Time's Up

Alex Andreou writes:

"There's no way we will sell Royal Mail 'on the cheap'," promised the government in its Royal Mail: Myth-Busters factsheet, issued before the sale of most of our stake in the public asset, last October.

Many commentators at the time thought the sale was irrational and the company grossly undervalued.

When shares finally opened for conditional trading, their price jumped from the government's valuation of 260p-330p each to more than 450p.

The business secretary, Vince Cable, dismissed this as of "absolutely no significance … it is froth and speculation". He asked to be judged on what the price looks like in three months' time.

Well, three months have come and gone and the price of the shares is, at the time of writing, sitting pretty at over 600p each, with a high of 610p a few days ago – an 80% climb on their original price.

This suggests that the company was undervalued by a giant £2.8bn: six times the projected saving this year by the imposition of the bedroom tax; six times the amount of money the government hopes to save by the imposition of a levy that is causing misery to thousands of vulnerable people and their carers up and down the country.

And Royal Mail could have further to go yet. JP Morgan predicts the price will settle at about 700p a share. Earnings-per-share forecasts bear this out – they estimate a 30% gain this year.

So, now that it turns out that the sale of Royal Mail was, in fact, completely botched and has cheated citizens of billions of pounds' worth of value, where is the apology? Where are the resignations?

If something like this had happened at local government level, there may have been questions of criminal prosecution.

Why do our representatives in Westminster feel that they don't have to apologise when they get it so disastrously wrong, that they don't even have to give an account of themselves? They can simply ignore criticism; wave it away as if it were an unsavoury smell.

Goldman Sachs and UBS, the companies paid a stonking £16.9m by the government for managing the privatisation, were questioned about the price discrepancy by a parliamentary committee in November.

They denied any impropriety, claimed the 330p price was correct according to their research and described the whole fiasco as a "well-executed transaction".

Less than a week later, Goldman Sachs issued a note to its investors, advising them that the price of the shares would settle at about 610p.

When it emerged that the very companies advising on the sale were offered millions of shares in Royal Mail, shares which today represent a potential profit of over £35m, the Department for Business, Innovation and Skills said there was no possibility of conflict.

This was because shares were offered to the investment arms of the banks and there are "Chinese walls" in place between them and any employees working on the sale.

When it transpired that one of the biggest potential private beneficiaries from the flotation was hedge fund management company, Lansdowne Partners, and that George Osborne's best man, Peter Davies, was part of their management team, more denials came: "At no point was George involved in, or even made aware of, the allocations," said a Conservative spokesman. More "Chinese walls".

Sir Paul Ruddock, Lansdowne's former chief executive, was awarded a knighthood last year after donating £500,000 to the Conservative party, although he denies the two are linked and stresses that his knighthood was for his services to arts.

Royal Mail has already announced its first post-privatisation price rise on business rates, explicitly to "help secure the sustainability of the Universal Service". Meanwhile, Royal Mail's chief executive, Moya Greene is rumoured to be in line for a £1.5m pay packet.


After all, she has magically doubled the company's value in three months, hasn't she? Vince Cable is vowing to do his best to block such a package.

Oh, the bitter irony … Vince Cable "playing boss", three months after selling the service, at a bargain basement price.

Talking tough on a single payoff, three months after presenting City investors with a bumper £2.8bn bonus. Of our money.

Courting The Lady

"For half a century, Myanmar, also known as Burma, was ruled by a military junta but, in the last three years there has been dramatic moves towards greater democracy. 

But it could still all come to a grinding halt. The Burmese army controls a quarter of all seats in parliament and could block any changes to the constitution.

In an effort to support reforms the British army have begun a tentative and controversial engagement with their Burmese counterparts. 

Jonah Fisher reports from Naypyitaw."

See also here.

Scale and Pace

Matthew Taylor writes: 

A cross-party group of MPs is backing a campaign to give people more control over the privatisation of public services.

The group will launch a private member's bill on Wednesday that would make public ownership the default option, give people a say over whether services are privatised and ensure private companies running services are more accountable.

