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Time for change: junk the Anglo-Saxon model* in 2018

The FT reports that senior executives at several of the largest US banks have privately told the Trump administration they feared the prospect of a Labour victory if Britain were forced into new elections.

It then referred to a report by analysts at Morgan Stanley arguing that a Corbyn government would mark the “most significant political shift in the UK” since Margaret Thatcher’s election and may represent a “bigger risk than Brexit” to the British economy. It predicted snap elections next year, arguing that the prospect of a return to the polls “is much more scary from an equity perspective than Brexit”.

Jeremy Corbyn gave ‘a clear response’ to Morgan Stanley in a video (left) published on social media reflecting anti-Wall Street rhetoric from some mainstream politicians in the US and Europe, saying: “These are the same speculators and gamblers who crashed our economy in 2008 . . . could anyone refute the headline claim that bankers are indeed glorified gamblers playing with the fate of our nation?”

He warned global banks that operate out of the City of London that he would indeed be a “threat” to their business if he became prime minister.

He singled out Morgan Stanley, the US investment bank, for particular criticism, arguing that James Gorman, its chief executive, was paying himself a salary of millions of pounds as ordinary British workers are “finding it harder to get by”.

Corbyn blamed the “greed” of the big banks and said the financial crisis they caused had led to a “crisis” in the public services: “because the Tories used the aftermath of the financial crisis to push through unnecessary and deeply damaging austerity”.

The FT points out that donors linked to Morgan Stanley had given £350,000 to the Tory party since 2006 and Philip Hammond, the chancellor, had met the bank four times, most recently in April 2017. The bank also had strong ties to New Labour: “Alistair Darling, a Labour chancellor until 2010, has served on the bank’s board since 2015. Jeremy Heywood, head of Britain’s civil service, was a managing director at Morgan Stanley, including as co-head of UK investment banking, before returning to public service in 2007”.

A step forward?

In a December article the FT pointed out that the UK lacks the kind of community banks or Sparkassen that are the bedrock of small business lending in many other countries adding: “When Labour’s John McDonnell, the shadow chancellor, calls for a network of regional banks, he is calling attention to a real issue”. And an FT reader commented, “The single most important ethos change required is this: publish everyone’s tax returns”:

  • In Norway, you can walk into your local library or central council office and see how much tax your boss paid, how much tax your councillor paid, how much tax your politician paid.
  • This means major tax avoidance, complex schemes, major offshoring, etc, is almost impossible, because it combines morality and social morals with ethics and taxation.
  • We need to minimise this offshoring and tax avoidance; but the people in control of the information media flow, plus the politicians, rely on exactly these methods to increase their cash reserves.

But first give hope to many by electing a truly social democratic party.

Is the rainbow suggesting a new party logo?

*the Anglo-Saxon model

 

 

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Birmingham Council adopts the government’s austerity agenda: asking the low paid to accept even lower wages

In July, Birmingham City Council reneged on an ACAS-mediated, cabinet-approved agreement between the Unite union and Birmingham’s talented Council Leader, John Clancy, which was to end the seven-week refuse collection dispute.

The well-paid BCC chief executive (right) was seeking to downgrade 106 Grade 3 jobs to a Grade 2, which meant that workers would lose £3,500-5,000 from their already low salaries of around £20,000.

And when BCC reneged on the Unite/Clancy deal, they also issued redundancy notices to the Grade 3 workers. These were later banned in the High Court when Mr Justice Fraser spoke at length about the “extraordinary” and “astonishing” state of affairs at Birmingham City Council with “chaos” between senior personnel. Read more about his reflections here.

Council leader Ian Ward (left) told a BBC reporter: “The cost of the (three month) dispute, yes that’s cost in excess of £6m”.

This ‘new’ version of the original deal (details here), described by union insiders as a ‘total climbdown’, was agreed at a special meeting of the BCC cabinet on Friday.

 ITV reports that yesterday Birmingham bin workers voted to accept the council deal.

So a seven week dispute was allowed to go on for three months, regardless of health and safety implications, losing £6m of ratepayers’ money – and the wrong head rolled.

From ‘Our Birmingham‘,  under another title.

 

 

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Broken Britain 6: deprivation, job losses, depression and suicides follow cruel ‘welfare’ legislation

Cuts protest during the last Prime Minister’s Questions session before parliamentary recess. Support given by Labour’s shadow chancellor John McDonnell and Green leaders, Jonathan Bartley and MP Caroline Lucas.

