When I first got a phone call telling me about the appointment of Mandelson to cabinet I thought it was one of those reshuffle day wind ups. Usually it is someone ringing a backbencher and pretending to be the Prime Minister offering a job. I though that this was a subtler version of the joke. When I found it was for real I expressed incredulity and the after a short while declined all media interviews because I thought it was coming across as personal and not political.
The significance of the reshuffle is not just the circling of the old New Labour wagons and the Faustian pact Brown has made with the Blairites to stave off another coup attempt for a period but more importantly the statement that is made by the appointment of Mandelson and people from the City like Paul Myners into government and the establishment of the National Economic Council makes about future economic policy.
This is in effect establishing openly the government of the city, by the city, for the city.
Look at the team of business advisers which Brown has appointed alongside the NEC. This includes :
Marcus Agius - Chairman, Barclays
Sir Victor Blank - Chairman, Lloyds TSB
Sir John Bond - Chairman, Vodafone
Lord John Browne - President, Royal Academy of Engineering and MD of Riverstone Holdings
Sir Terence Conran - Chairman, Conran Holdings
Mervyn Davies CBE - Chairman, Standard Chartered
Dr. Chris Gibson-Smith - Chairman, London Stock Exchange and British Land
Professor Malcolm Grant CBE - Provost and President, UCL
Sir Philip Hampton - Chairman, J Sainsbury
Dr John Hood -Vice Chancellor, Oxford University
Lord Digby Jones
Anna Mann - MWM Consulting
Dick Olver- Chairman, BAe Systems
Professor Alison Richard -Vice Chancellor, Cambridge University
Lord Richard Rogers - Richard Rogers Partnership
Paul Skinner - Chairman, Rio Tinto
Sir Kevin Smith, CBE - CEO, GKN
There doesn't appear to be a thought given to appointing a representative from the trade union movement to advise on economic, employment or industrial issues. Even the tamest general secretary in the history of the TUC, Brendan Barber, is not acceptable enough to sit at the high economic table. Surely all those trade union general secretaries who were convinced by Brown at the Labour party conference that a new dawn of policy change, partnership and co-operation had broken and the age of Blairism was over must now feel conned.
PS Here's a funny thing. When we were the first to call for Northern Rock to be nationalised, we were ignored then pilloried as dinosaurs. Eventially when Vincent Cable came out in favour of nationalisation he was depicted as prescient.
When we were the first to expose the role of Granite as a result of Richard Murphy's research, we were ignored and then looked upon bemusedly. When the government went into disarray on it, Cable then took it up and was praised for his sagacity.
For the last three months we have been calling for a significant cut in rates and the overriding of the Bank of England Advisory Committee. See the article reproduced from the Guardian's Comment is Free below and the LEAP website. (By the way we refused to support the independence of the Bank in the first place.) We were ignored again. Today Cable has come out with exactly the same demand and it is the number one story on the World at One and Cable is again feted as the profound greybeard of economic policy.
Next week we will be calling for at least a 3% cut in rates. I bet we will at best be derided but more than likely ignored. I also bet that within weeks people will be calling for a much more significant cut in rates than the Bank of England Advisory Committee will allow this week, amongst them will be one Vincent Cable.
Funny old world.
Sunday, 5 October 2008
Wednesday, 1 October 2008
Do What is Needed not What it Takes.
I have written this article for the Guardian's Comment is Free today.
Time for change
Careful thought has been given to the form of words to be used by the prime minister in reacting to the latest crisis of capitalism. There have been repeated assurances that the PM will "do what it takes". The Conservatives and Liberal Democrats have rallied round in almost patriotic fervour to support the government in doing "what it takes".
But "do what it takes" to do what?
Stabilise a system which has allowed homelessness in our country to double over the last decade? Bail out speculators whose obscene incomes and binge consumerism has created a society more unequal than at any time since the 1940s? Attempt to restore confidence in a system which has allowed 3 million of our children to continue living in poverty after 11 years of a Labour government?
And who is going to pay for enabling the prime minister with the support of the Cameron-Cable coalition to "do what it takes"? People are already paying for the crisis and are increasingly facing real hardship. The number of missed mortgage payments is up 50%, repossessions are up by 48%, unemployment has risen in each of the last seven months, electricity bills are up 18% and gas bills 28%, child poverty has increased in each of the last two years, and 20,000 pensioners are dying each winter from cold-related illnesses.
