Politics news allsorts

Comment and analysis of recent UK politics events.

Image of a badger

Major Tory party donor chosen as chair of government nature watchdog

Like it says but apparently totally coincidental that an investment banker is appointed head of wildlife and nature watchdog, Natural England.

The appointment comes at a sensitive time for both Natural England and the government, which has had to defend itself from accusations from 41 conservation groups that only four of its 25 pledges on environment and nature are progressing well.

Bullingdon Tory idiot Boris Johnson

Tory Bullinger [edit: Bullingdon] idiot employs a cornflake analogy to promote the Tories’ genetic superiority of the ruling elite thesis

http://www.theguardian.com/politics/2013/nov/27/boris-johnson-thatcher-greed-good

“Whatever you may think of the value of IQ tests it is surely relevant to a conversation about equality that as many as 16% of our species have an IQ below 85 while about 2% …” he said as he departed from the text of his speech to ask whether anyone in his City audience had a low IQ. To muted laughter he asked: “Over 16% anyone? Put up your hands.” He then resumed his speech to talk about the 2% who have an IQ above 130.

Johnson then told the Centre for Policy Studies think tank, which helped lay the basis for Thatcherism in the 1970s: “The harder you shake the pack the easier it will be for some cornflakes to get to the top.”

“… greed [is] a valuable spur to economic activity.”

Image of Royal Mail postboxRoyal Mail shares: Goldman Sachs sets price target of 610p

Goldman Sachs has risked a further escalation of the Royal Mail privatisation row by putting a price target on the shares of 610p despite telling the government that the business should be floated at 330p last month.

Analysts at Goldman said the postal group’s valuation should benefit from an increase in parcel deliveries, despite falling letter volumes.

The investment bank’s 12-month price target of 610p represents an 85% premium on the flotation price, and gave further ammunition to those critics of the privatisation who argue the government sold off Royal Mail too cheaply.

 

Continue ReadingPolitics news allsorts

Politics news allsorts

Commentary and analysis of recent UK politics news.

I found Cameron’s joke quite amusing: “It’s fair to say he’s no longer a follower of Marx, he’s loving Engels instead.”

 

Vince Cable defends Royal Mail valuation as profit almost doubles

Image of Royal Mail postbox

The business secretary, Vince Cable, defended the government’s valuation of Royal Mail on Wednesday after solid results from the newly privatised group sent its shares even higher.

Royal Mail was privatised last month when the government sold 60% of its stake to investors in an initial public offering (IPO).

Royal Mail shares were up 5% by mid-morning on Wednesday to 559.5p – 70% higher than the flotation price of 330p. Its market value has increased by £2.3bn since the flotation, which valued Royal Mail at £3.3bn.

Operating profit for the six months ended 29 September was £283m, up from £144m a year earlier.

Comment: The case that tells us what kind of country Britain is

His name is Isa Muazu. He is wasting away.

Locked in a cell just outside Heathrow, out of sight from the holidaymakers and business visitors, he can no longer get up off his mattress. He has not eaten in over 90 days. He can no longer stand or see. He struggles to talk.

On Friday, at 8:00 am, he will be forcibly put on board a flight and sent to Lagos, where he says he will be targeted by Islamic terror group Boko Haram. He was due to be deported tonight, but the Home Office has ordered new removal directions. Needless to say, he will be even weaker on Friday.

In a decision which has no legal, medical or moral consistency given the ‘end of life’ plan, a Home Office doctor has branded Muazu ‘fit to fly’. Yesterday morning, independent doctors visited him as he lay on the mattress in the detention centre and decided the precise opposite. There is a strong chance this man will die when he is deported.

 

Continue ReadingPolitics news allsorts

Royal Mail privatisation: Goldman Sachs and UBS to be grilled by MPs

http://www.theguardian.com/uk-news/2013/nov/14/royal-mail-flotation-mps-question-banks

Investment banks to be asked in Commons why sale of asset favoured foreign investors and if float price was set too low

The investment banks tasked with allocating shares in last month’s controversial Royal Mail float face a grilling by MPs over allegations they discriminated against UK pension funds and favoured foreign investors.

Goldman Sachs and UBS led an offer that has been widely criticised for short-changing taxpayers by selling a major government asset on the cheap, after Royal Mail shares immediately soared on the stock exchange and continue to trade at a premium of around 70%.

