By the End of the Century

What does that conjure up to someone who is in any case already 64 years old?

But John McDonnell was really just making an observation. He was not advocating a borderless world.

He was observing that, long after he was dead (and, for that matter, long after I was dead), there might very well be one, in fact even if not in name.

Policy would then have to deal with that reality, as it has to deal with all sorts of other realities.

I suspect that he might be right.

Osborne is the Baldrick of the Tory Party

John Prescott writes:

If you Google the word “gullible” you’ll find a picture of the Chancellor of the Exchequer looking at you.

At the World Economic Forum in Davos, Switzerland – a week-long egofest for billionaires – George Osborne hailed the “major success” of getting Google to pay tax on its 10-year profits of £7.2billion.

If it were any other company, it would have paid 20% corporation tax of £1.5billion. Instead he let it cough up an extra £130million on top of the measly £70million it had already paid.

Compare that to Italy, where Google is being told to pay £113m in tax on profits of £760m. That’s a tax rate of 15% – five times more than what Osborne agreed.

If the Chancellor had followed Italy’s lead the UK taxpayer would get £1BILLION.

That would build more than 4,000 council homes, guarantee a 3% pay rise for every nurse in the UK until the end of this decade or fund the flood defence projects they cancelled.

Even the French are demanding Google pay three times as much tax than Osborne settled for. So why did the internet giant get such a good deal? 

Well, I went online and googled “Tory, Google and links” to see if I could find any clues. 

When the Tories were in ­opposition, Google paid for Cameron to attend their annual conference twice – in 2006 and 2007.

Then in the first two years of the Conservative-led ­coalition, Tory ministers met Google executives 23 times. The Prime Minister saw them three times, Osborne four. 

Then between January 2014 and September 2015, Google met Government ministers 25 times. Google was effectively meeting a Government minister once a month! 

Within six months of coming to power, Osborne was writing joint articles with Google boss Eric Schmidt. It seemed Google had joined the Coalition.

In a way it had... 

Schmidt was made a member of the PM’s Business Advisory Council, and three years ago he attended a tax avoidance summit at No10. A bit like inviting King Herod to a childcare seminar. 

And in 2011, Osborne went to Google’s Zeitgeist conference and excitedly hailed “the impact that you are having – as internet entrepreneurs, innovators, technologists – on the world of government and politics”. 

He wasn’t wrong. Many senior figures have moved between Google and the Tories.

Former Tory leader Michael Howard’s political secretary Rachel Whetstone – a close friend of Cameron – became Google’s spin doctor and policy chief. She just so happened to be married to Cameron’s No 10 director of strategy Steve Hilton.

And Cameron made Google’s former MD of Europe, Joanna Shields, his digital advisor and then a peer so she could become one of his ministers.

Why move to a tax haven when you can cut a deal with HMRC which is championed by the British ­Chancellor in a billionaire Swiss ski resort? Talk about mates’ rates. 

Today is the last day to submit your tax return. So when you’re filling it out, think about how your money is ­subsidising that Google deal. 

When Labour’s Shadow Chancellor John McDonnell demanded a House of Commons statement, the cowardly Osborne sent his junior minister David Gauke to defend the deal. 

He was forced to admit he didn’t know what Google should be paying. 

Now the Treasury Select Committee has opened a formal investigation, the European Commission is clamping down and the EU Competition Commissioner said Osborne’s deal might even be illegal state aid. 

Google should be forced to pay up, just as any hardworking small business must.

Osborne boasts about the Northern Powerhouse, then cuts funding to Northern councils by up to 40%. He brags of a National Living Wage when it’s just a rebranded minimum wage subsidised by tax credit cuts. 

Osborne is the Baldrick of the Tory Party. His “cunning plans” always get exposed as being as daft as his haircut.

He should rip up his sweetheart deal and take a leaf out of the Italians’ book – and make Google an offer they can’t refuse!

And All That?

The great Labour intake of 1997 has only ever produced one Leadership candidate, and that was Yvette Cooper. She now differs from Norma Desmond only in that she was never big in the first place.

Consider, by way of contrast, that the 1983 intake has produced three actual Leaders of the Labour Party. And consider who the present one of those three is. Two of them have become Prime Minister. So far.

No Room For Sanity

The Government is to spend more on appealing against the Bedroom Tax decision than it would cost to abide by the ruling.

Sackless

I am afraid that Jeremy Corbyn might have been wrong to sack Michael Dugher.

Before then, no one had ever heard of The Other Simon Danczuk.

A Good Return

As we could all have guessed, John McDonnell's only income is his pay from his job, less his pension contributions.

Like most people's.

And that income is taxed at source.

Like most people's.

Now, over to the Bullingdon Boys.

Set The Sun On It

First, the Cayman Islands.

And now, Bermuda.

There was a charming article about St Helena in yesterday's Financial Times Weekend Magazine. Both my uncle and my grandmother were interviewed, and she was pictured.

St Helena is neither a tax haven, nor does it cost anything to defend.

But nor, as the article mentioned, have its people enjoyed full British citizenship continuously. Although they do hold it again now; Tony Blair did at least reverse that aspect of Thatcherism.

Unlike the white people for whom the rules are always totally different. Ask the Chagossians.

Not only would it be cheaper to declare all of the British Overseas Territories independent, each with an annual grant of one billion pounds in perpetuity, than it would be to continue to defend those other-determining white people.