The government must do what is needed, not what it takes. What is needed first is an honest debate about how we got into this mess. The government has a duty to lead the debate on the fundamental causes of this crisis and the Labour party has a once-in-a-generation opportunity to lead the discussion of the profound changes needed in our society to transform an economic system that creates poverty, insecurity and inequality.
The seeds of this crisis were sown in the 1980s, when the belief in the unfettered free market moulded the attitudes of a generation of political leaders. Concreted into all governments' policy since has been that it is neither possible nor desirable for governments to seek to fetter finance capital nationally or globally, but labour costs must be constrained by privatisation, deregulation and restraining employment rights. In this market state, the provision of housing, energy, water, health, and education become less and less the essentials of life for which government stands as guarantor and more and more commodities for sale and opportunities for speculative profit-making. If prices soar and wages are held down, demand is reduced but debt can take up the slack to keep the boom going.
After three decades of the reign of the economic law of the jungle we can now reassert the basic principle that rational democratic government must control our destinies, not the irrational forces of the market motivated by rumour, speculation and profiteering. Market solutions to market failure will simply risk an unstable rerun of the same mistakes.
The government could take four simple steps to demonstrate decisively who is in control:
First, rather than reacting on a case-by-case basis as firms collapse, the government should act decisively by nationalising now all those financial institutions involved in home loans or at least taking a determining equity stake in these bodies. The current policy of bail-outs and nationalising the losses whilst privatising the profits of the banks means that ordinary people will eventually pay the cost of market failure. Repeated bail-outs caused Japan's government debt to soar from 65% to 175% of the country's GDP. In contrast, Sweden part-nationalised its banks in 1992 when their imprudence led them to the brink of collapse.
Second, to avert the prospect of the longest and deepest recession in living memory, the government must reassert democratic control of economic policy by overriding the Bank of England monetary policy committee (MPC) and cutting interest rates significantly. The remit of the MPC could be widened beyond ensuring price stability to advising on the wider economic health of the country but the bank's policy role should revert to being one voice amongst many others to be taken into account when democratic government not bankers determine our economic policy.
Third, the government must re-establish its role in the provision of secure housing, democratically accountable public services and affordable energy. The government programme needed is blindingly obvious – a massive social house-building programme, repossessions converted to social rentals, ending the privatisation mania, and control of fuel prices or re-nationalisation of energy companies.
Four, at a time of economic downturn, the government must ensure that people are secure in their jobs and that their pay reflects the cost of living – this means abolishing Brown's public sector pay cap, making the minimum wage a living wage, and restoring trade union rights.
If the role of democratic government is reasserted, the real debate can now start on what type of democratic government is needed.
Time for change
Careful thought has been given to the form of words to be used by the prime minister in reacting to the latest crisis of capitalism. There have been repeated assurances that the PM will "do what it takes". The Conservatives and Liberal Democrats have rallied round in almost patriotic fervour to support the government in doing "what it takes".
But "do what it takes" to do what?
Stabilise a system which has allowed homelessness in our country to double over the last decade? Bail out speculators whose obscene incomes and binge consumerism has created a society more unequal than at any time since the 1940s? Attempt to restore confidence in a system which has allowed 3 million of our children to continue living in poverty after 11 years of a Labour government?
And who is going to pay for enabling the prime minister with the support of the Cameron-Cable coalition to "do what it takes"? People are already paying for the crisis and are increasingly facing real hardship. The number of missed mortgage payments is up 50%, repossessions are up by 48%, unemployment has risen in each of the last seven months, electricity bills are up 18% and gas bills 28%, child poverty has increased in each of the last two years, and 20,000 pensioners are dying each winter from cold-related illnesses.
The government must do what is needed, not what it takes. What is needed first is an honest debate about how we got into this mess. The government has a duty to lead the debate on the fundamental causes of this crisis and the Labour party has a once-in-a-generation opportunity to lead the discussion of the profound changes needed in our society to transform an economic system that creates poverty, insecurity and inequality.
