The hypocrisy over Cadbury’s is nauseating
“A bitter taste in Bournville” and “Cadbury: Not such a sweet deal“, said the Guardian. “Why takeover bids rarely work“, warned Jeremy Warner in the Telegraph. “Kraft takeover jobs bloodbath” and “High price for handing UK PLC to foreigners” were the headlines in the Daily Mail, while the Independent noted that “Bournville laments saddest day for 10 years“.
Yesterday’s papers couldn’t agree more. In essence, the widespread opinion across the spectrum was that another British institution is going, that the usual City “short-termists” are making a mint off the back of a local community, that the economic long-term interests of the country are being ignored and that Britain’s surrendering to one too many foreign takeovers.
But scratch beneath the condemnation for Cadbury boss Roger Karr’s own admission that job losses were an “inevitability“, the CEO’s £12m payout, or the simple fact that the buyers Kraft are a company ridden with something like £22 billion of debt, and few grasp the fundamental reasons behind the potential loss of Cadbury.
For instance the fact that the industrial policy of the past thirty years has been coherently and systematically biased towards the professional short-termism that turned London into the Mecca of City spivvery. And that’s under the active complicity of both Tories and Labour.
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Support the NoBonus4RBS campaign!
contribution by Stan Moss
Do you remember when the government bailed out the banks to the tune of £850bn? Didn’t Gordon Brown and Alistair Darling insist that conditions be attached, that it would all be very strict and that, with the government as major shareholder, the banks would not be free to slip back into past excesses?
“[The deal] will carry terms and conditions that appropriately reflect the financial commitment being made by the taxpayer” – said Darling in 2008.
Back to today, and neither Labour nor the Tories are saying a word to the scandal that is quietly unravelling before our eyes.
RBS, where the governments owns a stake of 84%, have announced that they’re about to dish up £1.5bn to £2bn in bonuses, with the board threatening to resign if not allowed to do so.
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Cadbury’s and Kraft: what the left needs to consider now
Cadburys has succumbed to the advances of Kraft in a takeover deal worth £11.5bn. Unions have expressed their concern for the future of Cadbury’s workforce.
They are right to be concerned; Kraft financed its takeover by incurring £7bn of debt and that will have to be repaid somehow and already, Cadburys Chairman has said job losses are ‘inevitable’. Plus there is the highly likely chance of asset-stripping.
Both Gordon Brown and Lord Mandleson expressed concern about Kraft’s intentions. Back in December Mandleson said;
If you think that you can come here and make a fast buck, you will find huge opposition from the local population and from the British Government
However, despite this both have been powerless to do anything and Mandleson now has washed his hands of the whole affair saying what happens is a “matter for the shareholders”.
But what happens to Cadbury’s is of concern to both British citizens, especially as we have to deal with the consequences of redundancies and we lose a successful British brand.
So, what can the left do to shape the debate in situations like this?
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Britain cannot let Haiti be pushed to ’shock capitalism’
As political leaders there is much more Barack Obama and Gordon Brown could be doing to help Haiti. Above all they must make sure that the disaster is not compiled by the cynical exploitation of the current crisis.
In an article for The Nation Richard Kim details how Haiti has been crippled by its indebtedness to Western powers.
Following Haiti’s liberation from the French in 1804 it was forced by 1825, under threat of embargo from France and other Western powers, to pay 150 million francs in reparations to French slave owners. It turned primarily to Germany and the US for help.
However, it has never escaped from this spiral of debt and also has been subjected to the imposition of ’structural adjustment policies’ by the World Bank and IMF.
All of which have contributed to Haiti being not just the poorest but also one of the most unequal societies in the Western hemisphere.
According to a report;
It is second only to Namibia in income inequality (Jadotte 2006) , and has the most millionaires per capita in the region. Margarethe Thenusla, a 34-year old factory worker and mother of two said, “When they ask for aid for the needy, you hear that they release thousands of dollars for aid in Haiti. But when it comes you can’t see anything that they did with the food aid. You see it in the market, they’re selling it. Us poor people don’t see it”.
Is it the end of racism?
In a speech today the communities secretary John Denham will say that ethnic minorities are no longer automatically disadvantaged in Britain, but that disadvantage is more linked to poverty, class and identity.
