By James Mills / @SaveEMA

This week in the House of Commons the NUS, in collaboration with the Save EMA campaign, launched the EMA Satisfaction Survey 2010, which highlights the importance of Education Maintenance Allowances to those teenagers who rely on them.

For those unaware of this issue, EMAs are means-tested allowances of between £10 and £30 per week, paid to 16-to-19 year olds who stay in education and come from families where annual household income is below £30,000.

These payments may seem insignificant to some but, as the previous EMA Satisfaction Survey found, 65% of participants on the highest EMA rate of £30 could not continue to study without the allowance. The maintenance allowance removes some of the barriers to participation in education, particularly in covering costs towards transport.

At the meeting, Iain Wright, the minister responsible for EMA, made the government’s position clear: the secretary of state Ed Balls “wants to increase spending on what we give to EMA, not reduce it” and “there will be no question that we would want to cut it”.

However, the Conservative Party’s position on EMA is confusing, or confused. The Save EMA campaign has managed to get David Cameron on record to say he will not axe the scheme, but when the question is turned onto whether the Tories will cut EMA funding they become rather evasive. David Willets told Shane Chowen of the NUS only last month, when asked if he planned to cut EMA funding, that it was “difficult to commit in the current climate” to the scheme.

The Conservatives so far have refused to commit to the government’s spending plans for 14-19 year olds, which cover EMA. The reasons for this stem from the Conservatives' education policies of “Free Schools” and “Pupil Premiums”, which have left them with a £2.5bn black hole in their education spending plans.

Furthermore, in the event of a hung parliament, where the Conservatives hold the highest number of seats, they will be reliant on smaller parties to get their policies through parliament and support any cuts in education they want to make to free up funds. One such party the Tories could rely on at Westminster to support a cut would be the SNP, who over the last year have cut EMA in Scotland by 20% and made regressive changes to the scheme's eligibility criteria, lowering the threshold for the £30 payment and axing the £10 and £20 payments. This is despite the growing evidence that shows EMA was working in Scotland: figures released by the Scottish government only last month showed 39,110 college students and school pupils from low-income families were taking up the allowance in 2007-8, up from 38,760 in 2006-07.

The figures also showed that the allowance helps school pupils from low-income families stay on in education, with 77% of pupils using the scheme for the full year completing the attendance rates and learning expectations set out for them, compared to 70% in 2006-7. In addition, the percentage of those completing the scheme on £10 and £20 per week payments increased to 82% (the figures for 2006-7 were 74% for those on £10 payments and £73% for those on £20 payments).

These cuts to EMA in Scotland are believed by NUS Scotland to lead to almost 8,000 pupils dropping out of further education in one year alone. Needless to say, in a recession, the 8,000 young people who will be forced to leave education will go from EMA to JSA. This is what frontline cuts would mean for the poorest in our society in an age of austerity, and it shows the dividing line between Labour administrations and the rest.

Only one party has made its position on this issue clear, and although we have won the argument with other parties for why it should not be axed, we now have to fight for why it should not be cut, at all, by anyone.

Share

By Diana Smith / @MulberryBush

Last year I had a trip to a local museum, the Museum of Cannock Chase. This little unpretentious museum traces the social history of this mining area. In the downstairs room there was an evocative exhibition of black and white photos taken by a miner, during the miners' strike. The photographer had virtually no money for film so these images were very carefully considered works of art - a powerful testament of a divided community.

The rest of the museum showed us how the mining industry had developed, changing the nature of this quiet and unassuming part of the country, creating huge wealth for the owners, and a whole new culture for the workers who were essential for bringing this source of wealth up from under the ground.

One of the things that the museum brought home to me is why it is that the Labour Party and the Conservative Party can talk about public services using the same language and meaning something quite different.

Th mine owners' wealth depended on a workforce that was well enough and educated enough to do the work – so they had to provide schools, houses, sanitation and a rudimentary health service. They needed workers to be sober and well behaved, so they provided churches and chapels. I am sure that there were some “enlightened” owners who wanted their workers to lead happy and fulfilling lives – so some were keen to promote culture.

