Category Archives: Austerity

Broken Britain 16: HMRC refuses to investigate money-laundering and tax fraud charges by largest Conservative donor

Three classes of British looting: which is the most culpable?

Professor Prem Sikka, Professor of Accounting at University of Sheffield and Emeritus Professor of Accounting at University of Essex, draws attention to the case of the UK telecoms giant Lycamobile, the biggest donor to the Conservative Party, which has accepted £2.2m in donations since 2011.

Her Majesty’s Revenue and Customs (HMRC) has refused to assist the French authorities and raid Lycamobile’s UK premises in order to investigate suspected money laundering and tax fraud.

Economia, the publication for members of the Institute of Chartered Accountants in England and Wales (ICAEW) which covers news and analysis on the essential issues in business, finance and accountancy, reports:

Following an initial denial (left, Financial Times), Economia confirmed that in an official response to the French government dated 30 March 2017,  a HMRC official noted that Lycamobile is “a large multinational company” with “vast assets at their disposal” and would be “extremely unlikely to agree to having their premises searched”, said the report.

The letter from HMRC to the French government added, “It is of note that they are the biggest corporate donor to the Conservative party led by Prime Minister Theresa May and donated 1.25m Euros to the Prince Charles Trust in 2012”.

This is an ongoing saga: in 2016 Economia noted: “The Tories have come under fire for continuing to accept donations of more than £870,000 from Lycamobile since December, while it was being investigated for tax fraud and money laundering”.

In 2016 In May it emerged that KPMG’s audit of Lycamobile was limited due to the complex nature of the company’s accounts. Later, KPMG resigned saying it was unable to obtain “all the information and explanations from the company that we consider necessary for the purpose of our audit”.

HMRC: “has become a state within a state”.

Prem Sikka (right) continues, “The House of Commons Treasury Committee is demanding answers to the Lycamobile episode – but HMRC is unlikely to prove amenable”.

In recent years, the Public Accounts Committee has conducted hearings into tax avoidance by giant global corporations such as Microsoft, Amazon, Google, Starbucks, Shire and others. The hearings have not been followed by HMRC test cases.

The Public Accounts Committee has also held hearings into the role of the large accountancy firms in designing and marketing avoidance schemes and exposed their predatory culture. In a telling rebuke to PricewaterhouseCoopers, the Committee chair said: “You are offering schemes to your clients—knowingly marketing these schemes—where you have judged there is a 75% risk of it then being deemed unlawful. That is a shocking finding for me to be told by one of your tax officials.”

Despite the above and numerous court judgments declaring the tax avoidance schemes marketed by accountancy firms to be unlawful, not a single firm has been investigated, fined or prosecuted.

There are real concerns that HMRC is too sympathetic to large companies and wealthy elites.

A major reason for that is the ‘revolving door’, the colonisation of HMRC by big business and its discourses: its current board members include non-executive directors connected with British Airways, Mondi, Anglo American, Aviva, PricewaterhouseCoopers and Rolls Royce.

After a stint at HMRC many of the non-execs return to big business. Corporate sympathies are therefore not counterbalanced by the presence of ordinary taxpayers or individuals from SMEs and civil society.

Sikka ends: “In such an environment, it is all too easy to turn a Nelsonian eye on corporate abuses and shower concessions on companies and wealthy individuals”. Read more here.

 

Why should we care?

Because tax revenue pays for the services used by all except the richest, the education health, transport and social services, increasingly impoverished by funding cuts imposed by the last two British governments.

The Shadow Chancellor has twice called for more rigorous examination and tightening of processes at HMRC to ensure that corporations and wealthy individuals are free from political corruption and pay fair rates of taxes.

Will the next government elected be for the many, not the few?

 

 

 

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Austerity 4: former Conservative MP deplores the effects of austerity

Matthew Parris writes in the Times, “the cracks are showing in austerity Britain”

We don’t think enough about local government, one of whose jobs it is to mend potholes. When in our own lives our nearside front tyre is shredded, the pothole, Parris believes, represents “a momentary twitching-back of one tiny corner of a great curtain, behind which lie, no, not potholes, but a million anxious human stories, caused in part by cuts in public spending”.