The seeds of this crisis were sown in the 1980s, when the belief in the unfettered free market moulded the attitudes of a generation of political leaders. Concreted into all governments' policy since has been that it is neither possible nor desirable for governments to seek to fetter finance capital nationally or globally, but labour costs must be constrained by privatisation, deregulation and restraining employment rights. In this market state, the provision of housing, energy, water, health, and education become less and less the essentials of life for which government stands as guarantor and more and more commodities for sale and opportunities for speculative profit-making. If prices soar and wages are held down, demand is reduced but debt can take up the slack to keep the boom going.
After three decades of the reign of the economic law of the jungle we can now reassert the basic principle that rational democratic government must control our destinies, not the irrational forces of the market motivated by rumour, speculation and profiteering. Market solutions to market failure will simply risk an unstable rerun of the same mistakes.
The government could take four simple steps to demonstrate decisively who is in control:
First, rather than reacting on a case-by-case basis as firms collapse, the government should act decisively by nationalising now all those financial institutions involved in home loans or at least taking a determining equity stake in these bodies. The current policy of bail-outs and nationalising the losses whilst privatising the profits of the banks means that ordinary people will eventually pay the cost of market failure. Repeated bail-outs caused Japan's government debt to soar from 65% to 175% of the country's GDP. In contrast, Sweden part-nationalised its banks in 1992 when their imprudence led them to the brink of collapse.
Second, to avert the prospect of the longest and deepest recession in living memory, the government must reassert democratic control of economic policy by overriding the Bank of England monetary policy committee (MPC) and cutting interest rates significantly. The remit of the MPC could be widened beyond ensuring price stability to advising on the wider economic health of the country but the bank's policy role should revert to being one voice amongst many others to be taken into account when democratic government not bankers determine our economic policy.
Third, the government must re-establish its role in the provision of secure housing, democratically accountable public services and affordable energy. The government programme needed is blindingly obvious – a massive social house-building programme, repossessions converted to social rentals, ending the privatisation mania, and control of fuel prices or re-nationalisation of energy companies.
Four, at a time of economic downturn, the government must ensure that people are secure in their jobs and that their pay reflects the cost of living – this means abolishing Brown's public sector pay cap, making the minimum wage a living wage, and restoring trade union rights.
If the role of democratic government is reasserted, the real debate can now start on what type of democratic government is needed.
Tuesday, 30 September 2008
US Bail Out Failure Demands Decisive Action From Gordon Brown
The failure of Congress to support the Bush bail out plan has put even more pressure on our own Government to take swift and decisive action otherwise the prospects for the British economy are a much deeper and longer recession. If the market fails the only solution is Government intervention. We can't wait much longer.
What I am amazed at is the lack of comment and reaction from across the Labour Party other than from us at LEAP (The Left Economic Advisory Panel). We may not receive the coverage of our views in the mainstream media but at least we are using whatever opprtunity we can to present an alternative analysis and policy proposals.
That is why I put out this further press release about the lack of decisive action by Government.
US Bail Out Failure Demands Decisive Action From Gordon Brown
Labour MP John McDonnell, chair of the Left Economic Advisory Panel, has called for decisive action from Gordon Brown in face of failure of US bail out plan.
John said ”After Bradford and Bingley and the failure of the US bail out plan we are facing further collapses and a long and deep recession. Simply addressing this crisis in Britain on a case by case basis means that the economy is staggering from one crisis to another into recession. The root cause of this crisis is the Government’s policy of allowing the housing market for over a decade to be used for profiteering speculation rather than to provide homes. The resultant crisis of confidence in the financial institutions has created a self fulfilling crisis of liquidity. Gordon Brown must take decisive action before it is too late. I am calling upon him to bring the home loans industry under pubic ownership and control and override the Bank of England Advisory Committee to cut interest rates decisively.”
What I am amazed at is the lack of comment and reaction from across the Labour Party other than from us at LEAP (The Left Economic Advisory Panel). We may not receive the coverage of our views in the mainstream media but at least we are using whatever opprtunity we can to present an alternative analysis and policy proposals.
That is why I put out this further press release about the lack of decisive action by Government.
US Bail Out Failure Demands Decisive Action From Gordon Brown
Labour MP John McDonnell, chair of the Left Economic Advisory Panel, has called for decisive action from Gordon Brown in face of failure of US bail out plan.
John said ”After Bradford and Bingley and the failure of the US bail out plan we are facing further collapses and a long and deep recession. Simply addressing this crisis in Britain on a case by case basis means that the economy is staggering from one crisis to another into recession. The root cause of this crisis is the Government’s policy of allowing the housing market for over a decade to be used for profiteering speculation rather than to provide homes. The resultant crisis of confidence in the financial institutions has created a self fulfilling crisis of liquidity. Gordon Brown must take decisive action before it is too late. I am calling upon him to bring the home loans industry under pubic ownership and control and override the Bank of England Advisory Committee to cut interest rates decisively.”
Sunday, 28 September 2008
Credit Crunch Latest
I am desperately busy in my constituency and with various initiatives in unions,on the Left and progressive campaigns so blogging time has been limited to non existent. Just to let people know what I have been saying over the last 24 hours on the latest events in the current crisis of capitalism, aka the credit crunch, I have posted the last two press releases I have put out on this weekend's developments.
Saturday 27th September
Labour MP John McDonnell Warns Brown Against US style Bail Out Plans and Calls for Urgent Cut in Rates.
Labour MP, John McDonnell has warned Gordon Brown against any plans to follow the American model of bailing out the bad debts of British banks and financial institutions.
John McDonnell is the chair of the Left Economic Advisory Panel, a group of economists established 5 years ago to provide economic analysis and advice to the Left.
John said ”People will be extremely angry if Gordon Brown tries to use taxpayers’ money to implement a US style bail out of the bad debts of Britain’s financial institutions. Every year we have witnessed obscene levels of bonuses doled out in the City. Ordinary people struggling with housing, food and fuel costs should not be forced to pay for the profligacy of these city’s speculators. Allowing the City to pass on its poor investments to the taxpayer whilst retaining the cream of the crop is simply not acceptable. Nationalisation of all the assets of an institution is the only fair way of balancing the risks to taxpayers. Given the current liquidity trap the Prime Minister needs to introduce an immediate and significant cut in rates if we are to avoid further institutional collapses.”
Sunday 28th September
John McDonnell MP Calls on Gordon Brown to End Bail Outs and Produce a Credit Crunch Strategy.
In response to the Government’s decision to nationalise the Bradford and Bingley, Labour MP, John McDonnell, Chair of the Left Economic Advisory Panel, has called upon Gordon Brown to end the one of bail outs of financial institutions and to produce a credit crunch strategy.
John said “The Government cannot continue just reacting to each collapse of a financial institution as we drift towards a potentially long and deep recession. The taxpayer shouldn’t be required to pick up the tab for the bad debts of the speculators. Ordinary people shouldn’t be forced to pay for a crisis not of their own making.”
“The Government needs to produce a coherent strategy for both the immediate threat of recession and for the long term housing market. To overcome the current liquidity trap we need an immediate and significant cut in rates to avoid deflation. This means if necessary overriding the Bank of England Advisory Committee.”
“At the same time we should use this opportunity to reconstitute the housing market as a provider of homes for families rather than as a tool for speculative gain. This entails bringing into public ownership and control all those financial institutions involved in home loans, controlling lending and converting mortgage defaults into social housing.”
Saturday 27th September
Labour MP John McDonnell Warns Brown Against US style Bail Out Plans and Calls for Urgent Cut in Rates.
Labour MP, John McDonnell has warned Gordon Brown against any plans to follow the American model of bailing out the bad debts of British banks and financial institutions.
John McDonnell is the chair of the Left Economic Advisory Panel, a group of economists established 5 years ago to provide economic analysis and advice to the Left.
John said ”People will be extremely angry if Gordon Brown tries to use taxpayers’ money to implement a US style bail out of the bad debts of Britain’s financial institutions. Every year we have witnessed obscene levels of bonuses doled out in the City. Ordinary people struggling with housing, food and fuel costs should not be forced to pay for the profligacy of these city’s speculators. Allowing the City to pass on its poor investments to the taxpayer whilst retaining the cream of the crop is simply not acceptable. Nationalisation of all the assets of an institution is the only fair way of balancing the risks to taxpayers. Given the current liquidity trap the Prime Minister needs to introduce an immediate and significant cut in rates if we are to avoid further institutional collapses.”
Sunday 28th September
John McDonnell MP Calls on Gordon Brown to End Bail Outs and Produce a Credit Crunch Strategy.
In response to the Government’s decision to nationalise the Bradford and Bingley, Labour MP, John McDonnell, Chair of the Left Economic Advisory Panel, has called upon Gordon Brown to end the one of bail outs of financial institutions and to produce a credit crunch strategy.
