Sunday, 31 May 2015

Reasons for low productivity

Much is being written about the UK`s low levels of productivity, but totally unsurprisingly, few, if any, mention some rather crucial points. Lack of investment in new plant and machinery is identified as being hugely important, but is not the method of paying bosses and managers significant here? If CEOs can only be motivated by the prospect of their share options rising in value, their focus will inevitably be placed on the firm`s profits in the short-term. They will not be incentivised to invest funds in new machinery and technology, which would increase productivity at a stroke, when such spending will reduce the immediate profits of the business, and therefore, reduce the value of its shares. The business sector must surely realise this type of payment for company chiefs is holding back the country`s productivity, but is doing nothing to alleviate the problem. Any suggestion of government interference would, of course, be viewed by the likes of John Cridland of the CBI as "business-bashing".
      Even if there was a change of renumeration method, and investment increased, productivity is not just a question of having the most up-to-date machinery, as the efforts and abilities of the workers matter hugely. However, if the dubious point of lack of skills being a relevant factor is important, should the government be contemplating cuts to the education services of up to 10%? Furthermore, if motivating bosses can only be achieved by huge financial reward, the case for similar treatment for every worker is incontrovertible; shouldn`t workers not only be receiving decent pay, and thereby avoiding the necessity to rely on in-work benefits to survive, but actually be sharing in the profits their efforts bring to the firms? The news that "one in three workers worries about how to stretch their pay packet until the end of the month" is absolutely appalling, and an indictment of our society.
    The huge gaps in pay between bosses and workers is the real problem with Britain`s economy, and low productivity the result of the lack of foresight of our politicians and business leaders.

Saturday, 30 May 2015

Letter to Independent on Mansion Tax

Donald Macintyre is right to criticise Labour for apparently dropping the "mansion tax" proposal, largely because the candidates for leadership tend to agree that it lost the support of the "aspirational" (Independent,27/05/15) If taxing owners of houses worth £2m and over symbolises "the politics of envy", as Burnham and the others suggest,  presumably they are also against raising the top rate of income tax to 50%, and a bonus tax on bankers? In fact, Labour is now, presumably, in opposition to all methods of wealth redistribution, something which is central to the creation of a more equal and fair society. Under Thatcher, the top rate of income tax was 60% between 1979 and 1988!   
      Do these candidates not want to improve the UK`s shameful 28th position out of 34 so-called developed nations in the equality league table? The fact is that the "mansion tax", itself an extension of the council tax, would have cost the owners of these homes, most of them in London, around £3-5,000 annually, an amount almost certainly exceeded by the increase every year in the house`s price. If these well-off people think that such a tax is unfair, and that money is better raised by "efficiency savings" in the public sector, they are never likely to vote Labour anyway!
    If  Labour is to recover from its devastating defeat, it has to develop transformational policies, which will undoubtedly cost billions. If there is no willingness to fund public services by taxing those most able to pay, not only will Labour`s ability to balance the books again be questioned, its raison d`etre will be too.

Wednesday, 27 May 2015

Labour manifesto too left wing? Nonsense.

The Blairite nonsense about the election result was being spouted literally before all the votes had been counted. The carefully rehearsed message, delivered with such barely disguised glee, repeated the rhetoric heard so often from Mandelson and the rest over the years. It was no surprise, therefore, when the Blairite candidates for leadership all too quickly offered their services, blaming the defeat on failing to attract the votes of the aspirational middle class, a lack of pro-business policy, and a Labour programme too far to the left. None of them appeared to realise how insulting this was, both to the electorate in general, all with  hopes and ambitions for the future, and to those who had voted for Ukip, and the more radical SNP, Plaid Cymru, and Green parties.  Insulting, but also, inaccurate! The fact is that the Blairite propaganda machine wants to demonise any leftward movement of the party, so, clearly, some analysis of the Labour proposals is required.
      For starters, nothing left-wing at all about the pledge to end the callous “bedroom tax”, just simply a humanitarian policy, which has the support of everyone with a hint of decency. Then there`s the raising of the minimum wage to £8 an hour by 2020; how can this be too left wing when wages are so low,  many workers cannot afford to live without in-work support from the taxpayer, to the tune of £11bn a year in  housing benefits, and when the current living wage is £7.85, and, in London, £9.15? Many would think £8 an hour a very moderate ambition, certainly not radical, especially as so many politicians have openly admitted they could not live on such meagre pay. With 44% adults not paying any income tax at all, because they earn so little, raising the minimum wage has to be considered sound economic policy.
     The same applies to zero-hours contracts, which enable companies` profits to rise, whilst the taxpayers subsidise the low-paid. Which is more alarming in the eyes of the average voter? Allowing those forced to work on zero-hours contracts full- time employment after three months, or threatening workers with “day-to-day hiring”, as the CBI chief, John Cridland, did when Miliband announced his plan?
    The idea that those earning houses worth £2m and over should pay the so-called “mansion tax” originated with the Lib Dems, so automatically ruling it out as “radical” or left-wing”. Tristram Hunt unbelievably said, in an interview with the Tory Times, that it reduced people`s aspirations! The sensible view is that it was merely an extension of the council tax, and the £3-5,000 most would have paid a year would have been offset by the rise in the value of the property, especially as most houses worth over £2m are in London and the south-east. It certainly did not prevent Labour doing rather well in the London area.
     Left wing policies in the Labour manifesto were far more noticeable by their absence. Where were the pledges to re-nationalise the railway and energy companies, ideas which, according to opinion polls, would have proved rather popular? Did Labour promise to keep hold of the 79% taxpayer-owned RBS and convert it into a People`s Bank, to rival those on the high street? No, of course not, just a bonus tax which bankers would, no doubt, have circumvented, with claims that their extra pay constituted annual “allowances”! Not even a promise to participate in the EU`s Financial Transaction Tax in January, 2016.
      With so many tenants having to pay up to 60% of their earnings to Rachman-like private landlords, was there a pledge to review exorbitant rents? No, merely a cap on future rent increases. Did the education policy plan to increase social mobility, or even to review Gove`s unnecessary assessment reforms?
     Presumaby, raising the top level of income tax to 50% for the very high earners was regarded as left-wing by Blairites, even though it was placed at that level by  Brown`s government, and under that Marxist, revolutionary, Margaret Thatcher, it was much higher: between 1979 and 1988 it stood at 60%!
      So, not left-wing at all, and certainly not really a factor in the election defeat. Many clearly voted for other parties because Labour`s manifesto included so many moderate ideas, rather than ones which would re-shape the country`s economy and transform our society. A stress on the fact that the coalition`s policies were, in actual fact, extremely right-wing, rather than Labour`s being too far to the left, might prove a more accurate evaluation by the leadership candidates; perhaps one of them will have the bottle to say so, but I`m not holding my breath.


