Earlier this month the FT warmed to the shadow chancellor. Following Jim Pickard’s first respectful report on any aspect of Labour policy, an article, by Jim O’Neill, chair of the Chatham House think-tank and former Treasury minister, had the headline, “The UK opposition steps into an economic void left by a government grappling with Brexit”.
Following a couple of caveats, O’Neill writes: “In at least six policy areas, which Mr Corbyn and his shadow chancellor John McDonnell are treating as priorities, businesses and the government need to catch up (detail here)”.
- The first area on which Labour sees clearly is Britain’s productivity crisis.
- Second is the orthodox belief that lower corporation tax will magically boost investment spending.
- Third, risking large amounts of money on fixed investment no longer appears attractive.
- Fourth, businesses need to rediscover profit with purpose.
- Finally, there is the housing crisis.
But today there was a decided change of direction – had the editorial board been leant on?
THE EDITORIAL BOARD: Labour’s economic plans have serious flaws: shadow chancellor John McDonnell is ignoring the realities of modern business. The following – mainly speculative – points fail to convince:
- Mr McDonnell’s most eye-catching announcement was a compulsory share ownership scheme. Employee ownership and other profit-sharing schemes are by no means outlandish. Many businesses already choose to run them in order to recruit and motivate their workforce. There are also sound political reasons to give employees a greater share of ownership and a bigger voice on boards after a decade in which wages have remained stagnant in real terms. But companies should not be coerced into taking such action.
- Mr McDonnell claims these proposals are designed to tackle Britain’s productivity crisis – the evidence for this is sketchy and outdated.
- It could increase the cost of capital and deter investment.
- As the scheme would bear only on employers with more than 250 workers, it could also disincentivise growing businesses.
- There is a real danger that Labour’s prescriptions may end up only harming the patient.
- Businesses (and many voters) are concerned that the proposals on the table may only be the tip of Labour’s interventionist ambitions.
- With Brexit representing a step into the unknown, however, the UK needs to preserve business and economic stability, not further radical experimentation
Then a reversion to something approaching approval
“Nationalisation, dilution of shareholdings, workers on boards, sweeping trade union powers — John McDonnell’s economic prospectus for Britain is the Labour party’s most radical in several decades. The shadow chancellor further developed the party’s socialist credentials in his address to its conference in Liverpool on Monday. He senses that the appetite for change is great enough to take Labour into office on a hard-left ticket at the next election”. And: “Labour’s policies do speak to the mood of many voters. Many Britons believe inequality is growing, public services are collapsing and the excesses of capitalism need taming”.
Though not as wholehearted as the conclusion of former Treasury minister O’Neill: “Dealing with the UK’s deep-seated economic problems requires sustained thinking and attention, not just occasional lip service. The Labour Party has stepped into the vacuum left by the government and appears to be offering the radical change that people seek”.
End note: email from Moseley hit harder than the editorial board:
- Looking forward to a rise in the number of companies with 249 employees, if any stay in the UK, should the nightmare come about at the next election ( Ed: as share ownership proposals apply only to companies with over 250 employees).
- The shadow Treasury team admits that private, unlisted companies could not be compelled to hand out dividends to workers. In theory that could incentivise public companies to delist from the stock market.
- The next problem is that foreign-listed companies will not be obliged to hand equity to their UK workforces. Again, that could provide an incentive for London-listed companies to switch their listings to an alternative financial centre such as New York or Frankfurt.
- Nor is it clear how the British government could force an overseas company with a London listing to comply with the scheme if most of its workers are abroad.
- One group of workers who could feel aggrieved by the proposals are those in the privatised utilities such as rail and water. Labour is determined to nationalise the utilities, and admits that — as state workers — staff would no longer be eligible for the share scheme. At present a third of employees in United Utilities participate in their employee share scheme, as do two thirds of South West Water employees and 70 per cent of Severn Trent’s UK employees.
- Another complication is that some companies could find alternative routes to rewarding shareholders, for example by carrying out share buybacks instead of dividends.
John Buchan, 1915: Financiers can make big profits on a falling market and it suits their books to set Europe by the ears.
Jeremy Corbyn, March 2017; the Tories’ hard Brexit’ will benefit super rich and hold back millions.
Private Eye, 6.10.17: investors could swoop on cheap assets after Brexit wrecks the British economy
Jeremy Corbyn opened in I News:
When Pret A Manger opened its first sandwich shop in 1986, I doubt many of us would have expected well-known high street chains to end up trying to pay their staff in leftovers. But that’s exactly what’s happened. Last week, Pret had to abandon plans for a work experience scheme paying 16-18 year olds only with food after a public outcry.
A taste of things to come . . .
It was an even faster U-turn than Tory chancellor Philip Hammond’s reversal of an increase in National Insurance for the self-employed – also after an outcry. Both the Hammond and the Pret sagas look like a taste of things to come. The not-so-hidden agenda of hard right Brexiteers, from trade secretary Liam Fox to foreign secretary Boris Johnson, is to create a bargain basement economy for big business.