Those concerns have been exacerbated by the presence of sovereign wealth funds – including Kuwait, Singapore and Abu Dhabi – on the Royal Mail’s share register.

One senior City source, who has worked on major UK privatisations, said: “The Royal Mail was probably a bit cheap, but it is one thing to sell it at a cut-price to UK pension funds … There was a disproportionate amount of shares that went to sovereign wealth funds.”

Senior representatives from Goldmans and UBS will appear in parliament next Wednesday to answer questions from MPs on the business, innovation and skills select committee, alongside peers from JP Morgan, Citibank, Deutsche Bank and stockbroker Panmure Gordon.

The MPs’ concerns over the flotation are echoed by City figures. A top UK fund manager said: “A lot of people were very upset at their allocation, even on day zero before the shares started trading at a premium.

“It may be that the advisers did not take account of the political implications and do as good a job as they could have done.”

A source close to the committee confirmed: “This is something the committee is aware of. It may well come up in the session.”

In the months running up to the privatisation, it is understood that Royal Mail, the government and its advisers were working with a small group of financial institutions in order to get an early idea of how the shares should be priced.

That inner core of investors, which is thought to have largely excluded top UK pension fund managers, ended up with the most sizeable allocations.

Continue ReadingRoyal Mail privatisation: Goldman Sachs and UBS to be grilled by MPs

MPs summon bankers to explain their valuations of Royal Mail

http://www.theguardian.com/uk-news/2013/nov/08/mps-bankers-valuations-royal-mail-sale-taxpayers

MPs investigate whether the £3.3bn sale of shares in the Royal Mail shortchanged taxpayers

Image of Royal Mail postbox
MPs investigating whether last month’s £3.3bn sale of shares in the Royal Mail shortchanged taxpayers have summoned City bankers to explain how they put a price on the near 500-year-old firm.

The Royal Mail share price has soared some 70% since 11 October when the government sold a majority stake in the postal service, prompting criticism from unions and opposition MPs that the firm was sold off too cheaply.

It was revealed after the float that four investment banks – JP Morgan, Panmure Gordon, Deutsche and Citi – believed the Royal Mail was worth far more than the price achieved. Representatives of those banks will now have to explain their valuations to the Business Innovation and Skills committee.

Goldman Sachs and UBS, which led the float on behalf of the government, will have to justify their lower valuation. Business secretary Vince Cable and a representative from Lazards will also be questioned. Hearings have been scheduled for 20 and 27 November.

At the time of their appointment a BIS spokesman said UBS and Goldmans had been selected for the sell-off work because of their past experience advising the government on Royal Mail.

How the Orange Bookers took over the Lib Dems


What Britain now has is a blue-orange coalition, with the little-known Orange Book forming the core of current Lib Dem political thinking. To understand how this disreputable arrangement has come about, we need to examine the philosophy laid out in The Orange Book: Reclaiming Liberalism, edited by David Laws (now the Chief Secretary to the Treasury) and Paul Marshall. Particularly interesting are the contributions of the Lib Dems’ present leadership.

Published in 2004, the Orange Book marked the start of the slow decline of progressive values in the Lib Dems and the gradual abandonment of social market values. It also provided the ideological standpoint around which the party’s right wing was able to coalesce and begin their march to power in the Lib Dems. What is remarkable is the failure of former SDP and Labour elements to sound warning bells about the direction the party was taking. Former Labour ministers such as Shirley Williams and Tom McNally should be ashamed of their inaction.

Clegg and his Lib Dem supporters have much in common with David Cameron and his allies in their philosophical approach and with their social liberal solutions to society’s perceived ills. The Orange Book is predicated on an abiding belief in the free market’s ability to address issues such as public healthcare, pensions, environment, globalisation, social and agricultural policy, local government and prisons.

The Lib Dem leadership seems to sit very easily in the Tory-led coalition. This is an arranged marriage between partners of a similar background and belief. Even the Tory-Whig coalition of early 1780s, although its members were from the same class, at least had fundamental political differences. Now we see a Government made up of a single elite that has previously manifested itself as two separate political parties and which is divided more by subtle shades of opinion than any profound ideological difference.