Tuesday, 26 May 2015

Unpublished letter about Labour and Blair

Jonathan Freedland is right to warn Labour that it has to sort out its relationship with Blair, "once and for all", especially when he stresses the need for the "making of distinctions" (Labour has to get over its Tony Blair problem,23/05/15). It is essential to remind itself of the improvements made to our society during the Blair years, like the introduction of the minimum wage and the windfall tax, but the trouble is that what Seumas Milne calls the "Blairite agenda" is driving the party so far to the right as to make it indistinguishable from Toryism (This New Labour revival could end with a party split,21/05/15). The Blairites` simplistic analysis of the election defeat, with  the emphasis on the perceived failure to meet the demands of both the "middle class people with ambition" and of business, is leading them to the reinvention of a Labour party alien to the majority of its core supporters.
     The Iraq war was not the only disaster under Blair; pandering and cosying up to the City, and generally de-regulating, contributed hugely to the over-confidence of the banking and financial sectors, and the subsequent economic crash. The same over-confidence and arrogance of business are still in evidence, with banking scams, tax avoidance, failures to pay minimum, let alone living, wages, and obscene renumeration, often in excess of 150 times that of their average employee, for many bosses. Didn`t the CBI chief, John Cridland, warn against the ending of zero-hours contracts after three months, as Miliband proposed, because businesses would resort to "day to day hiring", 19th century style? (Give zero-hours workers regular contracts after 3 months-Miliband,01/04/15) Hasn`t HSBC just threatened to take its headquarters out of the UK because of proposed taxes and regulation?
     Miliband was right to "get over any Tony Blair problem" he may have had, and challenge the right of business to exploit workers and flaunt laws, even though he was described by the likes of Cridland as "business-bashing". Labour`s leadership candidates should be praising Miliband`s efforts, rather than trying to create a party which is "intensely relaxed" about inequality, and in cahoots with the City and big business.

 

Sunday, 24 May 2015

"Politics of envy"

Andy Burnham, currently the "frontrunner according to the bookies" in the race for the leadership of the Labour party, made some very valid points regarding the party`s problems and future, but let himself down with comments on the "mansion tax" (Andy Burnham: My campaign is "heart of Labour". I was loyal to Blair, Brown and Miliband. I am not into factional politics,17/05/15). If taxing owners of houses worth £2m and over symbolises "the politics of envy", as he suggests, presumably he is also against raising the top rate of income tax to 50%, and a bonus tax on bankers? In fact, his comment indicates his opposition to all methods of wealth redistribution, something which is central to the creation of a more equal and fair society. Under Thatcher, the top rate of income tax was 60% between 1979 and 1988!  
      Does Burnham not want to improve the UK`s shameful 28th position out of 34 so-called developed nations in the equality league table? The fact is that the "mansion tax", itself an extension of the council tax, would have cost the owners of these homes, most of them in London, around £3-5,000 annually, an amount almost certainly exceeded by the increase every year in the house`s price. If these well-off people think that such a tax is unfair, and that money is better raised by "efficiency savings" in the public sector, they are never likely to vote Labour anyway!
    If  Labour is to recover from its devastating defeat, it has to develop transformational policies, which will undoubtedly cost billions. If there is no willingness to fund public services by taxing those most able to pay, not only will Labour`s ability to balance the books again be questioned, its raison d`etre will be too.

Friday, 22 May 2015

Hunt the Labour leader?

Whilst it is difficult to disagree with the main argument of your editorial about the Labour leadership, that "choosing the leader now is pretty daft", issue must be taken over your points about Tristram Hunt (The party has got its leadership election process back to front. Paging Alan Johnson, 21/05/15) Why hasn`t he had a "proper chance to develop his ideas"? How long does it take, or do you mean that candidates should adopt a pragmatic approach, and change their basic political principles to suit the occasion?
  Whether Hunt`s voice is one "worth hearing" is a moot point, too, as we have heard enough from him in his role a shadow education secretary to last a while. Didn`t he suggest that teachers take an oath, and that, because they are obviously not inspected enough by Ofsted, should apply to be re-licensed every few years? He showed his complete failure to understand how education works by advocating Performance Related Pay, and continues to insist how "character and resilience" are only achieved in the private sector. As soon as Miliband resigned he was writing in the Observer, attributing Labour`s defeat to the usual  causes, behind what Seumas Milne calls "a Blairite agenda"(This New Labour revival could end with a party split,21/05/15).The last things the Labour party needs right now are candidates who lack the bottle to accept the fact that many of Miliband`s more radical policies were popular with the general public!

