Demonstration against Israeli Attack on Gaza

I attended this evening's demonstration in London against the Israeli attack on Gaza. The bombings continue with mounting loss of life and suffering. It is widely understood that the assault on Gaza has been planned for some time. It is clearly timed as part of the electoral positioning of the political parties in Israel in the run up to the forthcoming elections. The Israeli political parties are vying to outbid each other on how more brutal they each can be in their treatment of the Palestinians.

The lack of decisive action so far from the UK government is a disgrace and the lack of firmness in dealing with this Israeli aggression by the incoming Obama administration is worrying for its future role on the Palestinian issue. As an aside the question also has to be asked about whatever happened to the Blair initiative?

I interviewed Jeremy Corbyn MP at this evening's demonstration. Jeremy is clear in his view that decisive action is needed from our government.

Attack on Gaza; The UK Government Must Act Decisively to Halt Bombings.

I put out the following press release on the attack on Gaza today. I will be joining the demonstrations outside the Israeli embassy. We must do all we can to halt this massacre.

Labour MP, John McDonnell, calls on UK Government to break off diplomatic links with Israel if attacks on Gaza are not halted.
John McDonnell MP said today 'The UK Government must threaten to break off diplomatic ties with Israel if bombings and attacks on Gaza do not stop. The government cannot stand by and do next to nothing as this mass slaughter goes ahead. Gordon Brown should take the lead in threatening to isolate Israel in the civilised world if these disproportionate lethal attacks continue.'

Brown Commits Government to Heathrow Expansion Environmental Madness.

At the weekend many will have missed the statement Gordon Brown made virtually committing the Government to a third runway and sixth terminal at Heathrow airport. This is not just environmental lunacy, it is also an assault on the human rights of tens of thousands who will lose their homes or have their local environment poisoned by air pollution and destroyed by noise pollution.

Brown's position on Heathrow expansion exposes the existence in Britain of a corporate political complex where the interests of big corporations have so permeated government that the major decisions of this Government are indistinguishable from the Boardroom demands of the leading companies in each commercial sector.

There’s a brutal arrogance about the corporate political complex that we know as New Labour. This has been no better demonstrated than in the Government’s behaviour on Heathrow expansion.

It isn’t just that this Government like every past government has acceded to every demand ever made of them by the aviation industry ranging from tax exemptions on fuel to turning a blind eye to the environmental impacts of uncontrolled expansion.

It is more the way that this time government under New Labour has actively colluded and connived with BAA so blatantly to fit up and fix the decision making process.

Spurious consultations and ludicrously doctored scientific assessments; government departments and even Number 10 populated by staff either coming from or going to lucrative posts in the aviation industry and funds poured into political parties or pet government projects to smooth the path of decision making.

A scale of contamination of the policy process we have never witnessed so starkly in this country.

In the face of an immense and unprecedented broad ranging coalition of opposition to Heathrow expansion, the Government has legislated to fix the planning process so that opposition voices are stifled. Even Parliament is to be denied a vote on the issue.

But the world has changed since Government ministers and members of BAA’s board first colluded on how to fix this decision.

The arduous but extremely effective opposition campaign, particularly over the last 5years, has exposed the Government’s role and its arguments for expansion. The result is that deep in Government doubts are now growing about the value of being virtually isolated on this issue.

There is also a growing consciousness that many people will not now simply accept a decision that so blatantly ignores the concerns of a vast section of our population and that rides roughshod over our democratic principles and practices.

Democratic government requires the consent of the governed. The savage impact of Heathrow expansion not just in devastating local communities but also in increasing the risks of climate change is mobilising a campaigning zeal to deny that consent to be passively governed. Vehement opposition has not been seen like this since the suffragettes and the early trade union movement.

Inevitably in this period of recession arguments for Heathrow expansion will be dressed up as vital to saving jobs and the national economy. The hope of the Government and BAA is that short term economic uncertainties will override environmental concerns.

This argument may have some limited impact but with high speed rail alternatives being promoted offering the same employment and economic advantages whilst overcoming many of the environmental concerns, people are not so gullible this time round.

A wise Government would recognise that the game is up on aviation expansion at any cost and make a fresh start on determining a rational policy for aviation’s role in an integrated and sustainable transport strategy.

The alternative is a vista of a decade ahead of a sustained campaign of protest and direct action as Heathrow becomes the internationally recognised iconic battleground for protest against climate change.

I have attached the video of my speech at the recent Climate Change demonstration.

Government's Welfare Reform White Paper- Attacking the Poor with Prejudice

Yesterday morning I listened to James Purnell's interview on the radio where he decribed welfare benefit claimants as offenders. I wasn't particularly shocked therefore when I saw the detail of his welfare reform white paper.

The reality is that however they are dressed up these proposals represent the first step in implementing the long term New Labour plan to introduce full blown workfare and private welfare insurance.

At my weekly advice surgery I already see too many people who find it too difficult and complicated to gain the benefits they are entitled to.

I raised my concerns in Parliament, explaining that with 2 million unemployed, the country facing the longest and deepest recession in decades and also according to Gordon Brown a lack of affordable childcare, the Government has sacked 30,000 workers in the Department of Work and Pensions. These are the very people who are supposed to help and advise people get back into work.

If there are no jobs because of the recession, putting people under pressure and threatening to cut their benefits is brutal and pointless.

I also question the Governments priorities.

This recession was caused by a small group of very rich speculators in the banks and financial insitutions who brought our economy to its knees but who have walked off with huge bonuses and massive pensions. We now know that between £20 billion to £100 billion a year of tax payments is not paid by many of these companies and individuals as a result of tax evasion and avoidance.

In my view the Government should prioritise tackling this tax evasion by the rich rather than atacking the poorest in our society.

I interviewed Mark Serwatka, General Secretary of the PCS, whose members staff the job centres and DWP.

Pre Budget Statement - No Way Near Enough

This is an article I wrote for the Guardian's Commemt is Free just prior to the Pre Budget statement. I am an admirer of Robbie Burns but the choice of title is not mine.

Cowering, timorous beastie

This is no time for fearful half measures. Darling must seize the nettle of major, redistributive tax reform and bank nationalisation

Whether the government intended it or not, Alistair Darling's pre-budget statement is rapidly becoming seen as a make-or-break move by a government desperate to prevent the recession becoming a depression.
Just before he finalises his plans, it would pay the chancellor to look up some of the ideas of the last group of Labour politicians who experienced an economic depression.
In the 1930s John Strachey, later a member of Attlee's cabinet, analysed the causes and the response to the depression in his books The Nature of Capitalist Crisis and A Programme for Progress.
His mixture of Keynes and Marx reflected the intellectual climate which influenced the policies of governments for the next 30 years. Step by step, the response to recession was first to cut interest rates fast and hard, second to redistribute income from the rich to the poor by taxation and to increase pensions and benefits also paid for by printing money, third to promote large-scale public investment and fourth to develop a "national and public as opposed to a commercial and profit-making banking system."
Against this checklist the government's response so far looks tentative, indeed pretty feeble, and needs radical change.
Following Strachey's model on monetary policy the government cannot afford any more dithering by the Bank of England. We need an immediate and substantial cut in interest rates. Handing control over interest rates to the Bank of England may have been seen as an adroit manoeuvre in 1997 to reassure the markets as Labour came back into power, but now is definitely not the time for political novices of any sort, even if they are senior bankers. It is time for the government to take back control from the prevaricating Bank of England.
It is also time to recognise that the government's policy towards the banks has been an unmitigated failure. The billions in bail-outs have done little to increase lending, and we are witnessing a startling rise in home repossessions by the very institutions bailed out with taxpayers' money.
The government now needs to move towards the full nationalisation of the banking sector to create a national public banking system run in the interests of the British people.
Darling is trailing a significant fiscal stimulus and a large-scale public works programme paid for by substantial borrowing and deferred tax increases. The introduction of a higher rate of tax for high earners is long overdue but the government's proposals are hardly radical and delaying them until after the next election is pointless.
The higher rate should be the start of creating a fair tax-reform agenda, redistributing wealth from the super-rich in order to take the low paid out of taxation altogether. The public revulsion over City bonuses and bank executive salaries has opened the way for radical tax reform. The government must seize the moment.
Just 18 months ago, Gordon Brown used his final budget speech to abolish the 10p tax rate – raising taxes on the lowest earners. Frank Field and others are right to be demanding that this group is compensated. I would go further by raising the personal allowance so that what was the 10p rate is now a 0p rate. This would put money back in to the pockets of those who need it most and those who will spend it most – bringing the maximum benefit to the economy.
But it is also those out of work who must be protected. Jobseeker's Allowance at just £60 per week is an absolute disgrace. As more and more people are thrown out of work, how can it be just that they are expected to live on less than one-third of the pitifully low minimum wage? The same calculation also applies to the 2 million pensioners, who still live in poverty and who still await a decent pension and the restoration of the link with earnings.
Paying for the fiscal package by borrowing will prove counterproductive and the threat of later tax increases simply encourages hoarding not spending.
Instead the necessary boost in expenditure should be paid for by tax redistribution, lifting the cap on National Insurance contributions and introducing a wealth tax but more importantly by ensuring the corporate sector pays its way.
In its 11 years in office, New Labour has cut corporation tax from 33% to 28% – and much of it remains avoided through various avoidance schemes and the use of offshore tax havens. The US has acted to stop the abuse of tax havens. Yet the UK continues to drag its feet, even when we know that the UK is losing at least £25bn per year – thanks to the excellent work of Richard Murphy. We therefore need legislation in the Queen's speech to tackle tax evasion by corporations and the wealthy.
If we are to depression-proof our economy we may need to pay more attention to the radical ideas and policies of those who witnessed the misery inflicted on so many during the 1930s.

New World Economic Order Needed.

Blogging time has been limited recently by political activities but here is an article I wrote for the Guardian's Comment is Free on Friday.

We need a new world economic order
Instead of the G20 summit, we need a new, accountable architecture of global economic co-operation
Barack Obama has decided not to attend the G20 summit convened by George Bush and the lack of involvement by India, China and the developing world in the G7 means that the best we can hope for is that this Saturday's talks are a preparatory session for a more inclusive and wider ranging summit in the New Year.
The timing is just not right to secure anything more than limited agreement on coordinating measures to mitigate the recession – and to set an agenda for the post-inaugural economic summit it is hoped the new president will convene.
Brown and Sarkozy will vie with each other over the weekend for the title of saviour of the global economy, but the reality is that until Obama is installed in the White House and unless China and India are engaged, little will change.
In the meantime, millions of workers worldwide will lose their jobs and homes as the recession bites. Many more people in the developing world will be pushed over the edge of poverty into destitution, with starvation putting many lives at risk. The demand for change, which elected the first black president of the US, has the potential to grow into a demand for change in the system that produces such insecurity and suffering.
Civil society now has a part to play in this transitional period between the G20 meeting and what appears to be the inevitable emergence of a new global institutional settlement that reflects the new world economic order.
Since the post-war world's economic institutions (the World Bank, IMF and WTO) were captured by neo-liberals in the 1970s, they have proved themselves a major part of the problem, not the solution to global economic instability. The same policies that have brought individual national economies to their knees are the policies that these institutions have spread across the globe. They have produced the global crisis.
The globalisation of unrestrained free market, rapacious capitalism by this economic institutional structure has produced inequality and insecurity in the west, desperate poverty in the developing world and a sequence of brutal wars causing immense human suffering. The plundering for profit of the world's natural resources has threatened the very sustainability of the planet.
A new democratically accountable architecture of global economic co-operation is now needed – new institutions pursuing new policies.
Civil society organisations could help set this transformation agenda to focus the minds of the politicians in the same way the popular demand for change after the experience of the 1930s depression created the Bretton Woods settlement. In our own lifetime the Jubilee 2000 campaign forced third world debt onto the global agenda.
An agenda of basic demands from any new global civil society coalition could include:
• A new structure of global economic governance inclusive of China and India and a wider representation of the developing world.
• The establishment of a democratically elected global assembly to scrutinise the policies and operation of the new global economic institution.
• The tackling of destabilising market speculation, through the introduction of a Tobin tax on international currency speculation.
• An end to trade policies and the imposition of trade agreements which are tied to deregulation, liberalisation and the privatisation of public services.
• An end to the policy of global collusion in the operation of tax havens that allow rich individuals and transnational corporations to avoid fair taxation.
• A renewed commitment to achieving the Millennium Development Goals, recognising the productive stimulus this would give the world economy in recession.
• An agreement that every nation signs up to the International Labour Organisation (ILO) conventions on international labour standards so that workers have the basic protections needed as recession sweeps the globe.
With this type of programme we could wrest the process of globalisation from the control of the corporations. The risk of the individual country recessions slipping into a worldwide depression provides the stimulus and the opportunity to create a new world economic order.

The Recession Begins to Hit with Repossessions and Unemployment Climbing Rapidly.

I put the following press release out today on hearing the news about the mounting repossessions being carried out by Northern Rock. We called for action at the early stage of the crisis to halt repossessions and to protect people in their homes by converting mortgages to social rents. I listened to assurances from both Gordon Brown and Yvette Cooper that action would be taken. Nothing appears to have happened and repossessions are rapidly rising. There is a real sense of tragic irony that taxpayers have bailed out the banks only to be evicted from their homes by the very banks that they now own!

Given the significant increase in unemployment I am calling on the Government to bring forward urgently a recession proofing programme to protect people's homes, jobs and pensions. Today's unemployment figures are bad but it should be remembered that each recent set of unemployment figures has had to be revised upwards because the staff cuts imposed by the Government on job centres means that there aren't enough staff left to keep up with the number of unemployed claiming.

Press Release
Is the Government's bank the most ruthless repossessor?
It was announced today that Northern Rock - the bank fully nationalised by the Government - has massively increased the number of homes it has repossessed in the last quarter.John McDonnell MP, LEAP Chair, said:"We fully nationalised Northern Rock, yet the Government's bank is becoming the most ruthless repossessor under the cosh of Government pressure to repay the loans. The Government is in danger of being seen as protecting banks while ignoring people."The Government needs to come up fast with a "recession-proof" strategy of halting repossessions and converting mortgages into homes for social rent."With unemployment rising, the Government should be injecting resources to save people's jobs and that means large scale public investment in major housing, rail and renewable energy infrastructure schemes."

One of the Greatest of Labour's Lost Opportunities

This is an article the Guardian's Comment is Free published from me on Monday on the economic crisis. The media are eulogising about Gordon Brown's role in bailing out the banks but I consider it is just a disastrous lost opportunity, which we will live to regret as the recession hits.
Turning a crisis into an opportunity

The financial meltdown is a chance for the government to transform our economy and taxpayers have the right to demand it

The government has been consistently behind the curve on the banking crisis and the chancellor's statement this morning demonstrates that it is missing the chance of turning this crisis into the opportunity of a generation to lay the foundations for transforming our economy.
In his interviews so far today the chancellor has insisted on an arms-length role for government and on returning the banks to private control as soon as possible. At a time when many British taxpayers will be losing their jobs and homes they are being asked to subsidise the banks in the bad times, simply to allow them to return to the profiteering role which caused this crisis.
Taxpayers will want to know what they have got for their money. Under public pressure, the government has been forced into placing some limited and temporary constraints on executive pay and bonuses – and may appoint some non-executive directors. Not a lot for £500bn of public money. The government has drifted into majority or sizeable ownership of individual banks without any coherent strategy about how to use its shareholding.
Let us be clear, the banks which the government has taken into part-nationalisation would have collapsed entirely where it not for government intervention. The billions invested today surpass even the most generous estimates of the banks' worth.
The chancellor seems oblivious to the unprecedented potential the government now has to lay the foundations for transforming our economy. To give the taxpayers a return for their investment, the government should insist on an entirely restructured banking system and a new set of economic priorities for our financial institutions.
The taxpayer, through the government, should now be forcing through an agenda with control of the board: offering full transparency and stakeholder democracy for customers and the workforce. There should also be a no-redundancies guarantee for bank workers to match the no-loss guarantee to depositors.
A new lending strategy of these nationalised banks must prioritise tackling the worst effects of the recession. We need to promote employment through investment in major public works schemes to meet the UK's needs. We urgently need a major programme of investment in renewable energy generation to tackle climate change. Likewise we need a national programme of council house building to tackle existing housing need, and to provide a safety net for those struggling to pay rent and mortgage costs as the recession deepens.
Such infrastructure investment would also mean large-scale job creation to arrest the rising unemployment levels. This would be a rights-based bank system, guaranteeing:
• bank workers and customers the right to a say in how their bank is run; • a right for the taxpayer to see investment that benefits their community; • a right to a secure home.
These are the opportunities the government is missing on behalf of the British public.
The public will also not look kindly if the government continues to refuse to assist local councils affected by the Icelandic banking collapse. The damage to essential local services by a forced round of cuts would be immense.
As taxpayers are paying for this bail-out, it should be their interests that now become the focus of a programme of major structural reform in the banking sector.

After a Week in the Crisis of Capitalism We Need to focus on Real World Economics

Over the last week most of us have been spectators to the latest crisis of capitalism, barely able to keep up with the hourly developments as markets nose dive, governments come close to panic and financial institutions rock. Debates in the media have focused on either the high economics of the global financial system or on the grubby dealings of the market floors in Wall Street and the City as individual banks and financial institutions are swept away.

Political fortunes of the major players have been on a roller coaster.

On Monday Brown and Darling thought that they could bluff out the first day back in Parliament with only a statement that they were thinking of a plan for the crisis. The market interpreted this as dithering and shares plummeted. By 5 o'clock panic set in and Mervyn King was summoned from the Bank of England only for him to tell the PM and Chancellor that it was for them to take the lead and produce some sort of plan because the Bank couldn't keep on pumping out money forever with no visible effect.

Tuesday morning and the bank bail out plan is produced with a fanfare. Described as daring, innovative, almost revolutionary, by Wednesday Brown is basking in his Falklands moment.

Thursday and all is not going to plan. Despite a small inevitable lift for some banks, understandable with £500 billion of taxpayers money thrown behind them, the plan doesn't seem to be jump starting interaction between banks and restoring credit activities as hoped. Iceland defaults and the various consequences of the crisis are beginning to come out of the woodwork including the large scale potential losses of councils and charities.

Friday comes and the markets worldwide are dropping like stones, recovering a bit and then dropping again. There is a growing feeling that the Brown/Darling quick fix is not going to be sufficient in the face of world wide market slump, the continuing absence of confidence in inter bank trading for fear of default and financial institutions hoarding resources to protect against default. The G7 meeting only serves to demonstrate that the G7 appear to be floundering in the face of the scale of the potential collapse of the world economy.

Brown and Darling may not like to admit it yet but full nationalisation of Britain's financial institutions is beginning to come onto the agenda as the only option left.

Whatever is happening in the stratosphere of high economics it is the real economy of jobs, homes, fuel and food bills and public services that we urgently need to turn to. What action are we going to take through our political parties and groups, through our unions and organisations and within our communities when the recession begins to hit hard and when people start losing their jobs, are repossessed, their services cut and they are unable to pay their fuel and food bills?

We need to start mobilising now the campaigns to support those who will bear the brunt of this recession whether it is workers threatened with the loss of their jobs, public services put at risk by cuts in public expenditure or families losing their homes through repossession. We cannot let our people be forced to pay for this crisis caused in the City board rooms and in ministerial offices.

On Monday at 7.30 in Committee Room 10 in the House of Commons we have organised a meeting to discuss the crisis and how we as a Labour and trade union movement respond. Come along.

The Fall Out from the Bail Out

Yesterday I was trying throughout the day on live media to cut through the New Labour spin and explain the potential consequences of the Government's bankers' bail out for the rest of us and also to ask the question "what next?" Even if this bail out works for the banks it simply let's them off the hook so that they can return to binge banking, which we will pay for with tax increases and cuts in expenditure on public services. This morning the Guardian has published this commentary from me on the Government's bail out for the bankers.

Reckless with our money

The government, in effect, is handing over taxpayers' money to the very people who led these banks to the brink of collapse
John McDonnell MP

The British government has announced a £50bn part-nationalisation scheme. As someone who has been calling for the nationalisation of the banking sector since this crisis began, I should be satisfied.

However, as more details of this package emerge left economists and Labour MPs are increasingly alarmed. The deal is incredibly reckless: the government will only take preference shares in the banks in exchange for a massive investment of taxpayers' cash. The only potential advantage for taxpayers is in dividend payments, if there are any, crucially though the government will have no controlling stake. This in effect is handing over taxpayers' money to the very people who led these banks to the brink of collapse.

If the government is injecting public money, it should also take the right to oversee board appointments, executive pay, and future business operations. The government argues that by taking preference shares, the taxpayer will have first call on dividends. However, the only banks that will come forward to use this £50bn facility will be those in trouble. The market capitalisation of these banks has only been sustained at all by the prospect of a government bail out. Many of these banks are actually bust. Therefore there will be no dividends, we are throwing good public money after bad.

The government should be ensuring the public is protected through cuts in consumer borrowing rates – ensuring that people do not default on their debt and mortgage payments; giving a no-repossession guarantee, providing people with a "right to stay" in their homes – by converting repossessions to social rentals; and securing the jobs of those workers now threatened with redundancy as their bosses' kamikaze capitalism unravels.

But to do that, we would have to take a controlling stake. We should have nationalised to stabilise, with control for the taxpayer to have scrutiny of the banks' accounts, representation on the boards, a pay cap for bank directors and the end of excessive bonuses.

This may prop up a failing system in the short term, but in the medium to long term this deal will have to be paid for and this can only come through either tax rises or (more likely) through public expenditure cuts. This will exacerbate the recession by reducing demand. So while the package might prop up the banks in the short term, it risks further damaging the entire economy in the long term.

This deal is like your neighbour going on a massive spending binge – throwing a party, buying a new car, going on holiday – and then sending you the bill. Taxpayers will end up paying doubly, once through loose subsidies to dodgy banks and the second time as the recession bites and they risk losing their jobs, homes and going further into debt.

At that point they will rightly be asking the government: "Where is the bailout for the British public?"

Immediate Reaction to Government Bans Bail Out Proposals.

This is the press release I have put out this morning in response to the Chancellor's announcement of the Government's bank bail out proposals.

"Government Plan Nationalises Losses"

"Taxpayers to pay for Bankers' Greed"

"Fear Too Little Too Late"

Commenting on the Government's Banks bail out, John McDonnell MP, Chair of the Left Economic Advisory Panel, said "Without full nationalisation the Government is effectively nationalising the Banks losses and privatising the profits so that taxpayers will now pay for this crisis caused by the greed of the bankers. I fear that it will be too little too late. Without full nationalisation at least we need very detailed and specific conditions on any taxpayers support."

See also the Guardian's letters page where we have published a letter setting out a summary of a people's programme for the crisis rather than a bankers' bail out.

Now that it is accepted that the British economy is in recession today there must be pressure on the Bank of England for at least a 1% cut in interest rates. Without this the recession will be longer and deeper, with the risk of serious deflation and some even talk about a depression.

Already job losses are mounting and repossessions escalating. Our people are beginning to suffer. On Monday (13th October) we have convened a meeting at the House of Commons at 7.30pm in Committee Room 10 to plan the Labour movements strategy to confront the recession. We need to mobilise to protect jobs, homes, and living standards. Come along.

No blank cheques for the banks

Last night, as the details of the UK bank bailout were emerging, I put out the following press release -

PRESS NOTICE:
FOR IMMEDIATE RELEASE:

No blank cheques for the banks

John McDonnell MP, LEAP Chair, said:

"Yet again the taxpayer is being asked to pay for the mistakes of the bankers with next nothing in return. The Governments set to throw £50 billion of taxpayers' money at the banking sector's failures. I believe that the Government should nationalise to stabilise the banks. At a minimum the Government must place conditions on any bail out including

1) Full public and parliamentary scrutiny of the banks' accounts
2) Representation on the boards
3) No repossession of homes
4) A pay cap for bank directors and the end of bonus binges
5) Reduction of consumer interest rates on borrowing

"Without these conditions, the bail out is nothing but a subsidy by the taxpayer to the very people who have brought our economy to the brink of collapse."

A People's Programme for the Crisis

The Government needs to act urgently to protect the British people against the economic turmoil that was not of their making, but is now resulting in them losing their jobs, and struggling to pay their rent or mortgage, and fuel bills. There should be no blank cheques to bail out the banks that contributed to this crisis.

We are calling upon the Government to implement a people's programme to protect our people from the crisis not just the bankers, including:

1) nationalising the banks and establishing democratic control over banking decisions, ensuring democratic representation on boards, ending the bonus binges, controlling executive pay and share holder rewards;

2) Cutting interest rates significantly and immediately, restoring democratic control over key economic decisionmaking by not only widening the remit of the Bank of England beyond ensuring price stability to advising on the wider economic health of the country but also reverting the bank's role to being one voice amongst many others to be taken into account;

3) Securing people a home by converting repossessions to social rentals so that people have a 'right to stay' in their homes and embarking on a massive council house-building programme;

4) Enhancing security in employment by ensuring people have a say over the future of the companies by strengthening rights and representation at work;

5) Bring fuel bills under control with price controls on the consumer price of gas and electricity, so that people are not being forced to choose between heating and eating this winter, with the threat of nationalisation if needed.

We call on all people to support these measures and to campaign to the Government for their implementation.

Government of the City, By the City, For the City

When I first got a phone call telling me about the appointment of Mandelson to cabinet I thought it was one of those reshuffle day wind ups. Usually it is someone ringing a backbencher and pretending to be the Prime Minister offering a job. I though that this was a subtler version of the joke. When I found it was for real I expressed incredulity and the after a short while declined all media interviews because I thought it was coming across as personal and not political.

The significance of the reshuffle is not just the circling of the old New Labour wagons and the Faustian pact Brown has made with the Blairites to stave off another coup attempt for a period but more importantly the statement that is made by the appointment of Mandelson and people from the City like Paul Myners into government and the establishment of the National Economic Council makes about future economic policy.

This is in effect establishing openly the government of the city, by the city, for the city.

Look at the team of business advisers which Brown has appointed alongside the NEC. This includes :

Marcus Agius - Chairman, Barclays
Sir Victor Blank - Chairman, Lloyds TSB
Sir John Bond - Chairman, Vodafone
Lord John Browne - President, Royal Academy of Engineering and MD of Riverstone Holdings
Sir Terence Conran - Chairman, Conran Holdings
Mervyn Davies CBE - Chairman, Standard Chartered
Dr. Chris Gibson-Smith - Chairman, London Stock Exchange and British Land
Professor Malcolm Grant CBE - Provost and President, UCL
Sir Philip Hampton - Chairman, J Sainsbury
Dr John Hood -Vice Chancellor, Oxford University
Lord Digby Jones
Anna Mann - MWM Consulting
Dick Olver- Chairman, BAe Systems
Professor Alison Richard -Vice Chancellor, Cambridge University
Lord Richard Rogers - Richard Rogers Partnership
Paul Skinner - Chairman, Rio Tinto
Sir Kevin Smith, CBE - CEO, GKN

There doesn't appear to be a thought given to appointing a representative from the trade union movement to advise on economic, employment or industrial issues. Even the tamest general secretary in the history of the TUC, Brendan Barber, is not acceptable enough to sit at the high economic table. Surely all those trade union general secretaries who were convinced by Brown at the Labour party conference that a new dawn of policy change, partnership and co-operation had broken and the age of Blairism was over must now feel conned.

PS Here's a funny thing. When we were the first to call for Northern Rock to be nationalised, we were ignored then pilloried as dinosaurs. Eventially when Vincent Cable came out in favour of nationalisation he was depicted as prescient.

When we were the first to expose the role of Granite as a result of Richard Murphy's research, we were ignored and then looked upon bemusedly. When the government went into disarray on it, Cable then took it up and was praised for his sagacity.

For the last three months we have been calling for a significant cut in rates and the overriding of the Bank of England Advisory Committee. See the article reproduced from the Guardian's Comment is Free below and the LEAP website. (By the way we refused to support the independence of the Bank in the first place.) We were ignored again. Today Cable has come out with exactly the same demand and it is the number one story on the World at One and Cable is again feted as the profound greybeard of economic policy.

Next week we will be calling for at least a 3% cut in rates. I bet we will at best be derided but more than likely ignored. I also bet that within weeks people will be calling for a much more significant cut in rates than the Bank of England Advisory Committee will allow this week, amongst them will be one Vincent Cable.

Funny old world.

Do What is Needed not What it Takes.

I have written this article for the Guardian's Comment is Free today.

Time for change

Careful thought has been given to the form of words to be used by the prime minister in reacting to the latest crisis of capitalism. There have been repeated assurances that the PM will "do what it takes". The Conservatives and Liberal Democrats have rallied round in almost patriotic fervour to support the government in doing "what it takes".

But "do what it takes" to do what?

Stabilise a system which has allowed homelessness in our country to double over the last decade? Bail out speculators whose obscene incomes and binge consumerism has created a society more unequal than at any time since the 1940s? Attempt to restore confidence in a system which has allowed 3 million of our children to continue living in poverty after 11 years of a Labour government?

And who is going to pay for enabling the prime minister with the support of the Cameron-Cable coalition to "do what it takes"? People are already paying for the crisis and are increasingly facing real hardship. The number of missed mortgage payments is up 50%, repossessions are up by 48%, unemployment has risen in each of the last seven months, electricity bills are up 18% and gas bills 28%, child poverty has increased in each of the last two years, and 20,000 pensioners are dying each winter from cold-related illnesses.

The government must do what is needed, not what it takes. What is needed first is an honest debate about how we got into this mess. The government has a duty to lead the debate on the fundamental causes of this crisis and the Labour party has a once-in-a-generation opportunity to lead the discussion of the profound changes needed in our society to transform an economic system that creates poverty, insecurity and inequality.

The seeds of this crisis were sown in the 1980s, when the belief in the unfettered free market moulded the attitudes of a generation of political leaders. Concreted into all governments' policy since has been that it is neither possible nor desirable for governments to seek to fetter finance capital nationally or globally, but labour costs must be constrained by privatisation, deregulation and restraining employment rights. In this market state, the provision of housing, energy, water, health, and education become less and less the essentials of life for which government stands as guarantor and more and more commodities for sale and opportunities for speculative profit-making. If prices soar and wages are held down, demand is reduced but debt can take up the slack to keep the boom going.

After three decades of the reign of the economic law of the jungle we can now reassert the basic principle that rational democratic government must control our destinies, not the irrational forces of the market motivated by rumour, speculation and profiteering. Market solutions to market failure will simply risk an unstable rerun of the same mistakes.

The government could take four simple steps to demonstrate decisively who is in control:

First, rather than reacting on a case-by-case basis as firms collapse, the government should act decisively by nationalising now all those financial institutions involved in home loans or at least taking a determining equity stake in these bodies. The current policy of bail-outs and nationalising the losses whilst privatising the profits of the banks means that ordinary people will eventually pay the cost of market failure. Repeated bail-outs caused Japan's government debt to soar from 65% to 175% of the country's GDP. In contrast, Sweden part-nationalised its banks in 1992 when their imprudence led them to the brink of collapse.

Second, to avert the prospect of the longest and deepest recession in living memory, the government must reassert democratic control of economic policy by overriding the Bank of England monetary policy committee (MPC) and cutting interest rates significantly. The remit of the MPC could be widened beyond ensuring price stability to advising on the wider economic health of the country but the bank's policy role should revert to being one voice amongst many others to be taken into account when democratic government not bankers determine our economic policy.

Third, the government must re-establish its role in the provision of secure housing, democratically accountable public services and affordable energy. The government programme needed is blindingly obvious – a massive social house-building programme, repossessions converted to social rentals, ending the privatisation mania, and control of fuel prices or re-nationalisation of energy companies.

Four, at a time of economic downturn, the government must ensure that people are secure in their jobs and that their pay reflects the cost of living – this means abolishing Brown's public sector pay cap, making the minimum wage a living wage, and restoring trade union rights.

If the role of democratic government is reasserted, the real debate can now start on what type of democratic government is needed.

US Bail Out Failure Demands Decisive Action From Gordon Brown

The failure of Congress to support the Bush bail out plan has put even more pressure on our own Government to take swift and decisive action otherwise the prospects for the British economy are a much deeper and longer recession. If the market fails the only solution is Government intervention. We can't wait much longer.

What I am amazed at is the lack of comment and reaction from across the Labour Party other than from us at LEAP (The Left Economic Advisory Panel). We may not receive the coverage of our views in the mainstream media but at least we are using whatever opprtunity we can to present an alternative analysis and policy proposals.

That is why I put out this further press release about the lack of decisive action by Government.

US Bail Out Failure Demands Decisive Action From Gordon Brown



Labour MP John McDonnell, chair of the Left Economic Advisory Panel, has called for decisive action from Gordon Brown in face of failure of US bail out plan.


John said ”After Bradford and Bingley and the failure of the US bail out plan we are facing further collapses and a long and deep recession. Simply addressing this crisis in Britain on a case by case basis means that the economy is staggering from one crisis to another into recession. The root cause of this crisis is the Government’s policy of allowing the housing market for over a decade to be used for profiteering speculation rather than to provide homes. The resultant crisis of confidence in the financial institutions has created a self fulfilling crisis of liquidity. Gordon Brown must take decisive action before it is too late. I am calling upon him to bring the home loans industry under pubic ownership and control and override the Bank of England Advisory Committee to cut interest rates decisively.”

Credit Crunch Latest

I am desperately busy in my constituency and with various initiatives in unions,on the Left and progressive campaigns so blogging time has been limited to non existent. Just to let people know what I have been saying over the last 24 hours on the latest events in the current crisis of capitalism, aka the credit crunch, I have posted the last two press releases I have put out on this weekend's developments.

Saturday 27th September

Labour MP John McDonnell Warns Brown Against US style Bail Out Plans and Calls for Urgent Cut in Rates.

Labour MP, John McDonnell has warned Gordon Brown against any plans to follow the American model of bailing out the bad debts of British banks and financial institutions.

John McDonnell is the chair of the Left Economic Advisory Panel, a group of economists established 5 years ago to provide economic analysis and advice to the Left.

John said ”People will be extremely angry if Gordon Brown tries to use taxpayers’ money to implement a US style bail out of the bad debts of Britain’s financial institutions. Every year we have witnessed obscene levels of bonuses doled out in the City. Ordinary people struggling with housing, food and fuel costs should not be forced to pay for the profligacy of these city’s speculators. Allowing the City to pass on its poor investments to the taxpayer whilst retaining the cream of the crop is simply not acceptable. Nationalisation of all the assets of an institution is the only fair way of balancing the risks to taxpayers. Given the current liquidity trap the Prime Minister needs to introduce an immediate and significant cut in rates if we are to avoid further institutional collapses.”

Sunday 28th September

John McDonnell MP Calls on Gordon Brown to End Bail Outs and Produce a Credit Crunch Strategy.

In response to the Government’s decision to nationalise the Bradford and Bingley, Labour MP, John McDonnell, Chair of the Left Economic Advisory Panel, has called upon Gordon Brown to end the one of bail outs of financial institutions and to produce a credit crunch strategy.

John said “The Government cannot continue just reacting to each collapse of a financial institution as we drift towards a potentially long and deep recession. The taxpayer shouldn’t be required to pick up the tab for the bad debts of the speculators. Ordinary people shouldn’t be forced to pay for a crisis not of their own making.”

“The Government needs to produce a coherent strategy for both the immediate threat of recession and for the long term housing market. To overcome the current liquidity trap we need an immediate and significant cut in rates to avoid deflation. This means if necessary overriding the Bank of England Advisory Committee.”

“At the same time we should use this opportunity to reconstitute the housing market as a provider of homes for families rather than as a tool for speculative gain. This entails bringing into public ownership and control all those financial institutions involved in home loans, controlling lending and converting mortgage defaults into social housing.”

Denounce the New Labour Faction Fighting andLet's have a Labour Leadership Election Based on Policies Not Personalities

I took August off from blogging simply because most of my time over the last month has been spent on time with my family, catching up on constituency work and preparing for the launch of the Trade Union Co-ordinating Group at the TUC. I last blogged when Miliband was positioning himself just in case there was a leadership bid and just as I return to the blog many of the loyalist of the loyal Blairites are attempting a coup.

I find it ironic that many of them are now arguing that part of the problem is Labour never had an election for leader last year. It is also typical that this this bitter internal infighting between New Labour factions has not raised a single difference in policy or political ideology. Both the Blairite and Brownite faction fighters have voted for virtually every policy implemented over the last 11 years, which have alienated our supporters and are delivering us up to the prospect of a Tory government.

I have largely declined media interviews because I just thought the Left should stand above and not get dragged down by this unseemly, internal, opportunist New Labour infighting. However a number of activists urged that we remind people of our position that for the Left the issue of the Labour leadership is about policies not personalities and that whilst we have wanted a leadership election for the last 2 years we believe it has to be a debate about alternative political analyses of the world we face and the alternative policy programmes that follow from them.

That is why I put out this short press release yesterday evening.


Its Like Watching the Crew having a Punch up on the Deck of the Titanic.

Commenting on Labour Leadership debacle, Labour MP John McDonnell said:

Most Labour Party members are looking on aghast as the Blairites and Brownites fight an irrelevant turf war. Its like watching the crew having a punch up on the deck of the Titanic. Without a single policy difference between them they are willing to destroy a Labour Government. I challenge both of them to publish a policy programme to put before our members for support and lets test the views of our supporters on the way forward for Labour.

Of course we are up for a leadership election at any time but our task is to ensure that we use any leadership talk or actual election as a platform for our policies and to demonstrate to our supporters and the country at large that there are socialists within the Labour Party that are willing to stand up for them as this recession hits our community.

An Appeal for Calm and a Bit of Common Sense and Decency.

This morning the media is again full of plotters engaged in the planning of coups and counter coups, conspirators infighting and character assassination. It's just another day in the life of New Labour.

The Blairite New Labour spin machine has gone into overdrive in promoting David Miliband throughout their usual media outlets. Yesterday it was embarrassing to read exactly the same eulogies to Miliband from the likes of the Guardian's Polly Toynbee that she had written initially for Tony Blair and only 12 months ago for Gordon Brown. Now in the Sunday papers we have Blair's own revenge attack on Brown published.

Also today the Jon Cruddas and Neal Lawson Compass camp has launched its leadership bid with a very personal coded attack on David Miliband, accusing him of a "narcissistic cash for personal glory" and refers to his small faction that "seeks immaturely to gain advantage." Whilst they call for policy changes and list a few policies the Government should consider, the only slight problem is that over the last 11 years they have wholeheartedly supported the Government's policies they now criticise and voted against many of the policies they now advocate.

The Brownite response is a planned cabinet reshuffle to bring more unquestioning supporters into the cabinet. This just gives even further the impression of a beleagured leader defensively circling of the wagons. Just at a time when we need more open and honest debate in cabinet he appears to be stifling this opportunity.

In the long term interests of our party, the people we seek to represent and indeed the country, we desperately need to find a way out of this mess and to end the personal dogfighting and to help restore some dignity to the standing of the Labour Party and our Government.

My straightforward proposal is that we should impose a time limit on the debate on whether there is to be a leadership election or not. This would involve saying to all these various contenders that by the Labour party conference in September you should declare whether you wish to stand for leader of our party. If you wish to stand then say so and publish the policy manifesto upon which you want to invite support from our members. So that there can be no means by which the factions within the Parliamentary Labour party can block an election we should drop the rule which a a candidate must secure a minimum number of MPs' nominations and thus veto an election.

At least this process force the current prospective candidates to make their minds up and come out the dark. It should not prevent any future debate about the policies Labour should pursue but at least it would no longer place these proper and democratic debates in the context of leadership conspiracies.

I appeal to all those who have participated in the discussion about Labour's future to support this compromise plan to resolve the current impasse.

Stop the Plotting and Have an Honest Politcal Debate.

In all the media melee on the Labour leadership issue the Left must rise above all the personality politics and backroom plotting. We have always held a principled position that open political debate and democratic elections based upon politics not personalities should always be the method of operation for a socialist party. The Guardian's Comment is Free website asked me my views and so I wrote the following so that people know where we are coming from.


Comment is Free Guardian Thursday 31st July


Why is New Labour so worried about elections?

Before the degrading spectacle of candidates coyly jockeying for position gets worse, the party needs to invite open debate on the leadership with voters

John McDonnell MP

I've kept my head down over the last few days since the latest round of Labour leadership election fever broke out. Trying to get a rational debate going about the politics and policies needed to address the issues our country and indeed our planet are facing just isn't possible when all the media wants you to talk about is who is stabbing whom in the back.

What is it about New Labour and democracy? Why is everyone so worried about democratic elections? Last year I was urging everyone in the parliamentary Labour party to lighten up and to allow a range of candidates to come forward for the Labour leadership election, so that we could have an honest and good-natured debate that genuinely reflected the wide range of views of our party members and supporters.

I thought then, as I do now, that this would have shown Labour politics at their best. We could have the type of open, creative debate that British politics desperately lacks at the moment. After that we would have been in such a better position to unite and defeat the Tories.

Before the final nomination process last year, I toured round the country for a year speaking to meetings large and small, in community centres, trade union branches, church halls and workplaces, talking to people who just wanted to talk about the politics of their everyday life. It was just fascinating to listen to people. Most felt completely alienated from party politics and cynical about politicians.

You can't blame them. They feel that they are mostly ignored by government. They rightly see parliament as largely toothless and the media as a small, self-obsessed clique. If the current Labour leadership debacle plays itself out in the same way as the last few weeks cynicism will increase not just at a cost to the Labour party but to politics as a whole.

It just becomes embarrassing and a bit degrading to watch candidates for the Labour leadership slyly position themselves to either bring about or opportunistically gain from the fall of the very person they so sycophantically rushed to nominate only 12 months ago. You have to feel for Gordon Brown having to rely for his future on such colleagues.

If Miliband, Harman, Purnell, Johnson or any others fancy their chances as leader of the Labour party why don't they just explain why and have a go? Writing articles, holding press conferences and having your friends brief the media are clearly designed to stake a claim for the leadership, so why not be straight about your intentions?

What has also become obvious from all the manoeuvrings so far is that the debate about the leadership is devoid of policies, so let's hear some politics rather than have the party being forced into some media fashion show.

The best process for the Labour party would to accept that there is a need for a debate about the future of Labour in government and to invite an open publication of the political programmes advocated by the different factions within the party and to get out and about around the country to openly debate these ideas. This is no big deal. It doesn't have to be divisive. Most social democratic parties across Europe have a similar sort of open democratic process for deciding their political futures.

No matter how hard people tried to make the Warwick mark 2 process more engaging, it has come across as a traditional internal party stitch-up and has hardly produced a political programme that will set the world of British politics alight.

Instead the Labour party could also learn a lesson or two from the new social movements that have emerged in recent times, like the Climate Camp. Last Saturday I was at the Climate Camp conference on opposing Heathrow expansion. It was just exhilarating to get involved in such a creative and exciting discussion not only about policy issues but also about the action needed to change policies.

Increasingly I believe that the Labour party will only survive and succeed if it rediscovers its roots as a social movement,a mass movement for social justice, of course, but also inherently democratic. Why not start this process of re-democratising the party with a democratic election for the leadership and political programme of the party?

There just can't be another coronation for the leader of the party. Our members and the electorate just wouldn't put up with another one. I am up for a leadership election at any time but it has to be about beliefs, about a political analysis of the world and about the political solutions we can promote to regain control over the destiny of our planet.

Sorry but Warwick 2 will not be Enough to Save Labour

I read Jackie Ashley's column in the Guardian this morning and couldn't find the apology anywhere.

Only twelve months ago she headed up the media dinner party circuit that urged upon the Labour party the strategy of "the smooth transfer of power" from Blair to Brown. Ms. Ashley and vitually all the other media commentators arrogantly dismissed a leadership election enabling ordinary party members to engage in an honest political debate about the future of Labour as just a distraction.

This morning she urges the party to dump Gordon Brown and states that "the party desperately needs a debate about its future direction."

Just as Ms. Ashley and other media commentators were part of the process last year of preventing party members having a say over the leadership of the party now their articles over the last few days are already trying to limit that debate and limit the participants in the debate.

Already elements in the media have selected for us ordinary party members and trade unionists who will be on the shortlist for any future leadership election. The range of potential candidates has already been restricted by these media commentators to those, who like them, supported Gordon Brown and the thrust of New Labour policies over the last decade. The media is reducing the most important debate about Labour's future into the equivalent of a political fashion show catwalk for the sole enjoyment of the gliterati of central London.

What this fails to appreciate is that the vast majority of party members understand that it is a radical change of politics that is needed and not just a new face. Labour Party members must not allow the debate about the future of our party to be dictated by the small clique of media commentators.

That is why the discussion of Warwick 2 is critical. From what we now know about this weekend's agreement, Warwick 2 may contain some very limited advances in the preparation of a policy agenda that could limit the damage to our party at the next election but it is equally clear that it does not go anywhere near enough. Indeed in some areas such as the endorsement of the Government's reactionary welfare reform programme and support for academies it is a retrograde step towards the loss of even more of our supporters.

Over the coming months in the run up to the LRC's confrence in November my role will be to promote a rank and file discussion about the future political direction of the Labour party. This will be led by members not the media. If that discussion leads us to the conclusion that the debate about the future of our party should include a change of leader that that decision will not be determined by media commentators but by ordinary members of our party and our trade union supporters.

The Test of Whether the Left Should Challenge for the Future of Labour will be if Warwick and the Party Conference Delivers Radical Policy Change

There is something nauseating in watching all those MPs and Cabinet Members now turning on Gordon Brown when only 12 months ago they so grovellingly nominated him in such large numbers that they blocked an election for Leader of the Labour Party.

The issue is not whether Gordon Brown is a personal liability or whether he is capable of getting Labour's message across to the electorate.

The reason people have turned away from Labour is the message not the messenger. Shooting the messenger and replacing him with yet another New Labour MP who has supported the politics that have nearly destroyed the Party would be absolutely futile.

The electorate aren't stupid. They would see through this stunt within weeks.

If Labour is to survive in Government and even as a party we need a new politics and a new policy programme. All of those mentioned in the fashionable media jockeying for the leadership contender position from Miliband, Johnson, Harman, Purnell and Cruddas have voted for and supported virtually every New Labour policy laid before them from the disaster of the war in Iraq to the 42 days latest assault on civil liberties.

If Labour is to survive we need a radical break with this type of opportunist politics.

Labour has a last chance to demonstrate political change through the policy programme that comes out of Warwick this weekend and is agreed by Labour Party conference in September.

If that opportunnity for radical change is not taken, it will be then that the Left will need to take the decision to challenge for the future direction of our party. Our challenge would be based upon political principle and not the career planning and plotting of politicians.

Reaction to Glasgow By-election Result

I have sent out the following press release as a first reaction to the disastrous by-election result in Glasgow.

Fatal to dismiss Glasgow result as protest vote.

Commenting on the result of the Glasgow by election Labour MP John McDonnell said If this result does not demonstrate to the Labour Government the need for change nothing will. It would be a fatal mistake to dismiss this result as a by election protest vote. The message is straightforward. Labour must change or we are finished.

New Labour attacks welfare . . . again

Yesterday, the Government set out its new plans for 'welfare reform'. The plans reform both Jobseeker's Allowance and Incapacity Benefit (soon to become Employment Support Allowance).

The proposals include compulsory community service for those on unemployment benefits (equating benefit entitlement with criminality), and a range of punitive measures for people on incapacity benefit.

At a time of increasing unemployment such draconian measures will not only prove counter-productive, but the requirement for forced labour and the greater harassment of disabled people is a moral disgrace.

Allowing the private sector to make money out of the unemployed and those on incapacity benefit is a step further than even the Governments of Thatcher or Major went.

The Government has sacked 30,000 staff in DWP since 2004 and now it is proposiing to give more of their jobs to the private sector through letting private companies deliver welfare programmes.

I will be standing in solidarity with the unemployed and the disabled, as well as PCS members working for Jobcentre Plus, to defend public services and welfare rights.

Solidarity with public sector workers

From tomorrow, public sector workers in local government and across the civil service will be taking industrial action to demand that their pay reflects the rising cost of living.

The Government appears clueless about the depth of anger among public servants facing pay cuts while energy, fuel and food prices are letting rip.

These strikes are just a reflection of the strong feelings public servants have because the Government has ignored their worries and refused to act.

I'm calling on the Government to review its pay strategy so that public sector workers are protected from the economic crisis and recession that we now face.

In solidarity with all Unison, Unite and PCS members on picket lines.

Housing Crisis Worsens but Government Dithers.

I was in a succession of meetings at Hillingdon Council yesterday accompanying local families to meet housing officers in the hope of persuading them to give the families a council house. The families were living in appalling housing conditions, overcrowded, damp, and subject to the harrassment of their private landlords.

This is a weekly event for me, following up cases from my weekly advice surgery. It is one of the most depressing experiences. The housing officers are struggling to do their best but are faced with a housing shortage on a scale we haven't seen since the Second World War.The families are desperate to get a decent home and to feel settled, instead of subjecting their children to the constant moving from house to house and school to school as the private tenancies run out.

Buy to let landlords, who have been promoted by Gordon Brown, are profiteering from housing benefits. They are often maximisimg their profits by charging extortionate rents and minimising their costs by doing the least possible to maintain the standard of their properties. The promotion of buy to let landlords is creating a modern form of slums. It was exactly to deal with this private landlordism that over a century ago council housing was created.

The refusal of the Government to allow councils to build homes once again has resulted in a doubling of homeless households from 40,000 in 1997 to 80,000 today. True to Brown's neo-liberalism the Government has relied upon the private sector to deliver the homes we need and of course not only has it dramatically failed to deliver it is now in crisis. The house building industry is collapsing fast and the Government's target of 3 million new homes by 2020 is looking extremely unrealistic. The aim was to build at least 250,000 nrew homes each year. The estimate for this year in at best 100,000 and falling.

The Government's solution is to give more public funds and public land to the private sector. This will just increase private sector profits.

The solution which the Government will inevitably have to implement is to ask local councils to take the lead in building new council homes on a massive scale aiming at a target of 500,000 a year. In the short term we have a house price slump,(today we hear that house prices have dropped for the 8th month in a row),many private landlords wanting to offload properties and over half a million homes are standing empty. Local councils shoud be given the ability to borrow in order to purchase properties lying empty in their areas. If landlords resist a reasonably priced sale local councils should be able to use speeded up compulsory purchase powers.

The scale of the housing crisis requires an emegency programme. The days when I have to witness parents pleading in tears for a decent settled home for their children could so easliy be put behind us if the Government had the will to act.

Left Candidate Must be Allowed to Run in Scottish Labour Leadership Election

Now that Wendy Alexander has resigned the Scottish Labour party has a real opportunity of staging a democratic leadership election, which would be able to focus on an honest debate about the current state of Labour in Scotland. It is deperately needed given the way the SNP has been able to dominate the political agenda so effectively since it was elected to government.

My fear is that there will be an attempt to prevent a real political debate either by following the Brown example of blocking any contest or more subtely by only allowing candidates from the right to run. Preventing a candidate from the Left from getting on the ballot paper would be as disastrous in the long term as the Brown no contest strategy. It would be seen as an obvious avoidance of facing to the much needed political debate about the future of the party in Scotland.

A candidate of the Left is needed and I believe that the best and most principled advocate for socialism in the Scottish Parliament is Elaine Smith. Elaine has a superb record of commitment and campaigning. She is articlate, popular and rooted in her community.

I hope that Elaine decides to stand and if she does it is critical that we mobilise to ensure she is on the ballot paper. The right and the bureaucracy must not be alowed to get away with a right wing slate on the ballot paper. We must not let them block Elaine. If they did it would another step on the path to the destruction of the Labour Party in Scotland.

We cannot allow any more coronations or election stitch ups in the Labour party. We must stand up for the right of Labour Party members and affiliated trade unionists to be able to elect a candidate of their choice and from a range of candidates who reflect the spectrum of political opinion within our party. Anything less would be viewed as yet another unsavoury New Labour manoueuvre.

Gordon Brown has taken Labour to the edge of extinction

I wrote this article for the Guardian's "Comment is Free" website yesterday. It has just gone up. I wrote it before the Henley by-election result which demonstrates even further the potential political wipe out Labour is now facing.

A year ago so many Labour MPs flocked to nominate Gordon Brown as leader that I had no choice but to concede that I couldn't get on the ballot for the Labour leadership.

Now it all looks pretty bleak. Brown is relentlessly leading the Labour party to the edge of extinction and yet again Labour MPs and trade union general secretaries appear at a loss to do anything but follow over the electoral precipice.

In the first month the euphoric reception for Gordon Brown was based firstly upon the fact that he wasn't Tony Blair and secondly that he promised change. In fact in one speech he referred to change at least 20 times.

The reason for the present scale of disillusionment in him and his government particularly among long-standing Labour supporters is that there has been no change. If anything, the policies have gone further right and the New Labour style of manipulative short-term triangulation is still being pursued but with less competence than Blair

It could have all been so different. A leadership election would have ensured a real debate on the future of Labour in government and the future of our country. For over a year I had already been on the campaign trail speaking with Labour supporters and many others in open meetings just to get people talking again.

A leadership contest would have produced this engaging process writ large, drawing people into a real discussion and testing not only the ideas but also the candidates themselves.

Labour members would have been given the chance to decide. The ideas I was promoting would have proved their popularity and 12 months on we would have all been in a different place. Just think what might have been.

British troops would have by now been withdrawn from Iraq and in Afghanistan we would be deploying every skill of conflict resolution learned in Northern Ireland, including the first stages of unconditional roundtable talks with all sides to enable troop withdrawal.

Trident would have been scrapped and arms conversion put in place to transfer skills and resources to socially productive uses.

The green revolution would be well underway with an 80% target on reducing carbon emissions firmly installed in law, feed-in tariffs introduced and a mass programme of alternative energy projects already under construction. The expansion of Heathrow would have been rejected and with rail back in public ownership the largest investment programme in high speed-rail in Europe would be moving from the drawing board to construction.

The fairness revolution would be in train to create a fair and equal society. To address pensioner poverty the first year budget would have increased the basic pension and restored its link with earnings. To achieve a historic target of abolishing child poverty, child benefits would have been increased. The minimum wage would have been lifted to a realistic level, with pay equity legislation introduced to eradicate discrimination against women and others. A fairer taxation policy would have ensured that corporations pay their way and their £100bn a year tax avoidance scams would have been outlawed. Local councils would have been empowered to build half a million new homes this year and to compulsorily purchase a significant number of the 300,000 homes that stand long-term empty to tackle the housing crisis that has seen the number of homeless households double under New Labour.

The freedom revolution would have already seen the restoration of basic civil liberties and trade union rights. ID cards would have been scrapped and detention without charge would be replaced with a normal rule of law relying upon evidence and court decisions. A draft constitution would have been published for debate extending social rights to housing, education, care and a decent environment.

The democracy revolution would have seen the ending of the privatisation of our public services, and the debate engaged on how each public service could be best managed, by those who are elected to represent local communities, those that deliver the services and those that receive them. Members of the House of Lords would be in their final session before abolition, and a new chamber would be elected by proportional representation, as people also voted on a referendum on the European constitution.

The safety revolution would be at it early stage of implementation, transferring the third of prisoners with mental health and drug problems to suitable specialist centres. At the community level, safer neighbourhood teams would no longer just comprise of police officers but would include family support workers, youth workers, play leaders and community development workers to intervene earlier and more effectively to overcome antisocial behaviour, crime, and violence at their roots.

The education revolution would have already abolished tuition fees and restored grants, class sizes would be tumbling towards public school proportions and more teachers were recruited, with teaching talent released from the burden of tests, targets and league table competitions.

The caring revolution would have been extending free childcare to all families with young children and free care for all the elderly. Elderly care standards would be under intense scrutiny and residential homes under democratic control with direct care and family representation.

The political revolution would have produced a Commons chamber where MPs were not just allowed but would be encouraged to vote on principle and personal judgment. Various coalitions on individual issues would become the norm. Democracy would have been restored within the Labour party, enabling members and affiliates once again to determine the policies of the party. Yes the political debate would have been robust and decisions difficult to pre-judge but democracy would be the better for it.

By now, Labour members and supporters would be proud again of being associated with our party and our government. I can't guarantee that this would have won us the next election but at least it would be a government worth fighting for.

This article was first published on guardian.co.uk on Friday June 27 2008.

Government must listen to low paid

Local Government workers in Unison (my union) have voted by a clear majority to take industrial action over the imposition of a below-inflation pay deal of just 2.45%.

The Government must listen to this appeal. The underlying reason for this vote for strike action is a genuine feeling of unfairness that lower paid public sector workers are being asked to carry the burden of the economic downturn.

Ministers, earning over £100,000 per year will barely notice their pay freeze, but for many local government workers it will mean real hardship.

Government mustn't punish workers for inflation incompetence

LEAP published the press release below on the costs of rising inflation for workers. The Government's statement that Ministers would forego their annual pay rise is a pointless gesture at a time when the Government is imposing a three year pay cut on public sector workers.

PRESS RELEASE:

Inflation figures released today show that CPI has risen to 3.3% due to rising food and energy prices. RPI inflation hit 4.3% as prices continue to rise. CPI inflation is now at its highest level since 1992.

John McDonnell MP, LEAP Chair, said:"This isn't about pay, and its not solely about the credit crunch, it's about short-term decision making over the last 11 years as New Labour has done nothing to move the UK from a fossil fuel based economy to an economy based on renewable technologies".

Professor Prem Sikka said:"The government now only have blunt tools for managing the economy. The government should use the regulation of gas, electricity and water to impose a price freeze, and also claw back monies through windfall tax on utilities and oil companies to support pensioners and increase tax free personal allowances, so that people at the bottom of the pile have more cash"

Andrew Fisher, LEAP Co-ordinator, said:"Inflation is rising due to the Government's failure to plan for 'peak oil'. Punishing public sector workers for international oil and food prices is economically misguided and will cause further resentment among dedicated public sector workers. It is politically and economically inept."

Threat of Emergency Powers to be Invoked against Striking Tanker Drivers

I have said all I can on the issue of the 42 days vote in the Commons in an article today on the Guardian's website "Comment is Free." I can't get much angrier at the behaviour of the Prime Minister and the Labour MPs who supported this attack on human rights. But just after the vote on 42 days detention when you thought the assault on people's civil liberties couldn't get worse the Government has briefed the press that it is threatening to invoke emergency powers in the oil tanker drivers' dispute to draft in soldiers to drive the tankers and break the strike. The drivers are members of UNITE.

When the Government introduced the Civil Contingencies Act many of us warned that it would be used against trade unionists and this latest threat from Downing Street confirms the role emergency powers can be used to undermine trade union rights.

Just at a time when there are attempts to achieve a negotiated settlement to the tanker drivers' dispute this inflammatory threat will exacerbate the situation and undermine the potential for resolving the dispute.

If the troops are brought in by the Government the leadership of UNITE will need to consider seriously whether now is the time to call for solidarity action from other union members and other unions no matter what the current law says about the illegality of solidarity action.

42 Days Detention is Another Line in the Sand

Finding time to blog regularly has been a real problem recently simply because of too many commitments and not enough time. Casework and community campaigns in my constituency are just overwhelming at present particularly as the housing crisis worsens and deportations are mounting. We are dealing with many people in some pretty desperate situations.

At the same time trying to cover all the bases on the legislation the Government is forcing through is stretching all of us.

Tonight, sorry, last night the Government guillotined the debate on the Counter Terrorism Bill so that we could only debate less than a third of the issues contained in the section of the Bill timetabled for discussion. The areas we were allowed to discuss included the continuance and tightening of control orders and the power of the Government to scrap juries in coroners' inquests when dealing with cases where the Government itself decides there is an issue of public security.

This means that where a person has died when in the hands of the state or is killed by the state the Government now has the power to have the inquest held in secret and the verdict decided not by a jury but by a special coroner appointed by the Government. The campaigning organisation INQUEST rightfully argued that this proposal undermines the independence of the coroners' system and will deny families access to a fair hearing to discover how their loved one has died. Can you imagine what the outcome of the Menezes case or any death in custody case would be if this provision was in place?

Tomorrow, sorry, today we move on to the Government's proposal for detention without charge for 42 days. I will vote against this further attack on civil liberties because there has been not a single piece of evidence produced to justify such a fundamental attack on the right of habeas corpus secured eight centuries ago in this country. I hope that we will be able to convince enough Labour MPs to reject this assault on human rights. I have been working with Liberty and Frank Dobson as chair of the Liberty group in Parliament.

Throughout the last few days Gordon Brown has contacted Labour MPs and offered all sorts of blandishments and political bribes in return for their votes for 42 days. I am pleased that so many have stood firm on principle and have rejected this combination of threats, grovelling pleas for support and outright political bribery. However we heard today reported in the media that those MPs representing the Compass group are supporting the Government on 42 days. This will undermine the vote opposing 42 days. Ominously they voted for the Government throughout last night on the proposals to to scrap coroners' juries and on toughening control orders.

If this does happen it destroys in my view any vestige of credibility those associated with Compass may claim to have to be part of the Left or part of any project to reclaim the Labour party as a progressive force. Compass may publish policy statements decrying the Government's policies but these are not worth the paper they are expensively published on when Compass MPs go on to vote through policies like this which fly in the face of all socialists should stand for.

I was scheduled to speak at the Compass conference on Saturday at the LRC/Briefing break out session. I will not do so now. I do not want to be associated with those that are willing to support undermining the basic human rights that socialists have fought and sacrificed themselves to secure and protect over generations. There are some lines in the sand you just do not cross. Undermining basic civil liberties by locking people up for long periods without charge is one of them.

Over 700 sign May Manifesto Petition

Over 700 people have now signed up to the May Manifesto petition.

If you have not already done so, you can sign up by emailing info@l-r-c.org.uk with 'petition' in the subject line with your name and CLP or trade union. The petition states:

"We believe that Labour can win back the support of our people by adopting a new 2008 May Manifesto, which should include:

• Nailing the 10p tax mistake by the introduction of a fair tax system removing the low paid from taxation and ensuring the wealthiest and corporations pay their fair share
• An increase in the basic state pension, immediately restoring the link with earnings, lifting people off means tested benefits and providing free care for the elderly
• An immediate start on a large scale council house building programme and assistance for those facing repossession
• Immediate end to programme of local Post Office closures and liberalisation of postal services
• An end to the privatisation of our public services
• A new pay deal for public sector workers to protect their living standards and tackle low pay
• Abolishing tuition fees and restoring maintenance grants for all students
• Scrapping ID cards and abandoning 42 days detention
• Introduction of a trade union freedom bill and measures to protect temporary and agency workers
• Rejecting the proposals to renew Trident"