New trends are emerging linked to the way that race and class together shape people’s lives and this makes the situation much more complex. That does not mean that we should reduce our efforts to tackle racism and promote race equality but we must avoid a one dimensional debate that assumes all minority ethnic people are disadvantaged.
This should be welcomed and I’ve been arguing for a multi-dimensional approach for years, one of the reasons why I opposed ethnic minority shortlists. Class is indeed one of the primary factors affecting minorities, especially in education where middle class boys of Indian and African backgrounds do better than working class kids from white, Caribbean and Bangladeshi backgrounds.
To say that a person’s race affects their opportunities in society less than factors such as class and gender is now, I think, to state the obvious. In a way it is also a welcome development because it shows our society has become much more progressive on race issues: though it’s still a problem that how much a child’s parents earn still matters.
I can predict some comments and headlines on the right: ‘see, it shows why multiculturalism and political correctness should be ditched and Richard Littlejohn spoketh the gospel‘ etc.
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What exactly is Labour’s election narrative?
Possibly the worst news to come out of the failed H&H coup, for Labourites, is that Gordon Brown has been forced to expand his team of ‘election campaign chiefs’. Sure, Brown is in a weak position, but any political team should never let a range of people decide election strategy or messaging.
At this point New Labour needs one strategy and one clear message. Then it needs ministers to repeat that message endlessly in the context of their policy announcements. The political anoraks can find the policy detail if they want; for the 10-second attention span of BBC News @ 6 viewers – the message has to be coherent and repetitive (so it be internalised). That’s the way it is.
The problem with these extra chiefs is that not only will they send out mixed messages, but it gives the media an opportunity to run the narrative that senior ministers are in-fighting over the election message. They’ve been doing this for a while anyway.
I’ve said this repeatedly and I’ll say it again – there’s only one viable election strategy and that is the class war strategy. Labour should ignore the right-wing press and the Guardianistas, the polls bear me out.
The most worrying finding for the Tories is that Mr Cameron is seen to be on the side of the rich over ordinary people, by 50 to 42 per cent. By contrast, Mr Brown is seen as 64 per cent for ordinary people and 26 per cent for the rich.
Nuclear job creation numbers fail to live up to the hype
Back in September when he announced the UK’s nuclear ‘renaissance’, Gordon Brown’s government insisted it would create 100,000 new jobs. ‘Building a new generation of nuclear power stations will create thousands of jobs in manufacturing in the UK,’ said Derek Simpson, the joint leader of Unite. That figure has since fallen to by 10% to 90,000 but that’s still a big promise.
Thanks to French nuclear company AREVA, however, we’re now getting an idea of how those numbers break down and the spin around nuclear job creation is revealed. AREVA’s EPR reactor is one of two designs the UK government is looking at building and is also being considered in the US…
…a new U.S. EPR™ would create up to 11,000 direct and indirect jobs during component manufacturing (including AREVA’s Newport News heavy component facility in Virginia) and plant construction. On top if this, construction and operation would also create more than 400 permanent jobs and spur billion of dollars in investment in the local economy.
The UK government wants ten new reactors, so that would create 110,000 ‘direct and indirect’ jobs according to AREVA’s numbers, wouldn’t it? Well, it might. That number is in the same ballpark as the UK government’s figures of 90,000-100,000 but it assumes that all ten reactors are built at the same time. continue reading… »
Homophobic former Archbishop speaks out on immigration
George Carey, Archbisop of Canterbury until 2002, has written in today’s Times< , in which he just stops short of calling for Christians to be given priority in a migration point system.
The article echoes what he already said yesterday on BBC Radio 4’s Today programme.
The former Archbishop and current member of the Balanced Migration Group followed a template that we’ve recently seen far too often from the usual suspects: a) if you talk about immigration you are branded a racist b) if you want to stop the BNP from growing you need to “seriously address the concerns” c) Britain is a Christian country.
To which the answers are:
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The government is smaller than the right admit
A standard attack on Labour is that it has left the government dominating the economy, which spells doom for our future growth. Policy Exchange’s approach to this has been the most uncompromising and (as I shall show) wrongheaded; see this publication, mentioned by the Wolf, and utterly debunked by me.