John said “The Government cannot continue just reacting to each collapse of a financial institution as we drift towards a potentially long and deep recession. The taxpayer shouldn’t be required to pick up the tab for the bad debts of the speculators. Ordinary people shouldn’t be forced to pay for a crisis not of their own making.”
“The Government needs to produce a coherent strategy for both the immediate threat of recession and for the long term housing market. To overcome the current liquidity trap we need an immediate and significant cut in rates to avoid deflation. This means if necessary overriding the Bank of England Advisory Committee.”
“At the same time we should use this opportunity to reconstitute the housing market as a provider of homes for families rather than as a tool for speculative gain. This entails bringing into public ownership and control all those financial institutions involved in home loans, controlling lending and converting mortgage defaults into social housing.”
Sunday, 14 September 2008
Denounce the New Labour Faction Fighting andLet's have a Labour Leadership Election Based on Policies Not Personalities
I took August off from blogging simply because most of my time over the last month has been spent on time with my family, catching up on constituency work and preparing for the launch of the Trade Union Co-ordinating Group at the TUC. I last blogged when Miliband was positioning himself just in case there was a leadership bid and just as I return to the blog many of the loyalist of the loyal Blairites are attempting a coup.
I find it ironic that many of them are now arguing that part of the problem is Labour never had an election for leader last year. It is also typical that this this bitter internal infighting between New Labour factions has not raised a single difference in policy or political ideology. Both the Blairite and Brownite faction fighters have voted for virtually every policy implemented over the last 11 years, which have alienated our supporters and are delivering us up to the prospect of a Tory government.
I have largely declined media interviews because I just thought the Left should stand above and not get dragged down by this unseemly, internal, opportunist New Labour infighting. However a number of activists urged that we remind people of our position that for the Left the issue of the Labour leadership is about policies not personalities and that whilst we have wanted a leadership election for the last 2 years we believe it has to be a debate about alternative political analyses of the world we face and the alternative policy programmes that follow from them.
That is why I put out this short press release yesterday evening.
Its Like Watching the Crew having a Punch up on the Deck of the Titanic.
Commenting on Labour Leadership debacle, Labour MP John McDonnell said:
Most Labour Party members are looking on aghast as the Blairites and Brownites fight an irrelevant turf war. Its like watching the crew having a punch up on the deck of the Titanic. Without a single policy difference between them they are willing to destroy a Labour Government. I challenge both of them to publish a policy programme to put before our members for support and lets test the views of our supporters on the way forward for Labour.
Of course we are up for a leadership election at any time but our task is to ensure that we use any leadership talk or actual election as a platform for our policies and to demonstrate to our supporters and the country at large that there are socialists within the Labour Party that are willing to stand up for them as this recession hits our community.
I find it ironic that many of them are now arguing that part of the problem is Labour never had an election for leader last year. It is also typical that this this bitter internal infighting between New Labour factions has not raised a single difference in policy or political ideology. Both the Blairite and Brownite faction fighters have voted for virtually every policy implemented over the last 11 years, which have alienated our supporters and are delivering us up to the prospect of a Tory government.
I have largely declined media interviews because I just thought the Left should stand above and not get dragged down by this unseemly, internal, opportunist New Labour infighting. However a number of activists urged that we remind people of our position that for the Left the issue of the Labour leadership is about policies not personalities and that whilst we have wanted a leadership election for the last 2 years we believe it has to be a debate about alternative political analyses of the world we face and the alternative policy programmes that follow from them.
That is why I put out this short press release yesterday evening.
Its Like Watching the Crew having a Punch up on the Deck of the Titanic.
Commenting on Labour Leadership debacle, Labour MP John McDonnell said:
Most Labour Party members are looking on aghast as the Blairites and Brownites fight an irrelevant turf war. Its like watching the crew having a punch up on the deck of the Titanic. Without a single policy difference between them they are willing to destroy a Labour Government. I challenge both of them to publish a policy programme to put before our members for support and lets test the views of our supporters on the way forward for Labour.
Of course we are up for a leadership election at any time but our task is to ensure that we use any leadership talk or actual election as a platform for our policies and to demonstrate to our supporters and the country at large that there are socialists within the Labour Party that are willing to stand up for them as this recession hits our community.
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