More BNP misuse of taxpayers’ money

It’s been a busy and tiring morning for the HOPE not hate campaign as we took delivery of 1.8 million newspapers and leaflets. We have produced 23 editions of a tabloid newspaper, customised to local areas, 800,000 copies of a 12-page women’s magazine and 600,000 general anti-BNP leaflets.

There will be more leaflets and newspapers to come over the next few weeks but in the meantime we are working hard to get the material into the hands of our local groups and then out through letterboxes.

In another clear indication that the BNP is misusing or at least misdirecting its EU facilities to assist in its general and local election campaign the party has just announced that it is circulating 500,000 leaflets in the North West over the next few weeks. Half of this amount, 250,000, is being posted at taxpayers’ expense through the Royal Mail to its key local authority and parliamentary targets.

Given that the elections are a few weeks away this is a clear attempt to deliver another party leaflet into the homes of voters in their key target areas.

Yesterday we launched a letter-writing campaign to protest at BNP misuse of taxpayers’ money. As I write this now over 18,000 letters have been sent.

You can join the protest at: http://action.hopenothate.org.uk/fraud

Breaking News Red Knights Hold Off Manchester United Bid Tube disruption 'unacceptable': MPs

Tube passengers are enduring "unacceptable" disruption to services following the Government's "flawed" part-privatisation of the Underground, a report by MPs has said.

Despite more than 100 weekend closures of the Underground's Jubilee line, private maintenance company Tube Lines' work on the line will be completed 10 months late, the report from the House of Commons Transport Committee said.

"The ongoing disruption caused to people who rely on the Jubilee line to go about their daily lives, and the cost to businesses, is unacceptable," the report added.

Tube Lines and the now-defunct Metronet were the two private companies given 30-year contracts to maintain the Underground under a bitterly-opposed public private partnership (PPP) agreement in 2003.

Metronet went into administration in 2007 and London Underground (LU) took over its responsibilities in May 2008.

The committee's report said that it was concerned "by indications that LU's work is up to one third more expensive than similar work undertaken by Tube Lines".

The report went on: "We are deeply concerned at the increasingly antagonistic relationship, stoked by the Mayor (of London, Boris Johnson), between Transport for London, and LU on one side, and Tube Lines on the other. Relations between the parties have deteriorated further over the past year."

The committee said: "We reiterate once again our judgment that the PPP scheme is flawed. Some 20 months following the demise of Metronet, the Government is no nearer to being able to demonstrate that the PPP provides value for money for the taxpayer."

The committee also said that more powers should be given to Chris Bolt, whose job as PPP Arbiter is to resolve any contractual or financial disputes involving the PPP.

It said Tube Lines had to learn lessons from its poor performance on the Jubilee line and publish plans to avoid similar overruns on its projects on the other two lines for which it is responsible - the Northern and the Piccadilly.

Lords reform Peter Mandelson blocks Jack Straw's Lords reform

Jack Straw wants an upper house of 300 members elected by proportional ­representation serving for up to 15 years. Photograph: Stephen Lock/AP

Jack Straw's detailed blueprint for a 300- strong, wholly elected upper chamber to replace the Lords appears to have been blocked at the last minute following resistance in cabinet. The justice secretary had been planning to publish detailed draft clauses next week in line with a commitment in the Queen's Speech. But the plan met opposition in cabinet yesterday.

The resistance has been led by Lord Mandelson, the business secretary, who said he wanted to delay any commitments until the Labour manifesto is published. But some cabinet sources said they believed he opposed a fully elected second chamber in principle. It is known he has specific, detailed concerns, including the role of the bishops in any wholly elected house. Straw has proposed that bishops, as symbols of the established church, have speaking rights but no right to vote.

A further meeting is likely to held next week to see if the draft clauses can be rescued. Some supporters of reform believe the issue is not dead yet.

Straw had proposed an upper chamber of 300 senators who would be elected by proportional representation for a maximum term of 15 years.

Mandelson, as director of election strategy, has great power over how the government handles all policy announcements.

Reformers did little to disguise their frustration at the surprise turn of events. It looks increasingly like the party will not publish a detailed blueprint before the election manifesto.

The dispute between Mandelson and Straw could prove difficult for the prime minister to manage since the two men are both leading figures in the party.

The draft clauses also contain detailed proposals for the powers of the second chamber as a revising body subordinate to the powers of the Commons.

It was expected that the bishops would have to leave the upper chamber as part of the modernisation plan.

One source said the complexities of Lords reform is not an issue that drives votes. But advocates of Straw's reform package insist abolition of the peerage is a vote-winner, will be seen as part of the renewal of Britain, will win over a key middle-class constituency, and is a popular issue inside the party.

There were also suggestions that Mandelson's opposition stemmed from his fear that he will be left without a political platform if the Lords is abolished.

But critics of the proposals in the cabinet expressed concern both about the details, and whether this was an issue on which the party needed to focus in the run-up to the election. There are concerns that if bishops are excluded from the upper house, it will prove difficult to continue to allow the Church of England to remain the established church.

Labour business managers in both the Commons and Lords have warned about the timing, suggesting next week's publication of the proposals ending 800 years of history might make peers less co-operative in the trading that lies ahead over the government's legislative programme. Government whips in both houses have to reach deals on which parts of the government programme, bill by bill, can reach the statute book before the prorogation of parliament and the election.

The fierce ideological battle around the budget - and why it must be won by Labour

There is a ferocious battle being played out around how we should interpret and understand the financial crisis and its consequences. And I am not talking about the crude and quite hysterical response to the budget in the Conservative press today. That we can safely ignore. No, it’s more than that. It’s about key economic issues, and it’s vital that we all grasp them, and fight the good fight on behalf of those who will be victims of orthodox economic ideology.

