Tag Archives: regions

Labour would halt RBS privatisation – in return for investment

 

This looks like Labour’s plan for a national investment bank, writ smaller.

A Labour government would halt privatisation because it would not profit the state. This makes perfect sense – far more than the current Tory plan to sell to the rich at a loss for the poor.

But the offer is only to delay continued privatisation of RBS – and only if the bank commits itself to lending money to the regions, and to small businesses.

For This Writer, it is not enough. RBS played a large part in the financial crisis of 2008 and it would be fitting if that bank were kept in public ownership and made to put right the damage it caused.

Put the Tories in Labour’s place, with a similar kind of offer, and I’d be calling them liars. History shows that Conservatives will say what they think others want to hear, to get them on-side. Then they renege on the deal.

I wouldn’t mind at all if Labour reneged on this one and turned RBS into a part of – or the basis of – the National Investment Bank in the party’s manifesto.

But Labour is not the Conservative Party and I have a feeling this is a sincere offer. But will the RBS bankers – and their shareholders – share my belief?

[The] Labour party would halt the privatisation of Royal Bank of Scotland (RBS) if it came to power but would not seek to exert day-to-day control, the opposition party’s shadow banking minister told Reuters.

RBS shareholders voted on Wednesday to approve the bank’s plans to begin buying back its shares from the government in order to accelerate a return to majority private ownership, with more than 98 percent backing the proposal.

RBS remains 62 percent owned by British taxpayers after a £45 billion bailout in the 2008 financial crisis, although the Conservative government has conducted two share sales as it looks to return it to private ownership.

The government’s two RBS equity sales so far have crystallised deep losses for British taxpayers on shares that have almost halved in value since the bank’s rescue.

“If RBS is now paying dividends, and the price of the shares is under what was paid, we cannot see the rationale for selling more shares,” said Labour’s Jonathan Reynolds.

Having previously suggested full nationalization of RBS, Labour has been rowing back as it seeks to build bridges to the City of London and ease concerns about a Labour-led Britain.

The extent of state involvement would depend on RBS’ willingness to increase lending to Britain’s regions and small businesses.

“We don’t have a policy of day-to-day control of RBS,” he said. “But there is clearly unmet demand in lending and a problem with financial inclusion.”

Source: Britain’s Labour says it would halt RBS privatization


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Has Chuka Umunna taken leave of his senses?

Ill-judged: Blue-scarved Chukka Umunna should remember that Michael Heseltine did much to destroy the UK's communities as part of the Thatcher and Major governments.

Ill-judged: Blue-scarved Chuka Umunna should remember that Michael Heseltine did much to destroy the UK’s communities as part of the Thatcher and Major governments.

After the story in The Guardian there are only two things required of Chuka Umunna: Repudiation – or his resignation.

The article states that Blue Labour stalwart Umunna would call on Conservative heavyweight Michael Heseltine for advice if Labour wins the general election. If this is true, it is madness.

Heseltine was a leading member of the Thatcher and Major Conservative governments of the 1980s and 90s, pioneering the disastrous ‘Right to Buy’ initiative that sold off the majority of council houses without replacing them, leading to the current housing crisis and the Bedroom Tax.

More recently he authored the ‘No Stone Left Unturned’ plan which made 89 recommendations on ways of stimulating local growth – 81 of which were adopted by the Coalition Government, with little effect. The UK economy has been stagnant for many years, with productivity at around the same level as it was when the Coalition came into office; it seems any boost in GDP has come from other areas – possibly the reduction in wages brought about by the widespread abuse of zero-hours contracts to rob working people of their rights to a steady job and entitlements to holiday and sick pay.

Yet it is in this area – revitalising the cities and regions – that Umunna wants Heseltine to advise. It would be an utterly pointless exercise.

For any stimulation policy to work, it has to put money where it can be most effective – in the hands of the people who actually need it to pay for things they need. But Heseltine is a Tory – they take money away from the proles; they don’t hand it out to them. He’ll devise something that makes towns look very pretty in order to hide the rot inside as local businesses and residents go to the wall.

Not only that, but it seems Umunna has not learned the overriding lesson of the Scottish referendum campaign: Voters will not tolerate a Labour alliance with the Conservatives on any level at all.

One of the main reasons the SNP is polling so well north of the border is because of a myth propagated by its candidates and supporters, that Labour and the Conservatives are “in bed”, “in cahoots”, “in alliance” – choose the phrase you prefer. It isn’t true – Better Together was an alliance of convenience because both parties wanted Scotland to remain in the union; they have very little else in common (although the SNP has exploited the very few examples of common ground to great effect, also).

