Banksters are “socially-useless” shocker!

Lord Turner is the head of the FSA (that’s the Financial Services Authority, not the Food Standards Agency).

If the Tories win the next election, he’s toast and so is the FSA which will be abolished, its powers returned to the Bank of England.

So that’s probably why he’s giving strong views on taxing banks – the kind of talk that gets frozen out of polite society in the City, I expect.

The kind of reforms Turner suggests could save the capitalists from their chaotic system – but would hurt them in the short term by imposing costs to implement the regulation of apparently speculative or dangerous activities.

Transnational corporations are lobbying against proposed EU regulations on derivatives which would require deals to go through a clearing house.

In the UK, however, there’s nothing tough planned for the transnationals. The government might be talking up food sovereignty, the transition to low-carbon manufacturing, and so on, but there’s no plan to put the casino-capitalists on a diet.

Response to Turner’s views are revealing:

The Chancellor, Alistair Darling, asks what would replace the City as a source of employment and tax revenues. So, at least he’s willing to consider alternatives if laid out before him.

The Shadow Chancellor has remained silent. For obvious reasons. No one would believe a Tory Chancellor would crack down on big business.

London’s buffoonish Mayor, Boris Johnson, is perhaps the only UK politician willing to leap to the defence of the City.

An unnamed London banker is quoted in the FT as saying “It is just illogical to want to shrink one of your most important industries,” unless it happens to have led to the destruction of all your other industries, I suppose… He goes on to say: “If you want to turn London into a Marxist society, then great.”

Yes, comrade. Great! Full marks for hyperbole.

“Saint” Vince Cable of the Lib Dems has welcomed what Turner has said, stating that that “competitiveness” arguments cannot be used to defend the status quo:

“If you are engaged in behaviour that is dangerous to the wider British economy, it is right some sectors may have to contract,”

However, Nick Clegg, the Liberal leader, has said that taxation would be unworkable as a way of shrinking the City as global agreement would be required.

It was interesting to observe President Nicholas Sarkozy of France revealing his tough plans for reform to bank remuneration – which will only be implemented if there’s a global agreement. Which in political terms, is a win-win deal. If the rest of the world says non, he wins; if the rest of the world says oui, he wins.

What changes do I suggest, then?

Well, given that the financial services sector could not exist without the taxpayer support that has been given, the government should ensure that restructuring takes place with the following modest reforms:

* Voluntary redundancies only, and terms and conditions respected for the pay and pensions of bank staff on low- to middle-incomes. Workers in the financial services industry should not be made to pay for the greed of their employers.

* Executive pay, pensions, and other benefits should be capped at all financial institutions – even those in which the government has no shareholding. If executives want to flee elsewhere, let them – there are plenty of talented people willing to take their place and be justly rewarded.

* To prevent future banking crises, the nationalised banks should be mutualised rather than be privatised. Mutual financial institutions – the credit unions, building societies, and Cooperative Bank – have served their members/customers and behaved responsibly.

Another public service reform is possible!

Not the catchiest of slogans, that. But, you get the picture, hopefully.

Following on from her 2003 book, Reclaiming the State, which was about reforming the public sector through greater involvement by workers and the general public, Hillary Wainwright has a new book published by the socialist pressure group Compass and Unison, the trade union….

Public service reform … but not as we know it!

How do you save money, improve services, involve the unions and strengthen democratic control at the same time? In Newcastle, they have come up with an alternative to privatisation that achieves all these objectives, as Hilary Wainwright reports

The need for convincing alternatives to market-led politics is urgent, especially as the government continues to defer to the financial markets rather than challenge them. Lord Mandelson’s determination to part privatise Royal Mail is the most high profile rebuff to what should be a common sense moratorium on handing anything more to private business.

There are many unsung alternatives that people are creating as they refuse the idea that market-driven policies are the only way. Take the Royal Mail itself. Go behind the union-bashing and you’ll find that the Communication Workers Union and the management of Parcel Force, a subsidiary of Royal Mail, are constructing a model of industrial democracy that has turned this public organisation around from near collapse, showing that a democratically managed public sector company can provide better value for money than most of the private companies with which it now has to compete.

What if we systematised and drew broader lessons from such practical experiments?

A laboratory of public service change
I was fortunate enough last year to be able to study, from the inside, a self-consciously public process of public service reform. I squatted in an empty office in Newcastle’s civic centre for several months interviewing the staff, management and trade union activists responsible for a five-year programme of modernisation of the council’s IT and related services, and with it improvements and savings in the systems of collecting council tax, delivering benefits and making its services accessible to the public. What gave the process its special character was people’s pride in transforming these basic services as public servants, following a hard-fought struggle against their privatisation led by the city council branch of Unison.

‘It wasn’t about resistance to change,’ explains Tony Carr, who was the full-time Unison rep for the staff involved in these services. ‘It was about controlling your own destiny and not having someone come in and manage us through change.’

Such an explicit effort at publicly-led reform created an ideal laboratory to test and elaborate the hypothesis that democratisation rather than privatisation is the most effective and appropriate way to modernise and improve public services. In testing this, my intention was also to explore exactly what are the specific mechanisms of change driven by democratic public service goals rather than by profit maximisation.

Keeping it public: a strategic campaign
This explicitly and determinedly public-driven programme of internal reform was the outcome of a struggle between 2000 and 2002 to keep these strategic services public. At stake for a private company was a £250-million, 11-year contract. For the staff and the union, it was 650 jobs and the quality of strategic services on which other council departments depended and that could be a base for public-public partnerships in the region.