Caroline Lucas, the Green MP for Brighton Pavilion, is leading on the bill, which would cover a range of services, including the NHS, public transport, and local services such as schools and libraries.

"Increasingly we're seeing different ways public ownership can deliver high-quality, cost-efficient services. The publicly owned east coast line, for example, delivered over £200m back to the taxpayer last year. Councils are starting to bring services back in house, because it's more cost-efficient."

Although the bill is unlikely to be passed, campaigners say it reflects growing public concern about the scale and pace of privatisation.

Plaid Cymru MP Elfyn Llwyd, who is supporting the bill, said: "Public opinion is strongly on the side of this bill, and so is the evidence. Public ownership needs to be the default option, outsourcing companies must be held to account and privatisation shouldn't go ahead unless the public supports it."

The bill is also backed by Liberal Democrat and Labour MPs and based on work by We Own It, a campaign group which aims to promote public ownership, and give consumers a stronger voice.

Cat Hobbs, the director of We Own It, said the latest polling showed the overwhelming majority of the population supported the measures set out in the bill.

"Public ownership is popular, and people are sick of the endless stream of selloffs and outsourcing deals," she said.

"This bill would give all of us a real say over what happens to our public services. Privatisation has failed and now we need openness, transparency and accountability. All parties need to get behind the public service users bill and stand up for the rights of ordinary people, not dodgy outsourcing giants."

Rachman's Return

Michael Meacher writes:

Since the 1980s, when Thatcher introduced the ‘right to buy’, some two million tenants of council houses/flats have bought their homes, aided by discounts of up to £60,000.

The market, however, has its own way of working. Instead of producing the acclaimed ‘property-owning democracy’, it has resurrected the evil practices of the 1950s and 60s. Practices made notorious by the exploitative Notting Hill landlord Peter Rachman.

In London, over a third of ex-council homes are now owned by private landlords, and privately let at rents of around £230 a week more than council rents.

The landlords who have bought up homes from the original ‘right to buy’ tenants now have the opportunity to exploit many would-be council tenants who have been forced into the private rented sector by the sharply dwindling supply of council homes and the lack of build of adequate social housing.

Since the ‘right to buy’ was introduced, over a quarter of a million council homes have been lost from the council housing stock in London, according to a recent report from Tom Copley, a Labour London Assembly member.

Under both Labour and Tory governments since 1998, more than 85,000 Council homes have been sold in London, but only 1% of that number of Council homes have been built in London.

Moreover, because of the scarcity of rented accommodation, landlords are able to impose huge increases in rents: in Tower Hamlets for example a council house tenant pays an average rent of £121 a week, while a private tenant is forced to pay an average rent of £212 a week.

In Westminster, in the Millbank council housing estate, half of the 560 flats are now privately owned. 1-bed properties now fetch £450,000 and a 3-bed flat costs £600 a week to rent. That compares with local authority accommodation there, if you can get it, at a rent of just £106 a week.

So what is Cameron’s response?

Almost unbelievably, he wants to aggravate the problem further by pushing ‘right to buy’ still further, through increasing the discount to £75,000 so that in his fantasied imagination a further 2 million tenants still left in Council homes across the country can be drawn into the ‘right to buy’ trap.

Exactly the opposite policy is needed. There should be mandatory covenants on all ‘right to buy’ properties so that they cannot be let through the private sector.

In addition, local authorities should retain a stake in any property sold. Councils should also have a right not to sell if it would harm their housing capability.

For Council houses/flats already sold and purchased by landlords for buy-to-lets, there should be strict rent controls and a tough crackdown on any potential Rachmans seeking to exploit the scarcity and utter desperation of many tenants.

Above all, there should be a massive new house-building programme strongly focused on good-quality, but low-rent, affordable housing for poorer tenants.

Disappoint Them For Another Year

Neil Clark writes: 

2013 was not a good year for the pro-war lobby in the West, but in America, those in favor of military interventions are looking to make it easier for the president to formally declare war.

As reported by antiwar.com, US Senators John McCain and Tim Kaine have unveiled a bill to the Congress that would change the legal status of the United States in starting future wars across the world.

