Darling begs banksters over small business loans

The FT reports:

Alistair Darling is pressing banks to change their voluntary code on lending to small businesses after admitting on Thursday that the government was powerless to dictate the amounts or terms the banks offered the sector.

Ministers have been in secret talks with high street lenders to rewrite the voluntary code, ensuring small business customers are given reasonable notice before loans and overdrafts are axed or made more expensive.

There’s a good case for strengthening the code, as we did for mortgage lending,” one government official told the Financial Times. An announcement could be made next week.

The move comes amid increasing political concern that the £400bn state bail-out of the sector is not reaping the promised benefits for smaller companies.

Gordon Brown, prime minister, has insisted repeatedly that support for such companies is a condition of the £37bn taxpayer-funded recapitalisation of Royal Bank of Scotland, Lloyds TSB and HBOS.

But Mr Darling, chancellor, said the government’s requirement that the three banks make lending available at 2007 levels simply means “the pool of money is there”. Decisions on whether to lend that money, and at what cost, remained with the banks. “In any banking operation, whether it is lending to individuals or to businesses, there must be discretion,” he said.

That same right of individual bank discretion applies to the £4bn four-year funding from the European Investment Bank (EIB) being channelled through the banks that the government announced on Thursday. The £4bn represents less than 10 per cent of the total borrowing by small businesses in the UK.

Vince Cable, Liberal Democrat Treasury spokesman, attacked the government’s “utterly pathetic” position. “The whole point about this deal with the lenders was that there was supposed to be a tough quid pro quo. It’s perfectly obvious now that the banks got the quids and there’s no quo,” he told the FT.

Bank executives say privately that the government’s 2007 criterion does not bar them from tightening lending criteria or increasing interest charges. “We don’t sense any purpose in providing small businesses with loans that they cannot afford to repay,” said Eric Leenders, executive director retail, at the British Bankers’ Association.

As the EIB deal was unveiled on Thursday, Mr Brown stressed: “We must continue to encourage banks to lend. Having recapitalised the banks, we must ensure that the money is used to sustain credit lines on normal terms to solvent businesses.”

The prime minister added a personal note of exhortation: “I urge banks not to change the terms and charges for existing lending to small and medium-sized enterprises.”

But political opponents warned that mere rhetoric could not force the banks to change their behaviour. Angry MPs told the chancellor in the Commons on Thursday that the experience of small companies in their constituencies suggested the £37bn deal, agreed more than a fortnight ago, had yet to change practices on the high street.

Don Touhig, a Labour MP, complained that many small companies were being “faced with bully-boy tactics from British banks, which are simply cancelling their overdraft facilities and denying them vital capital to invest”.

Richard Spring, the Tory MP, reported some banks “changing small businesses’ overdraft facilities to loan facilities” – changes that could be “devastating . . . to businesses’ cash flow and chances of survival”.

John McFall, the Labour head of the Treasury select committee that will grill the chancellor on Monday, complained the banks “do not play fair” with business and urged Mr Darling to ensure the taxpayer was not the “sucker of last resort”.

Calls grow for windfall tax on obscene oil and energy profits

From Compass, the social democratic thinktank:

Compass has responded to this week’s windfall profits announced by BP and Shell by renewing calls for the government to decisively intervene and levy a sensible one-off windfall tax on the energy and oil companies.

With BP reporting a 148% jump in profits and Shell reporting a 70% jump in profits we are renewing calls on government to levy a sensible one-off windfall tax to raise the money needed to help people in fuel poverty. It’s the role of government to actively intervene. As millions of Britons struggle in tough economic times BP, Centrica and Shell are making over £1000 profit for every second of every day.

In response to the recent windfall profits announcements and the failure of both the energy regulator and government to act decisively we will be working with over 120 Labour MPs who support a windfall tax to table a fresh Early Day Motion in the run-up to the pre-budget report.

Compass is proposing a £6BN windfall tax on the main energy and oil companies to fund a coherent package of short and long term measures with £1BN earmarked to immediately help the most vulnerable this winter with their fuel bills, plus £5BN to kick start an adequately funded programme of home insulation starting with the homes of the fuel poor.

In a recent YouGov poll commissioned by Compass over 67% of UK adults supported such a one-off windfall tax.