A state that actually dominated economic production is terrible for economic efficiency. For the UK to grow for 200 years has needed capitalism’s endless, restless search for better ways of doing things. Good ideas get rewarded and prosper– for a while – and bad ideas get thrown out.
Imagine if the development of the IT industry had been all decided in think tanks and Whitehall. We would still be on BBC Microcomputers.
So, are we in a 50%-state economy? Superficially the government spends about £650bn of a £1400bn GDP economy. But does it feel like that? Um, no.
Think about it: the state employs 6 million people, or about 20% of the workforce (h/t John Redwood). Half of the state’s spending is actually transferring money to people so that they can spend it themselves. Government consumption is about 20-25%.
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How immigrants created a national dish
contribution by Left Outside
Up until the 19th century we were not a particularly piscivorious nation.
In the United Kingdom, fish and chips became a cheap food popular among the working classes with the rapid development of trawl fishing in the North Sea in the second half of the nineteenth century. In 1860 The first fish and chip shop was opened in London by Jewish proprietor Joseph Malin who married together “fish fried in the Jewish fashion” with chips.
Consisting on a diet of mostly meat and one veg – two if you were lucky – the idea that a national dish – the national dish – would be fried fish and fried potatoes would be confusing to our 19th century forebears.
But then some Jews came along from Eastern Europe, fleeing terror or just seeking a better life. With their funny ways, keeping mostly to themselves, making cabinets and clothes and eating odd un-British things like fish, they didn’t do much harm.
This fish eating slowly dispersed throughout the nation and became more and more popular via market stalls and street hawkers until ventures like our Mr Malin’s became profitable.
It is no exaggeration to say that the marvellously, almost quintessentially, English dish fish and chips is an immigrant dish. With the disdain modern migrants are held in its a little hard to believe, but we owe a lot of what Gordon Brown calls “Britishness” to immigrants.
Funny old world, eh?
Iceland is ripping us off
Just for the avoidance of doubt:
1) The democratically elected Icelandic government, under EU/EFTA financial regulation equivalence rules, agreed long before the crisis even began that it would guarantee compensation of the first EUR20887 of deposit to retail depositors in Icelandic banks from other EU/EFTA countries.
2) The Icelandic banks, with explicit permission from the democratically elected Icelandic government (as part of the economic boom that vastly enriched Icelanders for many years), actively marketed their savings accounts to depositors from other EU/EFTA countries.
3) The Icelandic banks then went bust and lost their depositors’ money.
4) This means that, unequivocally and in every possible sense, the Icelandic government is responsible for paying the first EUR20887 of compensation to retail depositors in Icelandic banks from other EU/EFTA countries. They agreed to take on that debt, and retail depositors in the Icelandic banks made the deposits on the basis that the Icelandic government weren’t a bunch of ropey shysters who’d refuse to pay debt that they owed.
5) For understandable reasons of domestic harmony, the governments of the UK and Netherlands (where the majority of Iceland’s victims were located) agreed to pay the compensation themselves, and subsequently chase the Icelandic government for the money it owed.
6) Today’s populist refusal by Iceland’s president to pay the UK and Netherlands government the US$5bn it owes as a result, despite the extremely generous payment terms they’d been offered, represents every single Icelandic person nicking more than US$10,000 from British and Dutch taxpayers.
If that’s democracy, screw it.
Update: Dsquared in the comments has a good summary of the Iceland situation:
The basic story here is that a small and wildly self-regarding Nordic nation, with a history of electing right-wing governments on the back of get-rich quick schemes, did so. Then that right-wing government proceeded to deal with its creditors in an amazingly stupid and dishonest manner because it wanted to pretend that something close to boom levels of consumption could be sustained. Then it all fell apart and a left-wing government was elected and started trying to clean up the mess. Then the elected President (from the same party as said right-wing government) decided to veto the solution. And this is, in some way, Gordon Brown’s fault.
He’s also written the whole, erm, saga up as a morality play. Well worth a read.
How right-wing economics has trouble standing up
When it comes to the economy, right-wingers have one simple narratives: to reduce the size of government so it can aid job creation and growth in the economy.
That is, after all, what Milton Friedman advocated. The theory goes that government spending crowds out more efficient private spending – and therefore job creation – and the economy suffers.
But the evidence fails to support that, when applied to Capitalism’s natural home: the United States of America.