But it would also get shot of the national shames that are the Cayman Islands, Bermuda, and, as will doubtless be along in a moment, the Turks and Caicos Islands, and the British Virgin Islands.

The first two even have currencies pegged to the US dollar, which itself circulates freely in Bermuda, while the US dollar is the only legal tender in the second two. Yes, you did read that correctly.

It is time for the United Kingdom to exercise its own right of self-determination.

If the Falkland Islands did not want to be part of Argentina, then that would be up to them. A billion a year really ought not to make that too difficult for them.

Demanding that the rest of us be permanently at their beck and call for that purpose is not self-determination. It is other-determination.

A billion a year would also have given St Helena its airport a very long time ago.

Perhaps even when two Acts enacted under the same Prime Minister had jointly made it more difficult for St Helenians to enter the United Kingdom than for the German and Italian veterans of the Second World War who were still very much alive at the time.

A Transparent Manoeuvre

"I'll publish my tax returns and now it's George Osborne's turn to be transparent."

John McDonnell has just reset the entire debate.

Phantom Raspberry Blowers

I am not necessarily suggesting a cause and effect, but with the Lutfur Rahman business back in the news, it is worth mentioning that Britain, specifically London, and very specifically the East End, were almost incomparably more corrupt before mass immigration, or in its very early days,  than they are now.

They were also almost incomparably more violent where working-class men, especially but not exclusively, were concerned.

If the Krays and the Richardsons were not "clan-based", then I cannot think of any better term to describe them.

One of the Kray twins was having an affair with a prominent politician who was also sleeping with the Prime Minister's wife, but a newspaper was forced to apologise unreservedly for having mentioned even only the first part of what was that matter of common knowledge among People In The Know.

All backed up by just about the most corrupt Police Force imaginable, which was also just about the most racist Police Force imaginable.

These things were not true only of London.

For example, the endemic corruption of the right-wing Labour Establishment in the North East, and of its Conservative allies both here and in London (where they were curiously let off), was as white as the winter's snow atop the Pennines.

As was the staggering violence to, in and from drinking places that young men, especially, were just expected to accept as a fact of life in the pit villages and the steel towns.

And as was, of course, the extreme domestic, and not uncommon sexual, violence against women, in every part of this country and across all social classes.

That kind of thing is not a product of recent immigration, either.

The view that it was acceptable for a man to beat his wife under certain circumstances was mainstream White British opinion into the 1980s. Not universally held. But perfectly respectable.

In fact, there is every reason to believe that huge numbers of White British men, in every part of this country and across all social classes, remain firmly of that view.

Left The Guard Down

If the Morning Star can stay solvent, then why can't The Guardian?

Perhaps it needs to be taken over by the unions representing steelworkers, postmen, firemen, prison officers, railwaymen, miners in general, and Durham miners in particular?

All of those unions are represented on the Management Committee of the People's Press Printing Society, which is a going concern.

The Guardian would be far better off with them than it is with the financiers who have been put in by the venture capital company that has taken over from the Scott Trust.

One has to wonder how those financiers retain any professional reputation whatever.

Friends Close?

A warm welcome to the reappointment of James Murdoch as Chairman of Sky Television.

He paid $580 million for MySpace, and he sold it for $35 million.

Obviously, he has been re-employed on merit by his 84-year-old father.

"Fredo has a good heart, but he's weak and he's stupid."

A Good Influence

Whatever else may be said about Lutfur Rahman, this is very good news.

Open Doors, Red Doors

Like the births out of wedlock that were 10 per cent in 1979 and 36 per cent in 1997, and like the explosion in divorce and abortion under Margaret Thatcher and John Major (although it was pretty much done by his day), the move towards an economy that would necessitate huge levels of immigration certainly did not begin under Tony Blair.

The Thatcher anti-union laws made it possible. Before them, it could not have happened. Under them, it was bound to happen, and it was intended to happen.

It has been under David Cameron, George Osborne and the twice-elected Boris Johnson that London has become a city that could never again elect Johnson or any other Conservative as Mayor.

Oh, and if the doors in Middlesbrough have been red for 20 years, then how did Britain First, or whoever it was, know which houses to attack? Don't believe everything you read.

Hinc Lucem et Pocula Sacra

I hear that Cambridge University Labour Club has just endorsed staying in the EU by a mere 60 per cent to 40 per cent, after a very heated meeting.

The tide on this is turning within the Labour Party, and especially among what are suddenly its very numerous youths.

Science Is What Works

That means adult and cord blood stem cell research.

Not embryonic stem cell research, which has never produced anything at all.

Literally, nothing.

Yet it is adult and cord blood stem cell research that struggles to secure funding.

Brain Banks

If they cannot find a buyer for Lloyds, and that is obviously the real reason, then they are never going to find a buyer for RBS, either.

On the question of what to do with these permanent parts of the public sector, over to Jeremy Corbyn, John McDonnell, and their stellar line-up of economic advisers.

Amateur Hour is over.

Capital City

Take away import and capital controls, and there cannot be immigration controls, which are themselves import and capital controls.

London is now the most perfectly capitalist city ever. That is why it will never vote Tory again.

Ivory Tower View

As the trial of Laurent Gbagbo gets under way, consider that the French intervention in the Ivorian Civil War was arguably, if arguably, the only ever example of a Western power's intervention against both sides in a civil war.