For the workers, many would have simply accepted the bounty of the owners and got on with their jobs and their lives as well as they could. Others went further. The single piece from that exhibition which stands out for me is the account of the bath house manager. He describes the way in which the bath house was managed: wet home clothes hung up to dry, the pit clothes at the other end of the building. This was all carefully thought out so that when the men emerged dirty and tired at the end of the day there was hot water, clean towels, and a choice of different soaps that the men choose to buy. Lavender was the favourite! The bath house manager had added touches of his own. He recognised the potential of the glass roofed bath house for growing things and the bath house was festooned with hanging baskets.

What I am seeing here is a clear distinction between a service that is provided to preserve our value as economic units, and a service that is by us and for us.

We have talked before about The Spirit Level, and the fact that an unequal society is damaging for us all. We are facing a future where our ageing population, and the other big challenges of climate change, energy and globalisation will mean that we cannot afford to waste people. To borrow a phrase from George Osbourne, we really are “all in this together”. We are all owners, we all have a stake in the economic prosperity of our communities, and that prosperity depends on making full use of the talents of all of our people, not just the few.

The legacy of “owner” and “worker” runs deep. I see it on the doorstep in the voting decisions that people are making. It is divisive. If we want strong communities I think we have to move beyond this. We need the energy and vision that can sometimes come from the sense of being an “owner”. We also need the compassion and understanding of what it feels like to be on the receiving end of a service that comes from being a worker.

We have been through a couple of decades where individual prosperity has seemed the biggest “good”. I think this is now behind us. For the type of future that I would like to see, we have to begin to think in terms of the prosperity of our communities as a whole.

Share

By Jeremy Corbyn / @JeremyCorbyn

Tuesday's papers led with the interesting story that the EU is concerned that Britain will be unable to lower its debt to the required 3% of GDP by 2014. This casts aspersions on the strategy of the government before next week's budget - indeed a veiled threat was made at the weekend by the head of Japanese bank Nomura that a hung parliament would lead to the devaluation of the pound.

And as if to add to the growing right-wing consensus that public spending cuts should pay for the bankers' recession, the media are emphasising the effect of enormous cuts already made in Greece and then telling President George Papandreou he hasn't done enough.

The "new" Tories justify their planned savage cuts in public spending on the basis that the huge borrowing required to buy out the banks has to be repaid by cutting public expenditure and thus rapidly increasing unemployment for both the people cut and subsequently for anyone they used to buy goods from.

The approach taken by the government during the banking crisis of 2008 was a mixed one. In part it was the product of a process of financial deregulation stretching back to Thatcher's "big bang" of 1982 and Gordon Brown's decade - long pursuit of financial deregulation.

His response of taking controlling shares in all of the major banks when the crisis began was a correct one, but there Brown's interventionism ended.

Instead of converting the major banks into fully publicly owned companies, the shareholding was transferred to a holding company, the sole function of which is to dispose of the shares as quickly as possible.

On the Politics Show last Sunday Gordon Brown claimed that every penny loaned to the banks would be repaid by them. Meanwhile, the manifesto for the general election is being written and Alistair Darling is putting the finishing touches to next week's budget.

As well as bring a crossroads for Britain, this is also a huge crossroads for Labour. Any politician seriously proposing to reduce British borrowing to the levels now required by the EU in less than three years ought to look to Greece, and the political and public reaction to the slashing of wages, services and jobs.

The new Labour strategy of limited financial regulation, the contracting out of services and the reluctance to raise thresholds for the richest in society has left the gap between the rich and the poor as wide as ever.

Welcome as the government's anti-poverty measures have been, all of this is clearly at risk if we move into huge job losses, tax increases, and an advancing recession. More than ever, the arguments for intervention and socialism are the most relevant.

This is an abridged version of Jeremy's weekly column in the Morning Star.

Share

By Sunder Katwala / @NextLeft

We have reached the point in the clumsy and damaging Ashcroft cover-up where the Shadow Foreign Secretary may as well now change his name by deed poll to "the beleaguered William Hague".

The newspapers note how his attempt to close down the Ashcroft cover-up have surely raised more questions than they answer.

What now seems crystal clear is that William Hague either lied or misled in his interview on the Today programme yesterday morning.

