In condemnation of privatisation – the naked pursuit of wealth

The ideology of competition and superiority permeates our culture, and the cult of privatisation is at the root of sub-standard, expensive railways, electricity, gas and water; miserable prisons; inadequate care; decreasing legal aid; and failing mental health services.

Personal success and the creation of wealth are goals in a wilderness of private interests. ‘Success’ has widely come to be defined in terms of superiority over others.

Our system of knighthoods and damehoods – the invidious use of ‘Lord’ and ‘Lady’ – symbolise a power structure where outsiders are tolerated, and often quietly absorbed into a corrupt environment.

People motivated by greed, like the authors of devastated pension funds, suddenly and mysteriously reappear in positions of authority. It is as if history has ceased to exist. Those with the courage to expose them are vilified.

Recent media expositions relating to the House of Saud and the huge-scale laundering of the ill-gotten gains of oligarchs and dictators through the City of London, for example, portray the corruption. Empty luxury flats are more desirable than homes for people.

Armaments, for some, are more important to our wellbeing than the lives of underprivileged Yemeni families.

This presents a challenge. Condemnation is not the way to tackle the cult of success. We need successful artists, business people, musicians, actors, social workers, doctors, scientists and engineers – and we must find ways of stimulating and supporting them.

A redefined concept of success will lie in focusing on the huge potential of every single member of our society and not just those with the existing resources – physical, mental, economic – to realise themselves. 

Edited from an article by Roger Iredale in the Friend, 23 February 2018







Nurture and rebuild local economies and international relations: Hines, Corbyn, McDonnell

Opposition to open borders and failed neo-liberal policies that transferred wealth to the private sector and cut funding public services, fuelled the Brexit result, Donald Trump’s election and the continued rise of Marine Le Pen in the French polls. Colin Hines, in a letter to the Financial Times, said that these trends all point to the conclusion that the future will be one of protectionism, asking “The question is, what kind?” His answer:

“President Trump is a 1930s-style one-sided protectionist. He wants to curb imports that cause domestic unemployment, but at the same time plans to use “all possible leverage” to open up foreign markets to US exports”.

To avoid a re-run of the 1930s, when the US and others took a similar approach, Hines advocates a very different kind of “progressive protectionism” – one that can benefit all countries by nurturing and rebuilding local economies, reducing the level of international movement of goods, money and services. Policies geared to achieving more job security, a decrease in inequality, and protection of the environment globally would be championed.

Shadow Chancellor: a focus on developing strong local economies 

Sienna Rodgers reports that the shadow chancellor is in Preston today, a city whose ‘co-operative council’ has taken an innovative approach to funding in the face of swingeing budget cuts (see Localise West Midlands). In his speech McDonnell will champion “creative solutions” for local authorities suffering under austerity, from bringing services back in house to setting up energy companies, with a focus on developing strong local economies.

Such economic action, many believe, must be accompanied by a profound change in our foreign/defence policy 

A serious commitment is required to averting armed conflict, wherever tensions rise, by diplomacy, mediation and negotiation, redirecting the wealth currently used to subsidise the arms industry and to prepare for aggressive military action. This has also long been advocated by John McDonnell   (see Ministry for Peace, archived).

These are the policies of Jeremy Corbyn, who has made peace and disarmament his major international priorities. He has already appointed MP Fabian Hamilton as shadow minister for ‘peace and disarmament’, with a brief to ‘reduce violence, war and conflict’, participating in multilateral disarmament meetings at the UN in New York.

Mr Hamilton, who will prioritise reducing supplies of guns and other weapons worldwide, said that Labour is strongly committed to helping to reduce the violence, war and conflict in the world which destroys so many innocent lives every day and – many would add – cripples the economies of many regions, forcing their citizens to emigrate to find peace and to make a living.





Should Labour put an end to PFI schemes and outsourcing?

George Parker of the Financial Times reported on the content of a video by Labour leader Jeremy Corbyn, watched almost 300,000 times in 24 hours on Facebook.

Corbyn sees the collapse of Carillion, the company responsible for everything from building hospitals to providing school meals, as a “watershed” moment that proves that the private sector should not be running swathes of Britain’s public services. More here.