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

In their evidence to the Fifth Independent Review of the Work Capability Assessment (WCA), 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”.

Research by disabilities campaign group found more than 80 cases of suicide directly linked to billions of pounds in benefit cuts. Many other deaths have been indirectly linked to this regime:

  • In 2014, it was reported that David Clapson, a diabetic, had been found dead in his home. His benefits had been cut, he had no food in his stomach and the fridge that stored his insulin was not working because there was no credit on the electricity card.
  • A senior North London coroner spoke out, highlighting his inquest verdict that ‘Mr A’s’ suicide was triggered by a ‘fit for work’ assessment.
  • In 2010 Coroner Tom Osbourne blamed the death of Stephen Carré on a decision by the Department for Work and Pensions that the Employment and Support Allowance claimant, who was clinically depressed, was fit for work following a work capability assessment.
  • The suicides of Michael O’Sullivan and Julia Kelly, were also blamed on the result of work capability assessments by their respective coroners.

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 reports that the study found the areas with most WCAs showed the sharpest increases.

The Department of Work and Pensions (DWP) refused to reveal their peer reviews of suicides linked to the sanctions

Disability rights campaigners, mental health charities and the families of claimants who killed themselves, or died after cuts to benefits, have argued that 49 DWP secret investigations or “peer reviews” into the deaths of claimants should be published.

In April (2016) a decision was made by the First-tier Information Rights Tribunal that, pending any appeal by the DWP or the Information Commissioner’s Office, the government would have to hand over details of the circumstances of 49 deaths concerning claimants on benefits. The DWP was given five weeks to resolve the matter.

In May, following the successful legal challenge – John Pring v IC & Department of Work & Pensions – the DWP released the peer reviews of these cases but with many key words blacked out (redacted) and a Labour spokesman accused the Government of “rewarding failure” – giving new contracts to Capita and Atos.

The UN Committee on the Rights of Persons with Disabilities finds that UK welfare reforms have led to “grave and systematic violations” of disabled people’s rights. Work and Pensions Secretary Damian Green rejected the UN report’s findings 

Changes to benefits “disproportionately affected” disabled people, the UN Committee on the Rights of Persons with Disabilities (CRPD) found. The 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”.

2017 update: continuing the cruel cuts to those on low incomes and generous treatment of those already wealthy 

More than 160,000 people initially denied PIP have had this decision overturned since the benefit launched in 2013, according to DWP figures,

ITV News: the Motability charity, which allows disabled people to pay for specially adapted cars, from their benefits, reports that 900 people a week are having cars, scooters and even motorised wheelchairs taken from them – some losing their jobs as a consequence.

Motability also reports that 51,000 people have been taken off the scheme after a reassessment for personal independence payments (PIP) since it was launched in 2013 – 45% of all cases. 

The benefits budget is being repeatedly cut to pay for the ‘bailouts’ following the banking crisis and people are stripped of disability benefits or having them reduced by half. This is causing pressures which can leave them too sick to work, too poor to support themselves and too tired and frightened to appeal against these damaging decisions.

Even in comfortable ‘middle England’ the number of people who find this victimisation shameful and seek radical political change is growing.

 

 

 

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Focus on cuts 6: JAM families suffer as bus fares rise

 

 

In 2016, though the price of oil was low, average bus fares rose three times faster than the consumer prices index. The statistics report presented by government for 2015/6 was precise: “Between March 2011 and March 2016, the average annual percentage change in bus fares was 3.8% higher than the average annual rate of inflation (2.3%)”. Families who can’t afford a car can find travelling by bus costs more than taking a taxi.

Theresa May: “We will do everything we can to give you more control over your lives” (first speech as leader)

But reduced central funding means that as many bus services have been ‘axed’ people actually have less control:

  • Without accessible or affordable transport, adults in ‘just about managing’ [JAM] families will be less able to travel to work or to medical and other appointments.
  • Some feel compelled to go into debt to buy cars they wouldn’t need if bus services were reliable and affordable..

Due to government funding cuts, town hall chiefs have announced that councils have been forced to reduce bus services by more than 12% in the past year.

They  are calling on the Government to fully fund the Concessionary Fares scheme, and for the devolution of the £250m Bus Service Operators Grant scheme that refunds some of the fuel duty incurred by operators of registered local bus services. The grant was kept at 81% until April 2012, when it was reduced by 20%. The current payment rate is the lowest ever percentage since the rebate’s inception in the 1960s.

Theresa May: “When it comes to opportunity, we won’t entrench the advantages of the fortunate few, we will do everything we can to help anybody”.