Gavin Hayes General Secretary of Compass said: “These latest windfall profits reported by BP and Shell come as no surprise. As millions of us struggle to make ends meet, oil and energy executives struggle with a different dilemma, what to do with all their windfall profits, we get record fuel bills and they get record profits – this has got to stop. Extra-ordinary times demand extra-ordinary measures, it’s clear these companies are refusing to treat people fairly, it’s time for the government to decisively intervene and levy a windfall tax.”

Neal Lawson chair of Compass said: “With the economic downturn millions of Britons are struggling – they want to know the government is on their side. If the government is serious about helping people in tough economic times then it should bring plans forward for a windfall tax in time for the pre-budget report.”

Sign the petition against women’s no pay day

Will Peter Mandelson pay any heed? I mean, this is an issue of workers’ rights…

Perhaps his replacement will be more sympathetic (yes, I am betting he’ll not last ’til the new year…)

From the Fawcett Society:

It’s No Pay Day! The day that women receive their last payslip of the year and start working for free is here, so let’s do something about it.

Here’s our quick FAQ to No Pay Day 2008:

What’s the significance of October 30th?

We’ve labelled October 30th Women’s No Pay Day because it signifies the day that women start working for free while men get paid year-round – if you apply the 17% gender pay gap for full-time work to the average salary, it’s the equivalent of women working the last two months of the year for free.

What’s the cause of the pay gap?

Discrimination: it’s estimated by up to 40% of the pay gap is due to straightforward discrimination – so, women being paid less to do work of an equal value or skill level to their male colleagues.

Jobs traditionally done by women are paid less: Society has put a low value of women’s work, even when it’s a skilled job. For instance, we pay people more to look after cars than to care for our children or elderly people.

Few senior or skilled jobs offer flexible working: Mothers often work below their skill level because lower skilled jobs are more likely to give them the flexibility to balance work and home. We need more highly skilled and senior jobs to be available with flexible hours.

Isn’t it just because women work part-time?

No – the pay gap figures are broken down into full-time and part time:

  • Women working full-time earn on average 17% less per hour than men working full-time


  • Ethnic minority women working full-time earn on average 20% less per hour than men working full-time


  • Women working part-time earn on average 36% less per hour than men working full-time


  • …and women working part-time in London earn on average 45% less per hour than men working full-time.

What’s the solution?

Our Women’s No Pay Day campaign is calling for two main things:

Health checks for companies: Mandatory pay audits which would require all organisations to compare the earnings of women and men doing similar work to see if there is a gap

Help for women challenging their pay: Changes to the law to make it much easier for women to take cases to court, and to allow women to take such cases as a group, with the support of unions.

What can I do?

Sign our letter to Peter Mandelson! We’re almost at 1000 signatures – please add your voice to our letter asking for bold reforms to prevent pay inequality taking place. Follow the link below to add your name.

Fawcett supporters across the UK will be holding events to raise awareness of the pay gap today. Watch this space for photos and updates!

For more information about our equal pay campaign, please use the links on the right of this page.


Make use of repossessed homes, says independent MP

Here’s Dai Davies’ letter to the Guardian:

Your report on the “shell-shocked” state of the private housebuilding sector (Persimmon cuts value of its land bank by £600m, October 28), followed by your online report (Home repossessions and arrears rise as borrowers struggle, October 28) demonstrate starkly how housing demand and affordable supply are chronically out of phase.

Yvette Cooper, the former minister for housing – now the friendly face of Treasury policy on helping the hard-pressed with hope over homes – regularly pops up all over the media pledging ministers are doing all they can. They are not.

Yesterday her Treasury colleague Dr Ian Pearson responded to my written questions asking the chancellor if he would make it his policy to take possession of homes on which mortgage-holders with Northern Rock and Bradford & Bingley have defaulted and allocate the properties to those on the waiting list for social housing with the negative: “Northern Rock and Bradford & Bingley are run at arm’s length from the Government, on commercial principles.”

What is the benefit to taxpayers of keeping these banks alive, if they cannot be directed to helping people in dire housing difficulty? Dr Pearson added: “The Government have made increasing the provision of social housing a priority … In England, the Government are investing £8 billion over the next three years in affordable housing – a 50 per cent increase over the last three years.”

The situation is there are empty houses and flats and homeless people, which could be a win-win opportunity, but ministers refuse to require banks capitalised by taxpayers’ money to match the two together. Why not?
Dai Davies MP
Independent, Blaenau Gwent

Permanent Revolution reports on planned protests over the banking bailout and housing:

STOP REPOSSESSIONS – everyone needs a home 11.00am, Saturday 1st November, Northern Rock, Manchester


Northern Rock is repossessing homes and kicking families out on the streets twice as fast as any other bank in the country. Nationalised banks should be run in the interests of working people not taking their homes and making them destitute.

