How the hell did they get away with it? Michael Rosen explains

I thought this Facebook post by Michael Rosen would be of interest to readers:

How the hell did they get away with it?

Call me naive or stupid but when the financial crash came I will admit here and now that I thought that because, for the first time in my lifetime, that 

a) the workings of capitalism had been laid bare in a way that they had never been before,
b) as people found that their standard of living was being cut and c) as people found that their hard-won and precious public services and welfare was being cut too, people would be outraged in ways that we had never seen before.

I confess I imagined that people would perhaps occupy their places of work, or their public services institutions - hospitals, schools, social services offices in order to defend them. I imagined that people across public and private industries would find that they had common interests in defending their standard of living. After all, I reasoned, as never before, the nakedness of capital (finance) screwing up all on its own, with no excuses that they had been driven into a corner by 'high wage demands' or 'trade unions holding them to ransom' and the like, would make it clear to us all that there is a difference between money and wealth - money being the stuff that rich people play with in order to keep themselves rich and wealth being the stuff that we need and make to keep ourselves safe and warm and productive.

But how wrong could I have been? And why or how has it turned out that I was so wrong?

1. It has been possible for very powerful people - politicians and news media - to repeat over and over again that the 'mess' or the 'crisis' was caused by one political party which happened to be in power at the time of the most severe point in that crisis - namely the Labour Party of GB, even though the crash was (and still is) global and was caused by financiers taking risks that were…er…too risky.

2. It has been possible to keep the illusion going that the 'remedies' put in place to put things back together, are fair and just - even though they are nothing but a simple system of redistributing wealth from the poor to the rich. The richest 1000 people increased their wealth last year by over £40 billion while the poorest have seen their income (or standard of living) cut. The proportion of money earned by waged people in relation to money acquired by owners of capital has shifted and is shifting in favour of capital.

3. Interventions like £350 billion of quantitative easing ('printing money') have enriched the rich with hardly a murmur from those with the megaphones whose social duty was to tell us about it.

4. A constant burble over the last five years about the 'deficit' and 'balancing the books' and 'paying our way' has been like a mass education force telling us that
a) the deficit must be reduced or we will all go to hell in a handcart
b) the people in power are dramatically reducing it and this is improving our lives
c) we must re-elect them so that they can go on doing what they've been doing to reduce it further.

It has made very little difference that some people to repeat that a deficit can be productive in any economic system if it is used to invest in producing things we need, that demolishing public services has had a double effect of harming thousands of people's lives whilst handing over what remains of the services to subsidiaries of the super-rich.

It has made very little difference that some people have pointed out that the deficit is at levels we were told at the outset were unsustainable or impossible.

It has made very little difference that some people have pointed out that low income (engineered by the government) has two results:
a) people don't earn enough to pay enough taxes to lower the deficit and
b) people will borrow money to supplement their income…which is part of why the whole thing unravelled last time.

5. The 'economy' will recover.

The nineteenth century bearded chap pointed out that in a recession prices will eventually fall to a level at which the people who own and control capital will think once again that it's a good time to invest and produce and distribute. In the meantime, their cycle of boom and bust involves making the lives of the mass of people worse. This period of worsening standards of living can never be given back. They happen, they endure. The damage is done to people's minds and bodies and to the ways in which we hang together. Rich people - even the few who take a small hit in a recession - don't experience this. They have a bit less than a lot. The poor have less than very little. Even though people know this and feel this, it is possible to keep them from despair and anger by constantly suggesting that

a) it would be even worse if you let back in those terrible people who 'caused it' last time,
b) it's going to be better for you next year…er…when we cut £12 billion from services that you need and rely on…(not!)

6. Another useful way to distract people from the core fact that money is being transferred from the poor to the rich in the name of 'balancing the books' is to encourage or allow a story to be told over and over again about 'immigrants'. The truth of the matter is that the great cycles of boom and bust are not caused by a few hundred thousand people swapping countries. More often than not, it's a symptom and not a cause. If politicians were honest, helpful people they would spend a great deal of time explaining to us the benefits and drawbacks of the system they believe in - capitalism.

They love gassing on about all the benefits of innovation, competition and the like but hardly ever explain what 'bust' is all about. An honest advocate of capitalism might spend time explaining to us that, yes, it's a system that does demand that at times the poorest have to be poorer so that capitalists can go on making profits, because that's how the system works. Hello, they would say, we compete with each other, we try to cut costs, even as we have to invest loads of dosh in order to stay modern.

But no, instead, they allow or encourage all sorts of half-truths and lies to circulate in order to 'explain' why times are tough for millions of people. So, in one bust you'll see the bust explained by the fact that the workers have all been greedy and lazy, their pay too high, their holidays too long, their pensions too big. Another time, this story will be modified by saying that the hospitals, schools, social services cost too much. And another time the story is that the problem is what's going on abroad somewhere so the only solution is to go and bomb and kill hundreds of thousands of 'foreigners'. And another time, it's because 'we' are being 'swamped' by 'foreigners'.