Delusional Blairites and Kettle`s Tories

Seumas Milne`s evaluation cannot be faulted; the "delusional" Blairites blame Labour`s defeat on the abandonment of "aspiration and middle England", and its "spiteful" proposal to " tax the wealth creators" (The return of the Blairites is the last thing Labour needs,14/05/15). They clearly expect the party to believe that people on above average incomes, from around £30,000 to £60,000, could not bring themselves to vote Labour because, when their incomes miraculously treble, quadruple or more in the future, they would have to pay 5% extra tax on all the money earned over £150,000. Someone appears to be forgetting that the average income in the UK is £25,000 approximately, and that 44% of all adults do not earn sufficiently high wages to pay any income tax at all. 
     Perhaps small business owners, earning two, three or four times the average, did not think having to pay reduced business rates, as Miliband proposed, would benefit them sufficiently, or that Labour going after tax avoiding companies, which undercut smaller rivals` prices,and put many out of business, was sensible policy? There will always be those, of course, who feel having to pay an increased minimum wage is unfair, and that supplementing very low wages from the taxpayers is fine, but would such people vote anything other than Tory anyway? Only if the Labour party adopted such so-called "pro-business" policies like the Tories have done, as ignoring tax avoidance and cutting the staff meant to prevent it, ensuring firms paying less than the legal minimum get off with small fines, doing nothing to prevent the exploitation of tenants by Rachman-like private landlords, and awarding government contracts to firms best known for their inefficiency and dubious tax policies, rather than their competence and ethics, could it attract such votes away from the Tories.

 Labour did nor haemorrhage votes to Ukip, and the more radical SNP and Green parties, because its policies were too far to the left, and Labour clearly needs a leadership candidate with the bottle to say so.

Maybe I am one who fits Martin Kettle`s description, but is my view of the Tories really "naive"? (The Tories fooled us all. We must study how they did it,15/05/15) Tory voters may, indeed, see their party as "competent and reliable", but didn`t their incompetent economic policy of austerity not only delay any economic recovery by at least three years, but also fail to meet targets they set themselves on deficit reduction, whilst breaking electoral promises on VAT, and NHS topdown reorganisation? "Realistic" suggests knowing what is actually possible, but pledges to take government spending to levels last seen in the 1930s would entail returning, in effect, to a 19th century system of laissez-faire.
    "Prudent" would appear inaccurate, in view of the £375bn created by quantitative easing and given to the banks, whilst "generous" can only be viewed as precise when thinking of tax reductions for the very rich. "Tolerant" is certainly true when applied to tax avoidance and evasion, and "decent" is not the epithet that springs immediately to mind when thinking of the "bedroom tax" and welfare cuts for the most vulnerable. As for the Tories being "patriotic", many would consider this suitable but only as long as it applied to England rather than the UK.
     As Kettle says, none of these qualities are "objectionable"; the trouble is they do not accurately describe the Tory party. By all means ask "why the Tories succeeded", but answers might still go back to the opposition`s campaign.

Tuesday, 19 May 2015

Letter in Independent on industrial action

I fear Yasmin Alibhai-Brown`s husband may be correct, and that "post-election blues have weakened her political resolve" (Progressive thinking can come from surprising directions,18/05/15). She seems to have forgotten a number of things about the Tories, even about the ones she hopes will somehow reduce the harm done by "the brutish, iniquitous laws" soon to be passed. Didn`t Cameron`s post-election "one nation" speech remind her of Thatcher`s first speech as PM, when she also promised "harmony" and "truth"? Doesn`t Alibhai-Brown recall that Gove`s first action as Education Secretary in 2010 was to remove the Education Maintenance Allowance, thereby not only preventing thousands of would-be sixth formers from adding to their qualifications, but ensuring no increase in social mobility? Davis and Grieve may "fight hard against plans to replace the Human Rights Act", but neither are in the current, increasingly right-wing, Cabinet, and their efforts are destined to fail.
 Indeed, as your editorial correctly says, it looks like, at least in the short term, that it will be up to the unions to assume "the mantle of chief opponent of cuts" and attacks on public services (A power to unite,18/05/15). The editorial condemns employers who "see the minimum wage as a pay ceiling rather than the floor", but, as long as the Tories see wage cuts or freezes as the way to make what they laughingly call "efficiency savings", industrial action will be viewed by employees as their only option. Inevitably, the right-wing media will see McCluskey and his Unite union an easy target, but when the Royal College of Nursing threatens action, even Blairite leadership candidates need to take note! (Nurses may call strike over seven-day NHS plans,18/05/15) With Jeremy Hunt totally unwilling to reveal, on Radio 4`s Today programme, how funding for NHS reforms will be found, a "season of strikes" looks increasingly on the cards; the Labour leadership could well be decided by the candidates` reaction to it!