 

Continue ReadingMPs summon bankers to explain their valuations of Royal Mail

Privatisation, a very British disease

http://www.opendemocracy.net/ourkingdom/joe-guinan-thomas-m-hanna/privatisation-very-british-disease

JOE GUINAN and THOMAS M. HANNA

Britain is an extreme oddity regarding privatisation: nowhere else in the advanced world is there such a willingness to sell everything that isn’t nailed down. Time and again the British public is ripped off and sold out by its leaders.

Image reads Cameron's Cultural DevolutionA few weeks ago, London was the scene of a heist of spectacular proportions. We may never know the full extent of what was stolen, but the indications are that it was anywhere between £1 billion and an eye-watering £6 billion. Although the robbery was carried out in broad daylight, it is unlikely the money will ever be recovered or the perpetrators brought to justice. This is because they were sitting in some of the world’s largest financial institutions – Goldman Sachs, Barclays, Bank of America and UBS – and acting on behalf of the British government.

Their instrument was the undervaluation of shares in Royal Mail, which with the initial public offering immediately soared from 330p to above 500p. The company was sold at £3.3 billion but in J.P. Morgan’s estimation the real value may have been as high as £10 billion. No wonder the IPO was oversubscribed. It was, as TUC General Secretary Frances O’Grady pointed out, akin to “selling five pound notes for four quid.” The biggest private shareholder is now the hedge fund TCI, which snagged 5.8 per cent of the company. The principal victim of this daylight robbery is, of course, the British public.

There has been plenty of public and media commentary – and even a little outrage – at this latest instance of the looting of Britain’s dwindling public sector. After all, even Margaret Thatcher was “not prepared to have the Queen’s head privatised.” The sell-off was conducted in the teeth of sceptical public opinion as well as fierce opposition from postal workers, with 96 per cent opposed in a recent ballot. Billy Hayes, General Secretary of the Communication Workers Union, denounced the manner in which a centuries-old public company, returning regular profits to the Treasury, was “flogged on the cheap for no good reason.” Postal workers have voted for industrial action, seeking guarantees on pay and working conditions.

Missing from most of the discussion, however, is any recognition of just how extraordinary all of this is. Business Secretary Vince Cable may have faced some tough questions about the handling of the flotation but it will blow over. No heads will roll. Asset-stripping of the public sector has become a fact of life. Even among the British left, battered by the serial privatisations of the 1980s and 1990s, there is a certain wearied resignation, a sense of going through the motions in the face of the seemingly unalterable order of things.

We should resist this normalisation. Viewed from an international perspective, Britain is an extreme outlier regarding privatisation. In no other advanced industrial country would quite so flagrant a rip-off have been engineered and tolerated. Nowhere else – not even in the corporate-dominated United States – is there such a degree of nonchalance about ownership and control over vital infrastructure and public services. In the UK, the attitude seems to be that if it isn’t nailed down then it is for sale. Privatisation is increasingly the British disease.

From Pinochet to perestroika

Privatisation has been a prominent feature of the British political landscape for decades, but on the basis of an assumed international policy consensus about how to improve efficiency and economic performance. It is true that, since the 1980s, privatisation has been a key instrument in the toolkit of neoliberal globalisation, enforced from Latin America to Asia to Africa wherever the writ of the IMF and World Bank could be made to run. By 2009, 132 of the world’s 500 most valuable corporations were privatised former state enterprises. But within this neoliberal framework, very few countries were actually prepared to go quite so far quite so fast as the UK.

In a 2002 encomium to privatisation, HM Treasury calculated that, all told, between 1980 and 1996 Britain had racked up fully 40 per cent of the total value of all assets privatised across the OECD. This is an astounding figure. Elsewhere, the only remotely comparable experiences occurred in countries – Pinochet’s Chile and the disintegrating Soviet Union – that were undergoing exceptional transitions and in which the rule of law was basically inoperative.

Chile was the original laboratory. Between 1975 and 1989, under the jackboot of the Pinochet regime and at the urging of carpetbagging Chicago school economists, the country implemented two waves of privatisation. Not merely companies nationalised by Allende but a host of older public concerns – including 16 banks and thousands of mines, real estate holdings and agricultural enterprises – were auctioned off to elites at bargain-basement prices.

