The degree to which Ed Balls, as a key Treasury minister in the last New Labour government, is responsible for the government’s massive budget deficit is subject to argument. But what is not in dispute is Balls’ undying support for the unbridled, unregulated expansion of the financial sector which, as we know, went down in flames in 2008.
Balls, newly promoted as shadow chancellor following the sudden resignation of Alan Johnson, claimed yesterday that having studied economics for over 25 years, he knew what it was all about. Subsequent events prove a) how useless bourgeois economics is and b) how arrogant Balls is.
New Labour, as we know, transformed itself into a party that cheer-led the rise of corporate-driven globalisation and, in particular, the parallel growth of a financial sector that fuelled consumerism and, more to the point, had with government support, evaded all known regulatory frameworks.
As chancellor, Gordon Brown couldn’t believe it. The financial sector’s tax revenues grew apace. And in September 2006, Balls, then economic secretary to the Treasury under Brown, went to Hong Kong to sing the praises of London as a financial centre and how easy it was to do business under New Labour.
Balls told a joint meeting of the Hong Kong General Chamber of Commerce and the British Chamber of Commerce: “The UK’s financial tradition as a free, fair and open global market has resulted in tremendous growth in London’s international financial markets in the past decade – over-the-counter derivatives turnover up by 770%, foreign equities turnover up by 260%, cross-border bank lending up by 160% and foreign exchange turnover up by over 60%.”
After praising the growth of fantasy finance, Balls declared that central to London’s “success story” was “light-touch principle-based regulation” which New Labour was entirely responsible for. Giving the Bank of England independence was Brown’s first act in May 1997. Creating the toothless Financial Services Authority was act two.
Admiring the Big Bang of 1986, when the Thatcher government opened up the City to global competition as “decisive”, Balls went on to laud the FSA which had “confounded those who feared the FSA might become a heavy-handed and inflexible regulator.” In fact, Britain’s “regulatory regime continues to be the best in the world”.
Famous last words or what, considering there were queues outside Northern Rock branches 12 months later as people scrambled to withdrew their money from a bank that had failed in every respect?
The truth is that regulation was non-existent, not so much a light touch as light-headed. Bankers were running rings round the FSA and the Bank of England – and everyone knew it. “Products” like derivatives lay completely outside the scope of the regulators, yet Balls praised them as if they were a new form of gold.
At the time, this is how the political class and the financial elites saw it. Money could beget more money, profits would rise along with tax revenues, ordinary people could get as much credit as they wanted to buy commodities mostly made in other countries. Surely it could never end? As Brown himself said on the eve of the meltdown in July 2007, the City had entered a “new golden age”.
Then came the crash, an immediate recession and the crisis found its way into government finances, producing eye-watering deficits and interest payments on the debt heading towards £100 billion a year. So, yes, Balls does share political responsibility for the crisis. As he said in Hong Kong: “Government decisions … have an important role to play, for good or ill.”
Paul Feldman
Communications editor
For revolutionary solutions to create a sustainable, not-for-profit economy in place of global capital alongside a real democracy based on People’s Assemblies. Visit our web site at www.aworldtowin.net
Showing posts with label Alan Johnson. Show all posts
Showing posts with label Alan Johnson. Show all posts
Friday, January 21, 2011
Thursday, October 21, 2010
Time to end the profit system
The Lib-Con Coalition government’s Spending Review is an attempt to rescue an already bankrupt economy. With £81bn cuts in public spending, it is the biggest and most sustained assault on the public sector since the creation of the welfare state sixty years ago.
But the reality is that despite the ruthless measures announced yesterday, the cuts will hardly make a dent on Britain’s budget deficit, which at £162 billion is the largest of the world’s major economies.
The plan is to bring government borrowing down by £149 billion in four years. This is a 19% per cent cut in real terms, as opposed to New Labour’s proposed 12 per cent. But can this gamble succeed? The very measures intended to reduce the deficit will deepen the crisis.
The one million people who will be thrown out of work and those made homeless will need some kind of support. And whilst blighting the lives of countless citizens, especially the most vulnerable, government spending will continue to rise by an additional £38 billion over the coming four years. As Chancellor Osborne announced: “total public expenditure - capital and current - over the coming years will be £702 billion next year, then £713 billion, £724 billion and £740 billion in 2014-15.”
An additional £7 billion cut brings the total cut in the welfare budget to £18 billion so far. The poorest ten per cent of the population stand to lose the most. It is a monstrous bludgeon expected to achieve just a £5 billion reduction in the £43 billion per year interest payments.
The measures include:
• a 30% cut in funding for local authorities
• a 74% cut in the budget for house-building combined with a trebling of rents for new tenants in social housing
• insecure tenancy of council house dwellers
• the minimum possible increase for the NHS, that will leave health care struggling to keep up with an aging population and scientific advance
• ending the universal right to Child benefits
• a 3.4% real cut in education
• cancellation of major infrastructure projects, like the renewal energy from the Severn Barrage
• a 10% increase in rail fares
• a £7 billion cut in the welfare budget
• Culture Department to be cut by 42% with almost 30% cut for Arts Council
• up to 30% cuts in budgets for government departments
• 20% cut in funding for the police
• rapid acceleration in the process of adding a year to the working life of a man and six to that of a woman before they can claim a state pension
• huge and damaging reductions in the settlements for Scotland, Wales and Northern Ireland
There is certain to be much more as the contraction of the global capitalist economy tightens its grip. The attempt to reduce repayments to the money markets will be undermined by tax revenues falling faster as the recession turns to slump. The populist gesture of £2 billion to be raised from a permanent levy on banks will surely be passed on in the form of higher costs of borrowing.
Cuts in administration of around 30% over four years will lead to a loss of an estimated 490,000 public sector jobs, 8% of the total. The effects of the overall programme confirms consultancy PriceWaterhouseCooper’s estimate of a further 500,000 jobs evaporating in the private sector as spending is reduced and contracts are cancelled.
The Coalition has issued a sinister threat with its promise that it will always be better to be in work than on benefits. It means that they’re hard at work on schemes to reduce wages across the board. No doubt employers will be rubbing their hands at the prospect of new sources of cheap labour from the enlarged European Union and beyond.
This is only the beginning. The Spending Review spells out that the capitalist state can no longer afford to fund any of the rights or life-support benefits won by unions in a century of struggle.
The intention to reduce the wide and complex range of benefits needed by millions of people suffering the effects of three decades of profit-chasing globalisation to an all-encompassing single payment, and a time-limit on the Employment and Support Allowance reflects a profound contempt for the individuals whose needs have been assessed by cohorts of public sector workers. Capitalism in crisis wants to reduce millions people to bottom-line cyphers of cost before trying to eliminate them altogether.
Calls last night outside Downing Street for “French-style” strikes are a welcome move from the total inaction of the Trade Union Congress. But even industrial action needs a political purpose. The desperate gamblers in No10 and 11 are driven by a real economic crisis of the capitalist system itself.
The solution to the debt mountain comes in the shape of action by People's Assemblies http://aworldtowin.net/frontline/BuildPeoplesAssemblies.html, formed locally throughout the country with a view to defending services, livelihoods, jobs, and homes. Eventually a government formed from a network of people's assemblies will need to take control of the financial sector, cancel the debts and turn it into a not-for-profit service.
The global capitalist classes are watching to see the results of Osborne’s cruel experiment. It’s time to realise that we too must enter new territory.
Gerry Gold
Economics editor
But the reality is that despite the ruthless measures announced yesterday, the cuts will hardly make a dent on Britain’s budget deficit, which at £162 billion is the largest of the world’s major economies.
The plan is to bring government borrowing down by £149 billion in four years. This is a 19% per cent cut in real terms, as opposed to New Labour’s proposed 12 per cent. But can this gamble succeed? The very measures intended to reduce the deficit will deepen the crisis.
The one million people who will be thrown out of work and those made homeless will need some kind of support. And whilst blighting the lives of countless citizens, especially the most vulnerable, government spending will continue to rise by an additional £38 billion over the coming four years. As Chancellor Osborne announced: “total public expenditure - capital and current - over the coming years will be £702 billion next year, then £713 billion, £724 billion and £740 billion in 2014-15.”
An additional £7 billion cut brings the total cut in the welfare budget to £18 billion so far. The poorest ten per cent of the population stand to lose the most. It is a monstrous bludgeon expected to achieve just a £5 billion reduction in the £43 billion per year interest payments.
The measures include:
• a 30% cut in funding for local authorities
• a 74% cut in the budget for house-building combined with a trebling of rents for new tenants in social housing
• insecure tenancy of council house dwellers
• the minimum possible increase for the NHS, that will leave health care struggling to keep up with an aging population and scientific advance
• ending the universal right to Child benefits
• a 3.4% real cut in education
• cancellation of major infrastructure projects, like the renewal energy from the Severn Barrage
• a 10% increase in rail fares
• a £7 billion cut in the welfare budget
• Culture Department to be cut by 42% with almost 30% cut for Arts Council
• up to 30% cuts in budgets for government departments
• 20% cut in funding for the police
• rapid acceleration in the process of adding a year to the working life of a man and six to that of a woman before they can claim a state pension
• huge and damaging reductions in the settlements for Scotland, Wales and Northern Ireland
There is certain to be much more as the contraction of the global capitalist economy tightens its grip. The attempt to reduce repayments to the money markets will be undermined by tax revenues falling faster as the recession turns to slump. The populist gesture of £2 billion to be raised from a permanent levy on banks will surely be passed on in the form of higher costs of borrowing.
Cuts in administration of around 30% over four years will lead to a loss of an estimated 490,000 public sector jobs, 8% of the total. The effects of the overall programme confirms consultancy PriceWaterhouseCooper’s estimate of a further 500,000 jobs evaporating in the private sector as spending is reduced and contracts are cancelled.
The Coalition has issued a sinister threat with its promise that it will always be better to be in work than on benefits. It means that they’re hard at work on schemes to reduce wages across the board. No doubt employers will be rubbing their hands at the prospect of new sources of cheap labour from the enlarged European Union and beyond.
This is only the beginning. The Spending Review spells out that the capitalist state can no longer afford to fund any of the rights or life-support benefits won by unions in a century of struggle.
The intention to reduce the wide and complex range of benefits needed by millions of people suffering the effects of three decades of profit-chasing globalisation to an all-encompassing single payment, and a time-limit on the Employment and Support Allowance reflects a profound contempt for the individuals whose needs have been assessed by cohorts of public sector workers. Capitalism in crisis wants to reduce millions people to bottom-line cyphers of cost before trying to eliminate them altogether.
Calls last night outside Downing Street for “French-style” strikes are a welcome move from the total inaction of the Trade Union Congress. But even industrial action needs a political purpose. The desperate gamblers in No10 and 11 are driven by a real economic crisis of the capitalist system itself.
The solution to the debt mountain comes in the shape of action by People's Assemblies http://aworldtowin.net/frontline/BuildPeoplesAssemblies.html, formed locally throughout the country with a view to defending services, livelihoods, jobs, and homes. Eventually a government formed from a network of people's assemblies will need to take control of the financial sector, cancel the debts and turn it into a not-for-profit service.
The global capitalist classes are watching to see the results of Osborne’s cruel experiment. It’s time to realise that we too must enter new territory.
Gerry Gold
Economics editor
Monday, October 19, 2009
Johnson's hypocrisy over BNP
When Alan Johnson, the home secretary, expresses outrage at the decision of the BBC to invite the neo-fascist British National Party on to its Question Time programme this week, you know something is not quite right. This is a stench of opportunist hypocrisy here that is overpowering.
Johnson condemned the BBC for giving the party a platform it doesn't deserve. "They are a white-supremacist party," he said. "They are an illegally constituted party. They should be confronted in argument. I've been doing that all my life. But I won't appear on this platform with the BNP, because you're talking about bringing them in, to be a legitimate political party, to sit on this platform."
Firstly, if anyone should come under fire it is Johnson’s own New Labour and not the BBC. The programme could not have gone ahead if Gordon Brown had, as leader of his party, decided that New Labour would hold to its position of not sharing a platform with the BNP. Instead, Jack Straw, justice secretary, is to appear with BNP leader Nick Griffin. Johnson neatly sidesteps that one, perhaps with one eye on a bid to take over from Brown sooner rather than later.
Secondly, Johnson is no position to lecture the BNP, as he and the government have pursued policies that have played right into its hands. The constant demonization of asylum seekers, through policies that have included vouchers, the denial of emergency housing and medical treatment, has fed the prejudices of the right-wing press and the BNP.
Only last month, Johnson himself expressed his “delight” at the “swift and decisive” action by French riot police against mainly Afghan refugees living in a make-shift camp near Calais. What Johnson denoted a “dignified success” was a squalid business, where distressed teenagers were confronted by uniformed thugs, as video reports like the one by Jason Parkinson show.
Of course, it’s alright to send thousands of troops to invade Afghanistan. When a few hundred people turn up seeking asylum and refuge from that poor, war-ravaged, corrupt country, they are treated as if they were a major threat to “our way of life”.
The tone was set early on in the history of New Labour. David Blunkett, a former home secretary, claimed in 2002 that asylum seekers were “swamping some British schools” and that there was a case for educating them separately. He won the backing of the then prime minister Tony Blair – and no doubt of the BNP too!
Johnson claims that the BNP is not a “legitimate party” and should be denied access to the BBC on that basis alone. Agreeing to that point of view, however, would allow the political establishment and the state to decide who and who is not “legitimate”. Once you go down that road, anti-capitalist groups and parties could, for example, at some stage also be designated beyond the pale.
It is actually the break-up of “legitimate” parliamentary politics, in particular the transformation of New Labour into an openly capitalist party, that has fuelled the growth of the BNP’s influence and support. As the expenses scandal demonstrates, this process is continuing apace, with or without the BNP appearing on Question Time.
The political establishment has no answers to the destabilisation produced by the coincidence of the demise of traditional politics with a profound economic crisis. The democracy they allegedly promote is hollowed out and is now under open attack from the extreme right-wing. You can only counter that threat by extending and renewing democracy in new ways, setting out to transfer actual power at the level of the state into the hands of ordinary people. That’s the best way to fight the BNP.
Paul Feldman
Communications editor
Johnson condemned the BBC for giving the party a platform it doesn't deserve. "They are a white-supremacist party," he said. "They are an illegally constituted party. They should be confronted in argument. I've been doing that all my life. But I won't appear on this platform with the BNP, because you're talking about bringing them in, to be a legitimate political party, to sit on this platform."
Firstly, if anyone should come under fire it is Johnson’s own New Labour and not the BBC. The programme could not have gone ahead if Gordon Brown had, as leader of his party, decided that New Labour would hold to its position of not sharing a platform with the BNP. Instead, Jack Straw, justice secretary, is to appear with BNP leader Nick Griffin. Johnson neatly sidesteps that one, perhaps with one eye on a bid to take over from Brown sooner rather than later.
Secondly, Johnson is no position to lecture the BNP, as he and the government have pursued policies that have played right into its hands. The constant demonization of asylum seekers, through policies that have included vouchers, the denial of emergency housing and medical treatment, has fed the prejudices of the right-wing press and the BNP.
Only last month, Johnson himself expressed his “delight” at the “swift and decisive” action by French riot police against mainly Afghan refugees living in a make-shift camp near Calais. What Johnson denoted a “dignified success” was a squalid business, where distressed teenagers were confronted by uniformed thugs, as video reports like the one by Jason Parkinson show.
Of course, it’s alright to send thousands of troops to invade Afghanistan. When a few hundred people turn up seeking asylum and refuge from that poor, war-ravaged, corrupt country, they are treated as if they were a major threat to “our way of life”.
The tone was set early on in the history of New Labour. David Blunkett, a former home secretary, claimed in 2002 that asylum seekers were “swamping some British schools” and that there was a case for educating them separately. He won the backing of the then prime minister Tony Blair – and no doubt of the BNP too!
Johnson claims that the BNP is not a “legitimate party” and should be denied access to the BBC on that basis alone. Agreeing to that point of view, however, would allow the political establishment and the state to decide who and who is not “legitimate”. Once you go down that road, anti-capitalist groups and parties could, for example, at some stage also be designated beyond the pale.
It is actually the break-up of “legitimate” parliamentary politics, in particular the transformation of New Labour into an openly capitalist party, that has fuelled the growth of the BNP’s influence and support. As the expenses scandal demonstrates, this process is continuing apace, with or without the BNP appearing on Question Time.
The political establishment has no answers to the destabilisation produced by the coincidence of the demise of traditional politics with a profound economic crisis. The democracy they allegedly promote is hollowed out and is now under open attack from the extreme right-wing. You can only counter that threat by extending and renewing democracy in new ways, setting out to transfer actual power at the level of the state into the hands of ordinary people. That’s the best way to fight the BNP.
Paul Feldman
Communications editor
Wednesday, March 18, 2009
How cost cutting costs lives
New Labour health secretary Alan Johnson’s claim that the unnecessary deaths and abysmal standards of care at Mid-Staffordshire NHS Foundation Trust are not being repeated at other hospitals is based on wishful thinking rather than facts because the same target-driven, cost-cutting approach exposed in an official report is at work throughout the health service.
In one of the most critical reports of NHS treatment ever, the Health Commission found that up to 1,200 people could have died at the hospital as a result of what it described as “appalling standards of care”. The Commission denounced the trust’s disastrous failure to look after patients entrusted to its care.
Reducing waiting times took priority over the need to look after seriously ill while cost cutting, management targets, gaining foundation trust status and public relations marketing way came ahead of patient care. The Commission concluded that staff believed care of patients had become secondary to government-imposed targets and there was a “reluctance to acknowledge or even consider that the care of patients was poor”.
A survey found that two thirds of doctors would not be happy to have a family member treated at the hospital. Patients described conditions in one ward as a “war zone”. People in A&E were left covered in blood and without pain relief, food or water, even those with serious injuries.
But no need to worry too much. Mid-Stafford is simply one bad apple in the barrel, according to Johnson. “I can give a reassurance that what happened in Stafford is an aberration, it is not indicative of what is happening in other hospitals,” the health secretary said.