Has that ended well? Has it ended?

Let's just say "Syria", and leave it at that.

Doctor Angelicus, Doctor Communis

Saint Augustine of Hippo, whose Wikipedia entries in Portuguese and Slovene (neither of which I read) are for some reason a major source of traffic to this site, is an important forebear of the Dominican tradition in which some of us stand.

His Rule remains part of the Constitutions to this day, and his influence suffuses the great theologians and spiritual writers of Dominicanism. 

Saint Thomas Aquinas, whose Feast is today, was a Dominican.

Therefore, far from being the rupture with Augustinianism that is often asserted, his thought is wholly within it, and indeed utterly incomprehensible apart from it.

Other attempts to affirm the Augustinian vision of all knowledge as divine illumination are not necessarily in opposition to Thomism; rather, under the Magisterium, which is its own point of reference and correction, it provides their point of reference and correction.

This applies to the entire rational and empirical systems, since, at least in the context of those who devised these systems in Early Modern Europe, the very belief in the possibility of true knowledge by rational or empirical means – indeed, of true knowledge at all – is Augustinian, and indeed Thomist.

Saint John Paul the Great, in Fides et Ratio, commended at once Thomism in paragraphs 43 and 44, and the works of Blessed John Henry Newman, Blessed Antonio Rosmini, Saint Teresa Benedicta of the Cross (Edith Stein) and Russians of various stripes alongside Maritain and Gilson in paragraph 74, not to mention engagement with Indian and other non-Western philosophies in paragraph 73.

Alas that Chesterton defines Aquinas against the Christianised Neoplatonism of the Augustinian illuminist tradition, rather than recognising Thomism’s Christianised Aristotelianism as nevertheless belonging within, and greatly enriching, that tradition.

Had Chesterton done this, then he would have been quite astonishingly prescient in this as in so many other areas.

However, what Chesterton writes about Thomism as the definitive philosophical articulation of the worldview that he shares is of course entirely correct.

In Saint Thomas Aquinas (1933), he sets out that “the primary or fundamental Part” of Thomism “or indeed the Catholic Philosophy” is “the praise of Life, the praise of Being, the praise of God as the Creator of the World.”

Precisely so.

Ora pro nobis.

The Bigger It Is

Peter Hitchens writes:

I expect to have more to say about this, but today’s BMJ UCL/Nordic Cochrane Centre analysis of research on ‘antidepressants’ should surely change the terms on which we debate this subject.

I should say that all intelligent people should draw lessons about the difference between what they think is happening, and what is actually happening, from two major Hollywood films, The Big Short and Spotlight.

In both cases – the sub-prime mortgage disaster and the widespread unpunished sexual abuse of children by priests – complacency prevented serious concern for years.

In both cases the alarm was raised by outsiders, and most people refused to believe what was being said.

I believe that psychiatric medication contains a similar problem, which in a few years, everyone will acknowledge as fact.

But at the moment, it is still difficult to raise it without being accused of being a crank. Complacency rules. 

For some years now I have been more or less begging my readers to obtain the book Cracked by James Davies, and to study two clearly-written and straightforward articles on the subject by Dr Marcia Angell, a distinguished American doctor, and no kind of crank, in the New York Review of Books.

I link to them (yet again) here. They are devastating, not least because of their measured understatement. The alleged scientific theory, the Serotonin theory, which underpins the prescribing of such drugs is, to put it mildly, unproven.

The drug companies themselves have kept secret, until compelled to disgorge them by FoI requests,research results which suggest their pills are, again to put it mildly, not that effective.

Dr Angell’s articles, here and here, are themselves reviews of important recent books on the subject

I have also drawn attention to the huge sums of money involved, and to a recent case in which a major drug company was fined three billion dollars for (amongst other things) mis-selling ‘antidepressants’. See here.

Now comes the new report, a survey of research, which today led the front page of the Daily Telegraph.

Not merely does it link the use of ‘antidepressants’ to increased risk of suicide among teenagers (a suggestion I have often been derided here for making by people whose argument can be summed up as ‘they were depressed- duh!’).

It also suggests that clinical trials have until now been misreported and dangers under-reported.

I urge you to read it. You might also note this crucial admission: ‘Dr Joanna Moncrieff from University College London said: "People in the United Kingdom are consuming more than four times as many antidepressants as they did two decades ago. Despite this, we still do not fully understand the effects of these drugs.’

Indeed we do not. People who are prescribed ‘antidepressants’ naturally assume that they are being given them on the same principle as they might be given an antibiotic or an anti-inflammatory, or some other drug aimed at treating physical infection or a diagnosed disease.

I think this greatly exaggerates our understanding of how mind-altering drugs work, or even whether they do work.

As to their side-effects, which can be considerable, these may actually be their effects. Yes, it is that vague.

And it is that big, with tens of millions of prescriptions for ‘antidepressants’ issued every year.  So how come there’s no big fuss about it?

Well, how come there was no big fuss about the bundling of worthless loans into dangerous financial instruments, which ended by exploding the world’s stock-markets and causing a global recession? How come priestly child abuse carried on in Boston for years, and nobody did anything?

Maybe the bigger it is, the harder it is to believe there’s anything wrong.