 

Friday, 15 May 2015

Umunna as leader? No

In his analysis of Labour`s election defeat, Chuka Umunna wrote that the party got its priorities wrong, and that it, presumably under his leadership, "must never give the appearance" that it is relaxed about "inequality, poverty and injustice"(Where Labour went wrong - and what we must do to put it right,10/05/15). This section of his leadership claim was bracketed, as if it was an afterthought. Clearly, an "appearance" to care is all that is needed; the real focus has to winning the support of "aspirational, middle-class" voters, and business.
     The Blairites` emphasis on the middle-class ignores a number of points; Miliband repeatedly argued in favour of more being done for the "squeezed middle", aspiration and ambition are not the preserve of the middle-class, whilst the hemorrhaging of white working class votes to Ukip, SNP and the Greens cost the party dearly. All the Blairite candidates stress that a more pro-business stance has to be adopted, meaning, in all probability, one similar to the that of the Tories. Doubtless, then, they would like to hear lots of meaningless rhetoric condemning tax avoidance as "morally repugnant", but doing next to nothing to reduce the £40bn or so which should be going to the Treasury. Similarly, raising the minimum wage would be a very low priority, so the number of families relying on benefits would continue to rise, whilst government contracts would still be given to firms better known for their refusal to pay the living wage, and their tax avoiding practices, than their efficiency and competence. The financial sector would be allowed to pay obscene salaries and bonuses without fear of extra taxation. A Blairite Labour party would propose no increase in the much avoided corporation tax, even though the current rate is the lowest in the G7, and 18 points lower than in the US.  
  The people of this country do not deserve another party claiming to be pro-business when businesses in the country are anything but pro-people!

Thursday, 14 May 2015

Reactions to Labour`s defeat

As you reported on Friday, albeit before the disastrous election results were known, even Ed Miliband "has admitted that it`s pressure from below that changes society"(Morning Star,08/05/15). Could I, therefore, humbly suggest that Labour immediately starts listening to the views of its supporters, rather than those of Charles Clark and the rest of the Blairite clique? That will mean there has to be more emphasis on the re-nationalisation of energy and railways, though I fear it will be too late to prevent the re-privatisation of RBS.
     The teacher vote needs to be regained for Labour, and that will inevitably involve the selection of an education spokesperson with experience of state education, who realises the wonderful work being done in the vast majority of our schools. It is imperative to have someone at the helm of Labour`s education policy who understands that "character and resilience" abound in all schools and isn`t the preserve of the private sector. With teacher workload reaching ridiculous levels, Labour needs to work much more closely with teacher union leaders.
    On a similar subject, Labour can no longer be a party in denial of its links with trade unions. It needs to show pride, both in its history and in its support for all unions and their members, and have the bottle to be willing to support the inevitable industrial action which will take place under the rule of the callous Tories.

    Having a party united on such ideals as increasing social mobility and decreasing the huge gaps between rich and poor, and adopting the above ideas as priorities, would certainly bring some much-needed credibilty to the party after the disaster of May 7th.

Alan Johnson correctly stated that the "biggest damage" to Labour`s election prospects was done by there being "no effective riposte to Cameron`s successful distortion" of their "economic record in government (From that Question Time moment. the die was cast,09/05/15). Sadly, this shows not only the effectiveness of constant repetition, Goebbels-style, of a lie, but the weaknesses of Labour`s campaign. Why wasn`t, for instance, the fact that the coalition, in five years, had borrowed £157.5bn compared to Labour`s £142.7bn in thirteen years, made one of the centre-pieces of Labour`s message?
     Much soul-searching, as Polly Toynbee says, is now essential for Labour, with there being "no rush to any wrong judgements" (Labour has failed but it`s the low-paid who will lose out,09/05/15) However, as we know what to expect from the Tories and their "anti-state ideology" in the next five years, with government spending reverting to levels last seen in the 1930s, inequality rising, and savage cuts reducing public sector jobs and welfare benefits, Labour`s future direction should be obvious. Too many Labour party supporters jumped ship because it was deemed too similar to the Tory party, and Blairite advice to move to the right will only accentuate the problem. Policies have to be based around social justice, fairness, increasing social mobility and decreasing inequality. Austerity should be rejected, especially as there is always the possibility of using quantitative easing; if it can create £375bn to re-capitalise banks, it should be possible to use it to fund essential services and infrastructure. Work needs to be done on practical methods to reduce tax avoidance which costs the country at least £40bn a year, and which this Tory government will do as little as possible to reduce. Educating the electorate into a renewed belief in Labour`s competence needs to start this year, not a few months before the next election!
 
