Thursday, May 31, 2007

Poor Milburn

If there was any doubt about the direction of travel that New Labourites are taking as Blair departs, Hazel Blears and Alan Milburn give us a clear view. Former health secretary Milburn has been recruited by PepsiCo to join its ‘nutritional advisory board’ in the UK along with Blair’s PR advisor Philip Gould. PepsiCo's best-selling brands include Walkers Crisps, Pepsi, PJ Smoothies, Quaker and Tropicana juices. With Coca Cola, Nestle and Danone it dominates the $46billion global bottled water market. Desperate not to lose profits as people reject junk food, like crisps and fizzy drinks, PepsiCo says that “Alan Milburn’s track record will be of enormous value to our strategic direction”. Milburn has previously made attacks on the junk food industry. But it didn’t take much to get him on board. In the league table of "brand enhancers" he is way down the list. Milburn is only getting £25,000 compared with Britney Spears (£65m); Michael Jackson (£15m); David Beckham (£15m) Beyoncé Knowles (£1m) Alan Milburn. Poor Milburn

And then there’s Hazel Blears, party chairman and deputy leader candidate. Hazel is worried about the plight of the rich, who are being threatened by "punitive levels of taxation" by some of the other candidates for John Prescott’s job. In an interview with the Financial Times, Blears says the rich should be “rewarded” with tax benefits to revive Victorian-era philanthropy and encourage charitable giving in Britain. Instead of raising higher taxes on the rich, Blears wants to follow the US model of generous tax incentives to encourage investment by high earners and wealthy businessmen in sport and the arts. She believes that the government should look at the scope for adding to existing incentives, such as gift aid, where the charity, rather than the donor, gets most of the tax refund.

In appealing to the wealthy corporations for support, Blears said the party faced disaster at the next general election if it lurched to the left and, as she put it, revived 1970s policies. Wealth creators should be welcomed, she added. "One of the reasons we won the last election is because we are seen as the kind of country where businesses want to come." While she conceded that the gap between rich and poor had widened, this was, she said, in part because many people were better off. "What I don't want to see is a cap on people's aspiration and ambition to get on in life," she said. "I don't think you solve these problems by dragging other people down." Instead, she wants to lure even more low-paid people into debt. Rules on shared equity schemes, aimed at providing key workers with low-cost housing, should be relaxed so that buyers had to raise funds for only 10% of the property's value rather than the current 40 to 50% , she suggested. Meanwhile, figures released today show that number of County Court Judgments (CCJs) against consumer debtors has reached its highest level in almost 10 years. Nearly 250,000 CCJs were issued in England and Wales in the first three months of 2007 - up 9.5% on the same period a year ago. Lenders were "increasingly using the court route to deal with unsecured debts", the Registry Trust said. Experts said the data also showed more households were struggling financially. The 247,187 CCJs issued for consumer debt is the highest since the summer of 1997, when the New Labour love-affair with market capitalism began.

Gerry Gold, economics editor

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