This Is Criminal, Literally

Owen Jones writes:

Britain is arming and aiding a fundamentalist dictatorship that’s bombing and killing civilians. This is an incontestable fact.

The Saudi tyranny – gay-hating women-oppressors who kicked off the year with a mass beheading – has been waging war in Yemen for 10 months.

If the 26 million Yemenis were being besieged and bombed by an official enemy of the west, we might expect emotive calls to “do something” and militarily intervene.

Well, we are intervening: not simply by supplying weapons but even by providing the Saudi-led coalition of Arab dictators with British military advisers.

As the SNP’s Angus Robertson put it to the prime minister’s face, Britain is “effectively at war” – and yet few Britons know anything about it.

Since Saudi-led forces intervened in the conflict between President Hadi and Houthi rebels last March, around 6,000 Yemenis have been killed, perhaps half of them civilians .

With the country under naval blockade, what the UN was already calling a “humanitarian catastrophe” six months ago has been unleashed.

Eight in every 10 Yemenis are now dependent on humanitarian aid, and most do not have “adequate access to clean water or sanitation”, according to the UN.

Bombing raids have shredded the country’s healthcare system: 130 medical facilities have been targeted, including those run by Médecins Sans Frontières –“a total disregard for the rules of war”, as MSF says itself.

The risk of famine looms: the UN believes more than 14 million people are food insecure, half of them severely so, while nearly one in 10 have been driven from their homes.

Yemen is a human-made disaster, and the fingerprints of the west are all over it.

Consider what a UN panel report seen by this newspaper has revealed: that airstrikes have targeted “civilians and civilian objects, in violation of humanitarian law”, including everything from refugee camps to schools to weddings to buses.

More than 100 sorties, they believe, relate to “violations of international humanitarian law”.

Yes, all sides have been accused of war crimes. But, according to the UN’s high commission for human rights, the Saudi forces are responsible for “a disproportionate amount” of attacks on civilians.

No wonder, then, the war is being described as Saudi Arabia’s very own Vietnam.

Rather than condemning this dirty war, the United States stands fully behind its ally, one of the world’s most repugnant regimes.

“We have made it clear that we stand with our friends in Saudi Arabia,” says Secretary of State John Kerry, a former member of Vietnam Veterans Against the War.

But we surely need to hold our government to account for what it does in our name.

Since David Cameron became prime minister, Britain has sold the Saudi dictatorship nearly £6bn worth of arms.

Crucially, since the Saudis began their bombing campaign, Britain has signed off more than 100 arms licences.

The supply of military advisers underlines that this is no passive acquiescence in what the Saudis are doing: our government is directly involved.

“We support Saudi forces through long-standing, pre-existing arrangements,” is how the Ministry of Defence euphemistically describes its role.

As Amnesty International puts it, Cameron’s government has “fuelled this … conflict through reckless arms sales which break its own laws”.

According to legal advice given to them by Matrix Chambers lawyers, Britain is in violation of a number of obligations, including its own arms exports criteria and the EU’s common position on arms exports.

Indeed, in 2014, a ministerial statement declared that Britain would “not grant a licence if there is a clear risk that the items might be used in the commission of a serious violation of international humanitarian law”.

The Campaign Against the Arms Trade has launched a legal action against the government for breaching international law.

Astonishingly, as Labour have highlighted, parliament’s own watchdog on arms exports hasn’t met since the general election – that’s almost the entire time Saudi Arabia’s British-backed war has been waged. Britain’s alliance with the Saudi dictators – who, chillingly, last week refused to rule out acquiring nuclear weapons from Pakistan – does not receive the scrutiny it deserves.

It’s not simply about human rights, utterly appalling as the Saudi record is, locking up, lashing and killing dissidents, banning protests, political parties and trade unions, and depriving women of basic rights (incidentally, our government traded votes to ensure the Saudis were elected on to the UN human rights council – rather like giving Harold Shipman a seat on the British Medical Council).

It is also about Saudi Arabia’s threat to our national security: the country is at the epicentre of international extremism.

Its assault on Yemen is not only killing, maiming and inflicting mass suffering. It is also building up bitterness.

With our government fully behind its Saudi allies, resentment towards Britain is surely growing, resentment that can be all too easily manipulated by extremists.

If the British people were fully aware of what was happening, Britain’s involvement would surely be unsustainable. But there are too few voices speaking out.

One rare example is Andrew Mitchell, the former Conservative cabinet minister, who said a few months ago: “We must take seriously the possibility that British-made arms are being used to kill civilians in Yemen.”

Since then, we know of at least one fatal strike using a British missile, on a ceramics factory.

Yemen needs a peaceful, negotiated settlement. Its people need humanitarian assistance, not more bombs.

But Britain is helping to escalate this war, aiding a cruel regime that it knows is bombing civilians.

This is criminal, literally. And the government must be held responsible for it.

Rattling A Silver Ladle In His Grave

Polly Toynbee writes:

Selling off the family silver: that was the accusation against Margaret Thatcher, when Harold Macmillan condemned her with resoundingly aristocratic disdain.

“The sale of assets is common with individuals and the state when they run into financial difficulties. First the Georgian silver goes, and then all the nice furniture that used to be in the saloon. Then the Canalettos go.” 

He ventured “to question the using of these huge sums as if they were income.” 