Back last November when Northern Rock faced collapse and queues of worried savers stretched around the block, Gordon Brown’s Labour government stepped in to nationalise the bank, guaranteeing its deposits.

Now, as thousands of mortgage holders are threatened by repossession and negative equity, when asked why Labour was allowing Northern Rock to aggressively evict families, Gordon Brown said, “ministers did not run the business.” So they own it but they don’t want to run it. This is madness!

11.00am, Saturday 1st November, Northern Rock, Manchester branch,
at 1 Princess Street, Albert Square. 
Protest called by the Convention of The Left, Manchester

READ OUR LEAFLET at http://www.conventionoftheleft.org/resources/Northern%20rock_homeprint.pdf

(NB: Extra printed copies of this leaflet will be available to take away after the protest for local activities, stall, etc.)


Manchester students have also organised a Halloween protest against “a gruesome cast of vampire bankers” outside Northern Rock on Friday 31st October from 4.00pm-6.00pm. Bring Halloween costumes to give Brown and the bankers a nightmare. Read leaflet at http://www.conventionoftheleft.org/resources/NR_311008.pdf

John McDonnell, the socialist Labour MP and supporter of the Convention of the Left said: “We fully nationalised Northern Rock, yet the government’s bank is becoming the most ruthless re-possessor under the cosh of government pressure to repay the loans.The government needs to come up fast with a ‘recession-proof’ strategy of halting repossessions and converting mortgages into homes for social rent.” 

Why JCB workers voted for pay cuts

From this weeks’ issue of The Socialist:

JCB – Why should we accept redundancies and pay cuts?
Workers at JCB’s UK factories have voted by a two thirds majority to move to short time working, from 39 to 34 hours a week. This will mean a pay cut of over £50 a week.

A JCB worker
Short time will last a minimum of six months. The ballot conducted by the GMB gave workers two options. Either vote to stay at 39 hours and see 500 redundancies or vote for short time and only 170 redundancies. Death by hanging or the firing squad.

430 jobs have already been lost since August this year. It is not surprising that given these options, workers have chosen to keep their jobs. JCB chief Matthew Taylor said: “The ballot shows the tremendous unity amongst the workforce. They have looked after the needs of one another rather than the needs of the individual”.

Many workers asked if the directors were prepared to take the equivalent pay reduction. It seems that the unity does not stretch that far. The result does not reflect the real anger that exists amongst the workforce at having to pay for the present economic crisis with job and pay cuts.

Much of the anger is directed at the role of the GMB. In some cases no meetings were held with the workforce at all. Workers have had no chance to discuss the issues let alone put forward any alternatives to job and pay cuts and in protest many are now saying they will pull out of the union. Demands for the joint shop stewards’ committee to stand down have been raised.

The joint shop stewards’ committee said it was pleased with the outcome of the ballot. And scandalously it is now calling for the office staff who are salaried and not affected to follow the lead and take a reduction in hours and pay. The situation could worsen in the months to come as manufacturing industry could be devastated by the unfolding recession. What will the position of the GMB be then?

Why should we accept redundancies and pay cuts? JCB has made millions in profit in recent years as a result of the economic boom. Where has all the money gone? Workers at Ford in Southampton and low-paid civil servants are fighting back in the face of the economic crisis. Where there is a fighting leadership workers will feel confident that they can defend themselves against the attacks of the bosses. And real unity can be forged.

English students taken for granted?

From the Socialist Students:

New Labour caps new university places at 10,000 for next year
When Gordon Brown took over as prime minister in July 2007 part of his fanfare was that he increased the grants available for students.

Now the government has capped university places to 10,000, due to a budgeting crisis and the cost of borrowing to bail out the banks.

An expansion of grants came into effect with this year’s intake of students. Students from families with incomes of up to £25,000 are supposed to be entitled to the maximum grant of £2,825 a year (in reality bureaucratic, unfair means testing means many students miss out on money they are entitled to). The previous threshold was a family income of £17,500.

This year a third of students (showing what a low wage economy we live in) were entitled to the full grant. A further third of students with family incomes up to £60,000 a year receive a partial grant on a sliding scale, although this is has been cut to £50,020.

It appears New Labour have drastically underestimated the amount of poorer students who need to claim grants.