The strategy of the Newcastle city council branch of Unison to keep these services public had five essential elements, all of which laid down foundation stones for the democracy of the transformation process itself:

1. First, building on a tradition of participatory organisation, the priority was to involve members in every step of the campaign: from mass meetings and the election of reps when market testing was first announced, through industrial action against privatisation, to the reps directly scrutinising the private bid and contributing to the ‘in-house’ bid.

2. The second element in the strategy was to intervene in the procurement process and campaign for an effective in-house bid. ‘We had to recognise that even though we were against the whole concept of market testing, if we actually wanted to win an in-house bid we had to intervene at that level from the beginning,’ says Kenny Bell, then convenor of the Unison branch.

3. Third, campaigning meant reaching out to the public, building popular support for a general opposition to privatisation. ‘Our City Is Not For Sale,’ declared the banner leading several demonstrations of trade unions, community organisations and dissident Labour councillors.

4. Fourth, although the union filled a political vacuum in standing up against privatisation, Unison no more wanted to take the final decisions about who should deliver services than it wanted management to do so. The aim was not to substitute the union for council officers but to make the council genuinely ‘democracy’- led.

The pressure on the elected politicians eventually paid off, with the council passing a resolution insisting that alternatives to privatisation must be found.

5. Campaigning was little use unless it was grounded in strategic research. Key to the success of the Unison branch was the work of the Centre for Public Services, which in the course of 30 years of collaboration with trade unions and community organisations has honed a participatory method of work that shares skills and intellectual self-confidence. The CPS’s work had an impact on members’ consciousness as well as on trade union strategy. For Unison shop steward and housing benefits worker Lisa Marshall, collaboration with the CPS on investigating the bid of the private sector rival was a turning point: ‘As we looked over their bid, we found a lot that we knew could be done better. From then on I felt confident about what we were trying to do keeping it in-house.’

This leads into the final component of Unison branch thinking: the leadership treated their members as skilled people who cared about their work. Josie Bird chairs the branch: ‘We recognise that our members want to provide a service. It’s not a romantic idea that they live to work. No, they work to live – but it does matter that it’s a public service that they work for.’

The campaign was successful. The in-house bid drawn up by management in agreement with the unions was clearly better public value for public money.

In 2002, the then Labour-run council (since 2004 it has been Lib Dem) gave it the go ahead and borrowed £20 million to invest in it on the basis that savings would eventually more than pay back that investment. Jobs would go but without compulsory redundancies and with exceptional resources for training and redeployment.

Why union strength is vital to democratic reform
The union campaign laid the basis for real staff engagement in the process of change. The union was involved at every stage, from selecting new managers to discussing every significant change. ‘It’s our job to keep the management accountable, not so much to the staff but to the change’ was Kenny Bell’s description of the unions’ role.

‘The union keeps us honest.’ Ray Ward, the senior manager who led the changes, echoes the point from the management’s point of view. It’s a collaboration but the union has retained its power to act independently and to escalate a conflict if necessary. And the management knows this. The union wouldn’t be trusted by its members if it could not. The result is an experiment in industrial democracy with real benefits in terms of quality of services and the best allocation of public money.

By 2008, net savings of £28.5 million had been achieved, projected forward over an 11-year period. Every area of service has improved significantly, from the speed and accuracy of benefit payments to the high levels of satisfaction with the new call centre and the ‘one stop shops’ for all council services for which community groups have campaigned for years.

The role of the union in these achievements requires emphasis because although there is now widespread talk of the ‘empowerment’ of public service workers, there is scant recognition of the necessity of a well-organised and democratic trade union to achieve it.

A break with traditional managerial elitism
But it takes two to tango for change. And the nature of the City Service management team was important too. (City Service is the name of the new department that brought all the reformed services together.)

‘It’s the people, stupid’ has been the slogan of City Service. People’s capability and commitment are assets to be realised, not costs to be cut. This focus on people, on encouraging them, believing in them, has been systemic to the transformation. Management is about ‘coaching not commanding’. Initiative and responsibility has been pushed away from the centre, layers of supervision have been eliminated and replaced by support. The dynamism of the department lies in working across its different sections through project groups involving all those with a relevant angle on a problem to come together to resolve it.

All in all, City Service transformed the centre of its organisation from a traditional model of local government management into a hub from which management supports numerous, largely autonomous projects and activities. A new kind of public sector organisation has emerged, with a leadership role that is more about facilitation and developing a shared direction than it is about exercising control.

The kind of people who made up this leadership is revealing. Ray Ward for example, first chose to work for local government, aged 16, because it was ‘a good place to sleep’ after nightly gigs in a rock group! In 2003, many years later, with much experience as a senior manager but not forgetting his own early experiences, his goal was to reorganise Newcastle’s management systems to enable council staff to exercise their creativity in their day jobs, in the service of the public.

He recruited Kath Moore, who had transformed Newcastle’s school meals system through involving the cooks and kitchen staff. She saw one of her missions as to release the staff expertise buried beneath the hierarchies and procedural fetishism that is too common in local government – as in much of the public sector. City Service management’s ability genuinely to engage the staff in designing the changes, not simply accepting them, was a special key to their success.