The wise old man warned in the Lords: “Modern economists have decided there is no difference between capital and income. I am not so sure.” 

He recalled 1929, “when your Lordships had friends, very good friends, who failed to make this distinction. For a few years everything went well, and then at last the crash came, and they were forced to retire to some dingy lodging-house in Boulogne.”

Harold Macmillan, you may remember, was once claimed by David Cameron as his role model, back in his sunshine-in, “compassionate Conservatism” days.

Cameron had a photo of Macmillan, not Thatcher, on his desk. No longer.

For Cameron and George Osborne are now selling off more silver at knockdown prices than Thatcher ever considered.

She sold off state industries; they are bent on shedding the fabric of the state itself – capital, boiled down and poured into current income – as if there were no tomorrow.

Before long, large parts of the public realm will feel like that dingy Boulogne boarding house. New analysis shows a record £26.4bn was raised last year alone by state sales.

The Press Association lists this fire sale: Royal Mail, Eurostar, Northern Rock and shares in RBS and Lloyds were just the ones that made headlines (and though the chancellor today halted the sale of the rest of the Lloyds shares, that’s just what it was: a delay). 

Already this year, 67 acres of King’s Cross land has been sold for £371m. And London land is exceptionally precious – land the state will need but can never regain. 

Ahead lies the threatened sale of Channel 4, vengeful and ideological – and much more. 

“Central to our plan to fix the public finances is the sale of government assets to help pay down the national debt and ensure economic security for working people,” says the Treasury. 

Listen to Macmillan rattling a silver ladle his grave. 

The forced sale of state-owned land is asset-stripping with a political purpose, matching Osborne’s target to shrink the state to 35% of GDP by 2020. 

Cameron says that’s permanent, so of course they will sell the land it stands on, to stop it regrowing. 

The closeness of this government with private interests, the in-and-out revolving doors between ministers and business (Labour ministers did that too), and the sweetheart tax deals revealed over Google, make these sales at too-low prices doubly suspect. 

Whether ineptitude, naivety or venality is to blame, the taxpayer rarely comes well out of these selloffs.

The NHS, councils, defence and other departments are being instructed to shed land and to switch the proceeds to plug current deficits. 

The NHS faces a £2.5bn shortfall this year, “or perhaps north of that”, the NHS Improvement head told the public accounts committee.

Using sales proceeds may help a bit this year, but it does nothing to solve next year, or future funding when every scrap of land has gone.

Schools, clinics, care homes and other services will be needed, with a growing population, more children and more old people. But Osborne’s legacy means nowhere to build. 

The assault on socially owned housing and land forces councils and housing associations to sell, using the money for current spending. 

That stops borrowing against current property to build new: they want no new social housing for rent. 

That’s a win-win for Osborne and Cameron: they get money in to make it look as if deficit and debt are reducing while withdrawing the state from housing altogether.

The desperate need for housing of every kind is ignored as land is squandered, sold to developers, much of it in high-value areas, sold to be mothballed by foreign investors using homes as gold bullion.

NHS privatisations continue: VirginCare took over Kent community services this month, one of many such moves.

But less visibly, the NHS has been instructed to make capital-to-revenue transfers as “accounting adjustments” before April to bring the apparent debt down, according to the Health Service Journal this week. 

Shabby public buildings and services will have their repair and refurbishment capital budgets taken to ease the look of current accounts – short-term and synthetic accounting. 

Osborne talks piously of reducing debt and deficit so as not to burden future generations, but instead he burdens them with a squalid, under-resourced public sector with debts in kind, such as Labour inherited in 1997 – schools with leaking roofs and outside toilets, hospital wards in war-time Nissen huts. 

Failure to invest in people and skills, with deep cuts to further education colleges, is another way of diminishing national capital, as today the UK Commission for Employment and Skills says the shortage leaves one in four skilled jobs unfilled for lack of trained candidates in manufacturing, electricity, gas, water, construction and transport. 

Employers fear the 3m promised apprenticeships will be of low quality. 

None of this will worry this government, as it dashes to strip everything public to bare bones, losing the experience, skills and memory that a thriving public sector needs. 

Already there is a grave shortage of people willing and able to become headteachers and heads of NHS trusts. 

University College London Hospital, a national flagship, is just one example: it has had to abandon its search and implore its current head to stay longer.

Sometimes this government over-reaches, forced to correct itself – on tax credits, or last night again in the Lords, with a small concession on one benefit.

But the course is set, and it is not often diverted. Asset sales are an integral part of its long-term plan.

A Better Kind of Economy

Stewart Wood writes:

George Osborne did something foolish last weekend.

On Saturday morning at 8.15am, possibly as his guard was down while munching on some rösti over breakfast in Davos, he tweeted: “#Google tax bill is a victory for the action we’ve taken”. 

Now, whatever your political views, most people would agree that our chancellor is one of the best readers of the game of politics. Which is what makes this moment of spectacular misjudgment so surprising.

A cursory look at the Google tax deal is enough to show how ridiculous Osborne’s boasting was: a back payment of £13m per year for the past decade, which is probably not much more than Google’s annual spending on chicken in its UK staff canteens, and a paltry (sorry for the pun) 2.5% of the company’s annual UK profits. 

Reaction to Osborne’s hubris was pretty uniform and pretty derisive. But most interesting of all was the flicker of critical reaction within the Tory fold. And not just Boris, who of course got in some subtle distancing from his leadership rival.