Most of the Labour candidates so far seem united in their verdict on their party`s defeat: "not aspirational enough", and so not attracting the support of the middle class, and "failure to be pro-business", as Tristram Hunt says, "not doing enough to listen to business"(Leader lineup:The five who may be set to battle for Labour`s top job,11/05/15). Such simplistic and biased evaluation does not augur well for the future of the party.
       The Blairites` emphasis on the middle-class ignores a number of points; Miliband repeatedly argued in favour of more being done for the "squeezed middle", aspiration, and ambition "to shop at Waitrose" occasionally, are not the preserve of the middle-class, whilst the hemorrhaging of white working class votes to Ukip,  and also to the more radical SNP and Green parties, was clearly an important factor.
       All the Blairite candidates stress that a more pro-business stance is needed, meaning, in all probability, adopting a policy similar to the that of the Tories. Doubtless, then, they would like to hear lots of meaningless rhetoric condemning tax avoidance as "morally repugnant", but doing next to nothing to reduce the £40bn or so which should be going to the Treasury annually. Similarly, raising the minimum wage would be a very low priority, so the number of families relying on benefits would continue to rise, whilst government contracts would still be given to firms better known for their refusal to pay the living wage, and their tax avoiding practices, than their efficiency and competence. The financial sector would be allowed to pay obscene salaries and bonuses without fear of extra taxation. A Blairite Labour party would propose no increase in the much avoided corporation tax, even though the current rate is the lowest in the G7, and 18 points lower than in the US.  
  The people of this country do not deserve another party claiming to be pro-business when businesses in the country are anything but pro-people!
The speed with which the likes of Blair, Mandelson and Clarke have rushed to condemn the leftist leaning policies of Ed Miliband, claiming that his "terrible mistake" which ignored "ambition and aspiration" and wasn`t sufficiently pro-business, lost Labour the election, disgusts me (Morning Star,11/05/15). They clearly are delighted to see the Tories back in power. Similarly, all those contenders for the leadership who have not wasted a second in submitting their applications via the media, condemning Miliband and his policies in the same Blairite language, but very willing to accept the positions in the shadow cabinet which he offered them, deserve all the criticism which many on the left will undoubtedly heap upon them.
    Do Umunna and Hunt really believe the Labour party lost the election because it was anti-business? Is this why the party hemorrhaged votes to Ukip, and the more radical SNP and Green parties? Should Labour do nothing about businesses avoiding billions of tax like the Tories, sit back whilst millions are forced to accept zero-hours contracts and a minimum wage which is so low its recipents require housing benefits to survive? Perhaps helping private landlords to acquire more property, so that their exploitation of tenants can continue unabated, is what these would-be leaders prefer? They conveniently fail to recall the number of times people said that the "parties are all the same"!
      Blairites and Tories may well be "intensely relaxed" about CEOs earning 150 times that of their average worker, about millions relying on food banks to feed their families, and about little regulated banks paying next to nothing in extra taxation on obscene bonuses, but that does not mean the rest of us have to agree.
    As for their ridiculous point about ignoring the "aspirational middle classes", firstly it implies that only people regarded as middle class have any ambition whatsoever, which is deeply insulting, and secondly, it was Ed Miliband who repeatedly stressed the importance of not ignoring the "squeezed middle". However, like the Tories, the Blairites` turning a blind eye to empirical evidence is clearly habit-forming!
Polly Toynbee is right to urge delaying the choice of Labour leader "for a decent interval", especially because of the "indecent haste" shown by the Blairite candidates, and their supporters (Forget "Blairism".Rediscover the early radicalism of Blair,12/05/15). They might well stress the need for deep soul-searching by the party, but their failure to delay their leadership bids, and allow an element of dust-settling, does nothing to illustrate their sincerity. Winning "public trust" will require much more than simply blaming the party`s election defeat on its failure to woo the people they all refer to as the  "aspirational middle classes", conveniently forgetting Miliband`s constant concern for the "squeezed middle".
        All the Blairite candidates also stress that a more pro-business stance is needed, meaning, in all probability, adopting policies similar to the those of the Tories. Doubtless, then, they would like to hear lots of meaningless rhetoric condemning tax avoidance as "morally repugnant", but doing next to nothing to reduce the £40bn or so which should be going to the Treasury annually. Similarly, raising the minimum wage would be a very low priority, so the number of families relying on benefits would continue to rise, whilst government contracts would still be given to firms better known for their refusal to pay the living wage, and their tax avoiding practices, than their efficiency and competence. The financial sector would be allowed to pay obscene salaries and bonuses without fear of extra taxation, and there would be no increase in the much avoided corporation tax, even though the current rate is the lowest in the G7, and 18 points lower than in the US. 
   There are lessons to be learned by Labour, but, as Toynbee says, the leadership candidates will be better judged by how "they take the fight to the real enemy", rather than the speed with which they spout out "on Sunday TV sofas" Blairite platitudes!
 


Austerity a Tory con-trick!

It is difficult to disagree with the editorial on the need to change to socialism, especially as ever since "capitalism`s financial system collapsed in 2008", working-class living standards" have been attacked in order to "bail out the banks and markets".(Morning Star,01/05/15) The reasons the political parties have nearly all given to justify the austerity measures, which they say are necessary for the deficit to be reduced, have been that such debt was unsustainable, and that the country would otherwise follow in Greece`s footsteps on the road to bankruptcy. The Lib Dems swallowed this Tory nonsense completely so long as they could enjoy their share of government, whilst Labour, with Blairite influence still strong, are still insisting some austerity is necessary.
    In fact, austerity was never necessary, and not for the simple reason that this 6th richest country in the world has plenty of wealth, and can afford to pay off debts as well as supporting welfare, the NHS, state education and such-like, as long as the tax system is reformed, and everyone and every business is forced to pay their fair share. This coalition has never been serious about ending the tax avoidance "industry", despite all of  their "morally repugnant" rhetoric. Anyway, if companies refuse to pay the correct amount of tax, the simple solution has to be to force them by law to pay the money instead, with a much higher minimum wage, to workers who will pay the necessary tax!
Remember how Cameron said that austerity was necessary because such debt had to be erased for the sake of the children and next generation? Then the huge hike in tuition fees happened! Didn`t mind passing on £40-50 grands` worth of debt to all students!!
    There is another reason: the country is different from Greece because it is financially independent, and, in effect, can generate its own wealth. With the Bank of England being the government`s bank, quantitative easing is available. Funny how there was no problem in initiating the process of quantitative easing when the banks needed re-capitalisation, to the tune of £375bn! Then it was apparently essential for the benefit of the country, because this would kickstart the economy, as a result of the increased lending to businesses the extra money would generate. As if! The extra lending did not take place, and much of the money went on the vast salaries and obscene bonuses, rewarding the "socially useless" work of the greedy investment bankers.
     Austerity, with its accompanying cutting of jobs in the public sector, even 20,000 and counting at HMRC of all places, the tax collecting arm of the government, and the reductions of benefits, is simply the tool the Tories are using to shrink the state. With less jobs in the public sector, demand for work in the private sector will push down wages, and, as we have witnessed, enable greedy employers to use zero-hours contracts, part-time workers, and low wages generally, to increase their profits.
    Sadly, but typically, the Tories have not finished, and as can be seen from their election pledges, plan to take government spending back to levels last seen in the 1930s, in effect returning to the laissez-faire system of the previous century, with little or no regulation to prevent firms increasing the exploitation of their workers, increasing their profits exponentially, and avoiding paying the corporation tax which is already 18 percentage points below the American rate. In the last few years, however, despite the claims that deficit reduction is the priority, it has given way to measures designed to stimulate the economy, in the realisation that austerity prevents economies growing. Similarly, despite the rhetoric about the danger of increased borrowing under another Labour government, Tories are very keen to hide the following details: when Labour was in power, over the full thirteen years, they borrowed £142.7bn, compared to the £157.5 bn borrowed by the coalition in its five years!
    Quantitative easing, which is now in process throughout the majority of the EU, is not the only remedy available to a British government, as with interest rates and inflation so low, it is possible to borrow for the future at what are, in effect, practically negative interest rates, adding yet another reason to cancel austerity altogether. How can there be a problem with borrowing from a bank you essentially own?