The bill aims to repeal the 1973 War Powers Act, which was intended to limit the power of the president to take the US to war without Congressional approval.

The Act has been widely ignored by a succession of presidents, but now, if McCain and Kaine get their way, it would be scrapped altogether and replaced by a law which requires greater ‘consultation’ with Congress and a vote within 30 days of any ‘significant’ conflict.

But crucially, the bill makes an exception for ‘humanitarian’ missions and covert operations.

"The Constitution gives the power to declare war to the Congress, but Congress has not formally declared war since June 1942, even though our nation has been involved in dozens of military actions of one scale or another since that time," McCain said. "There is a reason for this: the nature of war is changing."

In 2013 McCain urged President Obama to consider bombing Syria without Congressional approval and his new initiative must be seen in this context.

What the US really needs is for presidents to abide by the 1973 War Powers Act- not its abolition, which is what the uber-hawk McCain is proposing. McCain’s and Kaine’s bill comes after a year of setback for those keen on western military interventions.

Ten years ago, in January 2004, US military corporations and their lobbyists and supporters in political establishment might have looked back at the previous 12 months with great satisfaction. The war against Iraq, which they had long lobbied for, had finally happened.

True, the US-led invasion had not been the cakewalk they predicted, and true, no WMDs had been found- despite this being the reason the war lobby gave for attacking Iraq, but what did that matter? Saddam Hussein and the Ba'ath Party had been forcibly removed from power - and a long-standing strategic goal had been achieved.

Fast forward to January 2014 and it’s a very different story. The past 12 months have been a real annus horribilis for those in the US who strive for war.

Last year they must have been hopeful that they’d get the US to commit to strikes on Syria, which would lead to a conflict embroiling Iran and giving the West the pretext to launch strikes against the Islamic Republic.

“There are times when the president of the United States has to act in the national interest and that clashes with my view [that] we are a nation of laws, governed by the Constitution and the separation of powers,” said John McCain as he urged President Obama to consider bombing Syria without Congressional approval.

But the same September US-led military action in Syria was averted due to skillful Russian diplomacy and widespread public opposition to intervention in Western countries.

To the horror of the war lobby, President Assad and the Ba'ath party are not only still in power at the start of 2014, but the Syrian Arab Army has pushed back the rebels.

The ‘regime change’ in Damascus that they are so desperate for hasn't happened and doesn‘t look likely to happen any time soon.

Worse still for the ‘liberal interventionists’, the US/UK establishment now seems to be slowly shifting its position on Syria - in December it was announced that the US and UK was to end all ‘non-lethal’ support for rebels in the north of the country.

The vast majority of people in the US and Britain were of course relieved that war with Syria was averted.

But American hawks were furious that US-led military action did not occur. In a joint statement with fellow Republican Senator Lindsey Graham, John McCain denounced the Russian/American agreement on Syria’s chemical weapons as “an act of provocative weakness on America's part.”

Neocon columnists joined in the Obama-bashing. In the Weekly Standard, neoconservative political commentator William Kristol said the US president had been inspired by Marx - not the German philosopher Karl, but the American comedian Groucho.

“Less than three weeks after Bashar al-Assad gassed his citizens, Obama let us know he was glad to have come before us to share his outrage, explained that of course he couldn’t stay, and went off to the United Nations with his partner in comedy, Vladimir Putin,” Kristol declared.

“By throwing the ball to Congress and then to Russia, Obama has effectively taken the use of force off the table, letting the Russians and Assad set the ground rules. From a moral and geopolitical standpoint, this is a debacle that will extend throughout the Middle East and beyond", claimed Jennifer Rubin, in the Washington Post.

In Britain, Labour leader Ed Miliband, whose party voted against the government in the crucial Parliamentary vote, was also singled out for the attack over Syria.

The public were blamed too for not supporting war- with historian Andrew Roberts criticizing the “hideous, amoral selfishness” of “new Britain.”

“All too often, we see on Twitter, Facebook, and blogs, a new generation who want Britain to become just another minor power that watches events from the sidelines: another Norway, Japan, Sweden or Ireland….Welcome to the most morally vacuous, pusillanimous and self-indulgent generation for half a millennium,” he ranted.