Given the accolades afforded the “Chilean miracle” by Milton Friedman and others, it is worth noting that the first wave of Chilean privatisation was a major embarrassment. All but five of the banks and many of the other enterprises failed and had to be taken back into public hands. By 1983 the government-controlled portion of the economy again equalled that under Allende, and critics mockingly referred to a “Chicago road to socialism.” (The second wave of privatisation, beginning in 1985, eventually returned many of these firms to the private sector).

Road tested in Chile, privatisation was then exported out across Latin America and worldwide. Under Margaret Thatcher, Britain served as the most prominent conduit and cheerleader. With free market economists again hectoring from the sidelines (see Thatcher’s correspondence with Hayek), all memory of capitalist mismanagement of factories and mines in the interwar years was forgotten as the commanding heights of the economy – electricity, gas, water, steel, civil aviation, telecoms and railways – were delivered up for auction. It was a massive transfer of wealth from public to private interests, marketed to the people with soothing promises of a shareholder democracy.

As with Royal Mail, the brazenness of the theft was stunning. In his magnificent recent book on public ownership, Andrew Cumbers, Professor of Geographical Political Economy at the University of Glasgow, found “considerable evidence that state assets were sold off at remarkably cheap prices.” Shares in BT jumped from 130p at privatisation to £15 by 1999. Railtrack was sold for £1.9 billion, but within two years had soared in value to £8 billion. The rolling stock company Porterbrook Leasing, privatised for £528 million, was re-sold just eight months later for £826 million, while the other two rolling stock companies were subsequently sold for £900 million more than their privatisation price. The architects of privatisation could barely be bothered to disguise what they were up to. Former Chancellor Nigel Lawson went so far as to state in his memoirs that undervaluation was a deliberate government tactic.

Hugely important strategic considerations were at work, as was evident in the subsequent development of the UK economy. Privatisation not only allowed for attacks on the trade unions but also – together with big bang deregulation – contributed to the build-out of London-based capital markets. The £3.9 billion rollout of shares in BT in 1984, for example, was six times bigger than any previous IPO and four times the size of any other capital-raising exercise in the world at the time. In this way, the privatisations of the eighties and nineties helped secure the City’s continuing place as a world financial capital.

In addition, the sale of 2.5 million council houses at a total value of £86 billion – more than all other privatisations combined – helped generate the real estate boom and (as Stephen Wilks notes) ultimately contributed to the property credit bubble. Revenues from the sale of other public assets – totalling £69 billion between 1979 and 1997 – allowed successive Tory governments to maintain public spending while cutting taxes for short-term electoral gain. Leon Brittan insisted that “people always overestimated Mrs Thatcher’s grasp of economics while underestimating her grasp of politics.”

How the Orange Bookers took over the Lib Dems


What Britain now has is a blue-orange coalition, with the little-known Orange Book forming the core of current Lib Dem political thinking. To understand how this disreputable arrangement has come about, we need to examine the philosophy laid out in The Orange Book: Reclaiming Liberalism, edited by David Laws (now the Chief Secretary to the Treasury) and Paul Marshall. Particularly interesting are the contributions of the Lib Dems’ present leadership.

Published in 2004, the Orange Book marked the start of the slow decline of progressive values in the Lib Dems and the gradual abandonment of social market values. It also provided the ideological standpoint around which the party’s right wing was able to coalesce and begin their march to power in the Lib Dems. What is remarkable is the failure of former SDP and Labour elements to sound warning bells about the direction the party was taking. Former Labour ministers such as Shirley Williams and Tom McNally should be ashamed of their inaction.

Clegg and his Lib Dem supporters have much in common with David Cameron and his allies in their philosophical approach and with their social liberal solutions to society’s perceived ills. The Orange Book is predicated on an abiding belief in the free market’s ability to address issues such as public healthcare, pensions, environment, globalisation, social and agricultural policy, local government and prisons.

The Lib Dem leadership seems to sit very easily in the Tory-led coalition. This is an arranged marriage between partners of a similar background and belief. Even the Tory-Whig coalition of early 1780s, although its members were from the same class, at least had fundamental political differences. Now we see a Government made up of a single elite that has previously manifested itself as two separate political parties and which is divided more by subtle shades of opinion than any profound ideological difference.

