Government by the wealthy, for the wealthy

If anyone had doubts as to where the Cameron government’s sympathy lay, the events of the last few days amply demonstrate that this is government for the few, not the many.

The row over bonuses in the banking sector saw battle lines clearly drawn: the public on one side, annoyed that they see living standards falling while the industry responsible for many current problems continues to over-reward poor performance.  On the other side, Cameron sent out an army of ministers to explain why the world would go to hell in a hand cart if Stephen Hester wasn’t given shares to the value of £963,000.  Just as he did with Rupert Murdoch last summer, Ed Miliband chose to stand with the outraged against the rich and powerful.  More kudos to him for that, but shame on Ian Duncan Smith, who claimed that the banking world would be plunged into some kind of “chaos” (his word, not mine), if the Government started to interfere with the pay arrangements of the sector’s higher echelons.  I can just imagine it.  They might all threaten to stop lending money to individuals and small businesses, preferring instead to twist the Government round their little finger.  Pretty much as they did a year ago with ‘Operation Merlin’.  It’s worth remembering that current Government policy has led to nurses and teachers having to work longer for less reward.  It has also led to bankers choosing whether to add a £963,000 bonus to their £1,200,000 salary. 

After Miliband threatened to force a Commons vote on the issue, Stephen Hester climbed down.  Chillingly, the Government then reiterated their refusal to interfere with any other bonus payments RBS choose to award.  It’s worth remembering that the financial sector donated £11.4 million to the Conservative Party last year.

Another move by the Conservatives, wholeheartedly supported by the LibDems, has been to alter the arrangements for payment in the legal system.  Under new legislation, the present ‘No Win, No Fee’ system will be altered.  As things stand, all costs in a successful action brought under such a deal are borne by the guilty party.  So, for instance, if I beat you up and you bring a successful civil case against me, I have to pay all of your costs.  Under the new proposal, you would have to pay a percentage of your lawyers costs for the pleasure of successfully suing me.  I’ll be better off, so if you don’t mind, I’ll beat you up next year if it’s all the same with you.  Why change the current arrangements?  Well, I have a sneaky suspicion that some law firms are not particularly happy with the level of damages that courts are setting.  As I am not a particularly wealthy man, the court cannot fine me millions for beating you up (apologies, that’s twice I’ve done it now).  A fee taken as a percentage of damages related to my circumstances would not be huge.  On the other hand, if you have to pay some of your costs, it would be more worthwhile for the lawyers to only pick wealthy clients.  If you are wealthy, the law firm could make sure they get their pound of flesh from you whatever the outcome of the case.  If you can’t afford to pay their fees then I guess it will be even cheaper for me to beat you up (I really must stop doing that).

All in all, it has been a mixed few days for the wealthy and the powerful.  It looks like lawyers will get away with charging victims of crime rather than the perpetrators, but it’s not great news if you’re a money driven Chief Executive of a state owned bank.  Perhaps Ed Miliband will choose the legal system as his next moral crusade.  Given his success in forcing the Leveson inquiry and making RBS climb down, victims of crime had better hope he does.

liamstubbslabour@hotmail.co.uk
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Needing to Ed in the right direction

Being Leader of the Labour Party, especially in opposition, is not an easy job.  Support is often sympathetically, rather than enthusiastically, given and enemies are never difficult to find.  Take this January comment from a senior M.P.:

“The man doesn’t understand the Labour Party.  He is isolated, depressed.  He won’t last beyond the end of the year.”

Cutting stuff.  Although, that quote wasn’t from this January, it was from January 1995.  Nor was it from a sitting M.P. but came from the late, great Gwyneth Dunwoody.  She was talking about Tony Blair.  Twelve and a half years and three General Election victories later, he did go before the end of the year.  Despite his failings, he proved a few people wrong along the way, too.

Ed Miliband is coming in for the same sort of criticism Blair had to put up with, as well as Wilson did and others in between.  People expect the Leader of the Opposition to be able to perform miracles, to storm ahead in opinion polls and to take the country by storm.  Even if Ed Miliband did all that, though, would it matter?  Neil Kinnock usually had a very healthy lead over Margaret Thatcher in the polls, but that hardly stopped the Conservative gaining a three figure majority in the poll that mattered, in 1987.

Real votes count and in the traditional Tory area of St Albans, Labour took a council seat at a by-election with a huge swing last week.  One Council seat may not mean a lot in the great scheme of things, but these were real votes cast in real ballot boxes.

Most of the disapproval seems to be coming from the media, or is at least media lead.  The two newspapers most vociferous in their criticisms are the Sun and the Times.  Both these publications are owned by Rupert Murdoch, whose News International stable is up to its neck in the phone hacking scandal.  The one party leader who brought the phone hacking issue to the fore, the one who was willing to break with Murdoch and risk his newspapers ire was Ed Miliband.  For this reason, should we be surprised that they are turning on him?  The Times published a disgraceful cartoon last summer, showing one starving child in the Horn of Africa saying to another “I’ve had a bellyful of phone hacking”.  This amply demonstrates the low standards the Murdoch empire will stoop to in trying to deflect attention away from their disgusting behaviour.  Stirring opposition to Miliband is another ruse to this very end.  Remove him, the theory goes, and his successor may not make such a principled stand.  Fortunately, not everyone has the same moral cowardice practised by News International on a daily basis.

I would accept, however, that Miliband is tainted by association.  Outgoing governments are not popular – if they were, they would not be outgoing Governments.  Labour were rightly criticised for over spending, but are being wrongly blamed for the majority of the current economic problems.  It was Gordon Brown who made the Child Trust Fund universal, rather than only applicable to those who truly needed it.  It was not Gordon Brown who caused chaos in the Eurozone.  It was Labour who failed to impose stricter regulation on the banks.  It was not Labour who allowed American banks to become so heavily involved in the sub-prime market.  Labour have to be honest about their failings in Government.  They do not have to accept the ridiculous and dishonest Tory line that the current situation is all down to Labour.

Ed Miliband needs to put forward his principles and hope they resonate with the people of Britain.  He has already started to do this by attacking the poor ethics of the ‘get rich quick and don’t give a toss’ merchants that have dominated British business for too long.  Unfortunately, Cameron and Clegg have both been quick to try to steal those ideas for themselves.  Not bad for a man who supposedly has no direction and poor leadership – having the Prime Minister and his deputy trying to muscle in on his ground.

To my mind, Miliband has one real problem at the moment, and it is a substantial one.  He’s not being himself.  A recent set-piece speech included an urge to David Cameron to “..bring it on”.  Whoever wrote that phrase or at least allowed it to stay in the speech needs to be sacked immediately.  I cannot for one minute imagine Miliband being the kind of person who would use that phrase.  He is not Clint Eastwood.  He’s more the kind of bloke you know who has intimate knowledge of tax returns or I.T. requirements.  Let him relax and talk to people in his own way.  He may not be the most charismatic politician in the world, but that does not matter as long as his substance shows through.  At the moment, those around him are not allowing this to be the case.

After years of showmanship, of slick politicians who looked more likely to sell you a photocopier than to provide ideas for the future, the country could benefit from a serious politician who had more substance than style.  Ed Miliband could be that politician.  But he will only succeed if his advisors realise that he should be allowed to actually be Ed Miliband.

liamstubbslabour@hotmail.co.uk

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Bank on local people to lead a revival

A new year is a good time to set out new directions.  We make resolutions that involve changing our behaviour and generally seek out ways in which this new period of time is different and distinctive from the last one.  Given the dreadful economic outlook which hangs like a huge grey cloud over all of us, there has never been a better time to rethink the way we do even the most fundamental things.

Traditionally, anyone hoping to start a new commercial venture has an anxious time, putting together a business case to present to an investor, normally a bank, order to obtain funding.  If that hurdle is cleared, the next step is usually for the request to be referred up the chain of command until the final agreement is given by a regional or even national office.  So by the time the crunch decision comes, the people who have the final say are far removed from the environment in which the initial application was made.  This means that most business decisions are made on a theoretical model, rather than on the practicalities faced 'on the ground'.

A good example of the problems this can bring has come recently in Monmouth.  A new coffee shop has opened, a branch of Cafe Nero.  Now let me say that I have nothing against Cafe Nero and have sampled their latte many times during my time in Bolton and in other places too.  Unfortunately, around the time that this chain cafe has opened, two locally owned and run cafes have closed.  This is not just another case of market forces taking their natural course.  It's a situation that takes money out of the local economy.  When a chain opens, the profits it makes are distributed in the form of dividends to shareholders, wherever they may be.  When a locally owned business makes money, the profits are usually recycled into the local economy, supporting local suppliers and distributors.  I'm no expert on Cafe Nero's purchasing policy, but it would not be unusual for large businesses to buy in bulk and deliver.  So milk, for example, will come from the cheapest source nationally, rather than helping to guarantee the survival of a local dairy.

It's my feeling that local issues need local solutions.  If someone wants to start a business locally, then decisions about it should be made as close to home as possible, including issues about investment.  The Bank of England recently printed a great deal of money in a process known as 'Quantatative Easing', money which was given to banks to lend to businesses, but the majority of which is sitting securely in bank vaults.  That money was intended to kick start the economy, but will not achieve the objective unless it is put into the hands of people who know where it needs to be used.  We need community investment partnerships, made up of councillors, members of business organisations and voluntary groups to decide what kind of businesses towns need.  Forget large and unwieldy regional development bodies, allow locally elected people to take charge of their towns and counties.  Give them the power to attract businesses to their areas.  Allow community investment partnerships to decide where resources need to be allocated.  And most importantly, give them the money to back people who want to create local jobs and local services. 

At the moment, the QE money is serving no purpose.  Even if it was used for investment, the decisions would be made a long way from local communities.  I'd rather see someone with business ideas going to a local partnership to ask for loans and grants to help them get started and the QE money could fund that.  Yes, there may be an issue of overlap, with people having vested interests, but this is important too.  Of course the local butcher does not want a competitor on his doorstep, but why should his voice not be heard?  Surely two identical businesses in a small community is a bad thing anyway?  One example of that here in Monmouth goes back to coffee.  You would need more than two hands to count the amount of places you could buy a cup around the high street.  If you're after a new cd, however, forget it.  Diversity keeps the shoppers coming and keeps a town alive.  Local people know that, so it is they who should be making decisions on the direction of their local economy.

Of course, there's always an issue of trust when financial matters are concerned.  Could we have faith in local people not to misappropriate large sums of cash?  Or perhaps, in the wake of the expenses scandal and the financial crisis, we should leave this money in the hands of politicians and banks.  Just a thought.

liamstubbslabour@hotmail.co.uk
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