A common vision
A precondition of this success of a decentralised system of management in an organisation facing huge challenges has been a clear common vision of high quality publicly-delivered public services. Every aspect of the transformation programme was geared to and judged by that goal. This shared goal provided a basis for motivation and common purpose, a mutually accepted reference point that avoided drift and helped to overcome conflict. It enabled the management and union leadership constantly to move the process forward.

The shared vision also served to dust off and bring to the fore a public service ethic that normally lies dormant or reduced to a matter of formal rhetoric. There was an active thinking through of what this meant in practice so that it became a practical force for change.

The political economy of democracy
There was a financial foundation to this revitalised public service culture. The goal was to maximise public benefit rather than to maximise profits. Again the determinedly public-led nature of the transformation process threw the distinction into sharp relief in every key relationship.

Consider relationships of scrutiny and democracy. Ray Ward sums up the difference: ‘The private company can say that as long as we are adding shareholder value, share prices are looking good, profits are looking good, we’re okay. We can’t do that. The level of scrutiny is much higher, quite rightly because it is public funds.’ If it is to be more than an empty or self-serving bureaucratic formula, the goal of ‘maximising public benefit’ rests on the importance of democracy as a live force, driving the efforts of everyone in a public organisation.

Until now, the focus on strengthening local democratic control over public money has focused on strengthening citizens’ participation. The Newcastle experience takes our thinking about democratisation further by opening up and democratising the normally hidden, taken-for-granted internal processes of managing public resources. As long as the internal organisations of the public sector are top-down, fragmented and semi-oblivious to the real potential of their staff, all the participatory democracy in the world can be soaked up and defused or blocked by hierarchical structures and bureaucratic procedure. The process of internal democratisation, therefore, is a matter of economic as well as political importance, creating the conditions for a public sector business model that lays the basis for a political economy of democracy.

When we get into the detail of such a new political economy, an important practical implication of maximising public benefit is minimising, if not eliminating, the amount of money spent on institutional relationships that are not intrinsic to the delivery of a service. This is one of the costs of outsourcing and privatisation.

Time and time again I asked Newcastle staff what it would have meant if this relationship (whether at the highest level between the council’s treasurer and City Service managers, or in the daily provision of a frontline service such as the call centre) had been with a private company instead of ‘in-house’. Repeatedly the answer came that it would have meant all sorts of extra charges – for making changes to respond to needs or problems not foreseen in the original contract with the private company –and a lot of time diverted to negotiating these charges and changes.

City Service did have a relationship with the private sector but it was only where the public sector did not have the capacity to do something itself – for example, with the procurement of the IT hardware needed for the modernisation programme. Here the relationship was very much on terms set by the public sector, including a ‘guaranteed maximum price’ contract to ensure there was no unpredicted overspend. Another aspect of the relationship being on public sector terms was the rigorous transfer of knowledge from the private company to public sector staff who worked with it. So often it is the other way round, with knowledge being privatised and re-presented as a profit-driven tender the next time round. Countering the depression

The service reforms in Newcastle’s illustrate in a modest but practical way how the public sector can have its own criteria and mechanisms for efficiency, quite distinct from goals of profit. This story provides evidence that, with a clear shared vision, an egalitarian and professional management, a strong union and workplace democracy, the public sector generally has the capacity to make itself a highly effective steward of public money. In particular it can realise its special asset of skilled staff committed to serve their fellow citizens. This is exactly the asset that Lord Mandelson’s plans will squander.

But this story is not relevant simply to the case against privatisation; it is also fundamental to an alternative economic strategy to counter the fast-moving economic descent into a depression. Publicly-led public service reform on the basis of the kind of principles exemplified in Newcastle lays the basis for creating new and useful jobs in the public sector throughout the UK – in building council housing, caring services, youth services, environmental services, ICT, strengthening the social economy and so on – it is not as though there is a lack of things that need doing!

Depressions lead to social devastation. One foundation stone of a new, more humane political economy should be the expansion of democratically reformed public sector.

For more detail on the Newcastle experience, see Public Service Reform … But Not As We Know It, published by Unison and Compass. Available from Red Pepper at a special price of £5 or free when you subscribe for £20.

Mandelson moans at mass opposition to mail sell-off

Apparently it’s making the sale that much harder that so many people don’t want Royal Mail to be sold. Good. It’s not for sale, it belongs to the people.

Socialist Worker outlines the opposition:

Anger grows at postal sell-off
by Yuri Prasad

Business secretary Lord Mandelson’s plan to privatise Royal Mail has created a storm of protest. This is raging through sections of New Labour that were once cringingly loyal to the leadership.

Delegates to the party’s Scottish conference last week applauded wildly as Dave Watson attacked the proposal as a breach of Labour’s manifesto commitment to keep Royal Mail publicly owned.

Watson is the chair of the Scottish Labour Party.

Welsh MP Siân James this week resigned as a parliamentary private secretary and signed an Early Day Motion against privatisation. Around 150 Labour MPs have now signed this motion.

James is the second member of the government to quit over the issue, and some commentators expect that another 15 could follow her.

The rebellion in Labour has grown as public opposition to the plans has become clear.

Now even the Liberal Democrats, who have been committed to Royal Mail’s privatisation for years, are deserting the cause and refusing to vote with the government.

There was further embarrassment for the government this week after an email from Royal Mail boss Adam Crozier attacking rival firm TNT, a likely bidder for a stake in Royal Mail, was leaked to the Guardian newspaper.

Crozier said that TNT had been lying to Royal Mail customers in Europe, telling them that it had already acquired the state-owned company.