The revolution in outsourcing public services was started by Margaret Thatcher and continued by New Labour under Tony Blair. Since 1980 public services — from providing school meals to refuelling RAF aircraft — have been outsourced to the private sector. Questions have been about whether the taxpayer is getting best value for money from some contracts, listed here. There is more on unsafe PFI hospitals and collapsing PFI schools here.

Should PFI schemes and outsourcing be ended under Labour? There is a substantial body of opinion that, though much of the criticism of PFI is justified, and relevant to the debate on outsourcing, this would be a mistake.  

The FT points put that the big driver of PFI has long been the desire to keep debt off the government’s balance sheet. A correspondent agrees with this: “Certainly, otherwise Tony Blair and Gordon Brown would have been accused of profligacy, whereas using PFI allowed them to be popular in the short term whilst transferring the problem to future generations”.

The civil service, according to the FT, is often very bad at specifying what it wants and managing contracts – our correspondent adds: “Because they change their minds part way through!!” 

Both agree that the processes for assessing the value of PFI projects, monitoring projects and evaluating PFI’s overall performance must become more rigorous.

Reports from the National Audit Office and the Public Accounts Select Committee indicate that successive governments have indeed been accepting unrealistically low bids, leading to inadequate levels of staffing. The Times this week quoted from a report issued by Balfour Beatty that in future it needs to move away from the position where fixed-price contracts, risk transfer and lowest-cost tendering are the norm.

Should hospitals, schools, prisons etc be built with cheap and flexible funding from the Public Works Loan Board? This arm of the Treasury has been helping to finance capital spending by local government since 1793. Its interest rates, linked to those in the gilt-edged market, have been at exceptionally low levels since the financial crisis of 2007-08.

Our correspondent responds: “Very good idea – but still needs a proper project managing organisation”.



Time for change: junk the Anglo-Saxon model* in 2018

The FT reports that senior executives at several of the largest US banks have privately told the Trump administration they feared the prospect of a Labour victory if Britain were forced into new elections.

It then referred to a report by analysts at Morgan Stanley arguing that a Corbyn government would mark the “most significant political shift in the UK” since Margaret Thatcher’s election and may represent a “bigger risk than Brexit” to the British economy. It predicted snap elections next year, arguing that the prospect of a return to the polls “is much more scary from an equity perspective than Brexit”.

Jeremy Corbyn gave ‘a clear response’ to Morgan Stanley in a video (left) published on social media reflecting anti-Wall Street rhetoric from some mainstream politicians in the US and Europe, saying: “These are the same speculators and gamblers who crashed our economy in 2008 . . . could anyone refute the headline claim that bankers are indeed glorified gamblers playing with the fate of our nation?”

He warned global banks that operate out of the City of London that he would indeed be a “threat” to their business if he became prime minister.

He singled out Morgan Stanley, the US investment bank, for particular criticism, arguing that James Gorman, its chief executive, was paying himself a salary of millions of pounds as ordinary British workers are “finding it harder to get by”.

Corbyn blamed the “greed” of the big banks and said the financial crisis they caused had led to a “crisis” in the public services: “because the Tories used the aftermath of the financial crisis to push through unnecessary and deeply damaging austerity”.

The FT points out that donors linked to Morgan Stanley had given £350,000 to the Tory party since 2006 and Philip Hammond, the chancellor, had met the bank four times, most recently in April 2017. The bank also had strong ties to New Labour: “Alistair Darling, a Labour chancellor until 2010, has served on the bank’s board since 2015. Jeremy Heywood, head of Britain’s civil service, was a managing director at Morgan Stanley, including as co-head of UK investment banking, before returning to public service in 2007”.

A step forward?

In a December article the FT pointed out that the UK lacks the kind of community banks or Sparkassen that are the bedrock of small business lending in many other countries adding: “When Labour’s John McDonnell, the shadow chancellor, calls for a network of regional banks, he is calling attention to a real issue”. And an FT reader commented, “The single most important ethos change required is this: publish everyone’s tax returns”:

  • In Norway, you can walk into your local library or central council office and see how much tax your boss paid, how much tax your councillor paid, how much tax your politician paid.
  • This means major tax avoidance, complex schemes, major offshoring, etc, is almost impossible, because it combines morality and social morals with ethics and taxation.
  • We need to minimise this offshoring and tax avoidance; but the people in control of the information media flow, plus the politicians, rely on exactly these methods to increase their cash reserves.