He adds that accidents due to potholes are usually relatively trivial compared with cuts which for others may have meant:

  • the loss of social care in dementia,
  • no Sure Start centre for a child,
  • the closure of a small local hospital
  • or the end of a vital local bus service.

Potholes are a parable for others that matter even more. Unfilled potholes put lives at risk and have become a symbol of the damage done to every walk of life by spending cuts.

All the pressures on those who run government, local and central, are to worry about the short-term. it is usually possible to leave issues like road maintenance, decaying school buildings, rotting prisons, social care for the elderly, Britain’s military preparedness or a cash-strapped health service, to tread water for years or even decades. “They’ll get by,” say fiscal hawks, and in the short-term they’re often right.

  • Nobody’s likely to invade us;
  • the NHS is used to squeezing slightly more out of not enough;
  • cutting pre-school provision is hardly the Slaughter of the Innocents;
  • the elderly won’t all get dementia at once;
  • there’s little public sympathy for prisoners;
  • teachers can place a bucket under the hole in the roof
  • and road users can dodge potholes.

Parris continues: “But beneath the surface problems build up. The old get older, and more numerous. Potholes start breaking cyclists’ necks. Care homes start going under. The Crown Prosecution Service begins to flounder. We run out of social housing. Prisoners riot. And is there really no link between things like pre-schooling, sports and leisure centres and local outreach work, and the discouragement of knife crime?”

“When New Labour was elected in 1997 we Tories groaned as it tipper-trucked money into the NHS, school building and other public services. Thirteen years later when Labour left office the undersupply was monetary, the red ink all too visible”.

Parris asks: “Must we forever oscillate like this?

One answer: Green & Labour Party leaders would meet these needs and avoid red ink by redirecting the money raised by quantitative easing.

 

 

 

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Broken Britain 15: “Cruel, rigid bureaucracy has replaced common sense in this country”

So writes Peter Hitchens, summarising the unease felt by many in his recent article. He was focussing on the events leading up to the anger felt about the treatment of the ‘Windrush generation’, regarded now ‘by most of us . . .  as something pretty close to family’.

He speaks of ‘the real lesson of the wretched treatment of longstanding British subjects who have been deprived of medical service, threatened with deportation and generally destroyed and trampled on by callous officials . . . deprived of the most basic freedoms and of entitlements they have earned by long years of working and taxpaying.’

After tracing the political trend from New Labour measures to Theresa May’s ‘Go Home’ lorries trundling around London’ he describes increasing ‘tough’ measures as a London liberal’s idea of what might please the despised voters.

Frankly it’s hard to see how the capital could function without foreign nannies, cleaners and gardeners

In a 2009 article, Andrew Neather reviewing the New Labour policies, ‘laced with scorn for working-class people worried about the immigration revolution’, said:

‘The results in London, and especially for middle-class Londoners, have been highly positive. It’s not simply a question of foreign nannies, cleaners and gardeners – although frankly it’s hard to see how the capital could function without them. Their place certainly wouldn’t be taken by unemployed BNP voters from Barking or Burnley.’

The post-Brexit plight of EU nationals

Last year there were reports about the post-Brexit plight of EU nationals who experienced the bureaucratic maladministration and occasional cruelty from which the country’s poorest have suffered for decades.

Universal Credit system

The most recent example, reported in The Financial Times, referred to the rollout of Britain’s “Universal Credit” benefits system, challenged by more than 120 MPs saying that delayed payments are leaving poor households exposed.

Food and heating

Recently Professor Prem Sikka tweeted about 21st century Britain: He linked to a BBC report about a separate survey for the Living Wage Foundation which says that a third of working parents on low incomes have regularly gone without meals, because of a lack of money. Around a half of those families have also fallen behind with household bills.

It also quoted Citizens Advice findings that as many as 140,000 households are going without power, as they cannot afford to top up their prepayment meters. The survey conducted by Citizens Advice found, “most households that cannot afford to put money in the meter contain either children or someone with a long-term health condition. Some people are left in cold houses, or without hot water”.

Sure Start

The Coalition and later Conservative governments’ cuts largely dismantled the Sure Start network, created by Labour to support families in the early years of their children’s development.

Youth Work

Unison has been working on this for some time – its 2016 report, A Future at Risk, found that £387m had been cut since the Tories took power. That’s over 600 youth centres and 140,000 places for young people.

