Labour in danger of returning to dividing lines of 1980s, when it languished in opposition to Thatcher’s Tories, says former PM
Tony Blair has warned Labour that a fierce resistance to austerity and welfare cuts risks reducing it to a party of protest.
In an apparent dig at Ed Miliband, the former prime minister cautioned that the political centre ground in Britain had not shifted to the left as a result of the credit crunch.
He highlighted the danger of returning to the dividing lines of the 1980s, when Labour championed the “status quo” and languished in opposition to Margaret Thatcher’s Tories.
The intervention – Blair’s most significant on the domestic stage since leaving office nearly six years ago – came in an article for the New Statesman magazine.
He flatly rejected the argument that New Labour created the financial crisis, insisting the structural deficit had been below 1% in 2007-8. But however the crisis occurred, he said, “no one can get permission to govern unless they deal with its reality”.
“The paradox of the financial crisis is that, despite being widely held to have been caused by underregulated markets, it has not brought a decisive shift to the left,” he wrote. “But what might happen is that the left believes such a shift has occurred and behaves accordingly.
“The risk, which is highly visible here in Britain, is that the country returns to a familiar left-right battle. The familiarity is because such a contest dominated the 20th century. The risk is because in the 21st century such a contest debilitates rather than advances the nation. This is at present crystallising around debates over austerity, welfare, immigration and Europe.
“Suddenly, parts of the political landscape that had been cast in shadow for some years, at least under New Labour and the first years of coalition government, are illuminated in sharp relief. The Conservative party is back clothing itself in the mantle of fiscal responsibility, buttressed by moves against ‘benefit scroungers’, immigrants squeezing out British workers and – of course – Labour profligacy.
Blair said the Labour party was back as the party opposing Tory cuts and highlighting the “cruel consequences of the Conservative policies on welfare and representing the disadvantaged and vulnerable (the Lib Dems are in a bit of a fix, frankly)”.
He said the scenario was “less menacing than it seems” for the Tories. “They are now going to inspire loathing on the left. But they’re used to that,” he said. “They’re back on the old territory of harsh reality, tough decisions, piercing the supposed veil of idealistic fantasy that prevents the left from governing sensibly … For Labour, the opposite is true. This scenario is more menacing than it seems.
“The ease with which it can settle back into its old territory of defending the status quo, allying itself, even anchoring itself, to the interests that will passionately and often justly oppose what the government is doing, is so apparently rewarding, that the exercise of political will lies not in going there, but in resisting the temptation to go there.”
Blair insisted Labour’s “guiding principle” should be to seek answers, not become the “repository for people’s anger”. The party needed to be “dispassionate even when the issues arouse great passion” otherwise it would become a “simple fellow-traveller in sympathy” rather than a leader. “In these times, above all, people want leadership,” he added.
Blair said “the case for fundamental reform of the postwar state is clear”, and urged the Labour leadership to ask itself questions such as: “What is driving the rise in housing benefit spending, and if it is the absence of housing, how do we build more?” He also suggested there should be more focus on increasing the skills of unemployed people, setting the right balance between universal and means-tested help for pensioners, and use of DNA technology to tackle crime.
In a passage likely to be taken as implicit criticism of Miliband’s policy platform so far, Blair said the public wanted to “know where we’re coming from because that is a clue as to where we would go, if elected”.
Producing a “vision of the future” is “of the absolute essence”, Blair insisted. “The issue isn’t, and hasn’t been for at least 50 years, whether we believe in social justice,” he wrote. “The issue is how progressive politics fulfils that mission as times, conditions and objective realities change around us. Having such a modern vision elevates the debate. It helps avoid the danger of tactical victories that lead to strategic defeats.
“It means, for example, that we don’t tack right on immigration and Europe, and tack left on tax and spending. It keeps us out of our comfort zone but on a centre ground that is ultimately both more satisfying and more productive for party and country.”
If you are running a large bank like HBOS your first duty is to make sure the institution doesn’t go bust – if you fail in that, you have to look in the mirror
Sir James Crosby, as we must still call him until the knighthood is removed formally, has done the right thing – but belatedly.
