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Friday, September 30, 2022

Tories to double down on attacks on the poor

As if Liz Truss and her shambolic Chancellor had not taken enough flack for an uncosted budget that handed out cash to the rich at the expense of everybody else, and which plunged the economy into chaos, the Times reports that the Prime Minister has said that she will not change course and will push ahead with government savings to pay for her £45 billion stimulus package.

The paper says that Ministers are drawing up plans for real-terms benefits cuts, saving £5 billion by increasing them in line with earnings, rather than with inflation.

In her interviews today, Truss acknowledged “difficult times for people” but insisted she would not be diverted from her plans. She “wouldn’t apologise”, she said, for cutting taxes on the rich, arguing that she had taken “difficult decisions” and adding: “I’m prepared to do that as prime minister because what’s important to me is that we get our economy moving.”

However, she also insisted that her government was “fiscally responsible”’ and would “bring debt down over time”.

Government departments have been told to find more savings, and Truss insisted this could be done while protecting the NHS, infrastructure and police, adding: “Our priority is frontline public services.”

She sought to attribute economic problems to the Russian invasion of Ukraine, but YouGov found that only 17 per cent of voters think Putin is most to blame and 40 per cent blame the government’s economic policies.

This is kamikaze politics, penalising the poorest elements of our society so as to enrich further the billionaires who back her party. How much longer can Tory MPs tolerate her presence in Number 10?

Thursday, September 29, 2022

Missing the point on MP's second jobs

The Mirror reports that plans to crack down on MPs’ second jobs have finally been backed by the government almost a year after the Owen Paterson scandal, but loopholes are set to be left open in a move branded “very odd” by a standards watchdog.

The paper says that Ministers accepted a recommendation that MPs should be banned from giving paid parliamentary advice, consultancy or strategy, but they refused to back the Standards Committee’s plea for a lobbying ban to be written into MPs’ contracts:

The committee had sought views on whether restrictions should be placed on MPs' outside earnings in a review of the MPs' Code of Conduct last year.

It followed the outcry over the disclosures that Tory Owen Paterson broke the ban on paid lobbying by MPs.

Meanwhile Conservative backbencher Sir Geoffrey Cox earned more than £900,000 last year from his work as a lawyer.

In a response, published on Tuesday, the Government gave its backing to a proposed ban on MPs working as parliamentary advisers or consultants.

"The Government firmly believes that an MP's primary job is and must be to serve their constituents and represent their interests in Parliament," the response says.

"Members have a duty to their constituents and any outside work should be within reasonable limits, in order for an MP's parliamentary duties to take priority."

The Government was more lukewarm on a proposal that would see MPs who take on outside work required to have a written contract which explicitly states that their duties cannot include lobbying ministers or officials or providing advice on how to influence Parliament.

Citing "reservations" about "whether it is appropriate to regulate the terms of employment contracts between individual MPs and outside employer", the Government said it did not agree with such a call.

The overall committee proposals should come before the Commons "as soon as possible", the Government concluded.

The problem with this approach of course is that it still allows room for abuse of the system, and therefore it undermines confidence in the integrity of MPs. Surely, the government must rethink this.

Wednesday, September 28, 2022

The IMF again

Those of us who are old enough will remember the 1970s when the IMF was asked to provide a huge loan to rescue the country from a balance of payments crisis, an intervention that wrecked the Labour Government's reputation for economic competence and helped pave the way for a Thatcher victory in 1979.

The conditions on which that money was lent to the UK included the sort of austerity measures later introduced by the Cameron Government in an effort to get borrowing under control. It sealed the reputation of the IMF as a right wing facing organisation, whose remedies for emerging countries are closer to Milton Friedman than John Maynard Keynes. Umder the circumstances one would expect them to back Truss's trickle down solution to Britain's economic woes rather than oppose them.

Unfortunately for Truss that is not the case. The Guardian reports that the International Monetary Fund has launched a stinging attack on the UK’s tax-cutting plans and called on Liz Truss’s government to reconsider them to prevent stoking inequality:

In rare public criticism of a leading global economy, the Washington-based fund said Kwasi Kwarteng’s mini-budget risked undermining the efforts of the Bank of England to tackle rampant inflation amid the cost of living emergency.

It said a statement planned by Kwarteng for 23 November presented an “opportunity for the UK government to consider ways to provide support that is more targeted and reevaluate the tax measures, especially those that benefit high income earners”.