But government actions belied these fine words; her chancellor announced a fuel duty freeze whichhe saidwill cost taxpayers a predicted £850m in the first year alone and really help the ‘fortunate few’ running the largest cars, not the JAM families.

 

 

 

 

 

Government cuts for disabled people escalate

The recent by-elections gave cover for the latest government announcement of emergency legislation inflicting further cuts on disabled people – ‘a good day to bury bad news’.

Two tribunals had ruled that the Department for Work and Pensions (DWP) should expand the reach of Personal Independence Payment (PIP) – which helps disabled people fund their living costs.

  • One ruling found that someone who needed support at home to take medication or monitor a health condition like diabetes would score the same on the benefits criteria as people who needed help with a demanding procedure such as kidney dialysis.
  • A second ruling said people who struggled to travel independently because of conditions such as anxiety scored the same as someone who was, for example, blind.

Ministers then swiftly revised the law to deny the increased benefit payments to more than 150,000 people.

super-rich-bailout

A Lib Dem work and pensions spokeswoman said it was outrageous that the government was using the ruling to make matters worse for disabled people: “What makes things even worse is that they have sneaked this announcement out under the cover of [Thursday’s] by-elections.”

From April, it is reported that new claimants will see a reduction of £29.05 in their entitlement, which will fall to £73.10 a week. This follows on from the cuts that the DWP tried to implement last year, which resulted in Iain Duncan Smith’s resignation.

Liz Sayce from Disability Rights UK said: “We’re not aware of one single disability employment or benefits expert who thinks this particular cut will be an incentive for disabled people to get a job.”

Unfortunately this logic, and a host of scathing comments seen in the Metro won’t pierce the thick skins of affluent legislators and further deprivation will hit the least fortunate in many sectors.

 

 

 

Media 62: A well-kept secret? Government proposal to intervene to invest local government pension funds in projects such as HS2

A Lancashire UNISON reader mentioned this recently and an online search confirmed a message which I had found hard to believe:

unisonGovernment proposals to force the 89 local government pension funds to invest in infrastructure projects have prompted over 100,000 people to sign a petition calling for a debate in Parliament, says UNISON today (Friday).

The proposals are part of the government’s attempt to create six new multi-billion pound British wealth funds. UNISON is concerned that the move could take away funds’ ability to invest in the best interests of local government pension scheme (LGPS) members.

If these changes come into force, it could mean the new funds replace government funding for roads, bridges and railways, which might not give LGPS members the best possible return, says UNISON.

UNISON general secretary Dave Prentis said: “It’s time ministers granted a debate in Parliament on the future of the local government pension scheme. No other pension fund in the UK has this level of interference, and it’s important that MPs can scrutinise proposals affecting one of the largest schemes in the UK.

“There must be proper consultation on the introduction of the new wealth funds, one that must involve unions in any investment decisions.

“Ministers must allow council pension funds to make their own decisions on where they invest the current and future pension pots of care workers, teaching assistants and social workers, and allow them to get the best return.”

The ‘thin end of the wedge’?

From the government’s response to the petition here:

We have recently consulted on proposals to grant the Secretary of State a power of intervention . . .

(Department for Communities and Local Government) Councils must invest local government pension scheme funds in the best interests of scheme members. The Government has no intention of setting targets for infrastructure investment or removing the right of individual pension fund authorities to make their own decisions about strategic asset allocation. However, the pooling scheme assets announced at the July 2015 Budget will improve their capacity to invest in infrastructure, as well as achieving significant cost savings, while maintaining returns. (Ed: weasel words follow)

weasel words cartoonWe have recently consulted on proposals to grant the Secretary of State a power of intervention which would further protect members’ and taxpayers’ interests.

We expect that the power to intervene would be used exceptionally when there was clear evidence that a pension fund authority was not acting reasonably and lawfully.

The Government is currently considering the responses to the consultation.

– The text of the parliamentary petition is available here. Nearly 103,000 people have currently signed the petition.

Media contacts:

Alan Weaver T: 0207 121 5555 M: 07939 143310 E: a.weaver@unison.co.uk

Liz Chinchen T: 0207 121 5463 M: 07778 158175 E: l.chinchen@unison.co.uk

 

 

 

Austerity 2: Corbyn “spending cuts would not be needed if big companies paid their tax”

hmrc header

Parliament’s own website heads the summary of the Committee of Public Accounts report on Revenue and Customs: “HMRC still failing UK taxpayers”.