In 2012, Fox said it is “too difficult to hire and fire” and “intellectually unsustainable to believe that workplace rights should remain untouchable”. Employment rights under threat Now that Article 50 has been triggered, Fox has his chance to sweep away decades of hard-won employment, consumer and environmental rights enshrined in EU law. In fact that’s exactly the direction Theresa May has made clear she intends to go if she can’t get the Brexit deal she wants – and Johnson has said not getting a deal is “perfectly okay”.
The Tories are preparing a Great Repeal Bill as part of the Brexit process, and all the signs are they will try to use it to tip the economic scales even further in favour of their super-rich supporters. They have after all spent the past seven years giving them one tax break after another while imposing austerity on everyone else.
Altogether, on official figures, they will have handed out £73bn in welfare for the wealthy between now and 2022. They have cut inheritance tax, the bank levy, capital gains tax, the top rate of income tax and corporation tax – squeezing or slashing support for the NHS, social care and other vital services.
While the earnings of working people have been held back, executive pay has soared to levels beyond most people’s wildest dreams. The chief executives of the top 100 companies on the London Stock Market were paid on average £5.5m each in 2015 – that’s 183 times average earnings.
The Conservatives justify tax cuts for the richest and big business by saying they will lead to an increase in investment. But there is no evidence of that.
On the contrary, investment in the UK has fallen, leaving us with antiquated infrastructure and uncompetitive industries. The future of our country cannot be left to the free market and the whims of the wealthy.
Are anti-Corbyn attacks prompted by politicians and their wealthy funders for religious or economic reasons?
As the Facebook blog Jews4Jeremy is taken down without explanation, online articles with allegations of anti-semitism proliferate.
The wealthy and their dependents – professing all religions or none – will fear the growing support for Corbyn’s socially valuable economic policies – some named in a blog based on a Birmingham Press article to be published here tomorrow:
- a high tax economy for the wealthy,
- re-nationalisation of the railways (by not renewing private sector franchises) and private utilities in the energy sector,
- removal of all elements of privatisation from the NHS,
- re-introduction of rent controls to reduce the amount the state pays to private landlords,
- funding of infrastructure by quantitative easing,
- a rebalancing of the economy away from a reliance on financial services to the manufacturing sector,
- tightening of banking regulations (Osborne intends relaxing them further),
- re-introduction of a 50% rate of income tax,
- raising of corporation tax (currently at a historically low level) by 0.5%, as a means of paying for the abolition of tuition fees.
Such measures would reduce investor and rentier profits or even remove their sources, in the case of re-nationalisation.
Do readers believe the denunciations of politicians with corporate allies, or the statement by Jeremy Corbyn?
Posted in Admirable politician, Banking, Capita, Conflict of interest, Corporate political nexus, Democracy undermined, Economy, Education, Energy, Finance, Government, Inequality, Lobbying, Manufacturing, Media, Outsourcing, Party funding, Privatisation, Revolving door, Unemployment, Vested interests
The Farmers Journal reports that, at the end of April, Farmers For Action (FFA) were seeking public support for their ‘People’s Prosperity Manifesto’, launched in front of Belfast City Hall, which calls on the public to vote for candidates who support farm gate pricing legislation, less red tape within the public sector and reform of education, health care and the EU.
William Taylor, Farmers for Action (NI) sent a copy of the People’s Prosperity Manifesto and writes:
“It has become clear that farmers at the coal face who are not getting properly paid for their produce have a lot in common with the stresses of teachers, health workers etc. In short, it’s time for a re-balancing the economy and a sort-out of top civil servants. We see the People’s Prosperity Manifesto as the missing link in democracy.
“We launched the manifesto in Belfast on Tuesday in front of the City Hall and found a huge thirst from people for something like this to turn on the politicians and say here’s what we actually want!”
UK ELECTION 7TH MAY 2015
The People’s Prosperity
Voters Check List 2015
This is your chance to
Vote traditional or Vote for Countrywide Prosperity
The people of the UK’s Manifesto is your blueprint to securing a guaranteed prosperous UK and re-balancing of the economy by tactically voting, using a tick box exercise to choose your local Westminster MP, who must be capable of following and delivering your agenda below and guarantee to influence Westminster and commit their Party / Independent position as follows [highlights only]
Food Security (UK barely 60%) delivered as follows: legislation on farm gate prices giving farming families an income safety net of the cost of production plus a margin inflation linked with flexible supply control across the staples, thereby, creating UK prosperity the President Roosevelt New Deal way. This will create 250,000 quality jobs overnight and then 1million + quality jobs across the UK soon after from John O’Groats to Lands End, town and country alike, thus helping to secure food security and exports. A firm commitment is needed from your would-be MP that their Party/Independent will immediately introduce legislation on farm gate prices as UK prosperity depends on it and the new government must insist that all government procurement of food must be regional, national or nearest supply and put an end to the vast majority of the unnecessary money-grabbing wasteful quangos!