 

Continue ReadingPrivatisation, a very British disease

‘Public ownership a winner’ say Communists

http://www.communist-party.org.uk/index.php?option=com_content&view=article&id=1834%3Apublic-ownership-a-winner-say-communists&catid=132%3Apress-statements&Itemid=167

Communist Party trade union organiser, Anita Halpin, has welcomed the upsurge in strikes and demonstrations against the Tory-led government’s austerity and privatisation. 

Addressing the Party’s Executive Committee in Cardiff this weekend, she accused the Tories, Liberal Democrats, and big business of `waging class war’ on workers, the unemployed and their families. 

Ms Halpin pointed to industrial action ballots and strikes by higher education staff, teachers, civil servants, fire-fighters, probation officers, and postal workers against privatisation and pay cuts and in defence of pensions, wages, jobs, and public services.

In particular, she urged solidarity with Ineos oil refinery workers at Grangemouth who have been locked out after protesting against the victimisation of Unite trade union convenor, Stephen Deans.

“The refinery is too important to the Scottish economy to remain in the hands of such a bullying, reckless, and union-busting management,” she argued, while calling upon the labour movement to demand that the SNP government in Edinburgh to take the plant into public ownership.

Britain’s Communists also reiterated their call for the Labour Party leadership to pledge to renationalise the railways, energy utilities, and Royal Mail after the next General Election.

“Such a policy would be a vote winner, now that so many people have had enough of the soaring pieces, mass sackings, and fat cat profits that always go with privatisation”, Ms Halpin insisted.

The CP leadership welcomed the formation of nearly 80 People’s Assembly groups in towns and cities across Britain. It was agreed that these should work closely in a “broad democratic alliance” with trade unions and trades councils in their locality to combat austerity policies, defend public services and build solidarity for workers in struggle.

Continue Reading‘Public ownership a winner’ say Communists

Postal workers’ strike: Royal Mail should expect a battle royal

http://www.theguardian.com/commentisfree/2013/oct/16/postal-workers-strike-royal-mail-cwu-privatisation

Image of post office van next to postboxIt’s been a case of third time unlucky for the postal workers’ union (CWU). It defeated the privatisation of Royal Mail in 1994 under the Tories and again in 2009 under Labour. Despite employing similar tactics of political lobbying and industrial action, on Tuesday the company was floated on the stock exchange. The share price has risen by almost 50% since then. And just a tiny handful of postal workers refused to take up the free share offer open to them.

Some have proclaimed it’s “game over” for the CWU and any planned industrial action – the left-leaning New Statesman pronounced striking now was “a little bit pointless”.

Yes, the CWU was caught on the hop by a sell-off timetable that was brought forward, a bargain basement initial share price and having to take extra time to fully check the accuracy of its membership records in order to avoid a possible high court injunction to stop any action.

But exactly the opposite is now true. So while industrial action is extremely unlikely to bring Royal Mail back into public hands any time soon – especially as the Labour leadership reneged on its own party policy within days of it being set , it is still vital. This is because it is necessary to allow the workforce to have the chance to contest what privatisation turns out be. And, that’s why postal workers today voted by 4-1 for action on a high turnout.

Continue ReadingPostal workers’ strike: Royal Mail should expect a battle royal

Royal Mail offers £300 to postal workers to cross picket lines

http://www.theguardian.com/uk-news/2013/oct/15/royal-mail-cross-picket-lines-strike

Image of Postal workers rally

 

The Royal Mail is offering a £300 bonus to any of its 150,000 staff who cross the picket line in any forthcoming nationwide postal strikes.

Moya Greene, its chief executive, wrote to all employees before Wednesday’s strike ballot result to offer the sum if they continue working while colleagues are out on strike.

… <about shares being ridiculously undervalued >

Greene’s last-ditch attempt to avert the first nationwide strike in four years came as the Communication Workers Union (CWU) said it was confident workers would back industrial action when it announces the results of a strike ballot on Wednesday afternoon.

Postal workers described her offer as an “act of desperation and discrimination” and a “scab bonus”. Paul Firmage, one of the 371 of Royal Mail’s 150,000 staff to rejected free shares in the privatisation, said the £300 bonus was “yet another bribe”.