          Shrinking the state is Tory ideology; imposing austerity measures because of the need to reduce government debt is Tory propaganda!

Sunday, 10 May 2015

Observer letter on low productivity

Last week`s excellent editorial stressed how the UK`s economic recovery "is fraught with weaknesses", including "low productivity and low wages", so it will be interesting to see the role played by workers` pay in the post-election negotiations. (We are now at a crossroads.We need to move towards a fairer, better Britain.Only Labour offers that vision,03/05/15) With 44% of all adults ineligible to pay income tax because their earnings are so meagre, it is essential, whatever new government is formed, this shameful situation be addressed. Our 28th position in an equality league table made up of 34 developed nations is disgraceful not only on moral grounds, but also because concentrating wealth in the hands of "fewer and fewer people with less reason to spend" contributes little to economic growth.
     However, if the reasons for low productivity, as your Business Leader suggests, are puzzling, ranging from "lack of investment, poor education",and failure to "buy in new technologies and equipment", perhaps more joined-up thinking is required? (Ignore the politicians and look at the figures: this economic recovery is veering off course,03/05/15) Even full-time workers are often receiving such little renumeration for their efforts, they have to rely on housing benefit to pay the rent. Is there any wonder that productivity is "lamentable"? No matter how hard people work, rewards are scant, whilst bosses and managers are in line for massive bonuses and pay rises, much of which avoiding the proper tax due. Is it not likely that productivity would rise if workers were not only receiving decent pay, but sharing more in the profits their efforts bring to the firm? It is not too late to learn lessons from post-war Germany when co-determination prevented pay gaps developing!

     There can be little point in bemoaning lack of productivity of the workers when the short-sightedness of politicians and business leaders is obviously a major factor

Saturday, 9 May 2015

West`s anti-Russian policies continue

Excellent to see Southwark Council teaming up with the Soviet War Memorial Trust Fund to "mark 70 years since the nazis surrendered to the Red Army".(Morning Star, 04/05/15). The contrast with the attitude of our vote-wary political parties, and sabre-rattling spokespeople from both the military and arms industry is obvious, and it is disgraceful that so many of the west`s leaders are boycotting the Moscow commemorations. Remembering the massive role played by the USSR in the defeat of the Nazis, and their loss of more than 20 million war dead, even if it only means taking part in wreath-laying like Merkel is doing, should be a no-brainer for UK representatives. The British refusal can be excused, apparently, because of the timing of the election, but are there not plenty of alternatives to a prime-minister? Would a Russian visit not be an ideal opportunity for a member of the royals to prove the family`s diplomatic worth, or are they too busy to be able to spare the time?
       The truth is that British foreign policy has long been based on an over-estimation of the threat of Russia. Throughout the 19th century British fear of Russia`s acquisition of a warm-water port contributed not only to the causes of the Crimean War, but also the flawed Treaty of Berlin which led to so many of the problems in the Balkans, building up to World War One. After the revolution, of course, communism was seen by the British establishment as a far greater threat than Nazism, and the exaggerated fear of Russian military expansion after 1945, despite its exhaustion and losses, led to the Cold War. Sadly, suspicion of Russian motives has not diminished!

     History has clearly taught political leaders in the west very little. How much could relations between countries improve if compassion and respect for war dead were shared? It should be obvious to everyone, by now, that threats and sanctions are not going to solve the Ukrainian problem, whilst diplomacy can almost certainly lead to a much-needed increase in mutual understanding.