People with disability

One of many austerity measures reported here is the cuts to school transport for disabled children. This, and many more examples of ‘cruel, rigid bureaucracy, may be seen on the website Disability United.

Sikka summarised: “Poorest families are going without food or power. Wealth is concentrated in relatively few hands and governments shower tax cuts on corporations and wealthy elites. Inequitable distribution of income/wealth is a recipe for social instability”.

 

 

 

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Francesca Martinez: a word on the latest Corbyn ‘mural’ outrage

While we’re all debating whether Corbyn’s a spy or a Putin stooge, or an anti-semite, people are dying in NHS corridors, disabled people are starving to death, our public services are being cut, our assets are being privatised, our wages are being driven down, our environment is plundered and polluted, and wealth and power remain in the hands of the 1%.

Francesca writes:

This is, as always, about politics. If anyone needs convincing, please read about other socialist leaders around the world. They are routinely called commies, anti-semitic, insane etc. It is an age-old tactic.

Corbyn can’t be touched on policy so they have to manufacture shit-storms.
He is a life-long anti-racist campaigner with a thirty year record of standing against racism in all its forms.

He is one of only 8% of MPs to have signed the five UK parliamentary motions that condemned antisemitism.

No other MP has such a record of commitment to fighting racism and anti-semitism.

While we’re all debating whether Corbyn’s a spy or a Putin stooge, or an anti-semite, people are dying in NHS corridors, disabled people are starving to death, our public services are being cut, our assets are being privatised, our wages are being driven down, our environment is plundered and polluted, and wealth and power remain in the hands of the 1%.

Make no mistake, this is a war.

If Corbyn goes, we, the 99%, all lose.

 

We will never achieve a more equal, democratic, humane and peaceful society, if we allow the elite to destroy anyone who stands up against them.

 

 

 

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Broken Britain 14: justice for people given NHS contaminated blood – too little, too late

Over 2400 of the people who were given contaminated blood have died and MP Diana Johnson (below, left) asked for an urgent Commons debate last year.

She had to get six leaders of opposition parties — including the DUP — to sign a letter to Ms May asking for an inquiry before Theresa May finally succumbed to pressure and announced a public inquiry into this 1970s and 80s scandal.

Last year it was recalled here that British haemophiliacs and other victims’ lives were blighted in the 1970s and 1980s by cheap imported US blood products, harvested from inmates and drug addicts. More than 5,000 were infected and went on unknowingly to infect family and friends. It is estimated that over 2.400 have died since then.

At a 1997 independent inquiry into the scandal, Lord Archer of Sandwell said: “By the mid 1970s it was known in medical and government circles that blood products carried a danger of infection… and that commercially manufactured products from the USA were particularly suspect… but the products continued to be imported and used, often with tragic consequences.”

It was decided that victims should die to avoid going over budget

 

In March 2017 this year a scheme to give the victims of NHS blood contamination ex-gratia payments’ – not to be called compensation – was scaled back under government plans.

Ministers believe the reforms (cutbacks) are necessary because more people are now considered likely to develop serious health issues – and be entitled to higher payouts – pushing the programme as much as £123m over budget.

In April, as he left the Commons, the former health secretary Andy Burnham declared there had been a “criminal cover-up on an industrial scale in the NHS” over contaminated blood and called for a Hillsborough-style inquiry.

Meanwhile the contaminated die apace as this inquiry gets under way, 30 years too late.

 

 

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Should the Green Party join Corbyn Labour and fight together for social justice and for the planet?

Owen Jones suggests that the Green Party should join Jeremy Corbyn and fight together for social justice and for the planet: “For those attracted to the Green message of a “peaceful political revolution” to end austerity, Corbynism seemed like a natural new home”.

He thinks it is time for the Green Party to join forces with Labour, unite the English and Welsh left under one banner, bring one of the country’s most inspiring politicians into the spotlight and reinvigorate the campaign to save the planet from environmental destruction, adding:

“It’s exactly the arrangement that has existed between Labour and the Co-operative Party for nine decades: indeed, there are 38 MPs who belong to both. Rather than proving the death of green politics, such a pact would give it new life”.