As The Guardian reports:

"Hague claimed on the Today programme that the documents showed that Ashcroft never faced demands to change his tax status in the negotiations over his peerage.

"A very key point that comes out of these documents is that the agreement that was made implementing the undertaking that he gave did not mention domicile," he said. "It was not about his tax domicile."

"But the documents make clear that the cross-party political honours committee, which refused and then approved the peerage, did want Ashcroft to become a full UK taxpayer. Ashcroft maintained his non-dom status by drawing up an undertaking to become resident in the UK which was then accepted."

Say it ain't so, William.

As The Times reports on how 'Tory wheeling and dealing let Ashcroft break non-don pact', that it was the Tory chief whip - apparently acting on behalf of both his leader and Lord Ashcroft - who stubbornly sought to resist the scrutiny committee's very clear insistence that the condition was very much about his tax status.

"The committee spelt out to Sir Hayden what this meant: notifying the Inland Revenue on his arrival and filling out Form P86 (Arrival in the UK) and IR DOM1 (Domicile)...

The committee secretary wrote back nine days later to say that they were “somewhat concerned” that Lord Ashcroft was declining to fill in DOM1. In their view the undertaking given by him did involve domicile, as well as residence. Sir Hayden tried this out on Mr Arbuthnot, only to meet even more dogged resistance."

Despite the obfuscations in the extraordinary Sir Humphrey like performance of Sir Hayden Phillips, apparently wanting mainly to get the problem off his desk, the agreement struck was that Ashcroft should complete the full domicile form at the end of the financial year after entering the Lords, and that the good chaps and chapesses of the establishment would now rely on his Lordship's honour and word in that undertaking.

As The Times reports:

"Phillips discovered that the Inland Revenue did not expect a new resident’s IR DOM1 form to be completed until the end of the financial year. This meant, in his view, that the issue of the IR DOM1 form could legitimately be deferred until after Lord Ashcroft had become a peer. Critically, that would also be the point at which Sir Hayden had discharged his duty and was no longer responsible for the matter.

... By agreeing to the deal, the committee let Lord Ashcroft cloak himself in ermine and entrusted the signing of DOM1 to his personal honour".

In the case of Lord A, that is something honoured rather more frequently in the breach, unfortunately.

Hague's chief whip knew. He was the chief go-between and instigator.

Yet Hague didn't know? Even if it was with a nod and a wink and the thinnest veneer of "deniability", he knew alright.

Hague misled everybody in 2000 with his statement about Ashcroft paying "millions a year in tax", which he withdrew as a mistake only yesterday. And he misled everybody again yesterday in saying the whole affair had nothing to do with tax, which is clearly nonsense, as the documents he was talking about prove very clearly.

We still do not have the full story. But the beleagured William Hague's new account stretches all credulity, as many of his own colleagues will admit.

The Guardian again:

"One senior frontbencher said: "We have handled this whole thing appallingly. We really should have come clean about this a long time ago."

One former shadow minister said it was difficult to believe Arbuthnot had not informed Hague about Ashcroft's tax status. "If William Hague did not know, then he is either a fool or a knave."

This post was also published at Next Left. 

Share

By Peter Barnard

Gordon Brown is not everyone’s cup of tea, even amongst Labour supporters.

One of many accusations made against him is that he was a profligate spender who “allowed the public finances to run out of control.”

The table below shows the state of the public finances at the end of fiscal years 1996/97 and 2007/08.

April 2008 was just six months before the financial tsunami - brought upon us by global banks (and insurer AIG) - started its journey around the world.

Source : Pre-Budget Report 2009 (except interest payments, which is sourced from Public Expenditure Statistical Analysis 2009).

Labour supporters may find these figures interesting.

Share

By Alex Smith / @alexsmith1982

* Improving tax receipts could give Alistair Darling an extra £13 billion for next week's budget.

* The government will today announce plans to help local communities buy up struggling pubs.

* Last ditch talks between BA and Unite will resume this morning, before strikes are due to begin tomorrow.

* Newly unearthed correspondence reveals Lord Ashcroft's written undertaking to become a permanent UK resident - and the "intense lobbying" on his behalf by William Hague.