It would have been more stylish for him to volunteer to give up his gong soon after HBOS collapsed into the arms of its foolish rescuer, Lloyds TSB, complete with state-funded bailout in late 2008. Instead he waited almost five years until the outside world, via the excellent report from the parliamentary commission on banking standards, woke up to the self-inflicted nature of HBOS’s failure. If it is a nonsense today to wear an award for “services to the financial industry” it was also a nonsense from 2009 onwards.
But let’s not be too churlish. Crosby deserves credit for volunteering, even if it is in the context of political heat that was still red-hot. David Cameron had little appetite to press the matter, but many MPs from all three main political parties did. The row was not going away. Unlike Fred Goodwin, Crosby has taken the initiative and retrieved some dignity.
As for his pension, a 30% reduction is a meaningful gesture. Yes, of course, Crosby won’t be discomforted one jot by having to rub along on £406,000 a year instead of £580,000. But the pension, as Crosby says, was a contractual entitlement; and not all his pot was accumulated during his years at HBOS. If a 30% cut was deemed satisfactory in Goodwin’s case (and, note, he took a £2.6m tax-free lump sum before adjustment), it is reasonable to use the same yardstick.
Some will argue Crosby has been harshly treated; that he and HBOS were merely creatures of the political, banking and regulatory climate of the time; that the removal of knighthoods has become arbitrary and the honours system itself is damaged that way.
It’s certainly true that Crosby and HBOS and all the other banks were egged on by the Labour administration (and there weren’t many Tory dissenters either). And it’s patently the case that the Financial Services Authority was asleep on the job – or, rather, that it failed to heed its own warnings since, as the commissioners’ report informed us, it had described HBOS as “an accident waiting to happen” in 2004.
But, come on, it’s absurd to conclude that the shortcomings of Crosby, his successor, Andy Hornby, and his chairman, Lord Stevenson, are excused by a gentle political and regulatory environment. If you are running a large bank your first duty is to make sure the institution doesn’t go bust. If you fail in that duty, there’s no point blaming political cheerleaders or pleading that the regulator should have stopped you. You have to look in the mirror, as Crosby now has.
Indeed, in the case of HBOS, the parliamentary report made an overwhelming case that the bank would have become insolvent even if liquidity in the wholesale market had not evaporated after the Lehman’s collapse. It was an old-fashioned case of bad lending. In the circumstances, an award that honoured Crosby’s exceptional achievement looked ridiculous.
Is the system itself discredited if knighthoods can be removed for mere incompetence rather than wrong-doing? Frankly, the honours system has always been rotten in the way it hands out gongs to business people and bankers in the middle of their careers. As argued here the other day, it’s a recipe for mutual back-scratching and the trading of favours.
Best to wait until the final whistle – meaning when careers are over – before handing out prizes.
Ex-foreign secretary David Miliband resigns from the board of Sunderland FC because of new head coach Paolo Di Canio’s “past political statements”.
Follow this link: Miliband quits after Di Canio hired
A political row has blown up over claims a Budget initiative aimed at helping people get on the housing ladder could be used for second home purchases.
Here is the original post: Row over Budget home loans plan
The president of Cyprus will on Thursday present political leaders with a “Plan B” for funding the country’s controversial bailout, state TV says.
See the article here: Cyprus ‘to present new bailout plan’
Is it statutory regulation, how would the new watchdog deal with phone hacking and what do victims of media intrusion think of it?
How will press regulation be different now from before?
Culture secretary Maria Miller has claimed the prospect of investigations, fines of up to £1m for the worst or serial offenders will make it one of the toughest regulators in the world. While the predecessor Press Complaints Commission had no powers to impose fines, it was its lack of independence from newspapers that caused its demise. Its inaction over allegations of widespread phone hacking at the News of the World led it to being branded a “toothless poodle”. The new watchdog should be completely independent. The press will have no veto over who sits on the board and serving editors will not be members of any committee advising on complaints, unlike the old system in which editors adjudicated on each other.
Is it statutory regulation or not? (And what is statutory underpinning anyway?)
The new regulator will be established by royal charter, not law. The charter will be entrenched in statute so it cannot be changed by ministers. It could only be amended if there is a two-thirds majority vote in both houses of parliament. The wording, described by one observer as “artfully crafted” allows both sides to claim victory on the fundamental sticking point. David Cameron claims the deal rejects so-called “statutory underpinning” because there will be no law that mentions either the press or the new regulator. However, Labour, the Liberal Democrats and Hacked Off insist the clause means it is “underpinned by statute” and stops meddling by politicians.
