Labour’s public-private plans are just a return to the dreaded PFI era

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https://morningstaronline.co.uk/article/labours-public-private-plans-are-just-return-dreaded-pfi-era

Shadow Chancellor Rachel Reeves in the shadow of Tony Bliar.

SOLOMON HUGHES warns Reeves’s proposed national wealth fund hands City financiers control over billions in public money for big business — and we get… to pay!

HOW will Keir Starmer’s Labour try to “grow the economy?” The short answer is it is going to try to use public money to persuade international investors to put cash into “growth” industries.

It’s the return of the public-private partnership. The big danger is that, like Labour’s last public-private partnership, the private corporations will get all the growth, while the public sector gets ripped off.

The main economy-grower Starmer is promoting is Rachel Reeves’s proposed national wealth fund. It will invest in key industries like “green energy” and other modern manufacturing sectors.

There is a strong Labour case to run a national bank investing in key industries: the 1945 Labour government set up two such banks, the Industrial and Commercial Finance Corporation and the Finance Corporation for Industry, which lent growth capital to small- and medium-sized industries or larger manufacturing firms respectively.

Labour argued that the City avoided investing in these crucial sectors, exacerbating the 1930s Depression. Both government-founded investment funds were very successful. Jeremy Corbyn’s Labour proposed similar publicly owned national investment banks.

But Reeves’s plan makes public money subordinate to private investment. She told the last Labour conference: “For every pound of investment we put in, we will leverage in three times as much private investment.”

Labour plans to invest £7.3 billion in the fund, and so attract around £22bn private “co-investment.” Reeves says private money will be attracted because the government cash will be “encouraging and derisking investment” from international finance: investors will assume that if the government has a stake in, say, a car battery factory, that it is a “sure thing” and won’t be allowed to go bust or lose money for shareholders.

But what happens if the publicly backed investments hit trouble? Say the car batteries come out too expensive, reducing profits, or need extra investment to fix production problems — will the private investors insist that the public investor take the losses? And if the profits are bigger than expected, will both parties benefit equally?

There are some major signs Reeves’s deals will favour the big private investors. First, because it is putting in more of the money, they can call more of the shots. This is not really a national wealth fund because most of the money will not be national.

https://morningstaronline.co.uk/article/labours-public-private-plans-are-just-return-dreaded-pfi-era

Continue ReadingLabour’s public-private plans are just a return to the dreaded PFI era

How big business took over the Labour Party

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Original article by Adam Ramsay republished from Open Democracy under a Creative Commons Attribution-NonCommercial 4.0 International licence.

Corporate lobbyists have successfully pushed Keir Starmer’s party to ditch its progressive policies

Keir Starmer sucking up to the rich and powerful at World Economic Forum, Davos.
Keir Starmer sucking up to the rich and powerful at World Economic Forum, Davos.

Over the summer, Keir Starmer’s Labour Party for the first time articulated a clear vision for government: everything will continue to be awful. Nothing will get better. Hope is for fools. And, most importantly, no one with wealth or power need worry themselves that any of either will be taken from them.

Because despite two-thirds of voters wanting the government to increase wealth taxes, shadow chancellor Rachel Reeves last month emphasised that she won’t. And although 63% of Brits think taxes on the rich are too low, Starmer has made clear that he doesn’t want to raise income tax for top earners, saying his driving principle is, rather, to lower taxes. Only 5% think the rich pay too much tax.

Meanwhile, Labour’s £28bn-a-year pledge to invest in a Green New Deal – a plan to boost the transition to a zero-carbon economy – has been cancelled by Reeves, who stressed a need for ‘fiscal discipline’. The policy has wide support among voters, particularly in key marginals in England’s North and Midlands.

Also on the party’s scrapheap are popular plans for a publicly owned energy company and a tax hike on digital giants such as Facebook and Google, as well as pledges to replace Universal Credit and scrap the two-child benefit cap.

A certain portion of the press – both Conservative hacks and Blairite shills – see all this as genius: if Labour steals the Tories’ story, how can Rishi Sunak attack? And in a way, though not the way they mean, they may be right.

Wealth and political power are enormously concentrated in Britain. Since 1945, Labour has only ever got into government when it’s made very clear that it doesn’t intend to challenge the ruling elite.

As we saw with Jeremy Corbyn, our oligarch-controlled media, the City and even army generals won’t allow any suggestion that the party plans to govern in line with the egalitarian desires of the overwhelming majority of voters.

In the battle of a general election, the cultural grip of the UK’s establishment is strong enough to override voters’ policy preferences. Actually doing the things voters want – taxing the rich, renationalising key services and tackling the climate crisis – would mean taking on institutions powerful enough to take you down. Or, at least, that’s what many Labour strategists have effectively concluded, even if that’s not how they would express it.

Of course, you can argue against that. Maybe establishment institutions are losing their grip. Perhaps the Tories would still lose the next election if Starmer stuck to his promise to run on the left.

On the other hand, it’s possible that the Labour leader being such an obvious liar – getting himself elected by his party on one set of promises and then immediately breaking them – will allow the Tories to successfully take him down. But more likely, it will make his first term as prime minister very difficult, and leave a festering anger that the right will exploit.

Cock-ups and corruption

Over the past few weeks, I’ve revealed a series of scandals about Labour.

The party accepted an illegal donation of £600,000. Starmer has accepted more corporate freebies over the past two years than every other Labour leader since 1997 put together. The shadow business secretary, his wife-come-senior-assistant, and a senior Starmer staffer accepted luxury Glastonbury tickets from Google, then announced they were scrapping plans to hike the digital service tax the next day. Shadow cabinet members, including Starmer, have corporate lobbyists placed in their staff teams.

Most of these stories boil down to at least one of the various C-words that shape so much of our politics: cock-up, conspiracy, co-option, coercion, collusion, corruption, capture, cooperation and class interest. Each is, in its own way, revealing.

In the first story, I showed that the Barnes and Richmond Labour Club had given the central party an illegal donation of just under £600,000. This seems to have been an example of the first C – a cock-up.

The money came from a local Labour club selling a building that had once been used as a social club for members. The club’s treasurer had given the cash to his local party through the national party in order to comply with regulations. But the national party seems to have failed to deliver it: within five minutes of going through their donor list, I could see that they’d broken the rules.

One local Labour club messing up isn’t a big deal. The fact that the central party cared so little about obeying transparency laws that one of its biggest donors in recent years inadvertently broke them, is. For all of Starmer’s emphasis on competence, the party he leads seems not to have invested enough in training its staff in the laws governing political finance.

It’s much harder to see Google as the bad guy when you’ve sung along to Elton John with its team, while tipsy on its tab

When we broke the second story, about Starmer’s freebies, and the third, about Jonathan Reynolds’ trip to Glasto with Google, there was a pretty ferocious reaction online. The word people kept coming back to was ‘corruption’. But I’m sure that, in his mind, Starmer doesn’t think there is any transaction going on; he’s not accepting gifts from the gambling industry in exchange for future laxity with gambling laws. They are just inviting him, he presumably thinks, because they enjoy the glamour of having the likely next prime minister on their arm.

And, the labour leader’s internal monologue might argue, it’s perfectly appropriate for him to hear from and experience the wares of various British industries. In any case, if a politician was selling elements of public policy, they could do a lot better than a four-course meal with fizz in a special box at the races.

A better word for what is going on is ‘co-option’.

Co-option

The social theorist Ralph Miliband – dad of Ed and David – documented how the same thing was done to the very first Labour MPs, a century ago. While some of the establishment was horrified by the arrival of these cloth-capped working-class men in the hallowed halls of the Palace of Westminster, its cleverer figures knew just what to do. They took them out for dinner at their smart London clubs. They introduced them to their wives, and to fine wines. They inducted them into the ruling class.

The consequence was that the first Labour administrations in the 1920s governed very much within the rules set by the establishment they had been socialised into, including pushing through massive public spending cuts after the Wall Street Crash, rather than devaluing the pound. What we’re seeing now is the same process of co-option in post-Corbyn Labour. Only now, it’s not so much co-option into the old ruling class – though we get a whiff of that in Starmer’s days out at the races – but into the glitz of big business: tickets to the Brit Awards, the best seats in the nation’s swankiest football stadiums, the luxury end of Glastonbury.

Part of the message these businesses are trying to convey to Labour folk will be expressed verbally, over sips of champagne or between the amuse bouche and the appetiser. But part of it comes in the setting itself: it’s much harder to see Google as the bad guy when you’ve sung along to Elton John with its team, while tipsy on its tab. It’s much easier to go soft on elites once you feel part of them, to see things from the perspective of a multi-millionaire if you’re watching the football from the premium suite than if you’re cheering from the stands with the fans.

You see a similar phenomenon with sponsored events at Labour Party conference, as revealed by my colleague Ruby recently. Often, these are luxurious affairs – I can still remember the delicious beef and truffle canapés I got from a firm pushing freeports a few years back.

Businesses with policy agendas invest time and money in buying nice things for politicians and their staff because it works – not in the simple transactional way that a word like ‘corruption’ implies. But in subtler, softer ways. If it didn’t, they wouldn’t do it.

Co-operation

Cooperation is important, too. While members of the cabinet have special advisers funded through the civil service, their shadows don’t get equivalent staffing support – and the resources aren’t distributed equally. Some members of the shadow cabinet have just one adviser, funded by the Labour Party, others have whole teams, paid for by major donors.

It’s generally those associated with the right of the Labour Party who seem able to attract the funding of the handful of hedge funders and millionaires who chip in to such things. As a result, they get the researchers and spinners who make them look more competent, allowing them to deliver more, to grow their profiles, to succeed.

In 2018, the party took £700,000 in donations. So far this year, it’s already taken £12m

Peter Kyle, for example, who has recently been appointed shadow secretary of state for science, and who is associated with the right of the party, has been given £50,000 by wealthy financiers over the past year. Jonathan Ashworth, who was shadow secretary of state for work and pensions and who is seen as being on the soft left of the party, got no such donations, and was demoted to paymaster general in the recent reshuffle.

Other recipients of large amounts of private cash include shadow chancellor Rachel Reeves, shadow health secretary Wes Streeting, and shadow home secretary Yvette Cooper – all of whom are associated with the right of the party. Shadow cabinet members who come from the ‘soft left’ don’t get anything like the same support.

There is no suggestion of impropriety here. Kyle and pals genuinely believe in policies that are good for their banker backers, while Ashworth et al are less keen. But the result is that the one on the side of the super-rich gets to have a super-sized staff team, and the political muscle which comes with it.

This phenomenon is not limited to shadow cabinet members. The Labour Party has changed its policy over the past few months, and has subsequently been richly rewarded with a surge in large donations.

Since becoming leader in 2020, Starmer’s Labour has struggled for money. Membership – and the revenue it provides – has dropped by 170,000 in the past three years, while trade union contributions have fallen by more than a million since 2018.

But the party’s latest accounts, which came out this week, show that the shortfall has now been more than bridged by large donations from rich people and companies. In 2018, the party took £700,000 in donations above the £7,500 reporting threshold (or £1,500 for local parties and the like). So far this year, it’s already taken £12m.

The policies that Labour has ditched in recent months may have been overwhelmingly popular among voters. But they weren’t, it seems, with its wealthy potential donors.

Collusion

It’s not surprising that lots of businesses want to shape Labour policy. Polls show that the party will likely form the next government, and corporations want to make sure it won’t get in the way of their plans to extract as much profit as they can.

In one of its newsletters this week, Politico quotes Alice Perry, associate director at H/Advisors Cicero and a former chair of Labour’s ruling National Executive Committee, as saying that demand for insider advice on how to lobby Starmer’s team has rocketed since last year. According to the website: “You can’t move in SW1 without meeting one of the new bespoke ‘Labour units’ being set up by lobbying shops or their latest ex-Labour hire.”

The revolving door goes the other way, too. As I revealed earlier this week, at least ten current staffers for shadow cabinet ministers previously worked as corporate lobbyists.

But the revolving door between lobbying agencies and the top of politics is old news. And at least a revolving door means you are either in or out at any given moment. Starmer and his colleagues, however, seem to have found a new way to blur the lines: taking on staff who are still employed as corporate lobbyists – seconded from their usual work to the Labour Party. Much of the shadow cabinet is, in other words, directly collaborating with the lobbying firms trying to sell access to them.

Commercial lobbying exists to help those with money get extra influence over governments. The inevitable corollary is that ordinary citizens will get, relatively, less say. As such, its point is to distort democratic processes, to bend them to the will of capital.

In the dying days of the last Labour government, a string of former cabinet ministers were caught offering themselves for hire as lobbyists. The ensuing scandal contributed to a sense that the party’s time in office was coming to a somewhat sordid end, and coincided with a dip in the polls. But that was after 13 years in power.

If the party is willing to so openly collude with corporate lobbyists when it ought to be fresh faced and ready for office, then voters will hear its message loud and clear: don’t expect anything to get better.

Original article by Adam Ramsay republished from Open Democracy under a Creative Commons Attribution-NonCommercial 4.0 International licence.

Continue ReadingHow big business took over the Labour Party

Labour figures took £10,000 gifts from Google and YouTube ahead of tax U-turn

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Keir Starmer sucking up to the rich and powerful at World Economic Forum, Davos.
Keir Starmer sucking up to the rich and powerful at World Economic Forum, Davos.

Original article by Adam Ramsay republished from Open Democracy under  Creative Commons Attribution-NonCommercial 4.0 International licence.

Senior Labour figures accepted valuable gifts from Google in the days before abandoning a plan to tax digital giants more, openDemocracy can reveal.

Labour’s shadow business secretary Jonathan Reynolds, his senior parliamentary assistant (who is his wife), and Keir Starmer’s political director all attended Glastonbury festival in June as guests of YouTube, which is owned by Google. Including accommodation and ‘hospitality’, Reynolds estimates his Glastonbury package for two was worth £3,377 – significantly more than the cost of two regular tickets, which were £335 each.

The next day, reports emerged that Labour had ditched its proposal to hike tax on digital businesses like Google.

The Digital Services Tax, introduced in 2020, is a 2% levy on the UK income of online companies like search engines and social media platforms. In August last year, Reynolds and his shadow chancellor colleague Rachel Reeves had called for an increase in the tax to 10%, saying the income would be used to fund a slash in tax for small businesses.

As recently as 5 June, Reynolds was still talking about the policy. Yet on 26 June this year, the day after Glastonbury ended, The Times reported that the policy had been ditched, with Labour saying it had “no plans” to raise the digital service tax when in government. Reynolds declined to comment.

It was not the only time senior figures in Starmer’s team accepted luxury gifts from Google in the months before the party’s U-turn. Shadow culture secretary Lucy Powell’s political adviser, Labour’s executive director of policy, and the party’s head of domestic policy all accepted tickets and transport to, and ‘hospitality’ at, the Brit Awards in February from the digital giant. Powell’s register of interests estimates that the adviser’s ticket was worth £1,170.

Starmer’s political director also accepted transport to and ‘hospitality’ ahead of the event from Google, though his ticket, along with that of Starmer’s private secretary, was covered by Universal Music.

YouTube will sponsor an event at Labour’s annual conference next month with the chair of the business and trade select committee, Darren Jones. The talk, hosted by the New Statesman Media Group, will be on “harnessing tech for growth”.

Last week, openDemocracy revealed that Starmer had accepted a £380 dinner from Google for him and one staff member during the World Economic Forum in January.

In total, openDemocracy estimates that Labour shadow cabinet members and their staff accepted luxury gifts from Google worth nearly £10,000 over the months before they announced their policy U-turn. By contrast, the value to the British public of the policy Labour appears to have ditched is estimated at around £3bn.

Nick Dearden, director of Global Justice Now, said: “This is a really very worrying set of events which suggests that big business has far too much access to senior opposition politicians.

“But this isn’t simply about foolish behaviour on the part of the individuals concerned. In office, Labour needs to radically restructure our economy if it’s to have any hope of creating a more sustainable and equal society, and undoing the damage of recent governments. To do that, they must take on vested interests, like the Big Tech monopolies, which have far too much wealth and power.”

Staff for other Labour shadow cabinet members have also accepted valuable gifts from controversial companies. A political adviser to the shadow chancellor Rachel Reeves, accepted two ‘box’ tickets to a Harry Styles concert worth £250 each from BT. In the 2019 Labour manifesto, the party committed to nationalising BT, a measure the company opposed. It’s not clear whether the party maintains this policy, but Reeves has distanced herself from other nationalisation plans.

In April this year, BT announced a 14.4% average increase in its prices, and £1.7bn in profit. An Openreach spokesperson said: “As you’d expect from any major employer investing billions into the UK, we engage regularly with a range of stakeholders to support the interests of our people, our customers and our business. Any hospitality is consistent with the rules, fully declared and transparent.”

Updated 31 August 2023: The original version of this article incorrectly stated that the value of the Harry Styles box tickets was £700 each. They were in fact £250 each.

Original article by Adam Ramsay republished from Open Democracy under  Creative Commons Attribution-NonCommercial 4.0 International licence.