* The Ashcroft affair is a vote loser for the Tories, write Martin Fletcher and Sam Coates.

* The next Tory poster campaign will attack the Prime Minister and carry a negative message.

* The Robin Hood tax's time has come, writes Jeffry Sachs in the Guardian.

* Mandelson and Clarke: A "rumble in the jungle that could always go the whole 15 rounds."

Share

Share

By Lisa Ansell / @LisaAnsell

On the recent BBC documentary ‘Secret Life of the Treasury, Alastair Darling spoke convincingly about the realisation that the "cash machines would run out by lunchtime", and how necessary decisive action was to bail out RBS.

The bailout was justified, using a strange mixture of ‘Keynesian' and ‘free market' rhetoric; it was a means by which the government would stimulate demand in the economy by underpinning the banks, which would redistribute that money round the economy - supporting enterprise by lending to businesses, which in turn would stimulate demand for services etc. The banks would be governed by a ‘fiduciary duty' to protect the interests of the taxpayers, as its biggest shareholder. Preventing their failure, as the mechanism which moves money round the economy, prevented ours.

The notion was that the banks' security would bring us out of the mess, just as their mistakes are what took us into it; that we must not, under any circumstances, undermine the free market principles that keep them 'competitive'. In the meantime, we better roll back that public sector for a while.

While we are waiting for banks to honor their part of the bargain, we used temporary liquidity measures, froze VAT, printed our own money, and kept interest rates artificially low. We do not appear to have been worried about the inflationary risks of any of these measures, even though that again will be borne by the taxpayer, and the temporary period was supposed to end with increased demand, triggered by the bank bail out, was it not?

There has been a distinct lack of analysis by either government or opposition, of which RBS actions caused this; how RBS hid the situation they were in so effectively that their failure could bring the country to its knees within hours. Nor were there questions over what they are doing with this money.

The cost of this scheme has ballooned from £50 billion in 2008, to £1 trillion this month, with little comment. This is while debates about who can protect local Sure Start centre best rage furiously - and while debates about protecting other public services don't rage at all.

When we debate obscene bank bonuses we don't seem perturbed by the fact that we have so little power, that we can't even force the banks hand over such a piddling issue. It is just accepted that this is the way it is.

The assumption that banks were best mechanism to stimulate demand, and send a trillion pounds moving round the economy is rarely questioned. Suggestions that there would have been a more cost-effective way to cushion the British people from the effects of the recession, and to stimulate sustainable growth - which may have allowed the free market principles which banks thrive in to come to fruition - are dismissed as naïve.

I have seen no appetite for analysis of how our market became so distorted in the first place. Neither party's agendas of increasing competitiveness through deregulation, have been subject to question. A merger between HBOS and Lloyds TSB was feted as part of the solution - without any consideration of why in a real ‘free market' a monopoly is supposed to be an anomaly.

If you are not going to let the market adjust naturally, and are going to prop it up using twice your annual expenditure, surely reform must be part of the condition of that support? You would at least let that support be informed by analysis of what needs to be fixed, to make sure that they don't use public money as carelessly as they used their shareholders, wouldn't you? Yet banking reform has, on the whole, been cosmetic. Opposition proposals are as toothless.

We are still measuring recovery in terms of stockmarket gains and improvements in mergers and acquisitions markets, even though these ‘gains' are often at  taxpayers' expense. The economic policy of our main opposition is underpinned by a belief that if we protect interests of ‘wealthmakers' - their recovery, is our recovery.

If a public sector policy had provided so little value for money, I am fairly sure that people from all sides of the spectrum would be demanding answers. Yet electioneering is dominated by questions about female voters. There is little evidence that either party have noticed that the most expensive part of our economic recovery strategy has yielded no results - or that they want to rectify that.

Share

Full Name: Greg Lovell

Age: 34

From: Corsham, Wiltshire

Member of the Labour Party Since: 2008

Selection Result: Selected to replace Nick Thomas-Symonds in December 2009 with majority support of CLP.