First, right-wingers frequently say they are committed to reducing the deficit and size of the government. But as the graph below shows: Republicans have actually presided over a growth in US national (and world debt) more than Democrats.
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Taking apart Conservative party policies
contribution by reader ‘Donut Hinge Party’
Some time this month everyone’s expecting David Cameron to release his manifesto. The conventional narrative, “the Tories have no policies other than the inheritance tax one,” frankly isn’t true.
A quick skip over to conservatives.com will show a vast swathe of information about policy. Admittedly, much of it is woolly thinking about encouraging this and fostering that, but there are a few hard commitments, too.
I thought it might be interesting to fisk it and see how much actually makes its way to the final manifesto.
Now, I’m no partisan, so let me say here and there; not ALL of the policies are a load of rubbish. Although most of their ‘new’ policies are already in action: ensured support of those on Incapacity Benefit, minimum tariffs for crimes, councils publishing expenses online, flexible working hours for parents.
I like their energy ideas; get farmers to use their fallow land for wind turbines and biofuels. However, these are vastly outweighed by some of the ill conceived policies writ large.
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The Tories seek out wisdom of the crowds
Shadow culture secretary Jeremy Hunt says he’s going to “develop an online platform that enables us to tap into the wisdom of crowds to resolve difficult policy challenges”. Marina Hyde thinks the Tories may have solved the problem of their lack of policies. But with what significance?
The wisdom of crowds phenomenon observes that if you get a lot of people together and ask them to guess something – the weight of a pig at a county fair, say – then the more people you have guessing, the more likely they are to collectively get it right if you average out all the individual answers.
For every ridiculously far-out over-estimate, someone else under-estimates by the same margin. Eventually, the over- and under-valuations even each other out. The more people guessing, the closer the collective guess gets to a remarkable degree of accuracy.
The problem with applying such theorems to the realm of politics is that they only have purchase if the crowd or jury is being asked to discover something objectively certain. But politics is essentially conflict and struggle between clashing world-views. Large groups of people cannot discover the “correct” political policies, because the notion of “correct” politics is a chimera.
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Tory dodgy stats on Inheritance Tax laid bare
Fabian Research Director Tim Horton’s proposal that the inheritance tax thresholds should be frozen was adopted by the government in November’s pre-budget report.
He has letters in The Guardian and (why only preach to the converted) The Telegraph pointing to just one of the glaringly obvious flaws in Phillip Hammond’s rather back of the envelope claim that 4 million people will now be liable for inheritance tax, put out by the shadow Treasury Secretary during the holiday period.
Here’s The Telegraph letter.
SIR – The Conservatives’ claim that four million face inheritance tax (report, December 29) is wrong.
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Tory strategy: to hope for a credit downgrade
I smiled a rueful smile when I heard David Cameron call for a ‘good clean fight’ in the forthcoming general election.
Let’s set aside for the moment the fact by pouring millions of Lord Ashcroft mega-wealth into marginal constituencies, the Conservatives are effectively buying up seats, while having the gall to suggest that it is the Labour party that prey to the agenda of its key financial backers.
What is new this time around is that the result of the election may be decided on the basis of a single, methodologically obscure decision by a single credit ratings analyst.
Let’s let Stephanie Flanders take up the story, in her ‘intriguing question for 2010’:
Everyone thinks that the markets will politely wait until Britain has gone to the polls to draw its verdict on the UK. Well, maybe. But if sovereign debt is indeed the new sub-prime – at least where the markets are concerned – it’s difficult to believe that Britain will get through the months before the election without at least one major market wobble.
Perhaps one ratings agency will put the UK on negative watch. Or investors will get seized with the idea of a hung Parliament. Or Britain will simply get caught in the crosshairs of a market panic over sovereign debt in Central and Eastern Europe. Who knows what the trigger will be. But my hunch is there will be something, this side of polling day. The question will be how the major political parties react.
Does socialism really cause racism?
contribution by Left Outside
Last month DK’s quote of the day from Charlotte Gore and her post inspired by Hayek’s Road To Serfdom.
