Liam Byrne backs coops… or sneaky privatisation?

Read the following and consider two questions:

1. Do we need to expand cooperative ownership into the private sector or the public sector?

2. If Mandelson is involved in a social enterprise summit, and Byrne is talking about a role for social enterprise in “accelerating public service reform” (privatisation), can we assume that the government could be looking to rebrand unpopular policies (the Royal Mail sell-off, for example) using the pretense of cooperative values?

Social thinking can pull UK out of recession
March 11 2009
The Minister for the Cabinet Office, Liam Byrne, said that social enterprise had a key role to play in helping the country out of recession.

“There will be a debate about the type of economy, society and country that will emerge from this recession,” he said. “I predict that social enterprise will become more, not less, influential because people are asking: ‘How on earth did we end up here?’

“A demand for answers will follow,” he told delegates at Birmingham’s International Convention Centre. “One answer will be that markets will need more morals like yours. We need business for the public benefit not the personal bonus. This country will look more for ethos with its enterprise – not just cut and thrust but care and trust.”

Mr Byrne said that social enterprise was an integral part of the Government’s New Opportunities white paper, which outlined how new jobs could be secured for Britain in the decades ahead.

He added that the Business Secretary Lord Mandelson would soon be chairing a social enterprise summit to ensure that that the sector plays a bigger role in the new British economy.

“If we want to re-balance Britain’s economy in the years to come, then the role of social enterprise has to expand. We will bring together the brightest minds and the most progressive thinkers – and even some politicians – to join us in this task.”

He said there would also be a bigger role for social enterprise in the delivery of public services: “In the last ten years we have rebuilt institutions in our communities — new schools, colleges, universities, health centres, surgeries and youth centres.

“In the next ten years we have to hand over the reins to local people, and we’ll need your help. When we publish our plans for accelerating public service reform, I will set out clearly how I want to see the role of social enterprise expand.”

In terms of new jobs, Mr Byrne said that he wanted to see 25,000 more people working in social enterprise in the months ahead.

He said that the “soft power” of social enterprise would grow when “investment in British youngsters is seen as more valuable than short-term bets on America’s sub-prime debt”.


Govt response to recession’s mental health crisis is all talk

No, really. Talking therapy.

As the UK economy slides further into recession, the prospect of millions out of work is putting pressure on individuals and families. Health secretary Alan Johnson and the minister for work and pensions James Purnell have announced more funding for mental health services to assist those made redundant by the economic crisis.

But what help is “cognitive-behavioral therapy”? Is it just a way of pacifying people who will be angry and upset that their hopes of prosperity are being ruined by the chaos of the capitalist system?

CBT encourages people to think about what they can do as individuals to improve their situation. Obviously, New Labour types like Johnson and Purnell would not naturally be promoting a therapy that encouraged people to look at how they can collectively overcome social problems – nor acting to prevent a mental health crisis by intervening in the economy to defend workers – but surely the failure of market fundamentalism to deliver “an end to boom and bust” should encourage politicians to think outside the box…

The Mental Health Foundation is calling on the government to treat the mental health epidemic caused by the recession as a public health issue:

The growing gap between rich and poor has caused a “social recession,” leading to low educational achievement, increased violence and poor community cohesion […]

The Foundation warns that “perpetual stress” and depression linked to public concern over excessive earnings has led to widespread social and health problems.

Radical shift

The charity’s report, Mental Health, Resilience and Inequalities, calls for a “radical shift” in understanding mental health as a public health issue, citing research from around the world that shows that affluent but unequal societies can have many problems.

It also recommends assessing all future public policy for its impact on people’s mental health.

Social problems

The report’s author, Dr Lynne Friedli, said individual and collective mental health and well-being depended on reducing the gap between rich and poor.