Website: greg4chippenham.co.uk

Twitter: @greglovelluk

CV: I was born in Blackburn and grew up near Dartford in Kent. I studied English Literature at Sheffield University, then worked in online marketing for four years until retraining as a solicitor at BPP Law School. I then worked for a large City law firm as a commercial contracts lawyer before becoming thoroughly disillusioned with international business and leaving to set up my own small online fairtrade shop, This Fair Earth, in early 2008.

I live in Corsham in the new constituency of Chippenham, in which I am standing. I should make it clear that when I moved to the area there was a candidate in place and it was only in December 2009 that I was selected after the incumbent was forced to step down. I have not been parachuted in to use Chippenham as a training ground!

I have a new baby daughter, Iris, and live with my wife Liz, who works in human resources for a firm in Bristol.

I was inspired to go into politics because:
I saw from the inside the empty soul of global capitalism. I would not criticise the individuals who work long hours inside major corporations and banks, but I lost the will to be a part of it very quickly. I thought that if I was going to put my heart and soul into what I spent every day doing, I needed to believe in it passionately. Setting up the fair trade business and joining the Labour Party went hand in hand with this.

I have always been a supporter of Labour, although I am not going to pretend to agree with everything we've done in the past 13 years. My aim in politics is to stand up for the poorest in society - whether financially or in terms of opportunity. I believe that to succeed in this, the left must be committed to convincing everyone of the benefits of equality. This is why I am particularly focused on policy and ideological debate. I hate the cult of personality that seems to have developed in UK politics. You'd feel the same if you were running against a brand of sausages rather than a politician.

My main policy interests are:
Equality - local and global. While I applaud our enormous achievements in supporting the less well-off, such as the minimum wage, tax credits, pension increases and winter fuel payments, there is an ideological hurdle that Labour needs to get over. We can genuinely tackle inequality while supporting enterprise, but we need to be bolder in terms of progressive taxation. Whether or not people earning £100,000 plus a year think they are rich or not, by any sensible measure, they are. Making the tax burden much fairer should not be seen as "class war" or taxing hard work, but a way of everyone contributing to making our country fairer and happier. Raising CGT and introducing a tax on excessive profits on property transactions (primary residence included) need to be considered.

And we must not ignore global poverty. Aside from the moral shame of exploiting the third world, cheap global labour limits our own competitiveness. We need to work harder to make global organisations using poorly-paid workers abroad sign up to binding international commitments on fair pay and conditions.

Education - A vibrant, relevant and positive education for everyone is vital to help achieve equality. We must create a system where every school offers a strong education, with a wide mix of pupils, managed by headteachers, supported by parents and bound into the local community. We should not encourage small special-interest groups to create schools and suck resources from the mainstream.

The environment - the poor suffer most from climate change and will continue to do so. The UK should lead the world in green innovation and as a nation should be energy self-reliant, using renewable resources as soon as practicable. Climate change is both a massive threat and a huge opportunity. We need to address both.

Three things I think should go into the next Labour manifesto are:
Changes to benefit payments - we should taper the lifting of benefit payments to give people an incentive to work without losing the support of the state immediately. While marginal tax rates and the poverty gap are tricky issues to address, the essential aim of the welfare state should be to protect the lives and dignity of those in need while giving them the motivation and support to participate fully in society.

A speculative transaction tax - whether a Tobin tax or the Robin Hood tax, Labour must commit to creating a global tax on socially-useless speculation. The banks had their time in the sun and it was ordinary people who got burnt. There is no excuse for not redressing the balance now - not for retribution, just to bring order and control to the market.

Government-backed green investment - We need to make the UK a leader in new technologies. This will come through education (which must be protected) and subsequent innovation. I support a tax framework which encourages innovation and UK manufacturing, and a fund of government investment money to help viable new UK businesses. Help for business needs to be targeted and not just a blanket corporation tax cut, which doesn't focus money in the right areas..

Share

By Alex Smith / @AlexSmith1982

Interviewed in the Guardian last month, Labour's general election co-ordinator Douglas Alexander (@DouglasGE10) outlined the 'word of mouth' strategy that underpins his campaign team's approach:

Revealing that Labour has been in discussion with the Obama team for over a year, he said: "Their key campaigning insight in an age of cynicism about politicians is word of mouth. The Conservatives are fighting a broadcast election in a networked age. What we are going to offer is not a one-way communication, but one-to-one communication.