The orthodox storyline goes like this: the most momentous crisis facing the world is government debt – not economic failure and collapse; not the collapse of private investment; not financial instability, or deflation, or currency volatility or the threat of a dangerous rise in protectionism and a new global trade war. And certainly not the rise in unemployment. No, the biggest threat facing civilisation is the rise in government debt.

Why? Because the rise in government debt ‘crowds out’ private debt. In other words, creditors (bankers and other lenders) can’t sell credit/loans at high prices (or rates of interest) if governments are in the markets selling or offering debt at lower rates of interest. So government debt must be cut! The public sector must be shrunk!

Today’s Financial Times spells out very clearly these lines of debate – and where the FT and its supporters in the Tory Party and City of London stand. Martin Wolf, a highly respected FT commentator, writes:

"Since the economy is substantially smaller than expected, the size of the state has to follow. The question is how and when.”

That’s it. No questions asked. The logic, it appears, is unassailable. The size of the state has to shrink.

Precisely the same logic was applied during the 1929 crash. The consequences then were deflation, economic failure, currency volatility, the rise of protectionism and trade wars, and of course a massive rise in unemployment.

It was only when President Roosevelt took the reins after 4 years of such economic logic – in 1933 – that the US economy turned around. And it was only when J. M. Keynes took the reins at the Bank of England and the Treasury – also in 1933 – that the UK economy started to turn around, and government debt started to fall.

I point you once again to my favoured chart. It’s one that should be pasted on the wall of every single Labour Party candidate’s election HQ.

Keynes (and Roosevelt) had proposed a different logic. To paraphrase:

“Since the economy is substantially smaller than expected, government must take action to re-boot the economy, and to stimulate economic activity – in both the public and private spheres. By re-booting the economy, government can expect to generate revenues – to pay for the re-booting.”

Of course they had never heard of the term re-booting, but that pretty much is what they argued, and what they went on to do. And it worked. Look at the chart and see what happens to government debt between 1933 and the start of the war in 1939. It falls, quite precipitously. That’s because economic activity generates tax revenues. Government spending pays for itself. Yesterday, the Chancellor was right to boast about the £11 billion fall in government borrowing: it was the direct result of the mini fiscal stimulus of last year. The improvement has come from tax receipts and the stimulus measures adopted, including the cut in VAT.

Regrettably it has not come from employment taxes. This demonstrates, nevertheless, that taxes are key to correcting the deficit, and that stimulus works in reducing the deficit. The remainder of the £11bn improvement has come from lower-than-anticipated gilt yields. In other words, the government paid less for its debt on the international markets than many – including FT writers – had predicted.

So much for: "cuts are needed to reassure financial markets and persuade them to lend to the government at lower rates of interest". With those numbers Darling has seen off the deficit hawks in the Tory Party, the Institute of Fiscal Studies, the City and the BBC. He has been proved right: a little fiscal stimulus staved off even higher unemployment and bankruptcies – and helped stabilise the economy.

Today John Authers of the Financial Times interprets this fall in borrowing in this way:

“the government’s borrowing needs are somewhat lower than had been expected by the market (at £163 bn against expectations of about £185 bn) thanks to spending cuts."

This is contradictory: on the one hand the FT complains that spending cuts are inadequate, on the other it argues that the fall in government borrowing is precisely due to spending cuts. Spending cuts vs stimulus.

The FT and the Tories are winning this argument, and the consequences for the Labour movement are dire. Because private sector investment continues to fall; because £46 billion was taken out of the economy last year; and because government is being brow-beaten into contributing to further falls in economic activity (by cutting spending) we can look forward to: rising unemployment, falling wages, rocketing bankruptcies and deflation (which increases the cost of debt). The numbers of those in full-time employment will continue to fall, and so will real wages.

This will lead to a loss of confidence in democratic institutions, to votes for those that promise to deal with the crisis by authoritarian means, and to social unrest. Regrettably, instead of using the better borrowing numbers as proof, and as a springboard for an even greater stimulus, the Chancellor yesterday began the process of fiercely turning down the public spending screw.

So, there is a great deal at stake in this ideological debate. Labour Party members must get stuck in.

Tory Policies Are Awry & Must be Challenged

David Cameron changed his mind on spoending cuts for crime prevention and then over children’s schools. The Tory leader had another debacle over tax breaks for married couples. Yet he appears to think it is sufficient to say: “Sorry we got it wrong, we’ll do better next time”. It would be wrong to let the Tories off the hook. As an aspiring Prime Minister, Cameron has a duty to do his sums properly and put forward workable policies on social spending.

But making a mess of domestic policy pronouncements is not his only problem. The party’s European policy – to repatriate powers from the European Union back to the United Kingdom – is not credible and cannot be delivered. No incoming government in any of the 27 EU countries has ever attempted to unpick treaties previously agreed by every member state. EU agreements, such as the recent Lisbon Treaty and the Maastricht Treaty that caused John Major so much grief, are negotiated down to the smallest detail by all EU governments.

Consensus is eventually reached. Once signed, EU treaties are finished and not something that can be played about with. No one has been clearer on this than Pierre lallouche, France’s Europe minister, who said: “nobody is going to indulge in rewriting for many years. Nobody is going to play with the institutions again. It’s going to be “take it or leave it” and they (the Conservatives) should be honest about that.”

Yet the Tories are happy to sell the British people something that is impossible. However, in a recent survey on the ConservativeHome website, 45 Tory candidates for the forthcoming general election listed repatriation of powers from Europe as their top priority.

Cameron’s cynical use of EU issues to boost his standing with his party’s grassroots – those people who want to bring back hanging and abolish the BBC – is despicable. The man and his party are not to be trusted.