 11:50 AM | Permalink

Clinton's speech at Labour Party conference made the point that New Labour, unlike Bush in the US, had cut inequality. That is the opposite of the truth. The Guardian's latest survey of boardroom pay - http://business.guardian.co.uk/story/0,,1886010,00.html - shows average earnings in the UK rose 3.4% last year, while the average pay of chief executives of the top FTSE 100 rose 28% - following 16% and 23% rises in previous years. What this means is that the average worker today gets about £400 a week, a worker on the National Minimum Wage gets £185 a week, while chief executives in top companies get on average £46,154 per week - 160 times more than their lowest paid workers. These colossal and growing inequalities are obscene.

We should raise the NMW from £5 to at least £7 an hour. We should tax bonuses, so called fringe benefits, share options and other tax avoiding remunerations of the super rich at the marginal rate. And we should require meetings, in all medium and large companies, where representatives of each main grade in the company, including from the boardroom, present their pay claims for the next year, and have to justify them to all other employees in the company.

Posted by Michael Meacher at 01:57 PM | Permalink | TrackBacks (0)

It’s all very well for Tony Blair at this stage, within sight of his departure, suddenly breaking the habit of a lifetime and announcing a consensual, inclusive review of the whole range of party policy before he goes

But it’s a bit rich to have a conversion to this new style of policy making at the end when for 12 years we have had policy settled exclusively in Labour HQ or No. 10 and election manifestos handed down from on high without so much as a flicker of Party consultation. Still, there’s more joy in heaven over one sinner that repenteth …

Continue reading "Joy in Heaven?" »

Posted by Michael Meacher at 01:10 PM | Permalink

At the very start of his leadership of the Labour Party, at the 1994 Labour Party Conference, Tony Blair promised that in his new Britain, the workforce would not be “treated as servants, but as partners” and that “ we will make work pay.” Then at the 1999 party conference, he added that the National Minimum Wage (NMW) would help create a “society [in which everyone has the chance to share in increasing prosperity.” So what happened?

Continue reading "Low Pay Article for Working Brief" »

Posted by Michael Meacher at 06:54 AM | Permalink | TrackBacks (0)

From The Guardian.

Inequality in Britain is escalating towards American dimensions. The government can and should take action now

Two stories of Britain 2003. Mrs Taylor (not her real name) is 36 and the mother of two teenage sons. She suffers from systemic lupus with lung intolerance, Renaud's syndrome, progressive fibrosis of both lungs and polymyositis (muscle-wasting). She is mostly bedridden. Her husband has had to give up work to care for her.

The Taylors have a weekly income of £228, made up of income support, child benefit, family premium and disability living allowance. Part of their roof is leaking, but they cannot get a renovation grant from the council because the roof is not bad enough for the "serious disrepair" category.

Jean-Pierre Garnier (his real name), chief executive of GlaxoSmithKline, recently received a pay package that the company said was worth about £11m. The small print, however, indicates that it is worth more like £16m.

Continue reading "Worse than under Thatcher" »

Posted by Michael Meacher at 07:57 PM | Permalink