“A large divide leads to a mentally unhealthy society, and many associated social problems. In the UK in particular, we’ve failed to acknowledge this link, preferring instead to blame the health and social conditions of those living on or near the poverty line on their own lifestyle choices. This in turn further stigmatises poverty, making disadvantage even harder to overcome,” she added.

Dr Andrew McCulloch, chief executive of the Mental Health Foundation, said living with inequality had “very real effects on the mind and body,” adding: “Given the huge social costs of poor mental health, it’s vital we begin to treat it as a public health priority.”

TUC calls for Green New Deal

Printing more money to give to banks isn’t going to save our economy – wealth is created by workers, not bankers…

Only Government can create the green jobs we need, says TUC

In advance of the Government’s low carbon economy summit later today (Friday), the TUC has called for bold government action to create green jobs and secure a transition to a low-carbon economy.

At the summit, the TUC will call on the Government to:

* Set demanding targets across the economy. While the overall target set in the Climate Change Act is welcome, the Government must follow up with detailed targets for individual sectors if behaviour is to change.
* Accept a central role for the state in creating demand for green products and services, using public procurement, providing green information to consumers and intervening in markets that are failing to encourage green behaviour.
* Invest in innovation, research and development at levels that allow us to catch up with those European economies.
* Invest in the skills needed in a green economy, and ensuring that skills shortages are not a block on future green developments.

TUC Deputy General Secretary Frances O’Grady said: ‘Even without recession we would need decisive action to drive down carbon emissions. Preventing climate chaos can give added purpose to government action to tackle the downturn. Moving to a low carbon economy provides an opportunity to create jobs across the country from high-tech industry to public services.

‘But pre-recession tools and techniques will not work. Regulation, government grants and direct government activity may have been unfashionable in the boom years, but they are the only way we can green the economy in the midst of bust.

‘This will be a key demand for the trade unionists attending the Put People First march for Jobs, Justice and Climate on 28 March in the run up to the G20 summit.

‘Germany has half a million jobs in renewable energy, while the UK has just 7,000. One and half million work in the wider green economy in Germany compared to a paltry 400,000 in the UK. That must change with investment in taking the carbon out of energy generation and reducing energy use in the workplace, the home and transport.’

The TUC will draw on the research in its Touchstone pamphlet Unlocking Green Enterprise: A Low Carbon Strategy for the UK Economy which says that to push the UK in a greener direction, the Government must first convince business that it is serious about the environment and that green issues will be at the top of the political agenda even after the economy recovers. Ministers should be promoting the environmental message to the public, and where necessary introducing financial incentives to encourage both consumers and business to go greener.

The Touchstone pamphlet also urges the Government to assess the kind of workforce and skills that will be needed in the green economy. The UK will need more designers and engineers, and also workers qualified to install and maintain the new renewable energy technologies. Ministers need to act to ensure suitable degree courses and training schemes are in place, says the TUC.

One of the current barriers to unlocking green enterprise in the UK, says the TUC, is down to the current cost of goods and services not reflecting their actual impact on the environment, leaving companies with little incentive to introduce costlier, greener alternatives. This in turn makes it less likely than firms will invest in new green products and keeps consumer demand low.

After Royal Mail, what will be privatised next, the Royal family?

The armed forces?

Already banned from unionising, should be easy to squeeze profits out of service-personnel. No doubt money could be made in sale-and-rent-back deals…

Perhaps the police forces could get “private investment”?

God knows, with ACPO a private company already, there could be plenty of money in driving down the pay and conditions of police officers. 999 could be changed to a premium-rate number…

Paul Feldman notes:

The extra £500 billion in liabilities taxpayers are said to be facing to prop up RBS and Lloyds will take the state’s commitment to the insolvent banking system to a staggering £1.3 trillion (£1,300,000 million if it makes the total any easier to understand). That’s equivalent to the value of the British economy’s output for a whole year.