Disarray

TNT has told its workers in the Netherlands that it will sack 10,000 of them if they do not accept a 5 percent pay cut.

Despite the disarray, Mandelson is determined to proceed with the privatisation.

His political future now depends on getting the sell-off through.

He knows that the government can win the final vote in parliament in a few weeks’ time with the backing of the Tories.

Many activists in the postal workers’ CWU union are aware that that any campaign that concentrates solely on winning Labour MPs will be doomed to failure, and that the union leadership’s strategy is flawed.

“If we’re going to win this, we’re going to need a strategy that involves industrial action,” says Alan Walsh, branch secretary of the union’s Watford branch.

“But I don’t think that postal workers should have to fight this battle alone. I’ve been at rallies where the leaders of other public sector unions have stood alongside the TUC saying, ‘Your fight is our fight.’

“Well, I’d like to see them put their money where their mouth is.

“I want postal workers to strike against privatisation – and I want to be joined by thousands of other public sector workers.

“That’s what workers do in France when they are under attack. We need to need to learn some lessons from across the Channel.”

Massive

The need for this kind of response is becoming clear as Royal Mail attempts to prepare the ground for a sell-off.

Postal workers in different parts of the country have told Socialist Worker that the company is attempting to ram through massive cuts between now and the end of the financial year in April.

Labour’s privatisation plan is also putting an enormous strain on the relationship between the CWU and the party that it has loyally supported for generations.

The union has committed to balloting its members on whether to fund the party at the next election, and many branches are now seeking a more fundamental review of the union’s affiliation to Labour.

“Labour says that it is the only game in town, and for a long time we in the CWU have believed them,” says Alan.

“But now many of us are telling our local MPs that if they refuse to vote against privatisation, not only will we cut our donations, but we’ll stand against you in the next election and cut your votes too.”

Northamptonshire CWU branch has called a march and rally in Corby against post privatisation.

The protest takes place on Friday 20 March – assemble 1.15pm at the Civic Centre, George Street, Corby.

Protesters will march to local MP Phil Hope’s surgery.

Northamptonshire CWU says, “Putting the people of Corby before career ambitions and blinkered loyalty to a Labour government is all we ask of Phil Hope.

“Who is he representing when he pledges support for the part-privatisation of Royal Mail? There is no support in Corby.”

A rally after the march will hear speeches from Lord Tony Clarke, CWU vice president Jane Loftus, TUC regional secretary Roger McKenzie, Unite regional secretary Adrian Axtell, CWU regional secretary Lee Barron and others.

A bonus question: are you having a laugh?

As David Cameron urges us to have faith in the capitalists who have ruined our economy, Mark Steel squeezes a few laughs out of the sorry affair of greed and corruption:

The real point about a minister saying this is the worst economic crisis for 100 years, is it shows they haven’t got a clue. That figure was plucked out of nowhere, unless there was a really dreadful crisis in 1909 that no one ever noticed before. Maybe the minister’s just seen Mary Poppins, and the scene where the bank goes bust, he thinks is footage of a real financial crash.

So his next statement to Parliament will be “In order to steady the financial markets we are proposing tuppence tuppence tuppence a bag, feed the birds, tuppence a bag. THAT is the sound economic sense that can rescue our banks, rather than the ill-thought-out soundbites from the party opposite.”

Why not say it’s the worst for 2,000 years, when the great crash of 9AD was caused by the gross overvaluation of aqueducts? Or the worst for 65 million years, when the Jurassic currency disaster led to bankers throwing themselves from the top of brontosaureses, followed by the eventual disappearance of all dinosaurs, despite the Prime Minister having boasted: “We have finally put an end to the cycle of evolution and extinction.”

Next week a minister will announce that the Bank of England has revised its forecasts, and instead of the crisis getting as bad as diarrhoea, as it first thought, it now expects it could be as bad as gastroenteritis, and the IMF believe it could even reach the point where it’s like one of those days when it’s coming out of both ends at once. But with careful fiscal handling this should be easing by the last quarter of 2010.

You have to admire the front of these ministers for saying anything at all about what’s happening, given they insisted for years there would never ever again ever be a cycle of boom and bust.

Similarly an army of experts assured us on a daily basis that this boom couldn’t possibly crash like previous booms because this boom was still going on whereas all previous ones had ended, and previous booms were founded on a manic belief that wealth could go up and up without any basis in reality, whereas this one was built on the sound footing that everything really is somehow suddenly worth twice as much so TAKE AS MUCH AS YOU CAN RIGHT NOW IT CAN’T EVER STOP!!!

For example, one of the bankers questioned yesterday said it was “not possible to envisage” the banking crash. But in every office, every pub, every launderette, there were people who managed to envisage exactly that. If Gordon Brown had got them to write his chancellor’s speech, so that it went: “The bubble’s got to burst sometime. I mean, you can’t base an economy on pretending everything’s doubled in value, and who’s going to pay for these bankers’ bonuses – WE are, that’s who. I commend this budget to the House,” he might not be in his present trouble.

Instead the people who couldn’t possibly envisage what was obvious are allowed to carry on. To be fair, ministers have expressed their annoyance at the bankers’ bonus system, so presumably there will now be a series of adverts in which a furtive banker buys a boat, while the camera zooms in to his sweaty face and a voice says: “Banking cheats – we’re closing in.”