Friday, 8 May 2015

Dear Ed

Dear Ed,
     You admitted to not reading newspapers so you lmost certainly didn`t see a recent editorial in the Morning Star, which stated that Labour in 2015 should not be `scrabbling around for votes` just before a general election, and√®specially just after five years of the most callous of Tory-dominated governments. It was right, wasnt it? Consequently, you have some explaining to do.
  Please explain why, for example, your party refuses to break with the City. You promised Labour under your leadership would be different from the Blair/Brown era, and completely different from the other parties, but you can`t honestly say it is, can you? Attacking the banks is a no-brainer for 90% of the population, but you haven`t even pledged a Financial Transaction Tax, let alone uttered a word about 81% taxpayer-owned RBS getting fully nationalised under your government, with profits going to Treasury instead of shareholders` tax havens.Don`t you want to change the country`s embarrassing banking culture?
Admittedly taxing the rich at 50% is an improvement on the present situation, but will it do much to close the ever-widening gap between rich and poor? Why don`t you admit the country`s 28th position out of 34 in the developed nations` equality league table is a disgrace? Aren`t people earning three or four times the national average, rich, and therefore capable of paying 45 income tax, whilst at the top end, don`t you remember that even under the awful Thatcher, top rate was 60%? Why spend all that time reading Piketty if you`re not intending to follow any of his advice, particularly on top rates of tax?
  What many of us don`t understand is why you don`t fight back when accused by the Tories and their friends in the right-wing media of being anti-business? The reply we hear is that you and Balls support business. What you don`t appear to understand is that voters want to hear you say you will support business when it starts supporting the country. Instead of bleeding the country dry with their low wages for their workers, obscene pay for CEOs and managers, and all-out policies to make as much profit as possible, regardless of methods or ethics, businesses should be paying back the debt they owe to our society. After all, who paid for their employees` education, their health care, and the roads and railways they use to make their profits? Who pays for the security they rely on to carry out their business?
    Why not say business will get Labour`s support when it has deserved it, and then spell out what it needs to do? Pay a living wage to everyone, including the outsourced workers, pay only a fitting salary at the top, not like as in the FTS 100 companies, 143 times more than average worker, and pay all income tax and corporate tax; are any of those unfair, or likely to lose votes not destined for the Tories anyway?
 Sorry to return to the subject of tax, which I believe you think, is a vote-loser for Labour, but there are more promises you should have made, if you really wanted to win this election. Why haven`t you promised to raise Capital Gains Tax to the same level as income tax, to stop the greedy rich from avoiding income tax by transferring their earnings. Why not make it illegal to form a company unless at least six employees are working for it, to stop highly-paid individuals, like many at the BBC, paying the correct amount of income tax, and employers paying National Insurance? They pay the much lower corporate tax, the one companies do their utmost to avoid paying, even though it is the lowest in the G7, and something like 18 percentage points below the rate in the States!
Why haven`t we heard from you about ending the practice of government contracts worth millions of pounds going to known tax-avoiding companies, or taking back honours from their CEOs? You surely don`t believe such policies would be unpopular with the voters?
Constantly at PMQs, you allow Cameron to ridicule your party for being in the pay of trade unions, at the behest of McLuskey and so on, and you barely respond. Why? Aren`t you proud of the party`s history and tradition as the defender of the workers` rights, and proud to tell the nation that Labour is the party today which stands against workers` exploitation, against zero-hours contracts and wages so low as to force people to rely on benefits to pay the rent? 
Apologies if this appears just as a list of questions, but so many of us are really baffled as to why you haven`t done these things, or even some of them. If you had, you wouldn`t still be `scrabbling around for votes`!
Cheers

Bernie Evans

Monday, 4 May 2015

Tory policy will exacerbate housing problems

Saturday`s Money section in the Guardian on the problems facing those renting privately, and a recent editorial, both acknowledged that "all the parties see housing as a major election issue", with Labour in particular, pledging to "improve the lives of tenants in the private rented sector". However, with many tenants already paying as much as 50-60% of their income on rent, it is difficult to see how Labour`s proposed cap on future rent rises will ease the problem. The charity consortium, Just Fair, reported that a quarter of those renting "rely on housing benefits to meet the cost" of what are clearly, in many cases, exorbitant rents, especially as over 30% of this accommodation does not meet "basic standards of health, safety and habitation". This situation has to change; taxpayers cannot be expected to provide, as they did last year, £9.2bn to private landlords in housing benefit, who profit not only from the renumeration provided by the high rent they charge, but also from the failure by tenants` employers to pay the living wage. Tory proposals will undoubtedly compound the problem, as extending the right-to-buy policy to 1.3m housing association tenants could well see yet more property being bought cheaply by private landlords, as happened under Thatcher; in Wandsworth, for example, 40% of the council flats originally bought by the tenants are now owned by private landlords!

    What, evidently, is needed is for the next government to place all matters relating to renting and owning property under the auspices of a Ministry of Housing,  whose remit would include responsibility for inspecting all rented accommodation. Depending on size, condition and locality, all such property could be placed in bands, similar to council tax ones, with the appropriate level of rent for each band set by the government. It is absolute nonsense to continue with the present policy where modern-day Rachmanism is allowed to flourish. With the "balance of power on the side of the landlords", the editorial`s conclusion summed up the situation perfectly:  housing has to be "rescued from speculation".

Saturday, 2 May 2015

HSBC`s threat needs to be ignored and treated with the contempt .....