Meanwhile, on the back of a paltry – by comparison – £5,900 million deficit in the Royal Mail’s pension fund, New Labour is planning to sell off part of the company to a transnational corporation. New investment will be undertaken at the price of “modernisation” of this nominally public service, resulting in large-scale job losses and price increases. The break-up of post office services is an indication of what is to come.

That, at least, is the plan and it is entirely consistent with New Labour’s role in life. This is to use the capitalist state to create opportunities for global companies operating in Britain to extract maximum profits from working people. With the capitalist economy in freefall, new opportunities for profit-taking are most welcome by business and part-privatisation does just that.

Well, who honestly believes that the private investor will be willing to bail out the pension fund as the government was trying to claim?

The investor will not be acting as a charity – it’ll be after the loot. And that will come from cuts in services, job losses, and increased costs to consumers. Whatever happens, the pension fund will be rescued by taxpayers.

Neil Clark, writing in the Morning Star, has been looking into the details of the possible sale:

The three leading contenders for a 49.9 per cent stake in the Royal Mail are Dutch postal operator TNT, Deutsche Post subsidiary DHL and private equity firm CVC Capital Partners. The Sunday Express informs us that “TNT and CVC are serious in their intentions.”

In fact, CVC is very serious in its intentions – it has been lobbying the government to sell off a stake in Royal Mail since 2005.

Founded in 1981, CVC describes itself as a “global private equity and investment advisory firm headquartered in Luxembourg with a network of 19 offices across Europe, Asia and the USA.”

To see how a CVC-owned Royal Mail might operate, we need only look at the way the company ran another British institution it acquired, along with another private equity firm Permira – the Automobile Association.

Since its transformation from a mutual organisation to one owned by private equity sharks, the whole ethos of this once much-loved British institution has changed.
Over 3,000 staff have been laid off. The organisation consequently slumped from first to third place for response times.

In 2006, the AA chief executive conceded on an audio tape leaked to a national newspaper that the slimmed-down workforce was struggling to get to stranded motorists.

The prospective sell-off of the Royal Mail is already providing lucrative business for some.

TNT is being advised by the international law firm Allen & Overy, while CVC is working with Clifford Chance, the largest legal firm in the world. TNT has reportedly been sounding out investment bankers to advise it, including new Labour’s favourite money men at Goldman Sachs.

And what do the British public think of the planned sell-off? Not a lot. According to a new poll, around 75 per cent of Britons who had heard of the possibility of Royal Mail being sold opposed the idea.

Felix Jakens reports on the Westminster rally of the campaign to Keep the Post Public:

The rally was opened by CWU General Secretary Billy Hayes, who evoked the clear battle lines that this issue represents: between people’s democracy and the political elite. He went on to point out the glaring hypocrisy of the Labour government which, in its 2005 manifesto, pledged to keep the post office fully in public hands. Hayes called upon the members of the CWU to come together to make sure that the politicians behind the scheme know exactly how much power the unions hold and that they will not be ignored.

To the joy of the massed crowd, Hayes handed over the floor to Tony Benn, who was declared an honorary member of the CWU. Benn, the former Postmaster General and long time champion of postal workers rights, was on typically spirited form. He eloquently argued the position that, as a public service, the Royal Mail must be for the benefit of the people who use it, not for the benefit of shareholders. He also pored scorn on the government’s assertion that the planned partial sell-off is not about privatisation at all but about modernisation. “The markets are failing” he stated. “Why would we ever place our most treasured public service in their destructive hands?”

This sentiment was largely echoed by the subsequent speakers. Other union General Secretaries on hand to offer full support and solidarity included Tony Woodley of UNITE, Mick Shaw of the FBU, Brendan Barber from the TUC, Bob Crow of RMT, Paul Kenny of the GMB, Dave Prentis of UNISON, Mark Serwotka of PSCU and Dereck Simpson from UNITE. Every one of these individuals pledged the full and unswerving support of their unions and vowed not to bow to governmental pressure in the fight against reckless privatisation.