These are all very potent lies to cover up for the fact that what makes people poor is employers paying working people less. And if they were honest, they would say that, yes, that IS what they do, and it's what they need to do in order for them to stay rich (i.e. make profits). But they don't.

7. So, in some ways, a time of reflection. As I write this, I suppose there is every chance that the Tories will win a few more seats than Labour. This may well mean that there will be another coalition - though it might be one that does not have a full majority. This means that there are certain kinds of legislation that could be defeated by the rest - unless Labour do that classic thing of saying that they are being 'statesmanlike' and supporting legislation which they don't agree with and which damage the majority of the people's standards of living. This will happen if, in the case of a Labour defeat, Miliband is replaced by someone from the Blairite rump.

Green Party supports tomorrow's PCS strike

GREEN Party leader Natalie Bennett will tomorrow (Wednesday) morning be speaking at a PCS Union rally outside the Euston Tower in Central London in support of the union’s budget day protest, expressing support for PCS members on strike that day across the country.

Natalie said: “The union is rightly calling for decent pay for all civil servants this year, while pointing out to the government that this – and many other steps to reverse its austerity programme – could be paid for by serious action against wealthy tax dodgers.”

A union report has demonstrated that since the start of recession in 2008 the real value of wages has fallen by 7%, more than £50 billion a year. The report also found that median pay in the civil service is 4.4% lower than direct private sector comparators. In some grades, the gap was 10%. It is calling for a 5% rise in civil service pay this year to keep pace with inflation, and an end to reduction in pension rights.

The union represents, among others, customs, immigration, benefits and Jobcentre staff.
Natalie said: "Congratulations to the PCS for rightly identifying the importance of tackling tax evasion in rebalancing our economy. David Cameron has said he wants to act on the issue, but has failed to take any meaningful concrete steps.

“To save time, I’d point him to Green MP Caroline Lucas’s 2011 Tax and Financial Transparency Bill, which set out how the government could force companies to ‘publish what tax they pay’, requiring all companies filing accounts in the UK to include a statement on the turnover, pre-tax profit, tax charge and actual tax paid for each country in which they operate, without exception. He could simply move that as a government bill, and take a big stride towards collecting money the UK is owed.”

Natalie added that the PCS call for fair pay for all civil servants and for all contracts to be underpinned by the living wage, would be a small step towards rebalancing the UK economy, in which the wage share had fallen from around 60% to 55%, with a great increase in the inequality of the distribution of those wages.
“We need to make the minimum wage a living wage – that is an immediate step the government should take, but in the meantime, ensuring that government outsourcing meets this basic standard is an important step.”

Natalie added: “It is clear that we need to not only reverse George Osborne’s austerity agenda, and invest in the infrastructure we desperately need – including energy conservation, renewable energy, but also to move towards a living wage economy with jobs that workers can build a life on.”

G20 A MISSED OPPORTUNITY

Darren Johnson AM, Green Party spokesperson on trade and industry, reviewing the G20 Statement said Gordon Brown had delivered a “kick in the teeth for British industry and global sustainability.” He said Brown had “managed to pull off a global stimulus that includes less than seven per cent climate-friendly investment.”

He went on, “Britain’s over-reliance on financial services has been a spectacular failure. It’s time we re-built the real economy. There are a raft of emerging technologies waiting for government investment to kick-start the Green industrial revolution that will give us the economy of the future - a balanced economy that includes heavy industry and self-reliance on energy. We have a golden opportunity to beat the recession and the climate crisis in one - and we’re wasting it.”

He concluded, “Every time we see evidence of progress we also see evidence that governments are dragging their feet. They don’t seem to understand that the policies we need for tackling climate change will bring huge social and economic benefits. “We need more Greens in elected office, because we need to push parliaments and assemblies and local councils towards a better understanding and a better set of policies.”

Full Statement

THE WEMBLEY MASTERPLAN AND THE RECESSION

“The Masterplan is a long term plan that should reach far further than the current economic down turn. A wide range of studies have been conducted that provide confidence that the proposals within the document can be delivered.”
Brent Council response to concerns about the Wembley Masterplan, December 2008

Brent Green Party and other objectors to the Wembley Masterplan called for Brent Council to put the Plan on hold until a full analysis of the impact of the recession on the local economy had been carried out and the Council’s Climate Change Strategy was in place.

A report entitled ‘The Local Impact of the Recession’ was tabled at the Council Executive on 16th March 2009. The Climate Strategy is long overdue and there appear to be concerns over the adequacy of the Consultant’s report. It is essential that a long-term project should be based on such a strategy. Despite this vital missing ingredient the Executive is due to make a a decision on the Masterplan at its meeting on Monday April 6th.

RECESSION OVERVIEW
The Recession Report resists engaging in detailed economic forecasting but states, “In short we face possible deflation, continuing low interest rates, a continued lull in property and housing markets and unemployment rising and possibly peaking in 2011-12…….At the same time, the government borrowing to defend the economy and provide fiscal stimulus will put huge pressure on public finances.” (4.5)

The Council faced with challenges on the financial viability of the Masterplan had earlier said that funds would be available from the government or the GLA in the event that Section 106 funding was not available.