In an act of political sacrifice at the last election, the Green Party stood down candidates across the country to avoid splitting the left-of-centre vote.

A pact could be made, creating the sort of relationship the Co-op Party has with Labour, with dual Labour/Green membership.

There would be Labour/Green MPs just as there are Labour/Co-op MPs today

Significantly more Green MPs would be elected. Climate change would become a genuine political priority. It should also mean Caroline Lucas in the shadow cabinet – and later in government with the environment brief. This would end a pointless division on the British left. Owen Jones continues:

“Lucas herself has been a committed fighter for causes that must be central to Labour’s message. She was right to criticise pre-2015 Labour for failing to challenge the “austerity message”, and has opposed cuts to everything from women’s refuges to schools. Her courage in fighting climate change led to her arrest at an anti-fracking protest in 2013.In many ways, her campaigning zeal echoes that of Corbyn, who she has repeatedly fought alongside. Indeed, it is hardly controversial to point out that Corbyn is closer to Lucas politically than he is to many of his own MPs, and yet absurdly Lucas is a political opponent”.

“Yes, the Green leadership wants Labour to go further – on everything from committing to a shorter working week to more radical taxation. But as someone who agrees with her – that Labour’s offer is not yet radical enough – I believe the Greens’ influence in pushing for greater radicalism would be strengthened, not diluted, in a formal pact”. He ends – after recognising the opposition from some within both parties:

“A red-green alliance is surely overdue. this could be the makings of a formidable political alliance to defeat Toryism and form a government to eradicate social injustice and help save the planet. And surely that prize makes the pain of overcoming partisan differences worthwhile”.

 

Read his article here: https://www.theguardian.com/commentisfree/2018/feb/22/greens-labour-jeremy-corbyn

 

 

 

 

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ATOS, remarkable for assessments that harm the most vulnerable, changes its name

Work capability assessments, introduced under the last Labour government, were first carried out by Atos, which had a £100 million a year contract in 2012 – and later earned much more. The firm made a £42million profit in 2010 and paid its chief executive Keith Wilman £800,000, a 22% pay rise on the previous year. Since then other providers, including Capita and Maximus, have also been making these assessments. For several years there has been evidence from a wide range of sources that they are not being carried out efficiently. A few examples follow:

2014: the British Medical Association called for an end to a system harming the most vulnerable in our society

Doctors backed a motion at the annual BMA conference in 2012 stating that Atos’s assessments were “inadequate” and “have little regard to the nature or complexity of the needs of long-term sick and disabled persons.

In their evidence to the Fifth Independent Review of the Work Capability Assessment (2014), the BMA repeated its 2012 call for government to end it “with immediate effect and replace it with a rigorous and safe system that does not cause avoidable harm to the weakest and most vulnerable in our society”.

2015: An academic paper, published in the BMJ’s Journal of Epidemiology and Community Health in which examined 149 English council areas, found that nearly 600 suicides in England may be associated with the government’s “fit-for-work” tests.

Oxford and Liverpool researchers looked at three years’ data and also found the Work Capability Assessments could be linked to a rise in mental health problems. The BBC reported in 2015 that the study found the areas with most WCAs showed the sharpest increases.

2016: The UN Committee on the Rights of Persons with Disabilities found that UK welfare reforms have led to “grave and systematic violations” of disabled people’s rights.

Changes to benefits “disproportionately affected” disabled people, the UN Committee on the Rights of Persons with Disabilities (CRPD) found. The 2016 investigation was launched after receiving evidence from disability organisations about an “alleged adverse impact” of government reforms on disabled people. UN committee members visited London, Manchester, Birmingham, Cardiff, Edinburgh and Belfast in October 2015 to identify any gaps in human rights protection for disabled people. As part of its inquiry, the CRPD also looked at a range of recent welfare reforms and legislation including the Welfare Reform Act 2012, Care Act 2014, and Welfare Reform and Work Act 2016.

The BBC reported the UN inquiry’s conclusion that changes made to housing benefits and criteria for parts of the Personal Independence Payment, combined with a narrowing of social care criteria and the closure of the Independent Living Fund, “hindered disabled people’s right to live independently and be included in the community”.