"Obama better understood community organisation and peer-to-peer communication than any recent candidate and we are applying that lesson."

Alexander has returned to this concept in an email and video sent to Labour supporters this afternoon. "Members of social networks, whether that is the book club, the coffee morning, the sports and social clubs, or whether it's being online, each one of us has a role to play in communicating Labour's message". 

In a cutting reference to the Conservative's use of paid advertising he remarks "it's people that win elections - not posters":

Such tactics are already paying dividends with over 100,000 face-to-face conversations with voters every single week - three times the number in the run up to the 2005 general election. You can get ready to participate right now by:

* Following Labour's Twitter feed
* Joining the Facebook page
* Downloading the application for your iPhone
* For members (sign up here), you can join Labour's social network Membersnet

You can also keep up to date with the latest video output from the party on Labour's YouTube channel.

Share

The Paul Richards Column

Throughout the 1970s, 1980s and 1990s, including the three years when David Cameron worked there, the Conservative Research Department pumped out pamphlets called ‘Politics Today'. They were propaganda rags arguing in favour of the poll tax, privatisation, Clause 28, the sale of council houses, or whatever the controversy of the day was. I used to have a box of them until my wife made me throw them out.

Every few weeks a new one would appear arguing that Labour was riddled with extremism and unfit to govern. A reoccurring theme was Labour's links to the trade unions.

The February 1987 edition warned that ‘Labour intend to shift the balance of power between trade unions and employers decisively in favour of their union paymasters. In return for their financial assistance to the party, Labour would seek the agreement of the trade unions for every item of economic policy: investment, public spending, regional policy, exchange rates and taxation.'

The February 1994 edition warned ‘despite all the talk of change, Labour remains a wholly-owned subsidiary of the trade union movement' and revealed that unions sponsored every MP in the shadow cabinet, and 163 out of Labour's 269 MPs.

There was nostalgia in the air this week when Michael Gove took to the stage to launch Charlie Whelan's New Militant Tendency. It was just like the bad old days, when swivel-eyed, adulterous, avaricious, right-wing Tory ministers, armed with half-backed factoids and out-of-context quotes, supplied by eager posh researchers like Cameron, would bash the unions, and other thought-crimes such as opposing apartheid or supporting gay rights. For a moment, the Nasty Party was back, and had the trade unions in its sights once again.

Today's YouGov tracker, with the Tory lead on four points, suggests that the voters didn't pay much attention to Mr Gove's document. It reveals an essential truth about political communication: it only works if it goes with the grain of what people already think and feel. It has to hit a nerve. Most people do not consider the trade unions to be a big issue in the coming election, to be called within the next few weeks. They have not heard of Derek Simpson or Tony Woodley. Most of the voters do not care whether unions give money to the Labour Party or not. The Tories are playing their old familiar tunes, but no-one is singing along.

As the more asute commentators pointed out this week, there is no Unite takeover of the Labour Party. This is because of a simple fact: the Unite union is not a single, unified force within the Labour Party, capable of acting in concert. Gove's analogy with Militant Tendency (which did behave in a unified, disciplined way) is wrong. The idea that Unite is united is as sound as the Titanic being unsinkable or the Maginot Line impregnable. Unite is the sum of its parts: the smaller unions AEEU, MSF, TGWU and GMPU (each in their turn amalgamations of even smaller unions). Its merger has been painful and is incomplete. There are still two general secretaries. For the Tories to point to the 111 members of the Unite parliamentary group as proof of a takeover is laughable. The bigger the parliamentary group got, the less unified it became. It includes MPs from the whole spectrum of Labour opinion, from the old Right, to New Labour modernisers, to the hard-left Campaign Group. The latest crop of Unite-supported candidates range from the traditional right-winger Michael Dugher, who cut his teeth with the AEEU when it was run by Sir Ken Jackson, to the traditional left-winger John Cryer, who was a T&GWU man and member of the Campaign Group. The fact that the Prime Minister's political secretary and the party general secretary are ex-T&G, or that Charlie Whelan is ex-AEEU, or that Gordon Brown's constituency was sponsored by the T&G is simply a reflection of the links between the trade unions and the Labour Party, which are transparent, regulated by law, and above board.