The money made available for these grants isn’t enough to meet the demand of by rising admissions which were up by 9.7% this year (for the first time this year UCAS figures included nursing students).

The government claims it is short of £100 million and that with a national debt piled up to £685 billion it can’t borrow anymore for public spending.

John Denham the Universities minister has devoted whole sections of his department’s website to lecturing students about managing their finances, perhaps some of his minions should take a look.

The admissions rise clearly reflects the aspirations of young people from poorer backgrounds to have the benefits of higher education. Many of whom will have had their fears about the cost of university and debt eased this year by New Labour’s promises of grants that may now prove to be empty.

Socialist Students has consistently warned that while we supported any increase in grants for students that these limited reforms would not be enough to meet the demand that exists, and that what New Labour promise or give to gain popularity for election purposes they soon try to take away.

If the number of university places is cut, or students find out they can’t get the money they were promised they were entitled to the government can expect huge anger.

Students will be asking what right the government has to take away the money that it promised them or stop them going to a university they want to go to because the government has bailed out rich bankers?

The NUS has stated its opposition to any cuts in grants or university places.

Good, but lets have some action! The NUS should follow the example of the USI (students union in Ireland) and the pensioners in Dublin who met the Irish governments budget cuts with a national demonstration.

Socialist Students says No to cuts in student grants and university places, For an immediate increase in public spending to meet levels of demand, Scrap all university fees and write off all student debt, for the introduction of a living grant for all and for a free, publicly funded good quality education system.

Galloway asks police to investigate Osborne

Forget Jonathan Ross and Russell Brand for a moment, and concentrate on another obnoxious pair: Gideon George Osborne and Peter Mandelson…

Respect MP George Galloway has today written to Sir Ian Blair (copy of letter below) asking him to investigate the possibility that shadow chancellor George Osborne has breached the law governing political donations in his admitted Corfu confab with Nathaniel Rothschild and others about how a Russian billionaire could help fund the Conservative Party.

Galloway expressed surprise that the authorities had been slow to take action on this matter and wondered if it was because those concerned constituted “what was left of the British establishment, albeit wintering in Corfu”.

In his letter to Sir Ian Blair, Galloway makes the point that in the “cash for honours” inquiry Scotland Yard waded in comprehensively, including interviewing the then Prime Minister under caution.

Galloway said today, “When I was suspended from Parliament last year I said that being lectured by the current House of Commons on the ethics of political fundraising was like being told to sit up straight by the hunchback of Notre Dame or taking lessons on good taste from Donald Trump.

“The Tory toff who made the complaint about me and the bicycling baronet Sir George Young who disposed of it have both been silent on the old Etonian Mr Osborne’s really quite transparent attempt to raise funds for the Tory party from a Russian oligarch who was clearly not permitted under the law to give the funds.”

Text of letter to Sir Ian Blair:

Sir Ian Blair
Commissioner, Metropolitan Police
Metropolitan Police Service
New Scotland Yard

29 October 2008

Dear Sir Ian,

I write on the subject of Gideon George Osborne MP and his admitted discussions in Corfu with Mr Nathaniel Rothschild and others on funding of the Conservative Party. It seems to me that these discussions may well have constituted an offence under the Political Parties, Elections and Referendums Act 2000 Section 61 (Evasion of restrictions on donations) (1) paragraph b, in which it explicitly states that a person commits an offence “if he knowingly does any act in furtherance of any arrangement which facilitates or is likely to facilitate whether by means of any concealment or disguise or otherwise the making of donations to a registered party by any person or body other than a permissible donor.”

On Mr Osborne’s own admission he did so discuss with Mr Rothschild and others means by which funds provided by the Russian billionaire oligarch Oleg Deripaska (an impermissible donor to a British registered political party in every sense) could be channelled into the Conservative Party in evasion of the rules governing donations.

I am puzzled why what the Prime Minister described as “the appropriate authorities” have not yet acted on this matter. Is it because Mr Osborne and his wealthy friends constitute what remains of the “British establishment”, albeit wintering in Corfu. After all, Scotland Yard moved in comprehensively in other such cases, including, in the matter of allegations of “cash for honours”, interviewing the former Prime Minister under caution.

I am therefore writing to you to request that you institute police inquiries into the conduct of George Osborne on the basis that, prima facie, the 2000 Act has been breached giving rise to a criminal offence.

Yours sincerely,

George Galloway MP