Its lamentable performance in simple tasks such as answering the telephone is on record and its failure to collect a reasonable amount of offshore tax evaded was published in November. It spoke of 11,000 job cuts since 2010 & 40,000 since 2004. Read the summary by the chair, MP Meg Hillier, here: http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-accounts-committee/news-parliament-2015/hmrc-performance-report-published-15-16/

“HMRC must do more to ensure all due tax is paid. The public purse is missing out and taxpayers expect and deserve better.

“We are deeply disappointed at the low number of prosecutions by HMRC for tax evasion. We believe it is important for HMRC to send a clear message to those who seek to evade tax that the penalties will be severe and public. It’s also important that the majority who play by the rules, paying their tax on time and in full, see that those who don’t will face the consequences.

“Tax avoidance also remains a serious concern. Too many avoidance schemes run rings around the taxman, operating legally but gaining advantages never intended by Parliament. If tax law is to be improved then HMRC must as a priority provide Parliament with comprehensive details of avoidance. HMRC must also rapidly improve its customer service, previously described by the PAC as abysmal and now even worse – to the extent it could be considered a genuine threat to tax collection.

“It beggars belief that, having made disappointing progress on tax evasion and avoidance, the taxman also seems incapable of running a satisfactory service for people trying to pay their fair share.”

crickhowell 3

The FT reports that people of Crickhowell agree: the town’s traders have submitted tax plans to HMRC, using offshore arrangements favoured by multinationals. They hope that their ‘tax rebellion’ will spread to other towns forcing the Government to tackle how Amazon, for example, paid £11.9million tax last year on £5.3billion of UK sales. Their rationale: High street coffee shop owner Steve said: ‘I have always paid every penny of tax I owe, and I don’t object to that. What I object to is paying my full tax when my big name competitors are doing the damnedest to dodge theirs.’

‘Taming the Corporations’ a monograph by Austin Mitchell and Prem Sikka

Having seen the PCU website, a publisher who published a book which highlighted the damage done by corporate lobbying some years ago, asked if there are any other books which deal with the malign effect of the corporate/political nexus.

A notable monograph* was in the list compiled for him, ‘Taming the Corporations’, which Hugh Willmott, Cambridge Professor of Management Studies summarises:

This study gives backbone to the meaning of corporate governance. It penetrates beneath the criticism of particular `fat cats’ and the soothing promise of tinkering reforms. It exposes endemic abuses of corporate power, greed and destructiveness, and reveals fundamental limits and weakness of existing forms of accountability and control. A challenging set of proposals suggest how, by placing the operations of corporations under democratic, publicly accountable supervision, their power could be responsibly redirected and beneficially exercised

Mitchell [MP for Grimsby], and Sikka [Professor of Accounting at the University of Essex] indict corporations which dominate all aspects of our lives and “roam the world in pursuit of profit and owe no loyalty to any nation, community or people but their decisions can undermine and even scupper government policies.”

“Cleaning up politics is a necessary precondition for effective corporate governance reform and for subordinating the business agenda to broader social needs.”

“[Under] New Labour increasingly greedy Chief Executive Officers (CEOs) are often treated as media super stars and Labour’s mates.”  Corporate donations and gifts flow to parties and politicians. Big accountancy firms, the utilities, banks, financial institutions, defence contractors and others have contributed cash, services and staff . “They buy places at Labour’s “high plate” party dinners, governmental advisory committees, task forces, and Think Tanks, and contributions to party funds facilitate titles, contracts and jobs for those who make them. In return, New Labour, like the Conservatives, defers to the donors.”

A clear, detailed and forceful description is given of the way in which major accountancy firms, some of the world’s biggest corporations, operating behind a veil of secrecy and through global networks, have diversified into tax avoidance, consultancy and any other activity that will make a quick profit.

Despite numerous audit failures, the ‘colonisation’ of senior civil servants, current and former ministers has enabled them to escape effective regulation and retribution. The colonised include Peter Mandelson, former Labour Secretary of State for Trade & Industry, who became adviser to Ernst & Young; Sir Malcolm Rifkind, the former Conservative foreign secretary, who for some years has been an adviser to PricewaterhouseCoopers (PwC); former Inland Revenue chairman Sir Nicholas Montagu who joined PwC and the former head of the Treasury’s transport team, Lewis Atter who joined KPMG in 2004.

Mitchell-Sikka’s recommendations for beneficial change will be placed on the website tomorrow.

*ISBN 1-902384-09-1, © Association for Accountancy & Business Affairs.

Can be downloaded from here in pdf format.