One answer may be a review of how this bonus system came about. As if the Government’s making out it’s only just heard about it and they’re as outraged as everyone else. Maybe Brown will make a statement to the nation in which he says: “HOW much do they pay themselves? Well no WONDER we’re in a pickle, you just wait ’til I get my hands on them.”

But New Labour urged and encouraged every aspect of this corporate avarice. It was defined from the beginning by characters like Mandelson making speeches such as: “In the modern Labour Party we are relaxed about those who express an insatiable and pathological desire for self-enrichment at the expense of our fellow man that borders on the truly evil.”

They grovelled to every banker, and now they want to set up a review to see how that happened. If only Karen Matthews had thought about it, she could have said: “Instead of going to jail, why don’t I set up a review to see how I kidnapped my own daughter,” and got herself six months’ work.

Peter Taafe continues on this theme in the latest edition of The Socialist:

When John ‘Two-Jags’ Prescott – a willing participant in the New Labour project that spawned these financial creatures – inveighs against the bankers and calls for a public campaign against the proposed bonus payouts of £1 billion at Royal Bank of Scotland (RBS), it indicates the mass rage on this issue.

Prescott even mentioned the ‘C word': “This is raw capitalism and this country rejects it”! Correct! But didn’t he serve in the government alongside Gordon Brown and Tony Blair which supported and did everything to strengthen neo-liberal “raw capitalism”?

When questioned on Newsnight, he wasn’t able to answer the accusation that it was him and his government that helped to create this situation. They promoted ‘performance related pay’, though for the bankers with the perversion that no satisfactory performance was even necessary.

Vince Cable, the Liberal Democrat spokesperson, pointed out that following the bursting of the ‘South Sea Bubble’ speculation in 1720, a parliamentary resolution proposed that bankers be tied up in sacks filled with snakes and thrown into the river Thames!

However it is guaranteed that the parliamentary committee that is ‘interrogating’ bankers this week will be full of ‘sound and fury signifying nothing’.

Alistair Darling and Gordon Brown are intending, under the enormous pressure that has built up, to introduce some curbs. But so far they have not even proposed what Barack Obama has suggested for the US, a ‘cap’ of $500,000 on the pay of what he has correctly described as the “shameful” US banking fraternity who want federal bailouts.

Economic abyss

In fact, the proposal is $500,000 too much. The overwhelming majority of the American people on the edge of an economic abyss clearly believe they shouldn’t get a cent.

In reality, all capitalist politicians are only proposing minimal action because of the public clamour against the greedy bankers. Obama remains firmly within the framework of the capitalist system; “we do not disparage wealth” (of the rich) he has said.

Their dilemma was summed up by Barney Frank, the chairperson of the US House of Representatives Finance Committee, who said of America’s bankers: “People really hate you. And they are starting to hate us because we have been hanging out with you. You’ve got to help us deal with that”.

The argument that RBS, which has received £20 billion from us, the ‘taxpayers’, ie the working and middle classes, must pay at least £500 million in bonuses because of “contractual obligations” is completely spurious.

This in a week when The Guardian has revealed that so-called ‘British’ companies, including banks like Barclays, use tax avoidance schemes to prevent payment of anything between £3.7 billion to £13 billion to HM Revenue and Customs.

Prescott also correctly stated that “these bankers would have been on the dole” if RBS had been allowed to go to the wall. He fulminated: “No ifs, no buts, don’t pay the bonuses”.

Amen, says every worker and middle-class person in Britain facing the burden of this crisis. The problem is how to carry out Prescott’s laudable aims. The government is once more merely proposing a delaying mechanism, another “review”.

Headed by a failed banker

Moreover, this is to be headed by a failed banker from the tottering investment bank Morgan Stanley, who himself has taken multi-million pound bonuses – a classic case of the proverbial “poacher turned (tame) gamekeeper”.

Neither Prescott nor the MPs on the House of Commons committee foresaw the pernicious effect of the work of the financial plutocrats and the breathtaking arrogance of them daring to suggest that they continue to profit from their past misdeeds.

But socialists and Marxists did. Tommy Sheridan, for instance, when Brown himself knighted Fred ‘The Shred’ Goodwin, declared: “It’s an absolute outrage that this man is to receive a knighthood for ‘services to the community’ when all the community has received from him is low wages and unemployment” (Daily Mirror). Tommy’s reward is to be pilloried and dragged once more, this time with his wife, before the capitalist courts in a case he has already won once!

Moreover, this was at a time when Jeff Randall of the Daily Telegraph was hailing Goodwin as a “world-class banker” and another characterised him as a “genuine business hero”. The whole of the ‘business community’, and all of the three major capitalist parties, were in reality on their knees singing hosannas to the City of London and the financial ‘wizards’.

Osborne and Cameron, the Tory leaders, would have us believe they and their party are innocents in all this. In fact, the roots of this crisis were created by their party when led by Mrs Thatcher and her massive ‘big bang’, the deregulation of finance capitalism. The result has been a huge polarisation of wealth which has ended in a devastating economic crisis and the ‘big bang’ of mass unemployment. The economic forecasting think tank ITEM now says that three and a half million workers could be ‘out on the stones’ in Britain, with one and a quarter million of this horrendous figure being under the age of 25.

This whole sorry bunch of capitalists, rooted as they are in a system that elevates the lust for profit over social need, cannot be expected to take effective action against their ‘own’, the bankers, other than to trim one or two fingernails. Why in any case do bankers under capitalism ‘need bonuses’ for super-exploiting the rest of us? They are on stratospheric salaries already. Managers, for instance, as late as the 1980s took home perhaps 20 times the average wage of their workforce, a managerial wage which was too high even then. Today, when the average wage is put at £25,000 a year (not an hour), their ‘remuneration’ is on average 275 times this figure and some receive a lot more than this.

And what is the net result of this? An anonymous cabinet minister told The Guardian: “The banks are f***ed, we’re f***ed, the country’s f***ed”. But not as much as the working class and the poor because they are the ones expected to carry the can. Therefore we must demand not a penny in ‘bonuses’ for bankers, both in the ‘nationalised’ and the private sectors.

But how can this demand be enforced? Darling the Chancellor says “commercial interests” are best at running the banks. Really? After 30 years when they have had the full ‘freedom of the park’ and have consequently wreaked havoc? Nationalisation, not in the capitalist, pro-boss way but in a democratic socialist fashion, is the first step in beginning to use the economic levers of power to benefit the majority, working and middle class people. Then Northern Rock for example, which has been bailed out by us and expects to dole out £8 million in bonuses to its executives while turfing workers out of their houses, may begin to act in the interests of ordinary working-class people.

Open the books

A precondition for effective action is to open the books of the banks. The argument that “bonuses need to be paid for specialised staff” is so much hooey. An average bin worker, car worker, steelworker or teacher, especially if they came together collectively in democratic committees controlling the banking industry, could do a lot better than these bankers, who did not even understand what they were doing with their financial alchemy.

A democratic form of organising a nationalised banking sector would draw in bank workers and other workers and their representatives, delegates of small business people, homeowners, etc. The organisations that represent working people, the trade unions, should be involved, as should ‘consumers’, including mortgage holders.

But, argue the opponents of nationalisation, “there would be a flight of capital”. The capitalists will always seek to sabotage measures they think are against their interests. The way to deal with this blackmail is to introduce a state monopoly of foreign trade, as a means of controlling all imports and exports including capital. Bold action is required, not tinkering, if a new road of prosperity and hope is to be opened up to the British people.

* Not a penny to the bankers in ‘bonuses’!
* Open the books to inspection by committees of workers, householders, consumers and small business people!
* No compensation to the financial ‘wizards’ who have ruined the economic position of Britain and with it the lives of millions!
* For a socialist, democratic, nationalised banking and financial sector.
* For a state monopoly of foreign trade.
* For a socialist plan of production democratically drawn up and implemented by committees of workers, trade unionists, small business people and consumers.

Above all, for the creation of a powerful movement now for a new mass workers’ party that can make these demands relevant and realistic for millions of workers who are looking for a lead.

Amen to that.

Israeli war crimes, British weapons

Rarely does a leader of the ilLiberal unDemocrats impress me, but by gosh, Cleggeron has done it.

His call for the UK government to cease sales of WMDs to Israel is a practical suggestion that shows up the silence of the Tories, the feeble responses of the Prime Minister and Foreign Secretary, and the inability of the UK media to adequately convey how the British government supports Israel’s military:

Brown must also halt Britain’s arms exports to Israel, and persuade our EU counterparts to do the same. The government’s own figures show Britain is selling more and more weapons to Israel, despite the questions about the country’s use of force. In 2007, our government approved £6m of arms exports. In 2008, it licensed sales 12 times as fast: £20m in the first three months alone.

There is a strong case that, given the Gaza conflict, any military exports contravene EU licensing criteria. Reports, though denied, that Israel is using illegal cluster munitions and white phosphorus should heighten our caution. I want an immediate suspension of all arms exports from the EU, but if that cannot be secured, Brown must act unilaterally.

There’s a petition on the Number 10 website, which is worth signing:

This petition recognises that the government has taken positive steps to tighten weapons exportation to Israel since 2005. However, only a complete arms embargo will send a clear message to Israel that this government will not accept the prolonged armed conflict which is aggravating existing tensions in the region. Additionally this will ensure that the government adheres to the UK Export Control Act of 2002 and the EU “consolidated criteria” governing the export of military equipment. Equally such a stance would set a precedent showing that this government is committed to establishing peace in the region. This precedent will have a far reaching impact in terms of marginalising the ideologies of radical extremist groups.

The Campaign Against the Arms Trade has plenty of details:

Export licences approved in the first half of 2008 include:

  • components for combat aircraft
  • components for electronic warfare equipment
  • components for helmet mounted display equipment
  • components for military aero-engines
  • components for naval radars
  • components for surface-to-air missiles
  • equipment for the use of weapon sights
  • general military aircraft components
  • general naval vessel components
  • military communications equipment
  • technology for the use of weapon sights

Israel has used F-16 fighter aircraft and Apache combat helicopters to bomb Lebanese and Palestinian towns and villages. These contain significant UK components including missile triggering systems for Apaches and Head-Up Displays for F-16s.

In July 2002, the government approved the export of components for F-16 fighters being made by the US company Lockheed Martin and sold to Israel. Then Foreign Secretary Jack Straw justified the sales saying: “The Government has judged that the UK’s security and defence relationship with the US is fundamental to the UK’s national security … Defence collaboration with the US is also key to maintaining a strong defence industrial capacity.” He went on “Any interruption to the supply of these components would have serious implications for the UK’s defence relations with the United States.” In other words, the commercial relationship between BAE Systems and US companies such as Lockheed Martin was judged more important than the lives of Palestinians.

The UK continues to sell arms to Israel despite the UN stating that Israel “violates humanitarian law” and even though the UK’s own “Consolidated EU and National Arms Export Licensing Criteria” are supposed to assess the impact on regional peace, security and stability and the human rights record of the recipient.

More information on UK companies known to have supplied military equipment to Israel

Feeding the poor to sharks?

Crypto-Tory James Purnell (if he was Labour, it’d be Jim) might be good-looking but he isn’t quick-thinking…

The govt wants to privatise the social fund and charge loan-shark rates on what are currently interest-free loans given to the poorest in our society.

There’s all to play for, mind you, and this suggestion could fuel the resistance to the so-called “welfare reforms” which are aimed at cutting the benefits paid to the sick and unemployed.

Given that Purnell is the face of the government’s so-called “welfare reforms” he’s not left sufficient space between one dodgy policy and the next. Hence the commotion.

Note that the Daily Mail isn’t outraged. If it was, the title of the article would be a great deal more urgent and certainly shorter:

Labour MPs revolt over Brown’s plan to charge 27% interest on emergency loans to poor

Gordon Brown and his Work and Pensions Secretary James Purnell were last night accused of behaving ‘like loan sharks’ over plans to slap punishingly high interest rates on vital loans to the poor.

In an astonishing move, rebel Labour MPs joined forces with David Cameron’s Tories to accuse the Government of penalising hundreds of thousands of families on benefits who get interest-free cash advances to cover the cost of unforeseen crises.

More than one million individual loans worth over £600million were paid out from the Government’s social fund last year to hard-up people – many of them disabled – who struggled to afford to repair a broken boiler or cope with some other domestic emergency.

However, in a provocative move, Mr Purnell wants to start charging 26.8 per cent on new loans – the sort of punitive rate found on High Street store cards and way above normal credit-card rates.

This would add nearly £50 to the cost of an average £433 loan and saddle the borrowers, who are almost all on State benefits, with an extra four weeks of repayments.

Senior Labour MP Terry Rooney, chairman of the Commons Work and Pensions Select Committee, led an all-party attack on the proposal. ‘Whoever dreamed this up, particularly at this time of year, must have lost their moral compass,’ he said.

‘It cannot be right to start charging almost 27 per cent interest on loans to the poorest people, who currently pay zero interest.’

Mr Rooney believed that the plan, outlined in a consultation document produced by the Department for Work and Pensions, was a cynical cost-cutting ploy to stop poor families getting the money they need.

He added: ‘I fail to see how Mr Purnell can reconcile raising interest rates for the poor with the Prime Minister’s repeated calls to the banks to pass on interest-rate cuts to struggling mortgage holders. There will be one hell of a row over this.’

Ronnie Campbell, Labour MP for Blyth Valley, said: ‘James Purnell makes me ashamed to be a member of the Labour Party. It is a disgrace the way he is hitting the poor. Not even the Tories would try to do this.’

Labour MPs also suspect that Mr Purnell is worried that the cost of the social fund will rocket as unemployment soars and thousands more people apply for help.

In an embarrassing development for the Government, Labour MPs received support from Tory Work and Pensions spokesman

Chris Grayling, who called on the Government to scrap the plan. ‘This is beyond outrageous,’ he said. ‘It’s nothing more than James Purnell and Gordon Brown re-inventing themselves as loan sharks.

‘That any Government would even consider imposing swingeing interest rates on unemployed people in the middle of a recession is just extraordinary. It’s a sign that this Government is utterly out of touch with what is really going on in Britain.’

And Liberal Democrat Treasury spokesman Vince Cable said: ‘This proposal is perverse and inhumane. The principle of social funds is that they are interest-free to help people cope with emergencies.’

Mr Purnell’s document, which suggests that non-profit-making credit unions could run the loans, spells out in stark terms how the poorest families in Britain would be hit hard in the pocket under the new system. It says: ‘Interest would be charged …at affordable rates compared to those charged by commercial lenders in the same market.

‘We propose to set it at the maximum charged by credit unions of two per cent per month – 26.8 APR.

‘In 2007-08, the average initial budgeting loan award was £433.30. The estimated average loan repayment for all loans was £10.54 a week. If interest were charged at two per cent a month, it would take 46 weeks instead of 42 to repay such a loan at such a repayment rate, with a total interest paid of £47.80.’

Mark Serwotka, general secretary of the Public and Commercial Services Union, whose members administer the social fund, said: ‘This might start with credit unions, but it will become a Trojan horse for the private sector to charge loan-shark rates for distributing public money.

‘It is scandalous that in these dire economic times, vulnerable people in financial difficulties could be exposed to profiteering. Interest of 26.8 per cent rates alongside some of the most expensive store cards.’

But the Government hit back last night, saying that under the proposed scheme, hard-up families would benefit from new advice on how to manage household budgets.

It said it would also be easier and quicker to get the loans, which would become available to working people on low incomes as well as those on benefits.

In the consultation document, Mr Purnell signalled that simply handing people interest-free loans without financial advice did little to help them manage their money.

‘We want to improve the help we give people when many are struggling,’ he said. ‘The social fund helps with money problems in the short term, but not the underlying problems of managing a limited budget.’

Last night, Work and Pensions Minister Kitty Ussher conceded that there was ‘very strong opposition’ to the plans.

But she dismissed the idea that the social fund was heading for loan-shark levels of interest, pointing out that ‘doorstep lenders can legally charge 180 to 240 per cent. Illegal loan sharks have been known to charge up to 1,000 per cent’.

It is not the first time Gordon Brown has been accused of betraying the poor. As Chancellor, he was criticised for approving a meagre 75p-a-week increase in the State pension. And this year, he was forced to climb down over his decision to scrap the 10p tax rate.

Hat-tip: Harpymarx

Royal Mail privatisation – Mandelson’s gift to media baron Rupert Murdoch?

In 2005 it was reported by the Sydney Morning Herald that:

Rupert Murdoch has linked up with another giant of Australian business, TNT, in its bid to compete with Britain’s state-owned postal service Royal Mail.

Transport and delivery company TNT has entered Britain’s letter market with its TNT Premier service which guarantees delivery in 48 hours and handles one million items a week.

As its service expands and the market opens up, however, TNT and other private mail providers have complained about Royal Mail’s “dirty tricks” and uncompetitive behaviour.

Murdoch’s pay TV network BSkyB is the latest of five major customers to defect from Royal Mail to TNT [...]

BSkyB’s link with TNT strengthens Murdoch’s ties with the company.

TNT trucks are used by Murdoch’s News Limited newspapers in Britain and drove through the picket lines of striking printers in London during industrial disputes in the early 1990s. [Emphasis added]

Today it was announced by Lord Mandelson that the plans set forward in the “independent” Hooper report would be implemented, despite Labour’s manifesto commitment to retain public ownership of postal services.

The only company showing any interest in a possible 25-50% stake in Royal Mail is TNT, a Dutch rival to the publicly-owned postal service.

TNT was the postal company involved in last year’s data loss scandal, in which discs containing the private details of all families claiming child benefits.

Talk about rewarding failure.

RickB points out that Adam Crozier, Royal Mail’s chief executive was given a 26% pay rise last year – which means he’s paid £1.25 million to run postal services into the ground, cut provision, lay off workers, and close sorting and post offices.

But why is an established public service like Royal Mail being forced to “compete” with foreign companies anyway? Whose idea was this?

Well, the EU has issued directives ordering the “liberalisation” of postal services and the UK government was so keen went ahead a year early.

I imagine if Royal Mail is butchered for the benefit of TNT that Rupert Murdoch will be changing his mind about the EU. Not such a threat to him after all, and his papers might become pro-EU and pro-Euro in particular. Just as it’s argued Royal Mail must be destroyed because of economics, Murdoch’s papers might trumpet we must join the Euro?

The FT reports that there will be turmoil in the Labour party as a result of Mandelson’s decision:

the announcement provoked an immediate backlash from the unions and Labour MPs, who saw it as a betrayal of the party’s manifesto commitment to keep Royal Mail publicly owned. The Communication Workers Union, which is already threatening a strike later this week, stressed its “dismay” at the prospect of a move that would “open the floodgates for full-blown, damaging privatisation”.

A string of Labour MPs in the debate on the Commons statement made by Pat McFadden, the business minister, echoed this concern, in a clear signal the prime minister will run into a rebellion over the legislation to allow the partial sale. Gordon Prentice typified the anger, warning he would vote against the measure and attacking the “scandalous” way Royal Mail had been undermined by competition from rivals.

The Conservatives, who stopped short of privatising Royal Mail when they were in power, broadly welcomed the proposals. Edward Leigh, the rightwing Conservative MP, mischievously gave a “welcome [for] new Labour to the Thatcherite wing of the Conservative party”.

The decision by both main opposition parties to back the plans will allow the prime minister to drive the part-privatisation through parliament, in the teeth of opposition from his own party. But the political sensitivities are likely to delay any bill until after a potential spring general election. Mr McFadden told MPs: “We’ll be working up proposals to do this in the weeks and months ahead.” He dismissed backbenchers’ concerns that the move marked a “slippery slope” to full privatisation, saying the party would honour its manifesto commitment. [Emphasis added.]

Note the reference to a general election. Is this a way of buying the support of the Murdoch press for Labour in a snap election next year?

If so, New Labour have possibly lost the votes of thousands of postal workers. Millions of traditional Labour voters who have abandonded the party won’t be tempted to turn out for Brown if he plans to destroy a cherished public institution – and sell it to foreigners.

So much for British jobs for British workers! “British institutions for Australian capitalists” doesn’t have the same ring to it…

The Communications Workers’ Union has responded to the Lord of Darkness:

Billy Hayes, general secretary, said: “It is incredible that the British Government which has lead the world in overhauling banks need another European postal service to rescue the Royal Mail. Especially one which has already been disgraced by losing sensitive data disks in the mail.

“This was meant to be a report about competition but Mandelson has ignored the damage done through irresponsible liberalisation and advocates more involvement by private companies.

“We welcome the move to Ofcom which recognises both changes in the communications sector and the failings of Postcomm to manage the mail market effectively, however we look forward to receiving more information on future regulation.”

Dave Ward, deputy general secretary, said: “There is no need to seek private funding from outside companies in a joint venture. This would open the floodgates for full-blown, damaging privatisation. Post is a key public and business service which must retain the protection and guidance of Government for sustainable success.

“We welcome the fact that our campaign to get the Government to secure Royal Mail workers’ pensions has been successful. The news that the USO has been safeguarded is also very welcome.

“We will be studying the detail of the report closely over the coming weeks and will respond fully in the New Year.”

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