Work and Pensions Secretary Damian Green rejected the UN report’s findings, but it has now been announced that after a high court ruling on 2017 regulations, introducing criteria which discriminated against those with impaired mental health, decisions on personal independence payments will be reviewed.

2017: Directors and other officers of the Department of Work and Pensions receive new year’s honours for services to ‘welfare reform’, as a reader draws attention to an undated article in the Dorset Eye, by Douglas James, listing 82 people who have died or committed suicide soon after dealings with agencies such as ATOS and the government’s Department of Work and Pensions. A search was made for news of the first five on the Dorset Eye list and links to fuller accounts were added. Most of the people were aged 30-40.  

2018: Private Eye 1462 reported in January that despite long-drawn-out resistance from the DWP, Atos and Capita, the Information Commissioner’s Office has now ruled that the DWP must reveal monthly reports These include details of complaints against assessors, the length of time taken by t-assessments and how many fail – i.e. are overturned on appeal.

In December the Commons Work & Pensions Select Committee report revealed that:

  • it had heard disturbing evidence,
  • accounts of medical assessments range from frustrating to gruelling,
  • there were remarkably high, if slowly improving, levels of unacceptable reports,
  • not one doctor had been involved in the assessments and
  • Capita’s own auditing found that at points in the contract almost 60% of its reports were “unacceptable”.

MP Tom Brake speaks out:

“Many constituents are in despair when they contact me after an inaccurate report. Reports of face-to-face assessments need to be unbiased, fair and above all accurate. It was important to flag up these discrepancies directly with ATOS. The Government need to ensure that assessments are recorded to prevent alarming inaccuracies. I will continue to put pressure on the Government to reform the current system. At the moment too many people have lost faith in the system.”

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Last resort: after many disastrous years – like Windscale nuclear reactor station – in June Atos Healthcare announced changes to its name – but not its practice.    

 

 

 

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Sprinklers for parliament but not for tower blocks

Inside Housing reports that the government has approved upgrades to parliament, including sprinklers, despite turning down requests from councils for cash to fund fire safety works on tower blocks.

Councils which hoped to install sprinklers following the Grenfell Tower tragedy in June which killed 71 people have received no commitment from government on funding.

Jane Urquhart, portfolio holder for housing at Nottingham City Council, said: “The government has found the resources necessary to install sprinklers in the Houses of Parliament as a sensible fire safety precaution for the safety of those who work and visit there. It does seem strange that, at the same time, the housing minister deems sprinklers in social housing tower blocks not to be essential to ensure the safety of our tenants”. Alison Butler, cabinet member for housing at the council, said:

“Parliament is a historic building and it is a place where people work, but protecting people’s lives and their homes should be a higher priority”.

The Times reports that David Stewart, a Labour MSP for the Highlands and Islands, is bringing in a member’s bill which would place a duty on councils and registered social landlords to fit automatic fire suppression systems in all new social housing. He said that sprinkler systems were so effective at preventing the spread of fires that there had been no instances of multiple fire deaths when a working sprinkler system was in place.

“This simple change in law is a practical step that will save lives. Councils in Angus, Fife and Dundee already install sprinklers into their new developments as standard and I want to see this approach extended.”

As Alison Butler said, protecting people’s lives and their homes should be given  priority.

 

 

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Will legal and political action deliver justice for WASPIs?

In an earlier post it was noted that “Governments are balancing budgets on the backs of the poor” (John Grisham) 2.6 million women born in the 1950s will ‘lose out’ because of changes to pension law: “while corporations and the richest individuals receive tax breaks”.

                                                        Left: hear affected Question Time audience member, no longer well enough to work (17.24 mins) and (right) the prime minister, herself a Waspi woman.

Grahame Morris, MP for Easington, wrote earlier this month:

“Across Britain some 3.8 million women are affected by the increase to the state pension age. Though there is a good deal of sympathy for the aim of equalising the retirement age, what has taken place in practice has been appallingly unjust. Women Against State Pension Inequality (WASPI) agrees with equalisation, but does not agree with the unfair way the changes were implemented – with little or no personal notice (1995/2011 Pension Acts), faster than promised (2011 Pension Act), and no time to make alternative plans”.

Guy Opperman, work and pensions minister with responsibility for financial exclusion, failed to reassure women in their 60s, hit by changes to their pension, by advising them to get a job or take up “extended apprenticeship opportunities”. 