Other notable contributions were made from Geraldine Smith MP, who tabled EDM 428 in the first place, and who drew attention to the shockingly underhand tactics that government has reverted to, in ‘leaking’ a document stating that only through privatisation will postal workers’ pensions be protected. She argued that these bullying, blackmailing methods reveal the true face of Peter Mandelson and New Labour in their most shameful reality. There were also good turns from Frank Dobson M.P, Lord Tony Clarke and Dot Gibson of the National Pensioners Convention, each of whom re-iterated the importance and historical poignancy of this issue, as well as the scandalous truth that the plan is being issued by a Labour government.

Neal Lawson, chair of Compass, was also a speaker. Neal started by making it clear that he believes a key factor in the government’s plans is the desire to crush the industrial and political strength of the CWU, but he also called for the need to work together to present a realistic alternative to privatisation. To draw together expertise to present a future for the Royal Mail that is viable and sustainable. He further used his time at the podium to draw reference to the wider significance of this issue. The need to seize the moment and engage with the shift in national thinking and ideology, away from marketisation, towards a fairer freer society. To avert the ever steady march of privatisation in favour of public services and create the type of society we want to see, a fairer more equal society, where the benefits are for the many and not the few.

There was an overwhelmingly optimistic, spirit amongst everyone present that the CWU, in concert with public and union support could halt and reverse the government’s plans to strip this country of one of its finest assets. The message was clear; the privatisation of our other national industries and services has failed. Failed to improve customers’ service and failed, to improve workers pay or conditions. In this time of economic crisis and uncertainty, the concept of selling off one of this country’s most prized assets, for the benefit of no one but a few select shareholders, is insane. Keep the post in our hands. Keep the post public.

Inflation or deflation?

I’ve been meaning to do a blog on inflation for a while now, but what do you know, Colin Foster has already written a piece at the Workers’ Liberty site that sums up the current hard times in old England:

Lower inflation? Not in the supermarkets

Food prices are still rising at a rate of 10% per year, according to official figures reported in the Financial Times on 18 February.

For months now, economists and the press have been predicting outright deflation – a fall in the average price level – for 2009. Prices of some staple industrial inputs – oil, gas, wheat, metals – have already gone down a lot, and the “70% off”, “50% off”, and “30% off” signs in shop windows do indicate some falling prices.

Clothing and footwear prices, for example, went down 10% between January 2008 and January 2009.

But day-to-day staples are still getting more expensive. Bread and cereals, by 10% a year; milk, cheese, and eggs, by 9% a year; coffee, tea, and cocoa by 16%. Although oil prices in the global markets have gone down, retail prices of electricity, gas, etc. are still up 36% over the year.

The real inflation rate for poorer households still remains high. And it could remain high even if overall average price levels fall.

We could face a double hit. Price falls on industrial goods and more expensive consumer goods – the sort of thing you might buy once in a while, or maybe not buy at all – tend to kill jobs. Consumers tend to postpone the expensive purchases, thus depressing market demand, and firms tend to postpone investment, in both cases because the postponement is likely to bring you a better bargain. And firms’ outstanding debts become heavier and heavier in proportion to the income from which they cover those debts, so more firms go bust.

But that sort of deflation, killing jobs, could go together with inflation in the prices of daily staples.

The case for the unions compiling a working-class cost-of-living index, and pressing for wage settlements which beat inflation even for the poorest workers, remains strong. It is even stronger because the push-out-the-cash policies pursued by central banks to try to prevent or limit deflation may well fuel rapid general price inflation at the next turn in the road, a year or two years down the line.

The trend will be for employers to push for pay freezes at best and cuts at worst – the argument that it’s better than being redundant will work with many fearing for their jobs.

Energy bills are supposed to be coming down in the short term, but will be higher in the long term. Which won’t help the govt’s stated aim of eradicating poverty amongst pensioners…

As for the government’s finances, public debt has doubled overnight!