“They are offering people money to be a scab. It is a scab bonus,” he said.”

The CWU said: “It’s an act of desperation and discrimination. We believe it’s irrelevant and will make no difference to the strike ballot.”

In a consultative ballot this year 96% of postal workers were opposed to the privatisation, which they said will erode their pay and conditions.

If staff have voted in favour of industrial action, the first strike could take place on 23 October and would likely be followed by a series of rolling strikes in the runup to Christmas.

Continue ReadingRoyal Mail offers £300 to postal workers to cross picket lines

Postal workers push ahead with strike plans over pay and conditions

http://www.theguardian.com/business/2013/oct/13/postal-workers-strike-ballot-pay-conditions

Postal workers union says staff concerns are about longer term issues not Friday’s 38% rise in the price of free shares

Image of post office van next to postbox

Royal Mail staff are pushing ahead with plans for strikes in the run up to Christmas as the battle over privatisation intensifies.

The Royal Mail’s 150,000 workers were handed £2,200 worth of free shares as part of the privatisation, handing them at least an £800 instant paper profit on the first day of trading.

Billy Hayes, general secretary of the Communication Workers Union (CWU), said the 38% rise in value would not make “one scintilla of difference” to employees, who are expected to vote for strike action on Wednesday. Staff are prevented from selling their shares for three years.

The union is planning a nationwide strike as early as 23 October – before balloting for further strikes in the run up to Christmas.

“It is likely to be an all-out strike first, then rolling strikes in the run up to Christmas,” a union source told the Guardian.

The union, which represents more than 100,000 postal staff, had wanted to hold the strike – the first since 2009 – before the privatisation but the government started the sell-off sooner than expected. More than 95% of Royal Mail staff were opposed to the privatisation in a consultative ballot earlier this year.

[Royal Mail privateers get thousands of pissed-off posties.]

 

Continue ReadingPostal workers push ahead with strike plans over pay and conditions

Royal Mail refusenik calls share offer ‘a step backwards’

http://www.theguardian.com/uk-news/2013/oct/10/royal-mail-refusenik-share-offer

Postman Paul Firmage, one of only 368 employees to have turned down the £2,200 of free shares, says they are ‘little more than a bribe’

Paul Firmage, a postman who turned down Royal Mail shares as a matter of principleOf the 150,000 Royal Mail employees, just 368 have turned down the £2,200 of free shares offered to them as part of the privatisation of the 500-year-old company.

One of them, Paul Firmage, 59, described the free shares as “little more than bribe” and said he refused to take the shares as a “matter of principle”, even though they could be worth more than £2,600 by Friday if the stock rises by 20% or more as predicted.

“I know my refusal to take the shares won’t make much difference, but it is a matter of principle. I’ve always been opposed to privatisations. It’s a step backwards,” he told the Guardian. “Only those at the top – the snouts in the trough brigade, the corporate executives and the speculators – will win. We, the postmen and women on the ground, will lose.”

Firmage, 59, from Downham Market, Norfolk, admits that others think he is silly for not accepting the shares despite his principles. “Yeah, I could have taken the money and still been opposed to it, but principles are principles.

“Some people think it is amazing to turn down £2,000, but I’m looking at it from a long-term point of view – the service will rapidly deteriorate. When it’s private they can cut back on pay and conditions. Our conditions are quite good at the moment.”

He conceded that he might have thought differently about taking a principled stand if he had had a family to support. “I’ve got an older brother, but no other family,” he said. “If I had a family around me I might have a different view.

“[Royal Mail] has always been a public company and there are some things that should be beyond privatisation,” he said. “It’s a state service – it should remain a state service.

“Everything these days is geared towards money. We’ve seen the water companies, the energy companies, the railways, all go. You’ve only got to look at the stock exchange to see everything that used to be ours.”

Firmage, who has been a postman for 11 years, said many colleagues had said they were also going to turn down the shares in protest, but “[the company] hit us with a lot of propaganda”.

The rejected shares will be redistributed between the 150,000 staff who have accepted the shares, which they must hold on to for at least three years.

The 368 figure includes all eight of Royal Mail’s non-executive directors, who are not taking part in the free allocation.

 

Continue ReadingRoyal Mail refusenik calls share offer ‘a step backwards’