But first give hope to many by electing a truly social democratic party.

Is the rainbow suggesting a new party logo?

*the Anglo-Saxon model



Prem Sikka: a critic of the Pin-Stripe Mafia

Accounting professor Prem Sikka received the Abraham Briloff award from The Accountant and International Accounting Bulletin at a conference and awards dinner in London on 4 October – The Digital Accountancy Forum & Awards 2017.

The award is named after Abraham Briloff (19 July 1917 –12 December 2013) who would have been 100 this year.

Abe was a professionally qualified USA accountant and accountancy professor who gained fame through his prolific writing and fierce criticism of malpractice within the profession (left).

He called upon the profession to act ethically and argued that in return for enormous social privileges and status, it must have a genuine commitment to society and be able to “see beyond the numbers” as he told The Accountant in an interview in 2013 a few months before his death.

Sikka is emeritus professor of accounting at the University of Essex, which he joined in 1996. Before that he worked at the University of East London between. He qualified with ACCA in 1977 and held various accounting positions in industry and commerce before committing to a career to academia.

Many of his articles may be read here. To get the real flavour of his outspoken assessment of the Big 4 accounting firms, listen to The Pin-Stripe Mafia: How Accountancy Firms Destroy Societies.

  • In 2003, Sikka helped the launch of the Tax Justice Network and is now one of its senior advisers (unpaid).
  • He has advised and given evidence to the EU and UK parliamentary committees.
  • Most recently, he was an adviser to the UK House of Commons Work and Pensions Committee for its investigation into BHS and related pension matters.
  • His research on accountancy, auditing, corporate governance, money laundering, insolvency and business affairs has been published in books, international journals, newspapers and magazines.

Sikka was given the award for his extraordinary contribution in promoting transparency and public accountability of businesses

This award recognises the work of an individual who has sought to improve transparency and accountability by asking the hard questions and questioning the dominant apparatus of truth, recognising that accountancy goes beyond debit and credit to subsume a broad canvas of disciplines involving the liberal arts and sciences. This recognises that accounting is a moral and political practice rather than a technical one.

The Accountant and International Accounting Bulletin editor Vincent Huck said: “No one other than Prem Sikka fits the bill better to receive an award named after Abraham Briloff. Not only do they share a common set of ideas, but they have the same insatiable drive and passion in promoting them. The accountancy profession and professionals often boast of occupying a moral high ground and claim that they act in the ‘public interest’, but such claims are now increasingly met with public scepticism. Rather than addressing the criticism, professionals have often been too quick to dismiss it, even when it comes from their own ranks. The profession needs to nurture its critics as, ultimately, a profession is only as good as its critics.”

The UK Shadow Chancellor of the Exchequer John McDonnell presented the award to professor Prem Sikka. He said: “It’s an honour to be asked to present this for someone who I think will be long known for the work that he’s done and laying the foundation of a fair, just, open and transparent tax system.” He praised Sikka for his role in setting up the Tax Justice Network in 2003 at a time when people where not necessarily interested in tax avoidance and evasion and for his contribution as an advisor to the House of Commons select committees, various individual MPs, the Labour party as well as other parties.

“Many of the policies that we are advocating at the moment are based on the work that Prem has done over the years,” McDonnell said, including:

  • The importance of opening up the books,
  • the importance of having a register of beneficial interest and
  • the importance of having an effective HMRC.

The Shadow Chancellor added that Sikka and his team have just undertaken a review of the HMRC and the resources that they need to ensure that there is an effective tax operation within this country, ending:

“And much of the legislation that you will see us promoting in parliament, often on all sides of the house, will be done as a result of the work that he’s done and the advice that he’s given us as to how we can establish fairness and transparency within the tax system.”



Rebuild the local economy: prioritise labour-intensive sectors, difficult to automate, impossible to relocate abroad

Colin Hines, convenor of the UK Green New Deal Group, comments on the Guardian’s recent editorial on productivity and robots which ‘repeated the cliché that automation does cost jobs, but more are created’.