It may be that the socialists are the most vocal anti-racists, but it is they who’ve created the economic conditions in which racism thrives. It’s they who’ve created a country with a growing obsession with stopping “foreigners” taking advantage of our welfare state, and it’s they who’ve spent the last 100 years telling everyone that Free Trade (which includes free movement of people) is a bad and terrible thing, it’s they who’ve told everyone that the job of the state is to pick sides and pick winners…. and they’re acting surprised, shocked and outraged when people who see themselves as losers in the current system want to use the state for their own purposes?
What exactly did they think would happen? I mean, really? The only way to stop National Socialism in the UK is to stop socialism.
For DK and Charlotte this is one of key critiques of even fairly mild state intervention. In my view it is a totally fallacious one. What Charlotte Gore, and DK, suggest is that once states (read: Socialists) have created even a modest welfare state they have set the scene for conflicts because they have been seen to pick sides and the creation of an “other” becomes central to politics.
We will look at 4 countries – US, UK, Australia and Germany - because they are the ones I have information for and because I think they provide a reasonably adequate sample. Of course, I would prefer to do more but I don’t have the resources or the time at the moment.
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More thoughts on a ‘class war’
A couple more thoughts on class war following on from yesterday’s post.
Sunny picked up the tenor of my argument about how 21st century appeals to privilege and minority interests is neither a disastrous retreat to 1970s antagonisms nor the suicidal doom-and-gloom message that New Labour dinosaurs claim. Yet he seems insistent on labelling the overall strategy one of “class war”.
To be fair to Sunny, he does say that this is intended merely as shorthand, holding his nose and agreeing with Ed Ball’s on this matter. But even then, I’m suspicious of using the term even as shorthand in strategy-debate. For terms have a tendency to stick. Especially when a predominantly right-wing media has already shown itself desirous of squawking about the “class war” label.
And there’s (at least) two more reasons why “class war” is an unwise use of language, on top of yesterday’s list.
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Blaming China for our failures in Copenhagen
contribution by Madam Miaow
This letter was written in response to Mark Lynas in the Guardian blaming China for Copenhagen
Dear Mark,
So the cold war is alive and well.
Western spin is really pulling out all the stops, perhaps because we are onto you as the various blogs and forums show.
If anything, China got strong-armed into signing a weak deal at Copenhagen when it should have held out as Bolivia, Venezuela, Cuba and others have said.
The US and the rich nations use up almost all the carbon allowance in the atmosphere over the past 160 years, the US dithers over ten years of Bush, they refuse to ratify Kyoto, the Danish summit chair has to resign when she’s caught fast-tracking the rich nations’ deal, the West fail in their Kyoto pledges, Canada rips up its Kyoto deal and proceeds with exploiting its huge reserves of dirty oil, the US will only reduce emissions by 4% against the 1990 base year and not the 17% you describe as “serious cuts”, while China makes real strides in green technology, and so on.
But it is all China’s fault.
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Labour’s need for a Class War strategy explained
Various people have waded into our discussion of electoral strategy in the upcoming election, namely that I think New Labour should fight a ‘class war’, without understanding what I’m getting at.
So I’ll restate some points, rebut criticisms and start by simply saying that if newspapers like the Telegraph are trying to kill it then the strategy must have some merit.
I also think it exposes some generational differences within the Labour party.
What is Class War?
Class War takes place in the papers of the right-wing media every time New Labour raises taxes on the rich even slightly or has the temerity to mention any vaguely economically left-wing policy. New Labour has bent over backwards to shake-off old skool connotations of being in thrall of trade unions, and so it runs away as soon as the spectre of ‘class war’ is raised in the media. Actual policies have been very thin on the ground.
In the current news cycle ‘class war’ nominally took off when Alastair Darling decided to marginally tax bankers’ bonuses. Since then the right-wing media have tried their best to play up supposed differences among ministers on the ‘class war strategy’. The Indy jumped on the bandwagon by bringing in the fox hunting angle.
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» Why does Phillip Blond see civil cohesion as a security issue?
» So what if the Labour candidates went to Oxbridge?
» Last night’s Labour hustings: will it get interesting or turn to torture?
» It’s now down to Ken to win London for Labour
» The Labour people need
» Blog Nation: what would you like to see discussed?
» The Labour leadership’s token contender.. and it’s not Diane Abbott
» In defence of these fraternal nominations
» Is this the end for the socialist left?
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