Which publications will it affect?
Newspapers, magazines and news-related websites that choose to opt-in will be regulated by the new watchdog. The nature of the independent self-regulator means that membership is voluntary and some prominent publishers have vowed to oppose any body underpinned by statute. Fraser Nelson, the editor of the Spectator, said his magazine would refuse to pay fines imposed by an underpinned regulator. Downing Street said that “personal blogs” like the Guido Fawkes political website would not be covered, but news-related websites like Huffington Post UK would.
Who chooses the regulators?
The regulators will be chosen by an appointments panel set up in accordance with civil service rules. Some sections of the newspaper industry wanted a veto on who sat on the board and the Tories initially had some sympathy with their view. However they lost the battle. The appointments panel will have a majority of members who are independent from the press but one person “with a current understanding and experience of the press” and one serving editor will be on the panel.
Who will pay for it all?
The newspaper industry including regional newspapers and magazine publishers will pay for the regulator. Fines imposed on publishers will be reinvested in the arbitration unit which will be set up to adjudicate on smaller claims of libel and breaches of privacy.
Will the British press now be the most regulated in the developed world as some claim?
Hardly. The most plausible comparison is with Ireland’s Press Council, which is recognised in statute but was not established by statute. Like the British model, the Irish Press Council was set up after negotiation between political parties and the industry. However, one key point of difference is that Ireland’s Defamation Act 2009, which recognises the Press Council, gives the Minister of Justice the authority to decide is fit to site on the Council body. Political involvement in the British model can only be achieved with a two-thirds majority vote in both houses of Parliament. It did not go unmentioned that, on the same day the royal charter was unveiled in London, journalists in Burma managed to head off plans to lock many of the country’s old restrictions back in place. The UK is 29th on the world press freedom index compiled by Reporters Without Borders, behind Denmark and Hungary, which both operate a form of statutory regulation.
What would the new watchdog have done about some of the practices described in Leveson inquiry?
The Press Complaints Commission’s critical failure was its inability to intervene while several newspapers published seriously defamatory stories about the parents to Madeleine McCann. David Cameron wanted the reconstituted watchdog to have the ability to proactively investigate concerns and order £1m fines for systemic breaches. In the case of the McCanns, the fines would prove much greater than the libel damages they received through the high court in 2008 (the largest being £550,000 from Richard Desmond’s company that publishes the Daily Express and Daily Star). The new regulatory body will also be able to direct apologies from newspapers and not simply require them. This raises the prospect of newspapers running front-page apologies and corrections if the breach is sufficiently serious.
What role did Hacked Off have?
It is understood that Hacked Off had four members at the all-night talks, including co-founders Brian Cathcart and Evan Harris, Martin Moore and Hugh Tomlinson QC.
What do the victims of media intrusion think of it?
Victims broadly welcomed the deal. They believe the royal charter will ensure the regulator is sufficiently independent of the industry and incorporate many of Leveson’s key recommendations. Several victims said the deal brings to an end four months of political stalemate and, they hope, draws a line under the worst abuses of the past. “What we have got is a very good opportunity for at last a new regulator, independent of the corporate end of media control and independent of political intervention,” said Professor John Tulloch, the 7/7 victim whose phone was hacked by the News of the World.
Who will be able to make complaints to the new watchdog?
As of Monday afternoon, it was unclear whether the new watchdog will allow group complaints but it is thought likely that it will. The current Press Complaints Commission does not allow for group complaints – for example, from bodies representing the trans community or gay rights campaigners – and some newspaper editors have cautioned against changing this over fears it will lead to the watchdog being endlessly bombarded by lobby groups. The Tories wanted to allow group complaints where there was a “substantial” public interest. Labour and the Lib Dems, on the other hand, lowered the barrier, removing “substantial” from the test.
Who will face exemplary damages?
Newspapers, magazines or news-related websites that that decline to join the new regulator face having to pay exemplary damages in civil lawsuits. The clause is meant as a “carrot-and-stick” incentive to encourage wide industry participation – but is likely to face a legal challenge as opinion commissioned by the newspaper industry described it as incompatible with European Convention on Human Rights.