Continue ReadingLabour figures took £10,000 gifts from Google and YouTube ahead of tax U-turn

Jeremy Corbyn annihilates Labour over ‘wealth tax u-turn’

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Image of Jeremy Corbyn MP, former leader of the Labour Party
Jeremy Corbyn MP, former leader of the Labour Party

https://www.thelondoneconomic.com/politics/jeremy-corbyn-labour-party-wealth-tax-355502/

Jeremy Corbyn, the former Labour leader who was banned from standing as a candidate for the party earlier this year, has taken an almighty swipe at Keir Starmer and Rachel Reeves, after it was confirmed that the pair would not look to implement a wealth tax if elected into office.

Keir Starmer also confirmed last month that would retain the two-child benefit limit – despite growing calls from poverty campaigners for the cap to be abandoned. The controversial stance has divided politicians within the Labour Party.

It’s another questionable policy u-turn from Starmer, and it hasn’t gone unnoticed by Jeremy Corbyn. The two-time Prime Ministerial candidate ripped into Sir Keir, saying that a wealth tax could easily fund an extension to the two-child cap.

Corbyn also urged his successor to ‘side with those in need’:

“With the money raised from a 1-2% wealth tax on assets over £10 million, we could afford to scrap the two-child benefit cap SEVENTEEN times over. Politics is about choices — and we should be on the side of those in need, not those with greed.” | Jeremy Corbyn

https://www.thelondoneconomic.com/politics/jeremy-corbyn-labour-party-wealth-tax-355502/

Continue ReadingJeremy Corbyn annihilates Labour over ‘wealth tax u-turn’

Young people stage climate protest at Starmer’s office: ‘stop breaking promises’

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Original article republished from the Skwawkbox for non-commercial use.

Anti-environmentalist Starmer finds climate-change protesters on his doorstep

Green New Deal protest Keir Starmer's office 14 July 2023.
Green New Deal Rising protest Keir Starmer’s office 14 July 2023.

‘Tree-hugger hater’ Starmer – who posed as climate-friendly as part of his con to get Labour members to vote him in as party leader then u-turned to enable the government to pass laws that will criminalise climate and other protesters and even said he hates ‘tree-huggers’ – had a little surprise on his constituency office doorstep yesterday.

Dozens of young ‘Green New Deal’ activists pitched up outside his office to demand that he stop breaking promises – Starmer has shown that his aren’t worth the air he emits to pronounce them – and decorated his office window to remind him they were there, as they explained on their Twitter feed:

The activists also staged protests at the offices of deputy leader Angela Rayner and the appalling Ian Murray in Scotland.

Tory-enabler Starmer has repeatedly fled from climate change protesters and reacted like an awkward robot when they protested at his speech last week.

But while the protest was good-natured, there is nothing remotely funny about Starmer’s contempt for protest, democratic and civil rights – and the environment. Unfit to run a tombola, let alone a political party or, worse still, a country.

Original article republished from the Skwawkbox for non-commercial use.

Hehe, “Unfit to run a tombola …”

Green New Deal Rising Events

Event nameEvent typeDateTimeLocationSign up
Keir Starmer Sit OutActionsEvery FridayLunch breakKeir Starmer’s Office, London, NW1 1TURegister at this link
Angela Rayner Sit OutActionsEvery FridayLunch breakAngela Rayner’s Constituency Office, Ashton-under-Lyne, OL6 7JURegister at this link
Ian Murray Sit OutActionsEvery FridayLunch breakMinto street constituency office, Edinburgh, EH9 2BTRegister at this link
Rachel Reeves Sit OutActionsEvery FridayLunch breakRachel Reeves’ Constituency Office, Leeds, LS13 2ETRegister at this link
Peter Kyle Sit OutActionsEvery FridayLunch breakCafe Nero, Hove, Brighton and Hove, BN3 2BARegister at this link
Pat McFadden Sit OutActionsStarts Friday 21stTBCCrescent House, Bilston, WV14 0BZRegister at this link
Jo Stevens Sit OutActionsStarts Friday 21stTBCJo Stevens’ Office, Cardiff, CF24 3RURegister at this link
Thangam Debbonaire Sit OutActionsStarts Friday 28thTBCBS32 0BQ


Continue ReadingYoung people stage climate protest at Starmer’s office: ‘stop breaking promises’