But the Tory strategy is slightly more cunning than simple union-bashing, as you might expect from the wily Mr Gove. The Tories know how damaged they are by the Ashcroft revelations, and they know there's more to emerge in coming weeks. Ashcroft's influence at Tory HQ, and impact in marginal seats, is concerning because of its secrecy. No one likes the idea of wealthy individuals ‘buying' parliamentary seats. So the Tories needed a smokescreen, and fast. They hope that shouting ‘Unite' every time Labour shouts ‘Ashcroft' will be an effective blocking move. That's why it may have been a tactical error for Charlie Whelan to give media interviews this week, because it risked falling into the Tory trap. It brings a back-room boy into the limelight, which seldom ends well. Labour election campaigns are like sausages: it's best not to see how they're put together.

Far more effective would be to step up the campaign against the Tories' economic policies, to hammer them on economic competence, and to drive a wedge between Cameron and Osborne. If we sound defensive about the party's union links, the Tory attacks will gain traction. If we go on the offensive over the Tories' proposals to obliterate large sections of Britain's public services (and their slavering excitement at the prospect), we will sound like a party preparing to win a general election.

Share

I do not regard myself as a Neo Con. As readers will know, I have been sceptical of the wisdom of being in Afghanistan, and a critic of the way Iraq was handled.

However, the Neo Cons do have at least one good point. If the President is going to remain engaged in the Middle East, as he seems to want to do, he needs to show resolve and strength. Dithering, alternating between more diplomacy and more military intervention, whilst wavering over alliances, is not the best way to handle a very volatile situation.

Recently the Vice President went on a visit which passed off relatively well. On return Washington became very critical in public of Israel. Shortly afterwards Mrs Clinton had to issue a statement stressing the closeness of the Israeli relationship to the USA. It was a bad wobble, leaving most people more on edge and dubious about the US position.

The Neo Cons say rightly that any US President, Democrat or Republican, Clinton, Bush or Obama, is going to remain engaged in the Middle East. Each successive President is heir to what his predecessors did, whether he likes it or not. In practise all recent Presidents have followed a similar general policy. This has been broadly supportive of Israel and the moderate Arab states, has sought to export democracy to certain troubled states, and has fought a war against people the US characterises as radical and armed insurgents. From time to time a peace process is offered.

When President Obama came into office, he implied that it would be different. He seemed to want to offer the hand of friendship to people the USA had seen as enemies before. This was popular with many around the world, and with the liberal wing of US politics. One year or more on, and it all looks very different.

After long deliberation, he has intensified the military involvement in Afghanistan. After flirting with a friendlier approach to China, he has agreed to contact with the Dali Lama, inflammatory to the Chinese, and agreed to send weapons to Taiwan, even more inflammatory to them.

The new fulcrum of the Middle east conflicts is the issue of Iran. Is Iran arming herself with nuclear weapons? Should Israel take pre-emptive action? Would the US allow her to do so by standing aside, would the US support her, or try to bring pressure to bear against it? If the US is not going to condone military action or undertake it itself, what is Plan B if diplomacy fails to prevent a nuclear armed Iran emerging?

The President is going to discover that diplomacy works better if difficult countries and forces think there could be resolve and military intervention. If diplomacy fails and leads to military intervention that often proves difficult to guide and to end successfully. It is especially difficult if the President's heart is not in a military solution, whilst sending troops into action. He who would commit his country's troops has to give them full backing, and plenty of time and resource to do what he wants them to do. Each expedition has to have realistic aims and enough force to make victory likely. The danger of intervention in the Middle East is that it has too many diverse aims, and is a backdrop to some fluctuating diplomacy.

Interesting findings from a survey of MPs for a programme on the BBC tonight, the People's Politician. Two-fifths of MPs say their work has left them feeling depressed, 84% say that the public doesn't understand their jobs, and four out of ten say that they 'always' or 'often' exceed the government's recommended weekly alcohol limit. Four-fifths of the MPs agreed they were "hate figures".