National Security to be maintained at a minimum of 2% GDP as is our NATO obligation – we live in dangerous times and therefore must ensure food security and national security.
Health Service: the new government must deliver a Health Service free of expensive red tape properly staffed and financed with Doctors, Matrons, Sisters, Nurses, paramedics, midwifery and auxiliary health workers, sufficient beds and equipment with rural hospitals kept open, alongside a root and branch majority cull of self-promoting over-paid non-technical top and middle management. Your MP to be selected must commit themselves and their Party/Independent to the above in Westminster and UK wide and return the Health Service to commonsense technically qualified management that listens to the people at the coal face. Finally hospital car park charges to be removed immediately after the election!
Education: the new Government must deliver a modern education system with adequate teachers/lecturers free of expensive red tape with healthy cookery skills, apprenticeships and University entrants catered for, to prepare young people properly for a working life and family life ahead, plus an end to school closures unless replaced by new, followed by a root and branch majority cull of self-promoting over paid, non-technical top and middle management. Your MP to be selected must commit themselves and their Party/Independent to the above in Westminster and UK wide and return education to commonsense technically qualified management that listens to the people at the coalface!
Environment: the new government must deliver an environmental policy of clean air, clean water, water is the UK’s strength and most precious resource, with only 2% of the world’s water fresh water and only 1% of that available; countryside and towns free of pollution pursuing the new and multiple sources of the very successful renewable energy now available and improving daily. 100% recycling at every opportunity. Your selected MP must commit themselves and their UK Party/Independent if elected to immediately block a proposed 20 year UK pillage of fossil fuels through unconventional oil and gas development, including fracking in Northern Ireland and across GB as the consequences would be irreversible for our beautiful green and pleasant land including water quality.
Business – many of the world’s large corporate businesses are already here in the UK and are trading, more will come due to the forthcoming reduction in corporation tax in Northern Ireland, however, the majority of corporates operating across the UK currently ignore their Corporate Social Responsibility (CSR) obligation as follows, CSR in short means they must not abuse financially any sole trader or small corporate businesses smaller than themselves. The new Government must legislate on certain parts of CSR to become involuntary across the UK to achieve fairness in rural UK and fairness in towns and cities. Furthermore, a law must be passed insisting that if these corporates are going to trade across the UK then they must have local telephone numbers answered by local people and no answering machines permitted. Your MP to be selected must commit to promoting the above in Westminster and commit to implementing the above legislation for the UK including banks.
Government: Successive Westminster Governments over the last two decades have progressively and still are capitulating to the greed of banks, large corporates and a top layer of management civil servants in agriculture, health, education etc totally ignoring the people at the coalface. Government sectors are run by an out of control, out of touch top and middle layer of self promoting civil servants, the majority now with no technical ability and many of them paid more than the Prime Minister. These people are living high off the hog and making everyone’s life a misery by creating self-promoting costly red tape and thus leaving services short of money and staff. The MP of your choice must insist that they and their Party/Independent if elected will see to it that these top civil servants are rooted out, trimmed and replaced with people with technical ability and commonsense as required. During the recent 4 years of civil servants pay freeze it was no accident that the cost of civil servants pay rose year on year by the top UK civil servant layer self-promoting themselves, in many cases under the guise of, e.g. closing a local school and merging it with an already larger one, to allow them to claim a higher pay scale due to an ‘increased work load’.
European Union: 50% of what goes on at the EU HQ in Brussels is very commendable e.g. Human Rights across all EU28 member states; peace kept since WWII across the member states, borders coming down to both trade across the EU and relatively free movement of people. The bad 50% – we have the once a month pilgrimage to Strasbourg by virtually everyone working in the EU Brussels offices moving to Strasbourg to complete their week’s work, wasting €200 million annually. We have the out of control top civil servants in Brussels creating expensive red tape to strangle all member states in order to justify their promotion-oriented existence. Again these top civil servants need culled and replaced with people with technical ability and commonsense. Remove all lowland and arable area subsidies to EU farmers, saving well over €100 billion in the life of the current CAP alone; instead give EU farmers legislation on farm gate prices stating that they have to be paid a minimum of the cost of production plus a margin inflation linked alongside flexible supply control across the staples to provide them with a financial safety net, and forcing the large corporates to lower their profits, returning your countryside to the well tried and tested family farming success story as opposed to aiding and abetting factory farming. The EU must implement an original Isle of Man policy of using all the produce available in any region first and foremost before imports are considered and those imports should be the nearest source, hugely against the corporates financial wishes.
Using the People’s Manifesto will give you the power of selection – have your say, tell your friends about the Voters Checklist and your vote will count!
Readers who want the full manifesto with the checklists, to present to potential MPs, click on https://politicalcleanup.wordpress.com/documents-with-no-hyperlink/the-peoples-prosperity-manifesto
Tags: CAP, civil servants, Corporate Social Responsibility, corporation tax, EU farmers, Fracking, large corporates, legislation on farm gate prices, People's Prosperity Manifesto, President Roosevelt New Deal, Strasbourg, William Taylor FFA