Tim Montgomerie, social conservative commentator and acolyte of Iain Duncan Smith, called on the Tories to use the Google uproar to rediscover the moral passion of Adam Smith, and make the reinvention of capitalism a 10-year priority. 

He has fellow travellers. Cameron’s shoeless former muse Steve Hilton was very persuasive on the airwaves yesterday on the need to shake up markets in which the success of the big players has come at the cost of innovation and competition. 

Meanwhile, Cameron’s occasional nemesis, David Davis, has just finished a book on the “new capitalism”, which will no doubt channel Teddy Roosevelt’s hostility to oligopolies on behalf of Britain’s consumers. 

And one of the Tories’ rising stars, Jesse Norman, who coined the term “crony capitalism”, has set out a reform plan to return to “properly governed markets” in the wake of the 2008 crash. 

My reaction to the emergence of this strain of “market reformism” inside the Conservative movement is to be heartened by it. 

Perhaps that is politically naive of me. After all, if the Tory leadership heeds the call of Montgomerie, Davis, Hilton and Norman to own the reshaping of capitalism, won’t their shift further squeeze a Labour party still in recovery from a year of turmoil?

And as someone who championed the cause of “responsible capitalism” in Ed Miliband’s team during the last parliament, shouldn’t I want Labour, not our opponents, to be the champions of building a better economy?

Perhaps I should have these reactions. But I don’t. And I think the reason for that comes from the experience I had working with Ed Miliband.

I continue to think that rewiring the way that our economy works is the biggest economic challenge Britain faces.

Our growth is too dependent on spending and household debt, and too little on investment and exports. Our track record in skills, R&D and innovation is relatively poor across the economy as a whole.

Our long tail of low-wage, low-skill jobs is wrapped up in a decades-long productivity problem that has got worse not better since the crash.

The problems in the engine-room of the UK economy manifest themselves in a range of economic symptoms – from weak penetration into emerging markets, to persistently large inequality – all of which put a strain on taxpayers and governments alike.

Sorting this out is a huge challenge, one that will require a shared commitment across political parties, and between politicians and business, to sort things out.

If the Tories are waking up to this challenge, that can only be a good thing for Britain.

On the other side, I want Labour to continue the zeal for a more responsible capitalism that Ed Miliband showed.

But we need to accept that for all that zeal, we failed to persuade Britain of our case in May last year. And we need to ask: Why?

Voters know that something is wrong with the rules of our economy. But they were singularly unpersuaded that Labour was the right party to sort the problems out.

If we are honest there were a number of reasons for that scepticism, lack of credibility on public spending being perhaps the biggest of them all.

But I think even those who found themselves agreeing with our diagnosis of what was wrong with Britain’s banks, energy markets, housing markets and employment laws didn’t think we had the prescription to go with it.

Our response looked limited and tinkering, nowhere near the scale needed to turn the supertanker of the UK economy around. I also think our body language wasn’t right.

My sense is that voters were not persuaded that our strong criticism of the way markets in Britain were working was coming from people who actually wanted the market economy to work well.

We came across as having the outrage of sceptics of capitalism, not the concern to sort things out of critical friends of capitalism.

Put all this together and our mistake on responsible capitalism was paradoxically both a credibility deficit and a radicalism deficit.

If we want to reform the way our market economy works – to channel the public’s anger about Google, Fred Goodwin, energy company profits, zero-hour contracts and inequality into real change – we need answers that match the scale of the problems.

We need to acknowledge that our economy is changing rapidly and we don’t have all the answers yet.

We need to settle the question of the affordability of our policies to get permission to be heard on our reform proposals.

And we need to invite business to share the mission to improve the way we create wealth, share it and compete.

And one other thing: we need to applaud and encourage those of our political opponents who agree with the challenge we face. Perhaps we should even think about talking to them and forming a common cause.

To do anything else suggests we aren’t as committed to actually achieving a better kind of economy as we pretend to be.

Put It To Bed

Ryan Curran writes:

To those who have campaigned against the so-called ‘bedroom tax’ from the beginning, Wednesday’s decision by the appeal court to rule the policy discriminatory and unlawful will come as no surprise.

To those who continue to defend the policy, this ruling should act as a stark reminder of its remarkable failure.

When it was first introduced by the coalition government in 2013, the bedroom tax aimed to cut the welfare bill and free up in-demand housing.

The policy works by cutting the benefits tenants receive by 14% if they have one spare bedroom and a staggering 25 per cent if they have two or more.

At first, it may seem reasonable to some to cut people’s benefits if they are living in a house with one or more spare bedrooms.

The idea is that this significant reduction in income will encourage the occupant to move to a house where all the rooms are used, therefore freeing up the larger property for those who require more than one room. 

However, when you begin to look at the implications of the policy, as well as the failure to achieve one of its main goals, it becomes clear that the bedroom tax has been a disaster from the off.

According to the government’s own research published in 2014, almost 60 per cent of those affected by the bedroom tax were in rent arrears as a result of the policy.

Furthermore, according to a survey carried out by the National Housing Federation in the same year, around one in seven families had received eviction letters and faced the prospect of losing their homes.

Even more worryingly, research carried out by the government’s Department for Work & Pensions found that three-quarters of those affected by the policy have had to cut back on food, while 46% had to cut back on heating and 33 per cent on travel.