He says that the problem with this is that the new jobs are frequently in different places from where they are lost and require very different skills, hence exacerbating the problems for the “left behind”.

Also unmentioned was that just as automation is starting to really bite, the world faces a strong possibility of another serious credit-induced economic downturn, from China to the UK and a perfect storm of domestic unemployment soaring and export markets falling, as happened after the 2008 economic slump.

The answer to these problems has to be a shift of emphasis to rebuilding the local economy by prioritising labour-intensive sectors that are difficult to automate and impossible to relocate abroad.

Two sectors are key:

  • face-to-face caring from medicine, education and elderly care
  • carbon-reducing national infrastructural renewal.

This should range from making the UK’s 30m buildings energy efficient, constructing new low-carbon dwellings and rebuilding local public transport links.

Funding could come from fairer taxes, local authority bonds in which all could invest, green ISAs and a massive new green infrastructure QE programme.

This approach should become central to all political parties, set out in their next election manifestos because “jobs in absolutely every constituency” is the crucial vote-winning mantra.



Rupert Read reviewed Colin Hines’ ebook, Progressive Protectionism in RESURGENCE AND ECOLOGIST May/June 2017

Rupert Read, Chair of the Green House thinktank, described Colin Hines’ new book as a ‘feisty clarion call’ to greens and ‘the Left’ – and, we add, small ‘c’ conservatives.

It calls for a change of direction: away from acquiescence in the trade treaties which shaped the deregulated world that spawned the financial crisis — and toward protection of nature, workers, localities and national sovereignty, as the key locale where democracy might resist rootless international capital.

Progressive protectionism’ is completely unlike the ‘protectionism’ of the 1930s, that sought to protect one’s own economy while undermining others; this by contrast is an internationalist protectionism, aimed, “at reducing permanently the amount of international trade”, and making countries around the world more self-reliant/resilient. ‘

Read believes that too many ‘progressives’ have sleepwalked into tacitly pro-globalisation positions incompatible with protecting what we most care about.

And partly because of this, a new political power is rising that threatens to trash the future: The Brexit vote and (in particular) the election of Donald Trump have restored the word ‘protectionism’ to the popular political vocabulary.

Hines argues that we need to take back protectionism from the Right. He means that only policies of progressive protectionism can make real the idea of “taking back control”. Read thinks that’s right. If we embrace progressive protectionism, we’ve something better to offer the voting public than they have.

The chapter on ‘free movement’ will be the most controversial of all. Hines (Ed: rightly) points out that countries such as Romania and the Philippines are being stripped bare of their medical personnel, and argues that no decent internationalist can support this sucking out of ‘the brightest and the best’ from their home countries.

We can take control of the agenda, rationally and seek to minimise such movement; for example by helping to make conditions better in home countries, tackling dangerous climate change, stopping foreign wars of aggression, encouraging ‘Site Here to Sell Here’ policies everywhere, and bringing back capital controls which helped the world prosper safely from 1947 till 1971 (and which certain countries, such as Iceland, have already brought back).

Capital controls are crucial, because they stop the threat of relocation which multinationals have used to ‘discipline’ democracies for too many years now (Ed: and capital can then be reinvested in the communities from which that capital was accrued).

Hines argues that the Treaty of Rome needs transforming into a ‘Treaty of Home’ that will allow peoples to protect what they hold dear – and Read thinks politicians on the Continent need to read his book if they are to prevent further exits, starting possibly with France. Read ends:

“This book is a necessary read. Perfect it ain’t; it’s slightly repetitive, and there are problems of substance too: most Resurgence readers will (rightly) dislike how soft Hines is on economic-growthism, and will wish that he were readier to embrace the post-growth future that is demanded by the acceptance that we are already breaching the limits to growth.

“But if there is to be a future, then progressive protectionism will surely be part of it. This book is crucial thought-leadership for us, away from the political dead-end of globalisationist fantasy, and toward a localisation that can transform the debate – and then the world”.

Progressive Protectionism Park House Press, 2017; ISBN 978-0-9544751-2-3

Read’s review may be read here: