Posts Tagged ‘UK politics’

Students pay the price for bad government maths

October 29, 2008

English students are to find the grants to which they are entitled cut by over £500 next year after the government – to quote George Bush – misunderestimated the number of students who would be eligible for the full grant. Instead of the anticipated 33%, 40% are eligible. Although the government is not cutting the full grant to those from families with an income below £25,000 per annum, the grant cut off point will be cut by £10,000 to £50,000. 10% of students will be affected. The shortfall in income is £200 million. Once again we see the gap between New Labour’s rhetoric and its reality. Talk of one in two going to university allied with the introduction of fees. £200 million seems a lot of money. But it probably wouldn’t buy you the Chelsea football team, and certainly wouldn’t pay the bonuses of financial speculators who have already been rescued by the taxpayer.

As can be seen in both the Republic and Italy as well as Britain, the education sector is an easy target for cuts, revealing the short-termism inherent in the current centre-right thinking (if that’s not too strong a word) prediminant across Europe.

UPDATE: The National Union of Students’ not very inspiring response is available here, as is a report it has produced on the funding of higher education generally.

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I’ll Never Do it Again. No, Really. Honest.

October 27, 2008

So good old George Osborne admits he made a mistake in his dealings with the Russian billionaire. When he met him 5 times. And in no way, shape or form discussed how a donation could be channeled from him to the Tories. Osborne has stated that he will not be discussing individual donations with individual donors again. So at least the Tories have recognised the damage that this has done them, and that it has restored the issue of Tory corruption, added to other stories such as the money they have been receiving from a non-trading company that exists only for the purpose of providing them with cash. Cameron has supported Osborne, and said that the party has learnt lessons.

This is quite interesting. Cameron and his kitcken cabinet clearly realised that something needed to be seen to be done. But to have Osborne fall on his sword would seriously damage the credibility of Cameron’s Tories, and so they have come up with this halfway house. I really hope that the public is not as foolish as Vince Cable, the Liberal Democrats’ Treasury spokesperson, who said that Osborne’s “effectively apologising” drew a line under his involvement. This makes me wonder two things. Firstly, what have the Lib Dems been up to that they don’t want coming out to take such a lenient attitude. And secondly, how is it that the UK, which loves to boast how corruption free it is compared to the rest of Europe, has such a corrupt parliamentary elite.

I’ve suggested some answers in my previous post on the subject, and I cannot really see how this product of a nexus of personal links forged at school and university, and an identity of interest in financial terms, can be removed without a serious reconstruction of political culture. Can’t see it happening. A good first step would be the state funding of political parties.

As for Osborne. I suspect that unfortunately he will be able to recover from this with his reputation relatively well intact. Still, I am pleased that it came out when it did, and that Brown seems to be handling the current climate relatively well. Let’s just hope that Mandelson doesn’t derail things with more skeletons in his closet.

Ethics, Economics, and Eton

October 22, 2008

Just finished watching Newsnight, something I don’t do that often anymore as I think the quality has dipped of late. However this episode was fantastic. Three main things caught my interest. The first was of course the George Osbourne solicitation story. The second was the discussion of the Governor of the Bank of England’s statement that the UK is likely to be entering recession between Newsnight’s own shadow monetary committee of former Tory Chancellor Kenneth Clarke and two economists whose names I didn’t catch, and the last was the coverage of the US election.

However, for the sake of not having a totally ridiculously long post, and having missed the names of most of the shadow monetary committee, I’ll simply note Ken Clarke’s extremely effective – and I hate to say it, convincing – performance in a discussion that ranged across possible solutions and especially what role interest rates might have to play in attempting to attenuate the current crisis. I felt enlightened by the conversation. Similarly the report on the US election, which focused on what difference the change from Bush to either McCain or Obama might have on US relations with the world and for the rest of the world. I have deliberately being avoiding the US election, largely because I think that there will not actually be that much difference in US foreign policy no matter who wins. Certainly what it has become fashionable to call “the optics” of either of the two will be different from Bush and McCain’s would differ from Obama’s, but US strategic interests and policy will not change a great deal. I expect the US military presence in Iraq to be greatly reduced but not gone by the next election regardless of who wins. Obama may pull troops out at a slightly faster rate, but ultimately I think at most we are talking about timing. And as for Iran, the Middle East, (or Cuba, and the DPRK), let’s not forget Obama’s extremely belligerent statements about Iran, and complete lack of indication that he would be any more coercive of Israel to get the peace deal secured. I see again a change mainly in timing and rhetoric when it comes to foreign relations, not in policy and aims. Because of this conviction that one is not that different externally from the other, I’m not that interested, and don’t follow the thing as closely as many others (and besides, I preferred Hilary to either of them). For more detailed, and much more erudite commentary from a progressive viewpoint, see World By Storm’s many posts on the issues at Cedar Lounge Revolution.

So to Osbourne, Mandelson, and the richest man in Russia, Oleg Deripaska, another of those oligarchs who got rich on the backs of plundering the natural resources of the Russian people. Here we have an insight into the way politics works at the very highest level, and it is far from gratifying. The EU’s Trade Commissioner is staying at the (a?) holiday home of a leading financier, Nat Rothschild, a member of one of the world’s richest banking families, who introduces him to the billionaire trader in aluminium, the tariff on which Mandleson helps to set. Mandleson’s defence is quite simple – one cannot be involved in these types of negotiations with emerging economies like India, Brazil, South Africa and Russia without talking to important businessmen as well as politicians. The EU clears him, though as Nick Robinson of the BBC points out, should he do this now as a member of Cabinet, he would be in breach of the ministerial code. Given Mandleson’s track record, it is to say the least unsurprising that he would place himself in a questionable position. The Tories try to take advantage of the situation, with Osbourne briefing all and sundry about Mandleson badmouthing Brown.

Oops. Big mistake. Rothschild seemingly regards this as a breach of trust, and decides to punish Osbourne by publishing in an open letter to The Times the details of conversations involving Osbourne and the Tories’ chief fundraiser Andrew Feldman (who had been brought to the villa by Osbourne for this purpose) that were had about a potential illegal donation by Deripaska to the Conservatives, possibly using one of his UK-registered companies as a front. Rothschild says that Osbourne and Feldman asked Deripaska for money. The Tories deny this, and correctly state that no money was given, but have to admit that the Shadow Chancellor and their chief financier were party to conversations about possible donations, and that they met Deripaska on his yacht. In additional fuel to the fire, Deripaska lets it be known to the BBC that neither he nor anyone acting on his behalf initiated the discussions, while Rothschild has named a witness in support of his version of events. From The Times

Mr Rothschild issued his statement at 9pm in what appeared to be an escalation of hostilities between the hedge fund manager and his old friend from Oxford.
In it, he directly contradicted Mr Osborne’s suggestion that there had been no discussion of channelling donations through a British company. He went on to say that his witness, Mr Goodwin, a former adviser to President Clinton and a prospective non-executive director of Rusal, Mr Deripaska’s aluminium company, recalled that the subject of a donation arose briefly after they went to the Russian’s yacht “but the conversation gained no traction”. He added that at dinner later that evening the donation was again talked about “and Mr Osborne was interested in whether and how such a donation could be secured”.

I’ll come back to the presence of an advisor to a former US President, and the fact that Rothschild and Osbourne are old friends from Oxford. What we have here seems to be a clear case of, at the very least, The Tories at the highest level being prepared to involve themselves in discussions about illegal donations. And, quite frankly, I am not charitable enough to believe this most charitable version of events. The stench of corruption pervades this whole episode. It looks a hell of a lot like potentially the next Chancellor has been grovelling for illegal cash. How can we trust his, and his party’s, judgment, when it seems that he will be in hock to such powerful vested interests? How can we forget what this says about the likely corruption levels of any Cameron government?

And what does it tell us about the way politics still works in the UK at the highest level? First, the old boy network is alive and well, and incredibly strong in the Cameron Tory Party. Call me Dave was at Eton, as were a lot of the Shadow Cabinet. Osbourne compartively “slummed it” at St Paul’s. Rothschild and Osbourne are friends from Oxford, where they were both members of the Bullingdon Club, a perennially obnoxious drinking society for super-rich Oxford undergraduates who delight in vandalism and other petty criminality, as were Cameron and Boris Johnson. Feldman, the chief fundraiser, played on the same tennis team in Oxford as Cameron. Are we getting the picture yet? These elite networks that look after their own and protect each other’s interests even when laws are broken are the type of people who are running the UK – its politics, its government, its legal and financial institutions, and its media and cultural institutions, as was nicely quantified and analysed by The Observer earlier this year here and here. Given this culture, is it any surprise that politicians are open to undue influence from financiers and other vested interests.

But it goes much futher than that. The elite network is clearly not confined to the UK, but is an international phenomenon. Hence the significance of the EU Trade Commissioner and an ex-advisor to President Clinton on the richest man in Russia’s yacht. I am not – I want to stress – advocating a conspiratorial understanding of political and economic policy across the globe. Rather I am saying that if we want a vivid demonstration of how class, wealth and power remain inextricably interlinked – and act as posion to the democratic process and the decisions that affect and all too often sacrifice the interests of the ordinary citizens of numerous states – we need look no further than the holiday home of one hedge fund manager. Oh, and did I mention Rupert Murdoch dropped by too?

The Thatcher/Major government collapsed under the burden of its own inadequacies and corruption. Blair left office irrevocably tarnished by the corruption that surrounded him and other prominent New Labour politicians. It looks as though should Cameron, Osbourne, and the rest of their public school/Oxbridge nexus win the next election, we can expect more of the same, except more shamelessly and more quickly. All this though may have positive benefits. Brown’s handling of the financial crisis, and the credit he has been given in the US and the rest of Europe, has resulted in a Brown bounce. The Tories, without power to affect the crisis, are already beginning to look a lot less confident, and have lost some of their lead in the opinion polls. It looks as though this crisis will be more damaging, and I certainly hope so. “Two-Brains” Osbourne is suddenly looking a lot less clever, and the Tory Party’s claims to have reformed a lot less credible.

Nevertheless, the main lesson to be drawn from this is the need for democratisation and transparency. In the administration of government, in the financing of parties, in the taking of government policy, in our relations with other states, and in the control we must now assert over the financial institutions in whose interests the UK and much of the world have been run almost without challenge for the last thirty years by the elite nexus represented by Mandleson, Osbourne and their friends and international equivalents.