The rebuke comes amid a growing international backlash over the chancellor’s £45bn of unfunded tax cuts, with the intervention from the IMF swiftly followed by sharp criticism from the credit rating agency Moody’s late on Tuesday. The US treasury secretary, Janet Yellen, also said the US was “monitoring developments very closely” in the UK.

As one of the most influential adjudicators in global financial markets, which rates the creditworthiness of governments and corporations on behalf of large investors, Moody’s said the UK’s “large unfunded tax cuts are credit negative”.

“A sustained confidence shock arising from market concerns over the credibility of the government’s fiscal strategy that resulted in structurally higher funding costs could more permanently weaken the UK’s debt affordability.”

The intervention from the IMF is rare given the influence of the UK in the global economy, and as one of the organisation’s largest shareholders.

Larry Summers, the former US treasury secretary, said such a warning shot from the IMF would be more usual for an emerging market economy than a country like Britain. He told the BBC’s Newsnight: “It is early days and things could change and economics is not an exact science, but I would certainly say that this has the look right now of a number of unforced errors.”

The paper adds that the IMF has consistently warned countries to avoid universal bailouts in response to the energy price shock. It has argued that only the poorest households should be protected from higher energy bills and the extra costs from rising inflation to limit the impact on public borrowing.

If the IMF are critical of this government's right wing policies then we know we are in trouble.

Tuesday, September 27, 2022

Labour takes one step forward, two steps back

For those of us who can see some hope of a more radical and longer term agenda emerging from this week's Labour conference with the vote in favour of a proportional voting system for UK General Elections, there are also familiar signs that we being led up the garden path.

Tbe Independent reports that Labour members voted in favour of three electoral reform motions, including to replace first-past-the-post with a form of proportional representation at general elections. They did not appear to specify what system they prefer though and local government was omitted from the resolution.

However, despite signs that the Labour Party at large is beginning to recognise that electing right wing Conservative governments on a minority of the vote is not in the best interests of the country, their leadership remains stuck in the old way of thinking.

The paper reports that at the weekend Sir Keir Starmer declared that electoral reform was “not a priority for me”, suggesting that if he were to become Prime Minister he would not implement the resolution.

When the majority are effectively disenfranchised by a voting system that denies them a voice and the opposition party is not prepared to do anything about that, it is little wonder that more authoritarian and right wing views are starting to prevail in this country,

Monday, September 26, 2022

An economic catastrophe

The immediate aftermath of Friday's financial statement led to the valid criticism that this Tory government is looking after the super-rich at the expense of the poor, a verdict shared by most people. 

The fact is that when all the changes are taken into account, including the freezing of personal allowances, only those earning more than £150,000 will be better off as a result of the Chancellor's policies, the rest of us are financial losers.

It is astonishing, though not surprising, that a Tory government, elected on a promise of levelling up, would be so brazen in the way they have gone about this. This is a government that is now clearly on the side of the rich at the expense of the poorest in our society.

The chancellor's problem is that his own fiscal policies are making things worse, both for the country, for ordinary people and even for the measures he has put in place to try and help with the cost of living crisis.

Because the chancellor has refused to levy a windfall tax to keep fuel bills low and is instead, relying on massive unsupported borrowing, the markets have lost all confidence in his ability to manage the economy.

As a result the pound has hit an all time low, leading to a massive hike in the cost of exports. As the oil and gas we import is paid for in dollars, this has caused an 11p a iitre hike in the cost of petrol, and it has also added to the cost of the gas and electricity that will heat our homes this winter.

That means that if the chancellor is going to maintain his cap on the price of energy, he will need to borrow more to pay off the big energy companies, which will further undermine the confidence of the markets.

Talk of further tax cuts will just add fuel to this fire, when what the chancellor needs to do is to impose taxes on windfall profits and the wealthy to prop up his borrowing and steady the market.

Kwasi Kwarteng has only been in office a few days, but already he is heading for an economic catastrophe of his own making.

Sunday, September 25, 2022

Breaking barriers - but not in a good way

The Times reports that Liz Truss's unconventional approach to basic economics is matched by the rather bizarre way of organising her office.

It is appropriate for Prime Ministers to have a Chief of Staff and special advisors, but normally these people are paid for by the state and are on the government payroll. That ensures they are accountable for their behaviour, have no conflicts of interest and only have the one boss. This barrier of impartiality and accountability is an important part of government.