RETAIL
The Wembley Masterplan envisages 47,000m2 of retail, restaurants and bars and a ribbon of retail running from Wembley High Road to Wembley Park. The Recession Report reveals that employment in wholesale and retail in Brent stands at 22%, a greater proportion than the British average (5.5.2) which ‘therefore may be an area of concern’. Brent has a greater proportion of firms involved in wholesale and retail than the British average: “This may be an area of concern, as the retail-related industry is predicted to be one of the sectors most severely hit by the recession.” (6.1.2)

So retail is already disproportionate, is likely to be hit most severely by the recession, but forms the backbone of the Wembley Masterplan. The Masterplan stated that further retail development was dependent on the successful completion of Quintain’s Phase 1 Wembley Boulevard development. A ‘success’ that looks unlikely in the present economic climate and the competing attractions of Westfield and a refurbished Brent Cross.

HOUSING
The Report suggests that with the fall in house prices and sales at a 30-year low, there may be an increase in demand for temporary and social accommodation. “A consequence of this could be that more people will turn to renting or seeking council housing. Brent already has one of the highest levels of demand for housing in the country, where we are unable to meet even a small proportion of the existing demand.” (8.2.1)

The Wembley Masterplan envisaged the provision of 3,727 new homes of which 1,400 were to be affordable. Much of this would be financed by Section 106 receipts (money paid by developers to the local authority towards infrastructure improvements). However the Recession report notes, “A quarter of the local authorities surveyed by the Audit Commission state that they have seen falls in Section 106 receipts of more than 5%, which is of particular concern because about half of the affordable housing supply in recent years has been provided under Section 106 agreements.” After noting that school building improvement plans will also be affected the Report states, “Opportunities to generate improvements in public sector infrastructure through regeneration projects will also be affected. (10.5.4)

The Report notes that the current forecast is that, “Brent will struggle to achieve the LAA target to deliver 458 affordable homes annually between 2008 and 2011 by 17.4% due to delays or terminations of development schemes. Wembley regeneration schemes were also expected to contribute to the supply targets, but some of these sites will be delayed, as developers such as Quintain concentrate on the non-housing part of their development.” The Report expects new starts to “drastically slow” and “in some cases where construction has commenced developers are delaying internal fit outs that allow new homes to be habitable in the hope that the market will improve”.

So housing, and particularly affordable housing, is essential and a major part of the Masterplan but unlikely to be completed in the short or medium-term, and some, already largely completed, will not be coming on the market. The Report pins its hope on government action to stimulate the housing market despite the constraints imposed by the huge long-term debts incurred by the government’s recent interventions to stabilise the economy.

REGENERATION AND DEVELOPMENT
It is worth quoting the first paragraph of this section in some detail:
“The construction industry has been severely hit by the squeeze on credit, and delays in development schemes have had a negative effect on the pace of Brent’s major projects, for example timetables have been put back for Wembley development….The lack of credit and economic recession may well both stop and delay private development, which may adversely affect our regeneration ambitions in Brent.” (11.1)

This throws the whole rationale of the Masterplan into doubt. The argument that the Plan is a long-term vision beyond the current crisis cuts both ways. If it is long-term there is no need to approve it at present when the Report recognises that the extent, depth and longevity of the economic downturn is unclear. The argument that, “…the council use this as a period of opportunity in terms of the regeneration agenda through undertaking detailed planning work and establishing clarity of vision, so that development projects can be kick started when the upturn occurs” (11.2), seems to be based on an assumption that things will soon be back to normal – an assumption as we have seen that is not well supported by other statements in the Report.

QUINTAIN ESTATES
Despite the council’s claim to the contrary when Quintain Estates criticised the Wembley Masterplan for unaffordability, they remain the council’s main developer partner.

Quintain have themselves been badly affected by the economic situation and their strictures need to be taken seriously in the context of their ability to provide Section 106 funding for the Masterplan proposals.

Quintain has recently negotiated a three-year deal with its lenders to manage its debts of £620,000,000. This involved increasing the firm’s maximum gearing ratio (the ratio of debt to net worth) from 110% to 150%, allowing for expected further falls in the value of its UK properties. This stabilised the firm’s stock, which has fallen 58% this year. However the arrangement provides protection only for a 20% fall in property valuation from September 2008 levels and the decline in property values has accelerated since then. Quintain is likely to seek further investment to help stabilise its finances.

CONCLUSION
The council’s own report, ‘The Local Impact of the Recession’, reinforces objectors’ criticisms of the Wembley Masterplan. The Plan based as it is on expansion of retail, housing, hotel and office space at a time of economic recession and long-term economic uncertainty is irrelevant in its present form. As a long-term Plan it should also take into account the council’s yet to be published Climate Change Strategy.

The Wembley Community Association will be attended the Executive on Monday April 6th to press their case for a realistic and sustainable Masterplan.