1. John McDonnell MP, Hayes & Harlington CLP
2. Dr Duncan Hall, Skipton & Ripon CLP
3. Cathy Watson, Welwyn Hatfield CLP
4. Rory MacQueen, Hackney North & Stoke Newington CLP
5. Martin Jenkins, Ellesmere Port & Neston CLP
6. Tom Michaelson, Garston & Halewood CLP
7. Pamela Galloway, Central Devon CLP
8. Ian Woodland, Unite
9. Simon Hewitt-Horsman, Walthamstow CLP
10. John Buckingham, Cambridge CLP
11. Walton Pantland, GMB
12. Robert Naether, GMB
13. Nathan Trout, Wakefield CLP
14. Colin Pritchard, Gravesham CLP
15. David Semple, NUT
16. Helen Ingram, Beaconsfield CLP
17. Graham Day, Falkirk CLP
18. Clare Hewitt-Horsman, Walthamstow CLP
19. Susan Press, Calder Valley CLP
20. Tom Davies, Walthamstow CLP
21. Steven Anderson, Jarrow CLP
22. Joseph Boughy, UCU
23. Paul Smith, Yeovil CLP
24. Ravi Gopual, Garston & Halewood CLP
25. Cllr Dave Young, Calder Valley CLP
26. Mike Baldock, Sittingborne & Sheppey CLP
27. Veronica Killen, Blyth Valley CLP
28. Aidan Williams, Altrincham & Sale West CLP
29. Peter Berry, Stockport CLP
30. Eric Wood, Amicus
31. Cllr Brian Smedley, Bridgwater CLP
32. Stuart Watkin, Tooting CLP
33. Glynn Davies, North West Leicestershire CLP
34. Kevin Hind, Bury St Edmunds CLP
35. Steve Brown, Wansbeck CLP
36. Judith Atkinson, Brentford & Isleworth CLP
37. Val Graham, Chesterfield CLP
38. Scott Lomax, Chesterfield CLP
39. James McSporran
40. Angela Sinclair-Loutit
41. Tristan Martin, York Outer CLP
42. Jim Brookshaw, Cardiff South & Penarth CLP
43. Hazel Brookshaw, Cardiff South & Penarth CLP
44. John Giddins, GMB
45. David Stokes, Bournemouth East CLP
46. Pamela Read, Hampstead & Kilburn CLP
47. Andy Walker, Ilford South CLP
48. Brian Oldale, Sheffield Central CLP
49. Philip Crawford, Bromsgrove CLP
50. Janet Shapiro, Hornsey & Wood Green CLP
51. Richard Henson, UCU
52. Dave Eatock, Unison
53. Gwen Cook, Chelsea & Fulham CLP
54. Rev Hazel Barkham, South West Wiltshire CLP
55. Tony Holmes, Farnborough CLP
56. Gwyn Bailey, Castle Point CLP
57. Tom Rhodes, Unite
58. Ian Morrison, Sherwood CLP
59. Mat Coward, Somerton & Frome CLP
60. Darrall Cozens
61. Melanie MacDonald, BECTU
62. Ian Sternberg, Wantage CLP
63. Dave O’Mara, Bromley CLP
64. Kevin Hogarth, UCU
65. C Chinnick, Monmouth CLP
66. Paul Bull, BECTU
67. Alastair Gittins, RMT
68. Jacqui Connor, Leyton & Wanstead CLP
69. Henry Birtley, Stafford CLP
70. Tim Boddy, Hackney North & Stoke Newington CLP
71. Ken Thomas, East Surrey CLP
72. Mike Gaskell, Wallasey CLP
73. James Ross, CWU
74. Mike Rowley, Oxford West & Abingdon CLP
75. David Holland, Hackney North & Stoke Newington CLP
76. Pete Firmin, Hampstead & Kilburn CLP
77. David Smith, Sheffield Heeley CLP
78. Russ Blakely, Portsmouth North CLP
79. Norrette Moore, Uxbridge & South Ruislip CLP
80. Matthew Corr, Livingston CLP
81. Daniel Nichols, Romford CLP
82. Ed Doveton, Colne Valley CLP
83. Keith Perrin
84. Robert Parker, Amicus
85. M Murphy, Scunthorpe CLP
86. M Todd, Scunthorpe CLP
87. David Carter, Middlesbrough CLP
88. Chris Mullarkey, Unison
89. Paul McLean, Leeds North East CLP
90. David Watson
91. Tony Rea, Westminster North CLP
92. Cllr Geoff Lumley, Isle of Wight CLP
93. John Drewery, Huddersfield CLP
94. Catherine Anne Tanner, Cardiff West CLP
95. Bob Waterton, Leicester West CLP
96. John Prince
97. Matthew Teale, City of Durham CLP
98. Daniel Ashton, Isle of Wight CLP
99. Christopher Charnley, Ashton-in-Makerfield CLP
100. Paul Mannion, Tottenham CLP
101. Glyn Tudor, Southampton CLP
102. Jim Dye, Preston CLP
103. George Durack
104. William Allberry, Esher & Walton CLP
105. David Williams, Wansbeck CLP
106. Tarquin Gotch
107. Chris Wood
108. Clive Searle, NUT
109. Rosemary Addington
110. Andrew Fisher, Croydon Central CLP
111. Julie Prince, PCS
112. Luke Wilson, Leeds Central CLP
113. Jenny Lynn, Halifax CLP
114. Jago Parker, Halifax CLP
115. Michael Richards, Cynon Valley CLP
116. Paul Mansell, Beaconsfield CLP
117. Michael Chewter, Skipton & Ripon CLP
118. Graeme Cowling, PCS
119. Philip Lewis, Unison
120. Tony Richardson, Wakefield CLP
121. Jeff Slee, RMT
122. Cllr John Rodgers, Calder Valley CLP
123. Joe Kowalczyk, Beaconsfield CLP
124. Anne Tanner, Cardiff West CLP
125. Dr Richard Barbrook, Hackney North & Stoke Newington CLP
126. Gwyneth Francis, High Peak CLP
127. Mary Mulligan, UCU
128. Michael Docherty, Harrogate & Knaresborough CLP
129. Annette Thomas, Islington North CLP
130. Suzanne Gannon, NUT
131. John Lipetz, Hampstead & Kilburn CLP
132. Joe Marino, BFAWU
133. Helen Simpson, Sherwood CLP
134. Mike Jones, Liverpool Garston CLP
135. Judah Smith, Halifax CLP
136. Malcolm Dunning, RMT
137. Alan McGuckin, Penrith & the Borders CLP
138. Tom Flaws, Hexham CLP
139. Graham Bash, Hackney North & Stoke Newington CLP
140. Dave Statham, Hampstead & Kilburn CLP
141. Lucy Haynes, Unison
142. Richard Coates, Maidstone & the Weald CLP
143. Jim Moffett, Unison
144. Jack Preston, Unite
145. Cllr Mark Brain, Bristol South CLP
146. Cllr Simon Crew, Bristol East CLP
147. Mr P T F Gregory, Sherwood CLP
148. Angie Gregory, Sherwood CLP
149. Jon Rogers, Unison NEC
150. Mike Armitage, Macclesfield CLP
151. Peter Thomas, BECTU
152. Frank Leetch, Ogmore CLP
153. Sally Free, Brighton Kemptown CLP
154. Graham Felton, Cynon Valley CLP
155. Claire Wadey, Brighton Pavilion CLP
156. David Williams, PCS
157. Colin Burgess, Thornbury & Yate CLP
158. Pat Thorpe, Huddersfield CLP
159. James Cummings
160. John Merrett Bloom, Waveney CLP
161. Alison Mandrill, Gosport CLP
162. David Gee, Calder Valley CLP
163. Simon Boardman, CWU
164. Adam Spencer, Nottingham South CLP
165. Hucknall Branch, Sherwood CLP
166. Joan Abrams, Hazel Grove CLP
167. Phil Chadwick, CWU
168. Paul Barbour, CWU
169. Matthew Langley, NUT
170. Dr Premraj Pushpakaran, CWU
171. West Branch, Maidstone and the Weald CLP
172. Phil Hingley, Holborn and St Pancras CLP
173. Helen Peters, Holborn and St Pancras CLP
174. Cllr John Bell, Broxtowe CLP
175. John Calderon, Hackney North & Stoke Newington CLP
176. Max Morris, Clacton CLP
177. Geoff Spall, Sherwood CLP
178. Ged Dempsey, Wentworth CLP
179. Vin Mullen, Jarrow CLP
180. John Bell, Greater Nottingham Co-op Party
181. Cambridge Universities Labour Club

plus another 550 through Facebook

To sign up please email info@l-r-c.org.uk with 'petition' in the title and your name and CLP or trade union

Short Termist Policy Making has caused the Fuel Crisis

The Government has trapped itself into a no win crisis over fuel and energy policy. Short term policy making over the last decade has resulted in a disastrous failure to develop alternative energy sources despite all the warnings about peak oil.

The result is a continuing and indeed increasing dependency on fossil fuels and now a panic rush to escalate the country's nuclear programme in the very week that new estimates have emerged over the spiralling costs of dealing with the country's existing nuclear waste.

The Prime Minister's announcement of the opening up of new North Sea oil fields is clearly recognised, pardon the pun,as a drop in the ocean compared with rising demand. In addition it re-opens the argument over the ownership of this oil for the SNP to exploit in the independence debate.

The sense of urgency we are now witnessing in the current public debate over fuel and energy shortages was certainly not witnessed in the recent debate in Parliament over the Government's Energy Bill. When Labour backbenchers were pressing to include in this legislation early action to introduce feed in tariffs for altenative energy produced by homes and community organisations the Government refused to co-operate and instead offered yet another consultation over the coming year, delaying the whole process by at least another year and possibly longer. In Germany and other European countries the introduction of feed in tariffs has resulted in a dramatic increase in alternative energy production.

In the meantime the oil price appears to be moving innevitably towards $200 a barrel and the Government by its inaction alienates more of our supporters facing mounting fuel and energy bills.