The Times though, reveals that this prime minister’s chief of staff is being paid through his lobbying company in a highly unusual arrangement that could allow him to pay less tax:

Mark Fullbrook insists he is not being paid through his company for tax reasons and has obtained no tax benefit from the arrangement. However, he is refusing to explain the agreement that lets him direct government strategy without being directly employed by the government.

Previous holders of the role have been treated like any other special adviser (Spad), appointed on a temporary civil service contract and paid a salary that is made public. Fullbrook is instead a contractor and will receive any payment through Fullbrook Strategies, a private lobbying company he created in April but which he says has suspended commercial activities.

One Whitehall source said it was “unheard of” for a No 10 official of his seniority to be employed in this way although Fullbrook disputed this. It is unclear what the implications of the arrangement are from a financial and transparency perspective.

Between April and June, according to the Office of the Registrar of Consultant Lobbyists, Fullbrook’s company contacted the government on behalf of clients including the Libyan House of Representatives, which is opposed by the West and the UN, an energy provider and a PPE firm linked to a fundamentalist Christian sect.

It announced it had “suspended” its commercial activities earlier this month after Fullbrook was appointed by Liz Truss to be her top aide.

However he is continuing to use it as a vehicle to receive his publicly funded salary. The equivalent post under Boris Johnson carried a salary of £140,000.

The arrangement will lead to questions days after No 10 scrapped the so-called IR35 reforms of previous Conservative governments that were designed to stop people paying themselves via a company to avoid tax.

As the paper points out, Fullbrook is already facing questions after they revealed he had been interviewed by FBI agents in connection with an alleged criminal conspiracy to bribe a US politician and influence the outcome of an election in Puerto Rico. 

He has since signed an agreement with US law enforcement and is co-operating as a witness. It is understood that he is not under investigation. He denies any knowledge of the bribe and in a statement says he is “confident” he behaved within the law at all times.

Nevertheless, the arrangement Truss has with him inevitably raises questions about his status in government and whether the arrangement he has in place is a proper one for the Prime Minister's office.

Saturday, September 24, 2022

The Norwich City question

The Guardian reports on some very interesting expenditure charged to Foreign Office credit cards at the same time that Liz Truss was Foreign Secretary. 

They say that officials are facing questions about spending on credit cards, including £1,841 at Norwich City football club online, and £10,000 at Fortnum and Mason:

Emily Thornberry, the shadow attorney general, wrote to the Foreign Office questioning why spending was up by 45% on its government procurement cards between September 2021 to July 2022.

She asked Gillian Keegan, a senior minister, to give more details about the spending on a range of items, including luxury restaurants and premium home decor brands such as White Company, Ercol furniture and Osborne and Little, a supplier of fabric and wallpaper.

The Foreign Office declined to provide explanations to Thornberry saying it would cost too much money, so the shadow attorney general went public with a letter to Keegan. Data on the FCDO’s spending shows thousands spent on high-end restaurants, such as the Cinnamon Club, the Corinthia hotel, Stanley’s in Chelsea and the Kennington Tandoori, a famous haunt of politicians.

Thornberry also queried more than £900 to Calm Over Chaos, which appears to supply adult colouring books, and £1,850 to Soul Sanctuary, which may be a wellness app. There were two payments of more than £4,000 in total to a barber company called Finishing Touches, although it is understood this relates to general maintenance rather than beauty.

Thornberry told Keegan it was difficult to understand the amounts spent on “high-end private catering; wellness and beauty treatments; extensive supplies from UK wineries; large amounts of home furnishing; and even £1,841 at the Norwich City club shop”.

Norwich City football club is a team supported by Truss. In 2018, as chief secretary to the Treasury, she gave a football shirt from Norwich City to a US official in Cleveland, Ohio in an attempt to encourage an American football club to relocate to the UK.

Obviously, more details are needed, not least how Norwich City Football Club got involved in British foreign policy.

Friday, September 23, 2022

Now, Truss channels Trump

Just when you thought it was safe to get back into international politics, the Prime Minister of then UK is revealed as a Trumpista. Flee for your lives.

Certainly, one of the most crass, hamfisted and insensitive things Trunp did in foreign relations was to move the US embassy to Jerusalem. It may have pleased Israel and the US Jewish lobby, but it did nothing for peace in the Middle East, in fact it undermined the USA's credibility with many Arab nations.

Now, according to the Guardian, Truss is set to follow suit.