Government Minister Michael Gove was just as angry, screeching “You’re a disgrace” at MPs who voted against intervention.

It wasn’t just their failure to get direct US-led military action against Syria which upset the war lobby in 2013. There was also the rapprochement with Iran.

American neocons were appalled that the Islamic Republic, under its new President, was coming ‘in from the cold‘ and in November their worst nightmare came true with a historic nuclear deal being agreed with Iran, which greatly reduces the chances of any western military strikes against the country, at least in the near future.

John Bolton, US Ambassador to the UN under George W. Bush, who despite his pro-war views rejects the label ‘neoconservative‘, called the agreement “an abject surrender” and concluded “an Israeli military strike is the only way to avoid Tehran’s otherwise inevitable march to nuclear weapons, and the proliferation that will surely follow.”

“In truth, it’s not a deal in the usual meaning of the term. It’s an accommodation. It’s a way for the Obama administration to avoid confronting Iran,” bemoaned American political analyst and a regular commentator for Fox News William Kristol.

Journalist Bret Stephens writing in the Wall Street Journal claimed that deal wasn’t another Munich: it was actually worse than the notorious agreement that handed Hitler the Sudentenland in 1938.

“If you hear echoes of the 1930s in the capitulation at Geneva, it's because the West is being led by the same sort of men, minus the umbrellas,” he claimed.

Across the Atlantic, British journalist Melanie Phillips, who earlier in the year advocated “neutralizing” Iran on national television, and who called the British Question Time audience “incredibly ignorant.” for not sharing her views on the “threat” to Britain from the Islamic Republic, labeled the deal a “capitulation” to the “terrorist and genocidal Iranian regime.”

In a piece entitled ‘World saved? Hardly. More a final countdown to nuclear blackmail and war’, Phillips fumed that the deal “all but guarantees that the principal source of terrorism in the world today will now develop nuclear weapons for its monstrous purposes.”

While we cannot write them off completely - given their level of representation in the US and UK mainstream media and in the national legislatures, which is wildly disproportionate to the level of public support they have – there is no disguising the fact that supporters of ‘humanitarian interventions' from politics and media are in a much weaker position than 12 months ago.

It’s much, much harder to sell foreign ‘interventions’ to the public now – in an age of austerity –than it was in 2003.

People across the Western world have had enough of being tricked into costly wars, on the basis of claims which later were proved to have been false, like the ones that Iraq possessed WMDs in 2003.

Moreover in the US and UK a split has developed between neocons and ‘liberal interventionists’ and other members of the political establishment in those countries who prefer diplomacy to war and who support a ‘realist’ foreign policy position based on an acknowledgement that we no longer live in a unipolar world.

Those who are hungry for more military interventions didn’t get what they wanted in 2013 and their frustration is there for all to see.

The people who have brought so much death and destruction to Iraq, have been trying to emotionally blackmail us over Syria claiming that the truly awful refugee crisis is caused by ‘non-intervention’ and is a result of the west ‘doing nothing’.

But in fact the Syrian conflict has become so protracted because the West and its regional allies have already intervened – by arming, funding and supporting ‘rebel’ groups dedicated to the violent overthrow of the government.

Instead of pouring water over the fire in Syria, the West and its allies have deliberately poured petrol.

In any case we don’t need lectures on morality from those who egged on a blatantly illegal war with Iraq which has led to the deaths of up to 1million people.

Let’s not forget that if the American uber-hawks had got their way over Syria and Iran in 2013 we’d probably now be entering the fifth month of World War III.

The war lobby tried their hardest, but thankfully this time they did not prevail.

Let’s hope that they don’t succeed in 2014 either.

Irrecoverable

People's minds are made up.

There is no point even arguing over the figures.

The voters' minds are already made up. They have been for years.

You do not have to take my word for it.

Oh, and unemployment in the North East has risen.

Just The Jobbik

As of course Owen understands, thanks to the EU, these people are now our legislators.

Yes, the actual Arrow Cross.