The beaches are inviting, but Puerto Rico’s political risks and its high crime rate should make wealthy tax-dodging Americans think twice before moving.
Continued here: Billionaires should beware of Puerto Rico
US Secretary of State set to urge bickering leaders to end the political chaos that is blocking a large international loan
US Secretary of State John Kerry is calling on Egyptian leaders and opposition politicians to forge a political consensus that will allow the country to emerge from economic crisis. Kerry, who is on his first overseas trip as a member of Barack Obama’s cabinet, was scheduled to meet a number of opposition figures and Egypt’s foreign minister on Saturday. He will see President Mohammed Morsi on Sunday.
US officials said Kerry was particularly concerned that Egypt should make the reforms necessary to qualify for a $4.8bn International Monetary Fund loan package. One official said it was extremely important for the new Egypt for there to be a firm economic foundation, which required reaching agreement with the IMF. To get that Egypt must make reforms, like increasing tax collections and curbing energy subsidies.
Agreement with the IMF would also unlock significant US assistance, including portions of the $1bn that president Obama pledged last April. Getting the IMF deal will also be contingent on an end to the political chaos that has wracked the country since Morsi’s election. Kerry will press for all political players to come to a basic agreement on the country’s direction ahead of parliamentary elections that begin in April, the official said.
Liberal and secular Egyptians have complained that Washington is siding with Morsi’s ruling Muslim Brotherhood. The main opposition group, the National Salvation Front, has said it will boycott the upcoming elections. The US official said Kerry would not tell the front what to do, but would stress that they should participate if they want their ideas and values heard and represented. At the same time, the official said Kerry would impress on Morsi the need for inclusiveness and tolerance.
The visit by the US state secretary was marked by protest on Saturday. In Cairo’s Tahrir Square, a small group of anti-Morsi demonstrators held banners reading: “Kerry – member of the Brotherhood” and “Kerry, you are not welcome here”. The protests in the capital were largely peaceful. However, unrelated demonstrations Saturday in the Nile Delta city of Mansoura saw clashes in which at least one person died. Meanwhile in Port Said, a mob torched a police station, according to security sources.
Egypt has been locked in political crisis for months, amid waves of protests against Morsi that have repeatedly turned into deadly clashes and rioting. The opposition accuses the president and the Brotherhood, from which he hails, of dominating power in Egypt, effectively stepping in to the same role as the ousted autocrat Hosni Mubarak and failing to carry out reforms while seeking to instill a more religiously conservative system. Morsi’s administration and the Brotherhood say their opponents are trying to use street unrest to overturn their rule.
Kerry’s visit to Egypt is the sixth leg of a nine-nation dash through Europe and the Middle East. He will travel next to Saudi Arabia, the United Arab Emirates and Qatar.
Airline takes action after rejection by European officials of its third takeover bid
Ryanair is taking to court its battle to acquire rival Aer Lingus following the rejection of its third takeover bid by European officials. The airline accused the European commission of acting unfairly and failing to apply its own competition rules and precedents to the latest takeover plan.
“We regret that this prohibition is manifestly motivated by narrow political interests rather than competition concerns and we believe that we have strong grounds for appealing and overturning this politically inspired prohibition,” said a Ryanair spokesman. “Accordingly, Ryanair has instructed its legal advisers to prepare a comprehensive appeal against this manifestly unjust prohibition.”
The airline said the bid rejected on Wednesday by the EU, was supported by an unprecedented remedies package. The “radical” bid included two buyers – British Airways and Flybe – agreeing to take over about half of Aer Lingus’s short-haul business.
The takeover plan had been boosted this month when Flybe agreed to fly 43 of Aer Lingus’s short-haul routes, easing competition concerns. There had also been a commitment from International Airlines Group – owner of BA and Iberia – to run overlapping Aer Lingus/Ryanair routes between Dublin and London Gatwick to ensure competition.
Ryanair said the decision to block its latest bid was a political one to protect the interests of the Irish government, which holds a 25% stake in Aer Lingus. The airline submitted its final package of takeover plans and commitments this month following a series of meetings with EU chiefs. It said the package addressed the shortcomings in its two failed bids in 2007 and 2012.