Clearly, the bedroom tax is having an extreme impact on those who are already struggling, forcing them to scale back on the essentials.

Such a situation is simply unacceptable and confirms the fears many raised when the policy was first introduced.

In addition, many have also criticised the bedroom tax for discriminating against vulnerable people.

For example, Wednesday’s ruling by the appeal court dealt with a case involving a seriously disabled child who requires overnight care in a specially adapted room.

The other case involved a single mother living in a three-bedroom council house fitted with a secure panic room to protect her from a violent ex-partner.

In both cases, judges ruled that the bedroom tax amounted to unlawful discrimination.

As a result of similar cases, the UN special investigator on housing called on the government to scrap the bedroom tax, pointing to what she described as ‘shocking’ accounts of how the policy was damaging the lives of vulnerable citizens. 

However, there is yet more evidence demonstrating the failure of the policy.

As aforementioned, one of the main aims of the bedroom tax was to move those with spare bedrooms into smaller houses.

However, according to figures released under the Freedom of Information Act, only around 6% of those affected by the policy have actually moved, showing that for many, downsizing is not a viable option, either for personal reasons or because housing is in such short supply.

Looking at the evidence, it is clear the bedroom tax has been a complete failure in terms of rehousing tenants and the impact it has had on thousands of people up and down the country.

The government may have saved around £1bn since its introduction, but this has been at the expense of struggling families and vulnerable citizens.

Following the appeal court’s decision to rule the policy discriminatory and unlawful, it is now time for the government to finally admit it was wrong and abolish the bedroom tax.

And Ruby Stockham writes:

Yesterday, the government lost two cases at the Court of Appeal, when a judge ruled that Iain Duncan Smith’s so-called ‘Bedroom Tax’ had in fact discriminated against two claimants.

The first was a woman whose home is equipped with a panic room because she is at risk from an ex-partner who has harassed, stalked and raped her.

The second claimants were a couple who care for their severely disabled teenage grandson, and have a room in which to store his medical equipment and accommodate the overnight carers he requires.

The Department of Work and Pensions (DWP) is now launching a legal challenge against both parties to ensure that they pay the charge.

These two cases are patently unfair, and it is difficult to see how the DWP can possibly justify charging these households what they call the ‘spare room subsidy’.

Even the Daily Mail has jumped on the bandwagon of calling out the policy, despite its support for it in the past. 

But is there an argument in favour of the ‘spare room subsidy’, and has it actually been successful? 

When the policy was introduced, the government said it would reduce the waiting list for families needing social housing. 

Housing associations have reported something of a vicious circle resulting from the Bedroom Tax; where families have a room that is genuinely surplus they are aware of the need to downsize, but there is simply no smaller housing available (the charity Shelter says that the waiting list for social housing has increased by 81 per cent since 1997). 

The government’s own report on the policy in December found that ‘there is evidence of a declining proportion of lets to those who under occupy their new home in England, and an increase in proportion of lets to families from 36.3 per cent in 2012–13 to 40.7 per cent in 2013–14’. 

“Most LAs and social landlords reported that large numbers of people were unable to move because of a shortage of smaller homes.

“Some claimants said they had not registered because they were aware of the shortage (case studies and claimant qualitative interviews).” 

There is of course a great human cost to the policy – a survey by the National Housing Federation found that 46 per cent of tenants affected by the Bedroom Tax had borrowed money to pay their rent since April 2013; 32 per cent had reduced their spending on food; and 26 per cent had cut back on heating costs. 

But the fundamental problem with the Bedroom Tax is that people cannot ‘downsize’ if there is nowhere for them to go. 

Shelter estimates that to solve the housing crisis, 250,000 more affordable homes would need to be built each year in England alone, but housebuilding is at its lowest ‘peacetime’ level since the 1920s. 

Meanwhile, rents have been rising faster than inflation – in the year to May 2015, average rental values for new tenancies in the UK were 10.7 per cent higher than the same period last year.

The decision to appeal yesterday shows that the government is willing to hold on to this policy despite all the evidence against it; it is ideologically driven, illogical, and unworkable in coordination with other policies.

London Calling

As Boris Johnson runs away from the London-wide electorate that he, David Cameron and George Osborne have created, it would take the very stoniest of hearts not to fall about laughing.

The most open economy on earth, in classically 1980s terms, has created the most reliably left-wing of the great cities of the West.

Both in reaction against the sheer cost of everything, especially housing.

And because as open as an economy is, that open will be its society, culture and polity. If you take the whole world's money, then you have to take the whole world.

The Great Mail Robbery

A criminal investigation into this is long, long, long overdue.

But can we have any hope of that, from our increasingly privatised justice system?

Meanwhile, the "Royal" in "Royal Mail" now refers to that major shareholder, the Emir of Kuwait.

How long before the same, or similar, is true of the Royal Courts of Justice?

Economy Drive

No surprise here. Jeremy Corbyn was always supported by serious economists, and was always unique in being so.

Scores of leading economists signed letters in support of him during the Labour Leadership Election. Although but a simple hack myself, I organised one of those letters. 

But not a single one of them did that for any of the other candidates, including two former Chief Secretaries to the Treasury.

Corbyn's advisers now include two Nobel Laureates in Economics. He has brought proper Economics back into British politics for the first time in 35 years.