A few weeks ago, the director-general of the CBI threatened the "return of day-to-day hiring"of workers, should Miliband carry out his pledge to allow those on zero-hours contracts to convert to a "regular job after three months instead of a year".(Give zero-hours workers regular contracts after 3 months-Miliband,01/04/15) Now it`s the turn of HSBC to attempt to dictate government policy with threats, this time "to relocate its headquarters out of London".(HSBC relocation review adds EU exit to the mix,25/04/15) How much longer can we allow companies and their representatives to hold the country to ransom like this?
     How dare any bank complain about regulation, bank levies and a corporation tax which is around 18 percentage points below the rate paid by companies in America, when their profit-at-all-cost philosophy has led them to trick customers, fix interest rates, launder drug money, and divert much needed revenue from the Treasury, whilst paying obscene amounts to their CEOs and top staff?  Let HSBC "review its location" but is a move to Hong Kong, where, as Nils Pratley says, it would come"under the increasingly watchful eye of the Chinese Communist party", really on the cards?(Mist clearing here but fog in the east,25/04/15) How often have we heard the similar threat that, if bankers aren`t allowed their annual bonuses, they will leave the country? If our politicians had any bottle at all, they would call HSBC`s bluff, for that is surely what it is. Most of the electorate would be in favour of an 80% bonus tax, and participation in the EU`s financial transaction tax due in January 2016, so HSBC and the rest should consider themselves lucky!

Osborne`s "northern powerhouse"

What a pity George Osborne didn`t find the objective to "revitalise the cities of the north" such an "exciting and creative area of public policy making" five years before the 2015 general election, rather than a mere ten days! (Power to the cities could reverse the Thatcher legacy,27/04/15) That could well have meant the section of HS2 from Birmingham northwards, and involving routes to Liverpool docks, taking precedence over reducing travelling times from London to the Midlands by a matter of minutes. An upgrade of the Manchester to Leeds railway is welcome, though long overdue, but for Osborne to describe the prospect as "HS3", with routes "built within the next parliament", is fooling no-one, and takes his disingenuity to Clegg--like levels
          Little rejuvenation has been possible in the mostly Labour dominated areas of the north when council grants from the government have been decimated, and when London and the south-east have always taken priority. Funny how this chancellor believes "in government as a force for good", when his economic plan involves the reduction of government spending to 1930s levels, and cuts to the welfare budget, mostly affecting the poorest and most vulnerable, of £12billion! Perhaps he would be better advised to devote more of his "energies" to regulation of the City, ensuring every rich individual and business pays the correct amount of tax, criminalising the giving of advice on tax avoidance and evasion, and substantially raising the minimum wage? 
   

2 letters to Independent

Hamish McCrae rather spoilt the validity of his argument by stragely stating that the "Coalition has been quite anti-business in office", using the examples of oil companies` North Sea revenues, and regulation of small businesses.(Voices: Can Britain learn to love its richest citizens? 29/04/15) An opinion ignoring so many instances of Tory-dominated coalition policies, which have shown both leniency and favouritism to the corporate sector, has to be seen as disingenuous. What about the lowering of corporation tax to a level eighteen percentage points lower than in the USA, or doing next to nothing about tax avoidance, with the latest device, the so-called Google tax, only estimated to collect around £600m, and not until 2019? Does that really qualify as anti-business? Profits have been allowed to soar, whilst many firms have been found guilty of refusing to pay their workers the paltry minimum wage, but only punished with small fines. Has the government clamped down on zero-hours contracts, used by many businesses to force down costs? No, of course not, with one result being the taxpayers annually having to fork out £9.2bn in housing benefit to help the low-paid meet the cost of exorbitant rents charged by largely-unregulated, profiteering private landlords.
    As for business bosses, don`t the latest figures suggest CEOs of the top firms are now paid something like 170 times the pay of their average worker, with the government`s only response being to lower their tax rate to 45%?
Your editorial (Salt shaker,29/04/15) reminded us how Andrew Lansley ended the "costly regulation" of  the food industry, leading to wholesale reductions in the role of the Food Standards Industry and numerous food scares, and with so little regulation, the banking culture of greed, profit-at-all-costs and ensuing scams has continued unabated. Then there `s the refusal to participate in the EU`s financial transaction tax, and Osborne`s frequent trips to Brussels to protect bankers` bonuses!

    "Anti-business", Mr McCrae? The contrary is much nearer the truth, and the UK`s position of 28th out of 34 in the equality league table of developed countries supports the point!

It`s hard to believe I was watching the same election special programme as John Rentoul.(Question Time Special,01/05/15) For a start he thought the audience was "packed with truculent northern lefties" when, judging by the applause and general reaction to the leaders` answers, there seemed to be a majority, albeit small, of conservative supporters, anxious about making profits from their businesses!
  Then there`s the comparison between the performances of Cameron and Miliband: no prizes for guessing who was described as "fluent", "impressive", "polished", "fresh" and even "persuasive", whilst Miliband, with his "Blairite mannerisms" received the "Like as if" treatment, and was viewed as "disingenuous". This biased approach to reviewing an election programme is disappointing in such a respected newspaper.
 The fact that Cameron was still peddling the old nonsense about Labour`s over-spending, even to the extent of resorting to his party trick of producing Liam Byrne`s note, seems to have gone completely unnoticed by your reviewer. Just to do a spot of re-balancing, it seems particularly relevant at this stage of the election campaign, to remind voters that in the thirteen years of Labour government, £142.7bn was borrowed, compared to the £157.5bn borrowed by the current Tory-led coaltion in its five years.
 I am sure Mr Rentoul would not agree, but it seems to me that the whole austerity business has simply been a confidence trick to enable the Tory-dominated coalition to shrink the state and carry out its long term plan for a low-wage economy; comparing the country`s economic woes to those of Greece was nonsense, when we have our own currency, and have quantitative easing at our disposal, Raising wages to increase spending back in 2010 would have led to economic growth and, through increased taxation revenues, enabled improvements to take place in the NHS, education and general infrastructure.