However.... it's not all bad. 58% said they got "a lot" of satisfaction from their work and 21% said they could not imagine being happier doing anything else. And 14% want to be Prime Minister.

The programme is on at 9pm tonight.

Kerry McCarthy
www.Kerry-McCarthy.blogspot.com
www.KerryMcCarthyMP.org

1. Right to repay: consumers' repayments will always be put against the highest rate debt first. For consumers opening new accounts the minimum payment will always cover at least interest, fees and charges, plus one percent of the principal to encourage better repayment practice.
2. Right to control: consumers will have the right to choose not to receive credit limit increases in future and the right to reduce their limit at any time; and consumers will have better automated payment options. Consumers will be able to do both of these online.
3. Right to reject: consumers will be given more time to reject increases in their interest rate or their credit limit.
4. Right to information: consumers at risk of financial difficulties will be given guidance on the consequences of paying back too little; and all consumers will be given clear information on increases in their interest rate or their credit limit including the right to reject.
5. Right to compare: consumers will have an annual statement that allows for easy cost comparison with other providers.

As I did not get a satisfactory answer yesterday, let me have a go firstly at an answer the PM could have given, and then at a fuller answer to the problem I was highlighting.

Question: "The balance sheet of RBS shows £700 billion less in loans and other assets at end December 2009 compared to a year earlier. Where has the £700 billion gone?"

Possible PM answer " The Rt Hon gentleman should understand that when we took over RBS it had a very overextended balance sheet. Management is currently working to shrink the size of the balance sheet by selling off trading and other assets, reducing liabilities at the same time. I am very keen that they should not allow this process to impede levels of lending to persons and companies in the UK and will take further action as shareholder to ensure they do not restrict their supply of credit in a damaging way"

I wished to highlight two related questions. The first is the actions and attitudes of the Banking Regulator, at a time when we need an economic recovery. The Regulator has chosen this time to demand higher levels of cash and capital from banks than they were required to hold during the boom. This means that at the weakest point in the cycle they are forced to reduce their lending and other risky activities, as a bank like RBS has no easy way to raise further large sums of capital to sustain its former balance sheet. Why is the Regulator behaving in a way which aggravates the cycle rather than smoothing it? Many now say they believe in the counter cyclical regulation I have been advocating, so why aren't they putting it into effect?

The second is shareholder value. Taxpayers have been made to buy 84% of RBS at an average price higher than today's share price. Taxpayers would like to get their money back with profit, and will want to know what impact such a rapid reduction in the overall size of the bank will have on the future value of their shares. There has been no guidance from the government as shareholder's representative on this important matter.

I think it is wrong that these huge sums of money at risk for taxpayers are neither properly reported nor debated in the House of Commons. As I keep explaining to the government, they have got us into a situation where the state is the best part of a couple of large banks with a medium sized government attached. The sums at risk in our bank ownership far exceed annual public spending. Ministers should take a more serious interest in what is happening in these large state owned and influenced banks, and report it to us. Ministers should also be able to answer questions on the main strategic thrust of what they are doing with them in our name.

Today was an unusual day. For the first time in years I won a PMQ in the weekly ballot for the opportunity to ask a question.

I decided to ask him what had happened to the £700 billion of assets that disappeared from the RBS balance sheet in 2009. You would have thought he might have noticed it and taken an intelligent interest in it. After all, £700 billion is more than the government spends each year, and is around half the national income. Now we own a bank on this scale, it would be nice to know the boss was in charge and knew the numbers and understood the strategy.

My purpose in asking was to highlight the conflict in current policy. The public sector is made to spend more and more to "keep the economy going", whilst the private sector remains under an intense squeeze. RBS has been forced into collapsing its balance sheet by huge sums to meet new requirements for more cash and capital relative to the amount it lends and trades.

I am trying to find out if the government realises it is squeezing the private sector too hard and is doing it because it really does want an ever bigger public sector at all costs, or whether it does not realise that its Banking Regulator is holding back the recovery. I am none the wiser, but hope others may take up this important quesiton on the back of my PMQ. With major banks slimming this quickly it is no wonder mortgages and business credit are scarce and dear.