Morris continues:

“Raising the pension age for women, often with little notice and sometimes failing to notify people of the changes at all, is a recipe for disaster.

“Many Waspi women affected by state pension inequality have been working full time and paying national insurance since the age of 15 or 16. In my constituency of Easington, the government’s changes to the state pension age will harm some 4,542 women.

“The OECD has recently ranked Britain’s pensions system as the worst in the developed world – yet the Tories are attempting to deny Waspi women even a basic state pension” . . .

“Excluded from the winter fuel allowance, from the free bus pass and now from the state pension, this generation of women are now in numerous cases having to sell their homes, take on precarious poverty-wage jobs or rely on foodbanks . . .

“The government’s given reason for failing these 3.8 million women is that to give them their pensions would cost as much as £30bn – for six years of pensions.

“Yet research from Landman Economics suggests the cost of helping Waspi women would likely be a more modest £8bn”. Morris lists the wider context:

  • Refurbishing Westminster will cost the taxpayer some £7bn,
  • Britain’s airstrikes in Syria are estimated to reach a cost of around £10bn.
  • Increased privatisation of the national health service is estimated to cost at least an extra £4.5-£10bn each year.
  • There have been billions of pounds of needless tax cuts to the bank levy.

“In this context finding the money for Waspi women seems a sensible price to pay to give these women justice and stop poverty from rising to ever more tragic levels. We know and we can see that it isn’t equal, it isn’t fair and it isn’t justifiable – it’s driving down the incomes and the quality of life of countless women.

Morris: “The prime minister is herself a Waspi woman but I doubt she ever has or ever will be faced with a choice between heating or eating. Yet this doesn’t mean it is too late for the government to do the right thing”.

“The parliamentary ombudsman is currently investigating the Department for Work and Pensions for maladministration, by failing to notify women of the changes to their state pension age. If the ombudsman finds in favour of the Waspi women the government could have to pay compensation to the tune of billions of pounds”

The Labour Party, Liberal Democrats, SNP, Plaid Cymru, the DUP and 50 Tory MPs support the Waspi campaign.

 

 

 

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FT: Populism is failing, but it is too soon to cheer: tame it and regain control!

The Financial Times’ Philip Stephens focusses on what he calls ‘populism’. He deplores the ‘electoral insurgency’ of the past few years leading to far-left and far-right parties winning significant vote shares across Europe.

After highlighting the failures and inconsistencies of the Trump government and the Brexit negotiations he warns the ‘hardliners’ in Mrs May’s cabinet that their choice is between:

  • swallowing a softer version of Brexit
  • or breaking with the prime minister
  • so risking a general election and a victory for Jeremy Corbyn’s Labour Party.

Adding “It is just possible that Brexit may prove too difficult to actually happen”

Last year Business Insider reported that the former head of the British civil service, Gus O’Donnell, told an LSE event that politicians need to focus on voters’ feelings of wellbeing to counter the rise of populism and win elections.

Linked to http://uk.businessinsider.com/gus-odonnell-focus-on-wellbeing-to-counter-populism-2016-12

His Times colleague, Gideon Rachman adds:The belief that the economic system is unjust has stoked the rise of rightwing and leftwing populism across the west”.

He continued by saying that until the shocks of 2008, centrist politicians in the west were able to offer a morally coherent view of the economy: a free-market economy would reward effort and spread opportunity. The creation of the global market system was reducing inequality and poverty across the world.

After the financial crisis, however, the “globalists” (to use a Trumpian term) began to lose the moral arguments and – Rachman continued – the fact that banks were bailed out as living standards stagnated, offended many voters’ idea of natural justice.

Stephens’ advice: centrist parties will win back support only when they separate populist leaders from their supporters — when they recognise that those voting for extremists are not by and large the “deplorables” described by Hillary Clinton and – belatedly – he admits those voters have real grievances — economic, social and cultural and offers a strategy to win back their lost support:

“Map an alternative route for society’s left-behinds”, not to do them justice, but because it is expedient:

Long-discarded notions should be disinterred:

  • progressive taxation,
  • active competition policy
  • and social equity

He ended lamely by asking: “And what, after all, was actually wrong with the social market economy?”

 

 

 

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