But how does this explain that Johnson’s own office ignored repeated warnings by bereaved patients’ relatives? Julie Bailey, daughter of a patient who died at the hospital as long ago as December 2007 wrote to Johnson about patient concerns on January 5, 2008. Bailey, who founded a group to campaign about deaths and poor care at the hospital, simply received a reply from the health minister’s office referring her back to the hospital.
Worse still, Johnson’s office was not the only official body to ignore warnings about the failings at the trust. The Healthcare Commission itself rated the trust’s quality of care as “fair” between 2005 and 2007, before it applied for foundation status which was granted in February 2008. In other words, it was granted “flagship status” exactly at a time when patients were suffering and dying needlessly because financial and marketing priorities were put ahead of patient care.
Those who failed to spot (or ignored) the debacle in Staffordshire are still in charge of leading NHS bodies. The manager in charge of the West Midlands Strategic Health Authority from 2006, Cynthia Bower, is about to head the health super-regulator, the Care Quality Commission. Her predecessor at the authority’s forerunner is now chief executive of the NHS. The same Trust is said to have “fobbed off” NHS investigators who reported high mortality rates in 2007, saying they were statistical errors. This delayed further investigation.
It is not only individual NHS executives who are responsible for what is going on in Britain’s hospitals. It is the entire ethos fostered for years by New Labour whose priority has been to introduce capitalist market techniques into healthcare. In the end, the trust was run like any other corporation, driving down costs while maximising output.
A different approach in which the needs of the patients come first is desperately needed. That means reshaping the NHS so that it is managed by doctors, nurses and other staff working in it, alongside patients and community groups. The pharmaceutical corporations, equipment suppliers, cleaning, catering, maintenance and construction companies must all be owned and run in a similar way.
Corinna Lotz
A World to Win secretary
In one of the most critical reports of NHS treatment ever, the Health Commission found that up to 1,200 people could have died at the hospital as a result of what it described as “appalling standards of care”. The Commission denounced the trust’s disastrous failure to look after patients entrusted to its care.
Reducing waiting times took priority over the need to look after seriously ill while cost cutting, management targets, gaining foundation trust status and public relations marketing way came ahead of patient care. The Commission concluded that staff believed care of patients had become secondary to government-imposed targets and there was a “reluctance to acknowledge or even consider that the care of patients was poor”.
A survey found that two thirds of doctors would not be happy to have a family member treated at the hospital. Patients described conditions in one ward as a “war zone”. People in A&E were left covered in blood and without pain relief, food or water, even those with serious injuries.
But no need to worry too much. Mid-Stafford is simply one bad apple in the barrel, according to Johnson. “I can give a reassurance that what happened in Stafford is an aberration, it is not indicative of what is happening in other hospitals,” the health secretary said.
But how does this explain that Johnson’s own office ignored repeated warnings by bereaved patients’ relatives? Julie Bailey, daughter of a patient who died at the hospital as long ago as December 2007 wrote to Johnson about patient concerns on January 5, 2008. Bailey, who founded a group to campaign about deaths and poor care at the hospital, simply received a reply from the health minister’s office referring her back to the hospital.
Worse still, Johnson’s office was not the only official body to ignore warnings about the failings at the trust. The Healthcare Commission itself rated the trust’s quality of care as “fair” between 2005 and 2007, before it applied for foundation status which was granted in February 2008. In other words, it was granted “flagship status” exactly at a time when patients were suffering and dying needlessly because financial and marketing priorities were put ahead of patient care.
Those who failed to spot (or ignored) the debacle in Staffordshire are still in charge of leading NHS bodies. The manager in charge of the West Midlands Strategic Health Authority from 2006, Cynthia Bower, is about to head the health super-regulator, the Care Quality Commission. Her predecessor at the authority’s forerunner is now chief executive of the NHS. The same Trust is said to have “fobbed off” NHS investigators who reported high mortality rates in 2007, saying they were statistical errors. This delayed further investigation.
It is not only individual NHS executives who are responsible for what is going on in Britain’s hospitals. It is the entire ethos fostered for years by New Labour whose priority has been to introduce capitalist market techniques into healthcare. In the end, the trust was run like any other corporation, driving down costs while maximising output.
A different approach in which the needs of the patients come first is desperately needed. That means reshaping the NHS so that it is managed by doctors, nurses and other staff working in it, alongside patients and community groups. The pharmaceutical corporations, equipment suppliers, cleaning, catering, maintenance and construction companies must all be owned and run in a similar way.
Corinna Lotz
A World to Win secretary
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