The paper says that in a meeting on the sidelines of the UN general assembly in New York, the prime minister told Israel’s caretaker leader, Yair Lapid, about a “review of the current location” of the building:

The status of Jerusalem, which Israelis and Palestinians claim as their capital, is one of the most sensitive issues in the long-running conflict.

East Jerusalem, along with the West Bank and Gaza Strip, has been considered occupied Palestinian territory under international law since the six-day war in 1967.

Like the vast majority of the international community, the UK’s position until this point has been that the divided city should host consulates, rather than embassies, until a final peace agreement is reached.

Trump’s 2018 fulfilment of an election campaign promise to recognise Jerusalem as Israel’s capital prompted international condemnation, and led to protests and clashes in which Israeli forces killed dozens of Palestinians. The then UK prime minister Theresa May criticised the move at the time.

On Thursday, the Israeli prime minister tweeted his thanks to Truss for what he described as “positively considering” the move. “We will continue to strengthen the partnership between the countries,” he said.

UK forign policy in the MIddle East is hardly covered in glory, Liz Truss apparently plans to take things to new depths.

Thursday, September 22, 2022

Jacob Rees-Mogg channels Cnut

King Canute (or Cnut in its correct spelling) fanously demonstrated his piety, proving to his fawning subjects that he was no better than any other man, by demonstrating that no matter how hard he might try, he could not control the elements and turn back the sea.

Jacob Rees-Mogg, it seems, is aiming to prove Cnut wrong by single-handedly changing the geography of the United Kingdom.

The Independent reports that the new Business Secretary is set to allow higher levels of seismic activity at shale gas drilling sites as part of its plan to lift the ban on fracking, Jacob Rees-Mogg has suggested:

Despite concerns about earthquakes, the business secretary said the current limit of 0.5 on the Richter scale was “too low”.

Speaking on BBC Newsnight on Wednesday evening, Mr Rees-Mogg indicated that the government would review the current permitted levels of seismic activity at fracking sites.

“The seismic limits will be reviewed to see a proportionate level. 0.5 on the Richter scale, which is only noticeable with sophisticated machinery, it is quite right that fracking would not take place – that level is too low,” he said.

Mr Rees-Mogg, who will set out plans to end the fracking ban on Thursday, said: “I can’t confirm a new level, because that is being looked at.”

The paper adds that a leaked British Geological Survey review into the safety of fracking acknowledged that forecasting for drilling-induced earthquakes “remains a scientific challenge”. It reportedly states that there is little evidence that progress has been made in reducing and predicting the risk of earthquakes from fracking.

Quite how Rees-Mogg is going to limit seismic activity therefore remains a mystery. Maybe he is the new Cnut, but without the reality check, and certainly without the former king's humility.

Wednesday, September 21, 2022

Another Brexit bombshell

There have been so many false dawns, lies and broken promises that it almost feels indecent to mention yet another failure from the Brexit camp, and yet we must if only to keep track of the huge confidence trick that has been played on the UK public to enrich a few billionaires who did not want to be subject to EU regulation in the way they move their money about.

I am sure many can remember the claim about how easy it would be to do a trade deal with the EU and yet here we are six years after the vote, three years after the final exit, still with no deal, businesses drowning in red tape, exports to the EU plummeting, the pound struggling to keep its head above water, and our relations with the EU on a war footing over the UK's insistence on breaking an agreement we entered voluntarily because of Northern Ireland, and which was heralded as a triumph by the then Prime Minister, Boris Johnson.

Since the vote there have been a number of inconsequential trade deals that came nowhere near compensating for our exit from the largest free trade area in the world, and in the case of Australia actually damaged our own farming industry. All of these deals were available to us while a member of the EU. But the biggest trade deal of all, the one being heralded by Brexiteers as easily within our grasp, continues to allude us.

As the newspaper headline from just before the 2019 General Election, reproduced above, illustrates, this has not stopped Brexiteers seeking to mislead us as to progress, even claiming that the deal with the USA was a certainty. And now the truth has come out, we were being misled all along.

The Guardian reports on the admittance by our new Prime Minister, Liz Truss that Britain may not strike a free trade deal with the US for years to come.

The paper says that this is the first time the government has conceded there is virtually no chance of getting agreement on an early bilateral trade deal with the US, Britain’s biggest trading partner, despite it being coveted by Brexit supporters as one of the major potential benefits of leaving the EU.

So what were the benefits of leaving the EU? Can anybody tell us?

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