Now along comes Chuka, thinking he’s clever with a plan to be inclusive and revive the “big tent” policies of Tony Blair – another figure who is now widely reviled by the electorate – and confirming everything the SNP whisperers have been saying!

Is he trying to stab Ed Miliband in the back?

If not, then now is the time to deny the Guardian story and put Heseltine back in his box.

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Labour plans ‘biggest devolution of economic power and funding for generations’

Ed Balls: He wants to put £30 billion worth of infrastructure funding into the hands of local government.

Ed Balls: He wants to put £30 billion worth of infrastructure funding into the hands of local government.

Today’s most interesting election announcement comes from Labour, which is promising to deliver “the biggest devolution of economic power and funding to England’s city and county regions for generations”.

Plans to devolve £30 billion of funding over five years – including funding for housing, transport, business support, employment and adult skills – will be at the heart of the next Labour government’s Spending Review, if elected in May.

A Labour Treasury will allow city and county regions which come together in combined authorities to keep 100 per cent of extra business rates revenue generated by additional growth. They will then be able to invest this to support further business growth in their regions.

All areas will be able to access these freedoms and areas which choose not to have an elected Mayor will not get a second-class deal.

It’s a clear attack on George Osborne’s plan for a “northern powerhouse” – Labour is asking, why just concentrate on ‘The North’ when so many other areas outside London need help due to Tory economic mismanagement?

It is to be hoped that Labour has not forgotten its support base in this business-friendly frenzy. Will this funding be used to promote the Living Wage, for example? Will it be used to create the new work demanded by its jobs guarantee – and will they be permanent, well-paying careers?

“Local areas will be in the driving seat on key decisions affecting their local economies – with new powers over back-to-work schemes, to drive house building, and to integrate, invest in and plan transport infrastructure,” said shadow chancellor Ed Balls, ahead of today’s announcement. It seems Labour has picked up a trick from the Tories – if this scheme fails anywhere, they will be able to blame it on local government. Hmm.

“And we will also let city and county regions keep all the additional business rates revenue generated by growth… We will not only back our great cities, but our towns and county regions too. Not just urban areas, but also rural areas.”

So there is much to recommend this plan – if a Labour government in Westminster can co-ordinate successfully with local authorities, of all colours, in the regions.

Or is this building castles in the air?

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Suicide rate is now the strongest indicator of unemployment

Iain Duncan Smith has been crowing about the private sector after the official unemployment figure dropped from 8.2 to 8 per cent of the workforce.

He reckons we should take our hats off to private sector employers for providing the new work. Well he would, wouldn’t he?

His attitude conforms with the narrative the Tories have been trying to build since 2010, that the private sector would rush in to fill the jobs gap left behind after the Coalition cut the public sector to ribbons – providing decent, gainful employment for the masses.

That story went straight into the circular file when the economy flatlined, right after George Osborne took charge – and resurrecting it now seems a desperate act, especially in the light of the facts.

Firstly, the Olympics have distorted the figures. We don’t know how many employers took on extra hands in advance of the games, so we don’t know how many of those jobs will go again, now that the major event is over. We do know that businesses suffered losses during the games because an expected influx of consumers did not materialise; how will that affect future figures?

Second, the number of people working part-time because they cannot find a full-time job hit a record high of 1.42 million – the most since records began in 1992.

Third, the unemployment rate actually rose in around half of the British regions. This supports the claim that the Olympics distorted the figures, and points to a continuing downward trend.

Finally, if Mr Smith wants a more accurate monitor of unemployment, he should look at the suicide rate – according to a new report by the British Medical Journal.

It found that the suicide rate among men rose by 1.4 per cent for every 10 per cent increase in unemployment.   This means that between 2008-2010, 846 more men ended their life than would normally have been expected; the corresponding number for women was an extra 155 suicides.   On average, male unemployment rose by 25.6 per cent in each of those years, while the male suicide rate rose by 3.6 per cent each year. When male employment rates rose briefly in 2010, the suicide rate dropped slightly.

We already know that an average of 32 people per week are dying as a result of Mr Smith’s brutalities against the disabled; now we know that more than 1,000 have been driven to kill themselves because of the government’s unemployment policy.

Meanwhile, among those who do have jobs, we know that average wages now only last 21 days in the month, meaning that workers have to dip into their savings, ask family for funds, or go to loan sharks for help – increasing the national debt problem and creating a trend that could lead to even more suicides.

I notice Iain Duncan Smith, promoter of the private sector, hasn’t got anything to say about that.