Darling’s growing pains

The public face of the Treasury is Alistair Darling. And what a face! Despite the ongoing credit crunch, he’s optimistic about the economy:

Speaking on Radio 4’s Today Programme, Mr Darling said that “there were grounds for optimism” despite the “unprecedented shock to the economy.”

Mr Darling said that the UK still had a “strong economy that had proved remarkably resilient” in the slowdown.

The IMF are pessimistic:

The International Monetary Fund has slashed its UK growth forecast for next year to 1.6 per cent, far below the rate forecast by the government and by private sector economists surveyed by the Treasury.

In explaining its sharply lower growth forecast, the IMF said that the current credit crunch, which began in the US housing market and now threatens other forms of debt, is inevitably spilling over into other economies.

“Risks to the global projections are tilted to the downside, especially those related to the possibliity of a full-blown credit crunch,” it said. It added that this may turn out to be a credit crisis, terming the dislocation which began last August “the largest financial shock since the Great Depression”.

The IMF’s latest World Economic Outlook, published on Wednesday, shows a UK growth forecast for 2008 of 1.6 per cent – 0.2 percentage points below its earlier forecast in January – and the 2009 forecast is 0.8 percentage points made at that time. Although it has downgraded growth forecasts around the world in the past three months, the downgraded forecast for Britain is slightly larger than the 0.7 percentage point that the IMF has shaved off its Eurozone growth forecast for 2009.

As Prime Minister, Gordon Brown is the public face of the government. And what a government! Let’s not talk about the face…

Brown used to be the Chancellor (you know, the public face of the Treasury) and he thinks the problems in the housing market aren’t all that bad.

It’s all, in his word, “containable”.

But last week’s IMF “bad news bulletin” revealed

estimates that house prices are more than 30 per cent above their fair value in […] the United Kingdom

And containing this will be painful, as the Lib Dems have been pointing out…

Sixty thousand homes in the UK are at high risk of repossession, according to analysis by the Liberal Democrats.

The study focuses on home owners that are spending 75% of their disposable income on mortgage repayments.

The number of households involved is double the amount that had their homes repossessed last year, it claims.

Brown’s not pushing the whole thing about the crisis “spilling over” into other parts of the economy, either. He can’t come out and say what’s obvious – that’d make things worse.

Factory output is unexpectedly up, but the falling pound will hit demand from overseas. Still, it proves that the productive economy is faring well even amidst a crisis – which might give policy-makers pause for thought.

Things can only get worse, as they didn’t say in the nineties. And they’ll get worse for working people, not those at the top.


Bertie bites the dust

Dirty Bertie announced he was quitting as Irish prime minister last week. His chum Tony Bliar was quick to get in front of the TV news cameras to give his praise for Aherne. If Bliar is leaping to your defence, let’s face it – you’re fucked. No one’s gonna believe your protestations of innocence…

Here’s an article on Bertie Aherne from The Socialist:

Ireland: “The most cunning and devious of them all” finally goes

AFTER 11 years as Taoiseach (Prime Minister), Bertie Ahern has announced his resignation for 6 May this year. Even in resignation, he lived up to his description by his mentor, the disgraced ex-Taoiseach, Charles Haughey as “the most cunning and devious of them all”. He had barely announced his resignation, before the Fianna Fail (FF) machine was spinning furiously. Wave after wave of ministers and TDs (MPs) were trotted out to declare that this was a “man of the people” hounded out of office by a malicious media!

Paul Murphy, Dublin

Ahern’s resignation had become inevitable. The sleaze and allegations of corruption surrounding him had reached a point where they could no longer be credibly denied. His resignation is the result of mounting evidence in the Mahon tribunal (one of many tribunals set up to investigate corruption in planning matters) of the numerous large payments he received from various businessmen.

The known transactions between 1988 and 1997, including when he was Minister of Finance, amount to almost €900,000 in today’s terms.

Ahern’s approach has been to attempt to confuse the issue and undermine the tribunal, claiming that he received a relatively small amount of money from friends as a “dig out” after his marriage break up. He has tried to explain away the cash donations, by the incredible claim that he didn’t have a personal bank account while he was Minister for Finance!

However, the evidence that has emerged illustrates the large number of donations he received and suggests that he was connected to a number of different accounts. The most damaging recent revelation was the evidence of his former secretary, Grainne Carruth, that she had lodged sterling for Ahern amounting to £15,500. This completely contradicts his attempt to explain this money as ministerial wages. This bald contradiction of Ahern’s evidence was a body blow to his credibility.

The latest opinion polls indicated that this was beginning to impact on Fianna Fail’s support, dropping 2%. What the Minister for Health described as “public disquiet” had developed to such a stage that both Fianna Fail’s new coalition partners, the Greens and the Progressive Democrats, as well as members of FF, were beginning to feel uneasy about the potential for damaging fallout.

Real legacy

With Ahern set to return to the tribunal later in May to answer this evidence and the vital Lisbon treaty referendum now likely to be held in early June, he decided to bow out before more damage was inflicted on the government and he was pushed out.

He may hope that with his resignation in train, there will be less focus on the Mahon tribunal when he returns on 20 May. He is unlikely to be so fortunate, and will be unable to untangle the web of contradiction and confusion he has spun about these various large donations. In fact, further damaging revelations are quite possible.

Some of the laudatory comments about Ahern’s eleven years in office are sickening. He is being credited in many quarters with single-handedly bringing about the ‘peace process’ in Northern Ireland, and with developing the ‘Celtic Tiger’ economic upswing, all through his supposedly brilliant negotiation and people skills.

The real legacy of Ahern and his relationship with the developers is faced by working people on a daily basis. His government has pursued a nakedly pro-big business agenda, which has resulted in huge profits for a select few, and massive problems for working-class communities.

His developer and speculator friends have made millions from new housing developments, yet the owners will pay the price for this speculation in huge mortgages around their necks for the next 35 or 40 years. They also face huge infrastructural and traffic problems as a result of planning to benefit developers rather than to meet the needs of ordinary people.

The health crisis is similarly a direct result of these pro-business policies. Ahern’s government has consciously underfunded and undermined the public health service in order to push people into the arms of profiteers, many of whom are the same developers that have benefited from planning decisions.

Fianna Fail is hoping now for a “smooth transition” of power to the current Tanaiste (Deputy Prime Minister), Brian Cowen, who will take over as Taoiseach and leader of Fianna Fail. However, Cowen will not have the backdrop of a booming economy to ease his passage. Instead, he will preside over an economy that is facing serious difficulties, and can quickly face serious opposition from ordinary people.

Ahern’s hasty departure anticipates the significant changes that are underway in Irish society. The “Celtic Tiger” is dead, with uncertainty about the future now facing working-class people.

In that context, the real legacy of Ahern – the squandering of the wealth created by workers during the boom, inadequate investment in public services and a planning process facilitating the developers and speculators – will come back to haunt the establishment.

No NHS privatisation for us, say devolved governments

This is from Healthcare Republic… (And might I remind you that England does not have a devolved government, so healthcare policy is controlled by the British parliament? Oh, I just did.)

Celtic governments reject privatisation agenda adopted in England

The three Celtic governments will not pursue the privatisation agenda being adopted in England, according to GPC Northern Ireland.

Dr Brian Dunn, GPC Northern Ireland chairman, was more concerned about the threat to general practice from the five large trusts in Northern Ireland.

Speaking at the Northern Ireland LMC conference in Newcastle, County Down on Sunday, Dr Dunn said that a rare joint statement from the health ministers of three countries implied they were distancing themselves from the use of private providers as in England.

The statement was signed by Scottish health minister Nicola Sturgeon, Northern Irish minister of health Michael McGimpsey and Welsh minister for health and social services Edwina Hart.

‘All three ministers are implying they are not in favour of a privatisation agenda. Our government certainly does not have a privatisation agenda, and none of the three political parties are promoting it,’ Dr Dunn said.