Don’t worry, Gordon hasn’t bought a house for Jacqui Smith – it’s just the bank bailouts are being counted as part of the national debt.

Talk about inflation…

The Mini jobs cull, Acas, and the rights of working people

Recall the statements by Lord Mandelson after the outbreak of wildcat strikes in the construction industry centred on the Lindsay oil refinery dispute.

Don’t worry, he told us, no laws have been broken by any of the multinational companies concerned

And, no doubt, he was telling the truth.

He told us he was sending Acas, the conciliation service, to investigate. He was sure of their results: the companies would be cleared

Who wasn’t certain of this outcome?

In this upside-down England it is against the law for workers to take strike action without a convoluted process (involving warning the employer!) – even though they have made a decision to down tools – and against the law for others to join them in solidarity.

But it is perfectly legal for big businesses to drive down terms and conditions, to undercut wages, and to exclude local jobseekers from applying for work.

Brendan Barber, General Secretary of the Trade Union Congress, responds:

‘It is hardly surprising that the ACAS enquiry has found that no laws have been broken, as the major union complaint is that the law does not properly protect UK based workers – wherever they were born.

‘The EU’s Posted Workers Directive has been implemented in the UK in a way that fails to guarantee UK agreements, and recent EU court judgements have raised even more worries that the law favours employers that try to undermine existing standards.’

On a similar theme: where are the rights of all workers to receive consultation in advance of redundancy? Why are temporary workers denied the rights that their co-workers enjoy?

I’m sure Lord Mandelson would be willing to instruct Acas to investigate BMW to see if their disgraceful sacking of 850 workers with one hour’s warning was in breach of the law…

City of London, the last rotten borough in England

From Tribune, news of a half-hearted attack on the City’s anti-democratic institutions by the Labour party:

LABOUR will this week challenge what it sees as the secrecy and unaccountability of the City of London’s government, as it seeks to become the first political party to be represented there in its 900-year history.

A slate of candidates is being put up for the elections to the Corporation of London’s common council, its main decision-making body.

Local Labour activists accuse the councillors – who are often business people non-resident in the Square Mile – of being part of an elite serving the interests of bankers.

Peter Kenyon, secretary of the 52-strong City of London Labour Party, said: “They were certainly very active in lobbying for the regulatory framework that proved to be fundamentally flawed and has plunged us into recession. The leaders of the City are looked to by our political masters as being sources of expertise.

“It’s very important for us to wake up and open the eyes of the electorate as to the extent of the influence of people they are electing.”

The current Lord Mayor of London, Ian Luder, is a partner in accountancy firm Grant Thornton, while Stuart Fraser, the corporation’s chair of policy and a common councilman, is a senior stockbroker. Both sit on Chancellor Alistair Darling’s financial services global competitiveness group.

Labour’s manifesto, launched last week by minister for London Tony McNulty, calls for all City employees to be paid the London living wage of £7.45 an hour.

It also promises to “speak out against special treatment and tax breaks for get-rich City financiers”, adding: “Too many common councillors neither live nor work in the City and are selected for their social connections”.

However, the balance of power on the council is unlikely to shift as Labour is only putting forward seven candidates for election to the 100-strong body.

Among them is Mark McDonald, a barrister of the Middle Temple who unsuccessfully ran to be Labour Party treasurer last year. No councilman currently declares themselves to be a member of a political party in the register of interests.

Mr Kenyon added: “We are not seeking to take over common council, but we are seeking to introduce a level of openness and transparency, which has previously been denied.

“We’re not seeking to overturn the role of people who had senior positions [in financial services]. It’s not to say that those skills are not relevant. But equally other sorts of skills are needed.”

The Corporation of London is the last authority in Britain whose members are elected partly by a business franchise. As well as about 8,000 resident voters, nearly 24,000 votes are distributed among businesses based in the City, with the voting share proportional to the number of staff each firm employs. (Emphasis added)