The Big Shortfall

Simon Jenkins writes:

What’s wrong with big business all of a sudden?

The latest revelations of malpractice at Tesco, Sports Direct and Volkswagen are now capped by Google’s grand larceny of British taxpayers.

There is of course “no wrongdoing”, that motto of modern business.

But Google executives are behaving like medieval penitents, wandering Europe’s confessionals to buy remission of fiscal sins for as little as they can get away with. 

The idea that the internet would herald a new, clean-limbed, egalitarian corporatism is dead. 

Some sacred compact between capitalism’s producers, consumers, shareholders and regulators appears to have snapped.

If it’s legal, goes the cry, then it must be moral. If it’s greed, it’s good. Only fools get caught and, if caught, they just apologise and go on as before.

There is no policeman, no court. It is not just multinationals.

The once noble sports of football, athletics and tennis are now mired in corruption allegations. Privatisation has brought the incentives, and the ethics, of big business to public service. 

The NHS is a cooperative of purchaser/provider rackets. Electricity prices are revealed each month as a conspiracy against the poor. The Hinkley Point nuclear power deal is close to meltdown. 

Common themes run through these scandals. 

One is the huge sums available to their participants, an incentive to misdemeanour. A sign of guilt is the speed with which press disclosure leads to remorse, as at Volkswagen and Tesco.

Another is the vulnerability of state regulators and ministers to pressure. Political lobbying in Britain has blossomed under David Cameron, for the simple reason that it works. 

Cameron once promised to curb it, but it proved its worth by lobbying for its own survival and winning. The industry now raises an annual £2bn in fees. 

Tesco could persecute its suppliers with impunity because it was powerful, a bully and unregulated. Agency staff could be underpaid by Sports Direct, keeping one step ahead of its unions and the law.

Volkswagen appeared to have no clue that its bureaucracy contained nerds out to cheat pollution inspectors. As for Britain’s tax authorities, they could win a role in the Keystone Cops. 

The American management guru Peter Drucker used to present the modern firm as an ethical construct, bringing the community goods and services in return for taxed profits. 

What was good for General Motors was good for America. That held for half a century. 

But even Drucker warned against untrammelled monopoly and the “economic rent” it offered those who could manipulate it. 

What Drucker failed to take on board was the message of his fellow American, the philosopher Reinhold Niebuhr. 

He was fascinated by the contrast he saw between interwar Germans’ behaviour as decent individuals and their appalling behaviour as a group. 

It was the difference between “moral man and immoral society”. 

I assume the directors of Tesco and Volkswagen were shocked to discover what was being done in their name. I am sure the tech giants of Silicon Valley tell their children they should always pay their taxes.

Yet when they enter their offices, they take on the immorality of the herd. They are ethically neutered – as depicted in the current film The Big Short. 

When communism collapsed across Europe and Asia it did not, of course, collapse. It never existed. It operated as a covert barter economy run by a network of local mafias. 

Collapse legitimised these mafias but did not police them. They became thieves. The robber barons of 19th-century America became the oligarchs of today’s Russia. 

We thought contact with western capitalism would make honest businessmen of Russian oligarchs. The reverse appears to be the case. Contact with oligarchs has turned western capitalists into dodgy businessmen. 

Big corporations have developed morally impermeable skins. They outsource their dirty work to subcontractors, consultants and lobbyists. 

The most sinister aspect of the scandals has been the ease with which government is wound round the little fingers of these corporations. 

Since 2009 the big banks have hurled lobbyists at the Treasury to ward off any retribution (or even inquiry) after the banking collapse, and to maintain their freedom to do the same again. They still pay out billions for mis-sold insurance. 

Tesco had been bullying farmers for years. On energy prices, hardly a month passes without the regulator, Ofgem, slamming firms for overcharging, while the companies laugh all the way to the bank. 

When, as with the benighted Financial Conduct Authority, a regulator tries to say boo to the City goose, the chancellor obediently sacks its chairman. 

Britain now parades the world with a Treasury, a tax authority and a chancellor who can describe as a “major success” just £130m in back taxes paid by Google on an estimated UK turnover of £6bn. 

It has to be one of the biggest sweetheart deals of all time. 

At present the only real expression of public outrage is through the unsteady columns of the press. 

Governments, parliaments, regulators and ombudsmen occasionally wail and gnash their teeth.

But in the cases cited it was often media investigation, aided by whistleblowers, that brought malpractice to light and forced government action.

Throughout its history, capitalism has stumbled through regulatory evolution.

Limited liability, bankruptcy and competition law have had to be constantly updated. So have protocols on governance, pricing, pay and the handling of customers and suppliers. 

The discipline of the market is never enough.

Britain’s Treasury should have no interest in appeasing international corporations for the sake of a few thousand jobs in the City. It should be collecting taxes. 

The irony of the Google deal is that, in most respects, London is already a tax haven, a refuge for the world’s money-laundering, tax-evading classes. 

It is also responsible for the most ludicrous offshore havens, such as Bermuda, the Caymans and the Virgin Islands. It is their accomplice in stripping the treasuries of the world of trillions of dollars a year.

The best argument for Britain staying in the EU is to help formulate some supranational authority to police global capitalism and tax its profits.

The trouble is that Britain, in this respect, is one of the worst offenders.